EU Planning Alternative to WTO


European UnionThe European Union is planning to launch an alternative to the World Trade Organization (WTO) as the latter is being threatened by president Donald Trump's blockade. The initiative is backed by some WTO members, according to reports by Bloomberg and Yahoo! News.

The EU is planning to release a document describing its plan to create an organization whose express goal is to preserve the WTO's system of conflict resolution. It also will also look for a way to replicate other WTO procedures. If implemented, the alternative trade body would enable WTO members to voluntarily arbitrate their WTO dispute rulings and to create a new way in which to appeal rulings.

The arbiters of such an institution would be chosen from the current WTO. The plan to create this new trade body was discussed at the G20 summit this weekend in Japan. The United States prevented the mention of this new model in the summit conclusion. Nevertheless, European representatives seem to have gotten support for their plan from countries such as Turkey, Russia, and Canada.

The WTO faces the risk of dissolution if U.S. president Donald Trump continues to oppose the renovation of the appellate body. This body is extremely important for the WTO members as it is the last instance any member of the organization can go to after the organization has delivered its judgment.

If the arbiters are not renovated before this coming December, the appellate body will be rendered useless as only one member will remain. The United States has been clear that it will keep blocking the organization unless it's reformed, an objective that the EU and many other members share. However, some fear that Trump would cause the collapse of the WTO before it could be reformed.

Some European sources claim that Trump wants an on-demand system that would satisfy the U.S. trade pretenses and that wouldn't affect its interests. Some also fear that Trump's government intentions are not reforming the system, but shutting it down entirely.

Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.