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At Thursday’s EU summit in Brussels, European leaders discussed the possibility of overhauling the WTO’s institutional framework, including its stalled dispute resolution mechanisms, to better reflect the current global trade landscape.
“The WTO hasn’t worked for years,” German Chancellor Friedrich Merz said in a press conference following the summit, referencing persistent dysfunction under both the Trump and Biden administrations.
Commission President Ursula von der Leyen presented leaders with different options of trade deals, labelling as the most attractive a closer cooperation between the EU and members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade pact of 11 Pacific Rim countries and the UK.
She introduced the initiative as a potential first step toward reshaping the global trade order.
“I said that we can think about this as the beginning of redesigning the WTO—of course, understanding what should be reformed positively within it,” von der Leyen told reporters after the summit.
She stressed the importance of learning from the WTO’s shortcomings and showing the world that “free trade based on rules” remains achievable with a wide group of willing partners.
“This is a project we should truly engage in. CPTPP and the European Union—that’s my team,” she said, adding that the EU must take the lead in managing this initiative.
Asked whether the United States should be involved, von der Leyen replied: “As far as I understand, the Americans left the CPTPP at a certain point.”
This is not the first attempt to circumvent the WTO’s paralysis. As a stopgap measure, 57 WTO members, including the UK, Paraguay, and Malaysia, have joined the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), a mechanism that replicates the WTO Appellate Body’s functions for participating members.
However, the MPIA covers only 57.6% of global trade and does not address the broader institutional crisis.
The WTO has been effectively paralysed since December 2019, when the US began blocking appointments to the Appellate Body, rendering the two-tier dispute settlement system non-functional.
Major trade negotiations—such as those on eliminating harmful fisheries subsidies and reforming agricultural rules—remain stalled due to entrenched positions from key members, including the US, China, Japan, and the EU itself.
With few signs of resolution, the WTO’s future relevance is increasingly being called into question.
