Transcription, The New World Disorder
An audience with Dr Ngozi Okonjo-Iweala, Director-General of the WTO
And Alec Russell, Foreign Editor of the FT
A WTO report on the organisation’s activities in 2025 highlighted that despite political headwinds,
“Trade…can be a powerful enabler of inclusive AI -supported growth by helping economies access AI-enabling goods, such as raw materials, semiconductors and intermediate inputs. The WTO report estimates that global trade in these goods totalled USD 2.3 trillion in 2023.
The Trade-Related Aspects of International Property Rights (TRIPS) agreement lays down a common regulatory framework under which members can act to protect their IP, in areas including copyright, patents and trademarks. There is a separate section addressing protected business processes, industrial designs and layout designs of integrated circuits, and the semiconductor market globally relies on the WTO to intermediate disputes where a country’s collective expertise is threatened by trade practices undercutting prices or otherwise manipulating market conditions for these items.
The panel found the following to be true:
As to the consistency of the ASI policy with the TRIPS Agreement, the Panel found that the European Union had not demonstrated an inconsistency with: Article 28.1, whether or not read in conjunction with Article 1.1, first sentence (concerning certain exclusive rights of patent holders); Article 28.2 read in conjunction with Article 1.1, first sentence (concerning patent holders’ right to licence their patents); Article 41.1 (concerning intellectual property enforcement procedures); and Article 44.1, first sentence, read in conjunction with Article 1.1, first sentence (concerning injunctions). In particular, the Panel found that the obligation in Article 1.1, first sentence stating that Members must “give effect” to the provisions of the TRIPS Agreement requires Members to implement the provisions of the TRIPS Agreement within their own domestic legal systems. The Panel concluded that Article 1.1, first sentence contains no additional obligation relating to frustrating the object and purpose of the TRIPS Agreement or other WTO Members’ implementation of the TRIPS Agreement.
With respect to the consistency of the five individual Chinese court decisions granting ASIs with the TRIPS Agreement, the European Union had advanced identical claims and arguments as those raised with respect to the ASI policy. The Panel therefore declined to make findings on these claims concerning the five individual decisions, as any findings would be duplicative of the findings on the ASI policy.
With respect to the transparency obligations under the TRIPS Agreement, the Panel found that China had acted inconsistently with the publication obligation in Article 63.1 of the TRIPS Agreement by failing to publish the decision issuing an ASI in Xiaomi v. InterDigital, read together with the reconsideration decision in the same case. The Panel found that China was not prepared to supply information requested by the European Union and had thus acted inconsistently with Article 63.3, first sentence. The Panel found that the European Union’s claim with respect to the provision of specific judicial decisions under Article 63.3, second sentence was outside its terms of reference.
Finally, with respect to the European Union’s claims that the five ASI decisions by Chinese courts were inconsistent with Section 2(A)(2) of China’s Accession Protocol, the Panel found that the European Union had not demonstrated that Chinese courts had applied China’s laws, regulations, or other measures in a non-uniform, not impartial, or unreasonable manner.
This panel finding demonstrates the continuing necessity for multilateral arbitration in trade disputes, and for a level of transparency to assure trust in imports from assignatory countries. Iweala explained the context of the decision as being “a commonly agreed approach to valuation… without trust in what you’re trading, there’s no appropriate unified valuation approach.”
She cited, separately, the Technical Business to Trade Agreement, which establishes rules to ensure non-discriminatory product standards and regulations that don’t unnecessarily hinder trade, while also encouraging the use of international standards and transparency to create a stable trading environment.
With regard to US Tariffs, she said these represented the “most severe disruption in world trading in years,” but highlighted that 72% of world trade is still operating under WTO rules; and that the US represents 13% of world trade. She has said that to fully activate its supervisory role, the WTO needed to be more adaptable – “more nimble and agile” in a fast-changing world, and see the situation as an opportunity to reform.
At a recent UN General Assembly, China made a big announcement – that it would no longer be classed as an emerging economy, with 23 nations’ delegates present. “Being a developing country,” explains Iweala, “accords you certain privileges to renege on agreements. We have closed the doors to some of the arguments… it’s a consensus general assembly,” but she acknowledged that where you reach a stalemate, you have to be more “nimble” in activating for pro-cyclical business enablement.
Alec Russell noted that “We’re seeing other markets trading more – trading more between each other” in South-East Asia with a number of recent bilateral agreements in Southeast Asia. And many members “who took the system for granted – middle powers – gathered to campaign for systemic reform, notably in Singapore, New Zealand, the UAE and Switzerland, which got together to consult on reform and new trading opportunities.” He observed that trade now is done via electronic transmissions i.e. ecommerce and AI, the subject of a recent WTO report.
However, in response to the suggestion a parallel system is being created, the retort was “absolutely not”, but that many members have acknowledged their over-dependence on US markets, and on China for essential supplies. He describes the adjustment as being a “temporary re-globalisation, bringing others in from the margin”.
Russell asked Iweala outright, “What keeps you confident about multilateralism where the US is absolutely, combatively, unilateralist?” and points to the fact the EU has accepted a blanket 15% tariff on exports to the US. The EU has negotiated preferential conditions for some agricultural exports, and in return agreed to spend $600bn on investment in the US, and also to pay $750bn on energy produced in the US.
She responded that “The US remains a member – despite their disruption, they have to work within the pre-existing system.” She said the IBRD doesn’t accept the realities of rising nations, but that you “need a global approach” to tackle climate change, and national conflicts. Russell said that the Bretton Woods organisations are mired in the economic reality of 1945, and Iweala acknowledged that used to be the case, except that Donald Trump has accelerated the pace of change – “the sledgehammer approach”.
The panel responded to questions from the audience – “What has the WTO done to facilitate these proposed reforms to the system?” She responded that decisions require the consensus of members, and that the General Counsel Chair, one of the arbitrators, had put forward a set of criticisms of “unfair trade practices at the WTO”. One of these is subsidising domestic industries, as it enables them to sell exports at less than market value, as in China which, incidentally, has criticisms of other nations’ agricultural subsidies. The ‘green subsidies’ are frequently criticised by the IRA. She acknoledged that current policy does not deal adequately with existing subsidies.
And she pointed out that “China’s emerging market status helps them locally, but certain advantages and privileges disadvantage other struggling nations.” Reforms on industrial policy can disadvantage emerging market economies, with Costa Rica and Brazil joining the US on opting out. In the context of income divergence, which was increasing pre-pandemic, “If you look at the graphs now, you will see this is not happening,” and developed countries have recovered at a faster pace.
One of the recent reforms she spearheaded was 2023 the WTO’s Fishing Subsidies Policy – “Africa loses about $7bn per year from unregulated fishing… there’s going to be a basket of different instruments to help” Africa monetise its fishing industry adequately. Fossil fuels as an export category attract $2.3bn in subsidies, she said, and that technically “revoking subsidies is one of the most politically difficult things to do.”
Brightsides.uk 