TWN Info Service on WTO and Trade Issues (Jul26/22)
30 July 2026
Third World Network

Trade: Two visions, one playing field - the battle over WTO reform
Published in SUNS #10493 dated 30 July 2026

Geneva, 29 Jul (D. Ravi Kanth) -- As World Trade Organization members discuss "level playing field" issues on 29 July, the seemingly clashing narratives offered by a large majority of developing and least-developed countries advocating for a development-oriented paradigm, and the proposals tabled by the United States, the European Union, the United Kingdom, and Japan seeking "a regime change", have come into the open.

While the Doha Round of trade negotiations has seemingly been killed by industrialized countries such as the US, the EU, and Japan, among others, these same industrialized countries driving WTO reform appear determined to change the regime of rules by focusing on the Uruguay Round outcomes that led to the establishment of the WTO in 1995, said people familiar with the development.

However, the small coalition comprising the US, the EU, Japan, the UK, and the aligning group of the "Friends of the System", led by Switzerland, is seemingly not ready to address the restoration of the two-tier dispute settlement system, which is also an offshoot of the same Uruguay Round of trade negotiations, said people familiar with the development.

It is apparent that the flawed narrative being advanced by the small coalition of industrialized countries is not only one-sided and destructive, but could also lead to a negative, exclusionary change regarding the expectations that the developing countries reposed in the Doha Round in areas such as agriculture, and the Uruguay Round asymmetries in the rules that seemingly denied any gains for the Global South, said people familiar with the discussions.

FACILITATOR'S NOTE

The new facilitator on "level playing field" issues, Ambassador Elmer Jose German Gonzalo Schialer Salcedo, has issued the schedule for the meeting on 29 July.

The plenary session on "level playing field" issues will "be driven by Members' written and oral contributions; the meeting will begin with presentations of Members' submissions."

According to the restricted note (ICN/GC/Reform/4), seen by the SUNS, proponents will be invited to introduce their papers in the following order:

* ACP Group - Fundamentals for WTO reform - Communication from the ACP Group (WT/GC/W/975);

* WTO reform considerations - Communication from Paraguay (WT/GC/W/987);

* LDC Group - LDC submission on WTO reform - Communication from The Gambia on behalf of the LDC Group (WT/MIN(26)/17-WT/GC/W/991/Rev.1);

* African Group - WTO reform: Development-centred priorities for a balanced WTO - Communication from the African Group (WT/GC/W/992);

* European Union - EU submission on WTO reform - Communication from the European Union (WT/GC/W/ 986) and Further reflections on disciplines, subsidies and industrial policy following MC14 (WT/GC/Reform/ W/5);

* United Kingdom - More relevant, more flexible, more accessible - Communication from the United Kingdom on WTO reform (WT/GC/W/993) and Levelling the playing field through multilateral reform (WT/GC/Reform/ W/4);

* Further perspectives on WTO reform - Communication from the United States (WT/GC/W/998) and On WTO reform - Communication from the United States (WT/GC/W/984);

* Designing together a fairer and more dynamic system - Communication from Japan (WT/GC/Reform/W/8).

The facilitator will then open the floor "for further contributions and an exchange of views."

COMPREHENSIVE ASSESSMENT

The WTO is currently undergoing a critical phase of reform negotiations, fundamentally divided over the conceptual definition of a "level playing field" and "fairness," said several trade envoys who asked not to be quoted.

A comprehensive review of recent proposals from various member groups - ranging from the African Group and least developed countries (LDCs) to the United States, European Union, United Kingdom, and Japan - reveals a stark and deep-seated ideological divide, said a trade envoy who asked not to be quoted.

The large swathe of developing and least-developed countries seems to view "fairness" through the lens of historical imbalances, demanding equitable policy space to sustain their economies and complete their industrialization, said people familiar with the discussions.

Conversely, the powerful group of industrialized countries appears to view "fairness" through the lens of modern market distortions, focusing on the alleged trade-destabilizing impacts of state-owned enterprises (SOEs), non- market policies, massive industrial subsidies, and a systemic failure on transparency - essentially targeted against China, said people familiar with the discussions.

For the Global South, the concept of a level playing field cannot be separated from the structural imbalances embedded in the WTO since the Uruguay Round, said a trade envoy from Africa, who asked not to be quoted.

In its proposal (WT/GC/W/975), the African, Caribbean, and Pacific (ACP) Group of States forcefully argues that true fairness necessitates confronting these historical disparities, the trade envoy said.

According to the ACP Group, it is "imperative to bring some equity in the obligations under the Agreement on Agriculture and correct the historical asymmetry whereby the support instruments used extensively by developed countries for their industrialization are now prohibited for developing countries."

The ACP insists that reform must offer sufficient space for structural transformation, noting that while "the playing field may never be fully level, the WTO can and must ensure that developing Members are enabled to participate and integrate into global trade without taking on new or disproportionate obligations, which do not improve their development reality."

This sentiment is seemingly echoed by the African Group, which warns against using the concept of a level playing field as a proverbial "Trojan horse" to further restrict developing nations, the trade envoy said.

The Group argues that "level playing field" cannot mean tightening disciplines primarily on those who already have limited fiscal and technological capabilities, while leaving intact the instruments and exceptions through which other members act with limited constraint.

For the African Group (WT/GC/W/992), a credible fairness agenda must center on agriculture as a foundational development issue.

The Group demanded a permanent solution for public stockholding (PSH) for food security purposes and an effective special safeguard mechanism (SSM), said a former African chair of the General Council, who asked not to be quoted.

They emphasized that WTO reform must address "the imbalance between continued large-scale support use by developed countries and the narrower space available to developing countries to support vulnerable farmers and ensure domestic production resilience."

Furthermore, the African Group insists that unilateral trade-related climate policies must respect the principle of Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC), and that the growing, unconstrained use of national security exceptions by developed nations "creates asymmetry in practice."

Paraguay's proposal (WT/GC/W/987) seems to zero in on the agricultural sector as the most glaring example of institutional unfairness.

It points out that measures prohibited in other sectors remain permitted in agriculture, leaving agricultural markets "among the most distorted in international trade."

Paraguay argues that "WTO rules that are considered to be outdated and not reflective of today's realities cannot be modernized without agriculture reform, otherwise unfair trade advantages and practices will continue to be perpetuated, creating imbalanced trade patterns for agricultural goods, and we could not speak of true fairness at the WTO."

For the LDCs (WT/GC/W/991/Rev.1), fairness is intimately tied to meaningful participation, inclusivity, and the right to economic growth.

The LDC Group highlights a stark reality: "In 2024, despite continued growth, LDC goods and services exports accounted for only 1.03% of global trade."

The Group argued that where LDC production capacity has grown due to preferential market access, "there should be no punishment from unilateral imposition of tariffs. Every country has a right to grow."

The LDC Group also points to the skewed burden placed on recently acceded members, noting that "acceded LDCs have taken on more market access commitments than many other WTO Members."

They demand to be actively included in agenda-setting, warning that "disregard of scheduling overlapping meetings frequently hinders participation in rulemaking and deliberations, which undermines expectations of fairness and inclusiveness."

TRANSPARENCY DIVIDE

A major point of contention in the reform debate is the WTO's notification and transparency system. While all members agree that transparency is vital, they fundamentally disagree on why the system is failing and how to fix it.

The small coalition of industrialized countries - the US, EU, the UK, and Japan - seems to view the notification deficit as a willful evasion of obligations by "bad actors", said people familiar with the development.

In its proposal (WT/GC/W/998), the US cites a December 2025 Report stating that the "actions of Members with economic systems that are incompatible with the principles of the WTO have tilted the playing field away from free market economies and have eroded trust in the ability of [the WTO] to ensure fair treatment in global trade."

The US points to some alarming statistics: "As of the final meeting of 2025 of the Committee on Subsidies and Countervailing Measures, 113 Members - more than two-thirds of the Membership - had not submitted their 2025 notification."

The US argues that "for certain Members, this reflects a choice not to be transparent." To fix this, the US and the EU advocate for a punitive and incentive-based approach.

The EU notes that "the design of the current transparency regime contains too few incentives to notify," and explicitly recommends that "notified measures should enjoy better treatment than non-notified measures."

The LDCs strongly pushed back against this narrative, said people familiar with the development.

The LDCs argue that their "notification challenges stem from structural capacity gaps, not from disregard of the rules."

The LDC group appears to assert that this deficit "cannot be resolved through short-term assistance alone," requiring instead long-term investment and adequate technical and financial support.

While they support facilitative tools like a "one-stop-shop" notification portal, the LDC Group vehemently "opposes any punitive measures, including restrictions on technical assistance due to contribution arrears."

They demanded that an "LDC suffering from arrears should be allowed access to documents and reports to ensure that no LDC is left behind."

THE DEVELOPED PERSPECTIVE

The advanced economies - primarily the US, EU, the UK, and Japan - view the lack of disciplines on state intervention and market-distorting subsidies as the primary threat to a level playing field.

In its proposal (WT/GC/Reform/W/5), the EU seems to focus heavily on the regulatory gaps concerning state trading enterprises.

The EU points out that outside of State Trading Enterprises (governed by GATT Article XVII) and general subsidy rules (the ASCM), "there is no specific WTO agreement addressing the potentially distortive conduct of other State enterprises in the marketplace."

However, the EU notes that many members have taken on strict disciplines on State Trading Enterprises in their accession protocols and over 100 Free Trade Agreements (FTAs).

Therefore, the EU argues that "for many WTO Members, commercial considerations and non-discrimination are already a widely shared international norm for the behaviour of state enterprises in the marketplace."

The EU proposes mapping these existing commitments to consolidate them into binding WTO rules establishing obligations on commercial considerations, non-discrimination, and transparency.

In its proposal (WT/GC/Reform/W/4), the UK seems to agree with the EU, noting that the WTO framework is outdated.

The UK argues that the WTO "does not capture the full range of economic effects generated by new and increasingly prevalent policy tools or forms of state intervention and cannot address poor or deteriorating compliance with transparency obligations."

In its proposal (WT/GC/Reform/W/8), Japan takes the most aggressive stance on industrial subsidies and overcapacity, focusing on Non-Market Policies and Practices (NMPPs) - seemingly targeting China, said people familiar with the development.

Japan warns that "NMPPs, which expand production capacity and supply in ways not driven by market principles, lead to a decline in international prices and reduce investment, thereby causing adverse effects on industry and the employment markets of other Members."

Crucially, Japan points out that this hurts the developing world as well, noting that the spillover of unduly low-priced products, "particularly, in developing countries, hinders their industrial development and deprives them of opportunities for economic growth."

To address this, Japan proposes radical updates to the WTO rulebook.

To fix the transparency failures, Japan suggests "rendering prohibited any non-notified subsidies that were counter-notified by another Member, unless the subsidizing Member provides the required information in writing within set timeframes."

To strengthen the substantive rules, Japan advocates for adding new categories of prohibited subsidies, such as unlimited debt guarantees and subsidies to insolvent enterprises without a restructuring plan. +