The Way Forward for the WTO Post-MC14 and China’s Role

This paper will be included in the University of Ljubljana’s compilation “The World Trading System in Dire Straits: Legal Challenges, Tariff Disputes, and the Future of the World Trade Organization,” to be published in autumn 2026.

Full text is as below:

The Way Forward for the WTO Post-MC14 and China’s Role

Xiankun LU, FMG Geneva

1. WTO 14^th Ministerial Conference (MC14) in March, and the follow-up General Council in May 2026, ended with little progress on the multilateral front (SVEs, TBT/SPS S&D Provisions, and fisheries subsidies). Nothing was agreed on key issues like WTO Reform, or agriculture which was absent consecutively from 3 past MC results. For many trade wonks, this was not surprising since, in their eyes, multilateral negotiations in the WTO, since 2008, is always a descending spiral, with a few twitches (IFA, fisheries subsidies, accessions, etc.), but the general trend remains worryingly unchanged.
2. Having said that, there are some encouraging movements on the plurilateral front, with the Joint Statement Initiatives (JSIs). IFD and e-commerce, albeit rejected by India for their incorporation into Annex 4 of the WTO Agreement, both committed to “just do it”, i.e. “to explore interim and autonomous implementation of the Agreement” (IFD), or “to implement the Agreement on Electronic Commerce as soon as possible” through “the interim arrangements…to bring the Agreement into force”. Other plurilateral initiatives, such as MPIA, MSMEs, trade and gender, FFSR, all issued ministerial statements intending to move ahead. EU and CPTPP also issued joint statements which offered some slim hopes for a coalition leadership that is earnestly needed after Trump abandoned the US leadership role in the WTO.
3. Looking back, the multilateral-front failure merely confirmed the long-standing worries that the world has changed, and the WTO has not adapted, hence paralyzed in delivering its functions, while the plurilateral-front movements, albeit encouraging, cast some doubts on whether they are enough to preserve, and to advance, the system. On the other hand, we continue to witness geopolitical tensions, trade measures bluntly defying WTO principles like MFN, and bilateral deals undermining the multilateral trading system (MTS).
4. Looking ahead, many envisage a quite pessimistic picture about the MTS and international trade, forecasting more unilateralism, more securitization, more balkanization, more fragmentation and, behind all these, the worsening geopolitical tensions and rivalry among major players particularly US-China. So, many believe that the way forward for the WTO and MTS will be a bumpy one. And they tend to ask two questions:
   1. whether the current system (mainly GATT plus a little bit of WTO agreements) can be preserved and, if yes, how;
   1. whether the system can be advanced and, if yes, how.
5. On question 1), the answer might be “it depends”-it depends on how other WTO Members act, and on whether they can act jointly. The current system can still be preserved if, when some others go low by defying the system and its principles and embracing protectionist policies, they can go high by continuing to honor WTO principles, to resist temptation for protectionist measures, to utilize WTO bodies to discuss initiatives and to resolve disputes.
6. On question 2), the answer might be “yes, but”-yes, the organization will move ahead, but differently-in plurilateral format by a sub group of the 166 Members with variable geometry depending on the issue. Plurilateral agreements will be applied autonomously by participants, through interim arrangements and outside the WTO, if their agreements are blocked by a few, or only one, to be integrated into the WTO acquis.
7. Having said that, we need to start doing serious thinking if this trend continues towards a kind of new system-what I call “WTO 2.0”, with more and more plurilaterals, and applied outside “WTO 1.0”. We need to ask ourselves some questions:
   1. The first and the big question naturally is: how can we ensure that this “WTO 2.0” will not erode “WTO 1.0” and reduce its relevance? What mechanisms do we need to apply to make sure that these two interact, intersect, and eventually integrate, and not the other way around?
   1. how to build up synergy among different plurilaterals and avoid silo work, e.g. through an informal mechanism to group together all plurilaterals, exchange information and views, and eventually synergize them?
   1. What administrative and legal mechanisms are needed to better serve the plurilaterals and to resolve potential disputes, again, in a holistic way? One crazy idea might be to establish a small-scale secretariat and to use MPIA to serve all agreed plurilateral initiatives except those few with their own dispute settlement mechanism like e-commerce? MPIA itself also merits some serious thoughts on its institutionalization and better service to the mechanism and its 10 arbitrators, without which its authority will be gradually eroded, as said by some insiders.
   1. Last but not least, what shall we do to better the developmental aspect of plurilateral initiatives, not merely to persuade developing countries and LDCs to join plurilateral initiatives, but to include solid provisions to make sure that they benefit from such initiatives and help integrate them into MTS and international trade, an objective established in the WTO preamble in 1995 but remains to be fulfilled;

• Finally on China, the challenges are particularly daunting. 25 years after accession have substantially transformed China and, said by many, the global trade order. China is shifting from a rule-taker to a rule-maker, and is trying to play a leadership role, albeit a different one, and unilaterally open up its markets by cutting its applied tariff to 7.3% (under the WTO biding level of 9.8%), granting imports from LDCs duty-free and quota-free treatment (DFQF), and recently extending such DFQF treatment to all African countries. At the same time, China says it will advance domestic reforms, including by aligning itself “with high-standard international economic and trade rules”, and “expand institutional opening–up with regard to rules, regulations, management, and standards”.
• The question is how to translate these political commitments into concrete actions in WTO reform discussions, and to do this at an expedited manner.

Many believes that, with China’s rise as a major power, the system needs to be rebalanced in terms of rights and obligations among major players. China, while maintaining its developing country status, has announced last year to give up S&D in on-going and future WTO negotiations. Is that enough? Can we envisage negotiations to further that rebalancing? What will China demand as trade-offs?

Many also calls to seriously look at the spill-overs effects of Chinese different economic system. This touches upon issues like industrial policies, subsidies, and SOEs. MC14 WTO Reform facilitator tabled a draft of the workplan on WTO reform, with a specific pillar on “level playing field”, focusing very much on such issues. Chinese leader did say in 2021 that China will participate in WTO negotiations “with a proactive and open mind” on issues like industrial subsidies and SOEs. Chinese Commerce Minister WANG Wentao also told WTO DG on May 22^nd this year that China “is ready to work with other Members to collectively advance WTO negotiations including on level playing field issues”.

1. Then, what can China do specifically? As a Chinese scholar, Mr. CHEN Zhanran said in his book “Waking-up Thoughts” (《寤言》) in 1902: “He who does not plan for the long term cannot plan for the short term; he who does not consider the whole cannot manage a part.” So, let’s me share a few thoughts in a holistic and long-term perspective:
2. 1. At technical level, China needs to:
      1. Help advance ongoing discussions to develop interim arrangements to autonomously implement the finished plurilateral agreements on IFD, E-commerce, and others to follow;
      1. Help develop more plurilateral initiatives to feed steam into the WTO plurilateral, e.g. on services, sustainability (green supply chain, green mining of minerals), smart customs, etc.;

On both, of course with the big question just mentioned about “WTO 1.0” and “WTO 2.0”.

1. To participate proactively in WTO discussions on level playing field issues. This will not be a China-specific negotiation since other major players like the US and EU are also applying industrial policies and subsidy measures. However, given the controversy around China in the past years on the spill-over effects of its economic system, the sensitivity is understandably higher for China than for other major players, and the key for the success of these discussions will be to draw a clear line between the technical spill-overs and the system per se.
   1. At horizontal level, China can help promote developmental aspects of plurilateral negotiations. Not only its own experiences to upgrade itself from a poor and weak country (GDP 1.3 trillion USD in 2001 at WTO accession) to a major economic power (1.9 trillion USD in 2025) could be usefully shared with other developing countries, China has already made some efforts to help enhance developmental aspects of various plurilateral initiatives, e.g. IFD, which has a specific development pillar and has attracted most developing country participants (over 90 including about 20 LDCs). Development is a priority for many developing countries on WTO reform and various initiatives proposed. For example, when we talk about industrial policies, developed countries underline that it is about industrial subsidies, while developing countries, like African Group, underline that it’s about industrialization. And when we focus more on “behind border regulations”, developing countries are still attached to “at border barriers” like tariff peaks and tariff escalations mostly developed countries.

Various ideas to do this by China include: lead to formulate a development pillar within various plurilateral initiatives, with good lessons from previous agreements like TFA (multilateral) and IFD (multilateral); provide more targeted TA/CB assistance to other developing countries, multilaterally through China Program in the WTO and bilateral channels; help expand MPIA by including more developing countries, particularly LDCs, like what they have done to expand IFD participation into the most representative JSIs.

• Last but not least, at the political level: China should work with other interested WTO Members to launch a political-level dialogue on macro aspects of the WTO and MTS. MC14 has tried to do similar things through its “breakout sessions”, albeit with limited impact given the formats of such sessions, said by some delegates. Any new dialogue like this should be ministerial level, smaller group, closed-door under Chatham House, and well-prepared to target issues such as: geopolitical tensions, WTO reform orientation, as well as decision-making, dispute settlement, key principles like MFN, plurilaterals and MTS. Having said that, the very success of any WTO reform, and this political dialogue for that purpose, will depend on whether answers could be found for the following two questions:Whether US and China could find a common understanding to allow co-existence of different systems in the WTO. The gap between the two countries is surely huge, but an answer has to be found or, before that, some parameters have to be set up; Whether other WTO Members could play a role between US and China to help bridge that gap as honest brokers, instead of enlarging the rift by taking sides.

One should also envisage a Track II dialogue among independent experts to discuss concrete ideas and solutions to feed into the above-mentioned dialogue. This could be done in Geneva as well as China forum like Hongqiao International Economic Forum (HQF) at Shanghai.

The reason for such efforts is simple: without clearing the big picture behind the WTO crisis, and restoring the trust among major players, incremental progress will be of helpful to sustain the last breaths of MTS, but won’t get it out the ICU.

(The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy or position of any organization, agency, or government.)