The US Push to Redefine the WTO

Why the US Wants WTO Reform Now

In a statement on December 12, 2025, the United States Trade Representative's office outlined a sweeping proposal to revamp the World Trade Organization's (WTO) decision-making architecture. At the core of this push is the dissatisfaction with the WTO’s consensus-based rule-making, which the US has bluntly described as "paralytic." With 166 member states, getting all parties to agree on new trade norms has proven torturous — as evidenced by the WTO’s failure to conclude the Doha Development Round, despite 14 years of negotiations. The message? Trade multilateralism in its current form is unsustainable, and a shift to plurilateralism may be inevitable. This stance represents one of the most explicit calls for institutional disruption in the WTO's 30-year history.

Breaking Patterns in Global Trade Governance

Plurilateral agreements are not new, but their endorsement as the “future” of WTO rule-making is revolutionary. These agreements limit participation to willing members rather than needing universal consensus. While this approach may accelerate outcomes in niche areas, it risks segmenting global trade rules into fragmented blocks, undermining the WTO’s founding philosophy of unified regulations.

The US vision also seeks to restrict Special and Differential Treatment (S&DT) privileges, which have allowed developing nations to opt out of certain obligations citing their economic development gaps. For instance, India and China have historically benefited from relaxed tariff reduction commitments under S&DT. By advocating such provisions solely for Least Developed Countries (LDCs), the US is setting up a collision course with emerging economies, many of which argue that development differentials merit nuanced flexibility rather than rigid categories.

Another break from tradition comes in its critique of the Most-Favoured-Nation (MFN) principle — historically the bedrock of the WTO's non-discriminatory trade policy. The US contends that MFN’s insistence on uniformity is misguided in an era where major economies operate under divergent rules, including state-driven industrial models in China. This marks a sharp policy U-turn that challenges decades of trade liberalization ideology.

Mechanisms and Machinery Behind the Reform Push

The reforms proposed fall largely within procedural guidelines of the WTO Agreements, though their execution will require collective negotiation. For instance:

• The advocacy for plurilateralism aligns with Article X of the Marrakesh Agreement, allowing amendments via members' consensus or substantial votes. However, bypassing universal participation is not explicitly authorized.
• Restricting S&DT would hinge on redefining criteria under the General Agreement on Tariffs and Trade (GATT). Currently, S&DT is loosely formulated under provisions such as Article XVIII, allowing self-identification of development status.
• On the MFN principle, altering rules would require renegotiating GATT Article I — a Herculean task akin to amending global constitutional frameworks.

The WTO Secretariat has also been targeted by the US, accused of overreaching its administrative role by producing unsolicited research and amplifying commentary on trade imbalances beyond mandates. This critique could serve as a wedge in diluting the Secretariat’s capacity as a neutral repository of trade data.

The Numbers Behind the Tensions

The US complaints about trade distortions tie prominently to its $418 billion goods trade deficit with China as of 2024. Unsurprisingly, the reform proposals emphasize curbing "non-market practices," indirectly targeting state interventions like Chinese subsidies that sustain industrial overcapacity. Yet, empirical research complicates this narrative — the IMF found that only 35% of China's export competitiveness stems from such practices, with efficiency gains and labor costs forming the bulk.

On S&DT, India and China have drawn criticism over their continued classification as "developing" despite holding GDP figures of $3.7 trillion and $19.1 trillion, respectively, in 2024. Limiting S&DT to 46 Least Developed Countries (LDCs) — whose combined GDP is under $750 billion — seems disproportional, though the US insists this would restore fairness.

A third flashpoint is regulatory compliance. Per the WTO’s Trade Monitoring Report, the average notification submission accuracy rate between 2010 and 2022 hovered around 68% among developing members, compared to 91% for developed nations. The US proposal for stricter penalties will disproportionately affect weaker economies struggling with technical capacity.

Uncomfortable Questions and Overlooked Risks

The ironies in the US proposals cannot be ignored. While it criticizes unequal trade practices, its push to charter plurilateral agreements risks creating parallel systems where major economies dominate deals tailored to their preferences. Can the WTO remain credible while promoting fragmentation? Hard to say.

Additionally, economic security concerns — though legitimate — are being narrowly framed. Is trade policy truly the panacea for geopolitical vulnerabilities, or does this expectation oversimplify broader structural realities like production dependencies? The proposals seem to sidestep this complexity.

The US critique of the WTO Secretariat raises valid points but could also hamstring crucial monitoring activities. Transparency reports and policy reviews by the Secretariat are often essential for exposing systemic trade barriers — not just bureaucratic overreach. Curtailing its research mandate could create blind spots in global trade oversight mechanisms.

The Comparative Lens: South Korea and Plurilateral Successes

One successful use of plurilateralism can be seen in South Korea's participation in the Information Technology Agreement (ITA) — a WTO plurilateral signed in 1996. ITA covers tariff eliminations on technology products among its 55 signatories, including South Korea. This narrowly targeted scope fast-tracked outcomes in the sector, boosting South Korea's exports by nearly 12% annually between 1996 and 2016.

However, the ITA had a double-edged impact. Non-signatories outside the agreement faced discrimination in market access, reinforcing the risk that plurilateralism fosters trade hierarchies instead of universality. South Korea's experience thus illustrates both potential and pitfalls of such arrangements.

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