WTO Deadlock Due to U.S. Obstruction... EU Proposes Establishing Alternative Organization

Von der Leyen: "EU Hopes for Structural Cooperation"
WTO Virtually Paralyzed Since First Trump Administration
German Chancellor Reaffirms Plan for WTO Alternative at Press Conference

Ursula von der Leyen, President of the European Commission, is speaking at a press conference held during the EU summit in Brussels, Belgium, on the 26th (local time). Photo by EPA

On the 26th (local time), the European Union (EU) proposed "structural cooperation" with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in the Asia-Pacific region as an alternative to the World Trade Organization (WTO). The initiative aims to establish a new foundation, led by Europe, to replace the WTO, whose functions have been virtually paralyzed due to U.S. obstruction since the first Trump administration.

Ursula von der Leyen, President of the European Commission, stated at a press conference following the EU summit in Brussels, Belgium, that "we have presented member states with various options for engaging in free trade with countries that desire it." She specifically noted, "From my perspective, the most attractive and interesting option is the CPTPP. The Asian member countries wish to pursue structural cooperation with the EU, and the EU feels the same way."

She emphasized, "This could be the beginning of redesigning the World Trade Organization (WTO)," adding, "The aim is to show the world that free trade is possible within a rules-based framework." She also remarked, "If the CPTPP and the EU work together, it would be a formidable alliance, so I believe we should actively pursue this."

The CPTPP, led by Japan, is a mega free trade agreement (FTA) aimed at eliminating tariffs and achieving economic integration among countries bordering the Pacific Ocean. After the United States withdrew during the first Trump administration, Japan and 10 other countries maintained their membership, and the United Kingdom was accepted as a new member in December of last year. South Korea also sought to join during the Moon Jae-in administration, but the effort was thwarted by deteriorating Korea-Japan relations and domestic opposition. The task was handed over to the administration of former President Yoon Suk-yeol but remains incomplete.

The EU's proposal comes at a time when the WTO's global dispute arbitration function has been effectively paralyzed. Since December 2019, during the first Trump administration, the United States has continuously blocked the appointment of appellate body members, rendering the WTO unable to function. The two-stage dispute settlement system has also been neutralized. Euronews pointed out, "Negotiations on issues such as reducing fisheries subsidies and reforming agricultural regulations have stalled due to differences in positions among major member states, including the U.S., Japan, and Europe."

German Chancellor Friedrich Merz also confirmed at a press conference following the meeting that President von der Leyen had proposed the establishment of a 'WTO alternative organization,' expressing his support by stating, "If the WTO continues to be dysfunctional in the coming years as it has in the past, we must prepare other options." However, he added, "This is still a very early-stage idea."