EU To Set Up Global Trade Alternative, Challenging US Dominance

EU To Set Up Global Trade Alternative, Challenging US Dominance (Worthy News In-Depth)

Stefan J. Bos

Preparations are underway to establish a European Union-led alternative to the World Trade Organization (WTO) as part of a new global marketplace that would challenge America’s economic clout.

The EU’s executive, European Commission President Ursula von der Leyen and German Chancellor Friedrich Merz, say the WTO, founded in 1995, is broken.

“You all know that the WTO doesn’t work anymore,” Merz told the media, adding that a “new kind of trade organization” could gradually replace “what we no longer have with the WTO.”

The German chancellor referred to the WTO’s dispute resolution mechanism’s “near-total breakdown.”

Yet questions remain about how to replace the world’s largest international economic organization, which has 166 members representing over 98% of world trade and global Gross Domestic Product (GDP).

Commission President Von der Leyen said the EU could opt for closer cooperation with members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a regional trade pact of 11 Pacific Rim countries and Britain.

“I said that we can think about this as the beginning of redesigning the WTO—of course, understanding what should be reformed positively within it,” Von der Leyen told reporters after the summit.

She stressed the importance of learning from the WTO’s shortcomings and showing the world that “free trade based on rules” remains achievable with a broad group of willing partners.

“This is a project we should truly engage in. CPTPP and the European Union—that’s my team,” she said, adding that the EU must take the lead in managing this initiative.

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