The United States’ latest articulation on reforming the global trading system, submitted to the WTO General Council in December 2025, marks a pivotal moment for multilateral trade governance. Rather than signalling a renewed commitment to the World Trade Organization, the paper reveals a deeper scepticism about the institution’s capacity to address contemporary trade challenges — and a preference for unilateral, bilateral, or selectively plurilateral pathways.
What the US Has Put on the Table
The US submission to the responds formally to three reform themes identified by the WTO facilitator — decision-making, special and differential treatment (S&DT), and ensuring a level playing field. Yet its scope goes far beyond these headings.
Washington questions the continued centrality of the most-favoured-nation principle, criticises the evolving role of the WTO Secretariat, rejects any scrutiny of national security trade measures, and argues that several core trade problems are simply not solvable within the WTO framework. Taken together with the Trump administration’s reliance on tariffs and selective trade deals, the paper signals not rejuvenation but retreat from trade multilateralism.
Decision-Making: Plurilaterals as the Default
On rule-making, the US places almost exclusive faith in plurilateral agreements — negotiations among subsets of willing members. It argues that consensus among 166 diverse economies is unrealistic, especially for new disciplines involving digital trade, subsidies, or industrial policy.
Plurilaterals, limited to consenting participants, are presented as the only practical way to keep the WTO relevant as a negotiating forum. However, the paper leaves key questions unanswered: why should WTO resources be used for agreements not binding on all members, and how are the interests of non-participants to be protected? Countries such as India have long warned that unchecked plurilateralism risks fragmenting a carefully balanced multilateral system.
S&DT: A Hard Line on Differentiation
On special and differential treatment, the US takes an uncompromising stance. It argues that flexibilities should be confined largely to least developed countries, with all other members subject to the same rules regardless of economic disparities. Any deviation, it insists, must be rigorously justified.
This approach effectively dismisses the development gradient that underpins much of the WTO’s legitimacy for developing countries. It also ignores structural differences in income, capacity, and adjustment costs that persist well beyond LDC status.
Level Playing Field: Transparency Without Discipline
The US diagnosis of distortions caused by non-market policies and practices — widely understood as referring to China — resonates with many members. However, its proposed remedy focuses narrowly on enhanced transparency and stricter compliance with notification obligations.
There is little appetite in the paper for negotiating new disciplines on subsidies, state-owned enterprises, or industrial policy — areas where the hardest trade-offs lie. Transparency, while necessary, is presented as sufficient.
What Washington Wants the WTO to Avoid
More revealing than the US reform agenda is its list of red lines. First, it questions the MFN principle, arguing it was designed for an era of economic convergence that no longer exists. With widening divergence in economic systems, the US contends, countries should be free to differentiate among partners to optimise trade relationships. While not calling for MFN’s abandonment, the paper clearly advocates wider departures from it.
Second, the US criticises the WTO Secretariat, insisting its role should remain strictly administrative. It accuses the Secretariat of overreach through monitoring, analysis, and research not explicitly mandated by members, claiming this undermines neutrality.
Third, Washington rejects any review of national security trade measures. Following adverse rulings on steel and aluminium tariffs, it insists such determinations are self-judging. Under President Donald Trump, this justification has expanded to cover automobiles, timber, copper, and more.
Problems the US Says the WTO Cannot Solve
The US goes further by arguing that the WTO is fundamentally ill-suited to address persistent trade imbalances, overcapacity, and production concentration — again implicitly pointing to China. It asserts that beneficiaries of such practices will never agree to binding rules that undermine their advantages.
Similarly, Washington dismisses the WTO as a forum for economic security and supply-chain resilience, arguing these issues require trust, confidentiality, and shared strategic interests that the WTO lacks. In its view, the organisation’s bias toward efficiency and liberalisation downplays systemic vulnerabilities.
What This Signals for Multilateral Trade
While parts of the US diagnosis are valid, the remedies proposed focus more on limiting the WTO’s role than on strengthening it. This signals a preference for legitimising recent US actions — unilateral tariffs, selective deals, and expansive national security exceptions — rather than rebuilding consensus-based rules.
The US may have the power to operate outside multilateral disciplines. Most countries do not. If other major economies emulate this approach, systemic instability becomes likely.
India’s Broad Policy Response
From India’s perspective, defending the MFN principle is essential. Dilution would entrench power-based bargaining and disproportionately harm developing countries that rely on predictable, rules-based trade. Stability in trade rules remains critical for investment and growth.
On economic security, India could push for multilateral solutions rather than unilateral carve-outs. One option is to expand the WTO Safeguards Agreement to address strategic vulnerabilities, allowing members to limit excessive dependence on single suppliers for critical goods without invoking dumping or subsidy claims.
On S&DT, restricting flexibilities solely to LDCs is too blunt. A more calibrated approach — based on World Bank income classifications with transition periods — would better reflect economic realities. Finally, while plurilateral agreements should be approached cautiously, outright rejection may be impractical when such initiatives enjoy broad support, as with the Investment Facilitation agreement. A solution-oriented balance is needed.
What to Note for Prelims?
- The US submitted its WTO reform vision in December 2025.
- Key issues include decision-making, S&DT, and level playing field.
- The US favours plurilateral agreements over consensus multilateralism.
- MFN principle and WTO Secretariat’s role are being questioned.
What to Note for Mains?
- Critically examine the implications of US-led WTO reform proposals.
- Discuss the risks of diluting the MFN principle for developing countries.
- Analyse plurilateral agreements within a multilateral framework.
- Evaluate India’s strategic interests in preserving WTO centrality.
The Road to Cameroon 2026
With sharply divergent reform visions on the table, expectations of consensus at the WTO Ministerial Conference in Cameroon in March 2026 are modest. At best, members may agree on a framework for continued discussions. The deeper question remains whether the WTO will evolve as a shared institution for managing interdependence — or fragment into a platform of convenience for the most powerful.
