DDG Ellard cites urgent need to boost multilateral trading system in university speech

Good afternoon, distinguished faculty, students, guests, and friends of Waseda University.

It is an honor to join you today at this renowned institution, which has long been a beacon of academic excellence, innovation, and global impact. Waseda University was built on the principle of fostering individuals who would contribute to society, not just within Japan, but across the world. Over the past 140 years, this university has remained true to that mission, shaping leaders, thinkers, and innovators who have gone on to make profound contributions in business, politics, culture, and science.

Waseda's commitment to international collaboration and forward-thinking research continues to make it one of the top universities not just in Japan, but in the world. In the field of international trade law, I would like to extend my gratitude to Professor Fukunaga (Waseda University), as well as Professors Araki (Yokohama National University) and Kobayashi (Otaru University of Commerce) for their valuable contributions and for joining us today.

It is my great pleasure to share my views concerning the global trading system today before trade scholars at an institution of such international renown.

In my speech today, I will begin by briefly introducing the WTO and highlighting the benefits of the multilateral trading system. I will then outline the current negotiating priorities of WTO Members and touch upon the current geopolitical landscape. Finally, I will take the opportunity to inform students about potential career opportunities with the WTO.

Ladies and gentlemen, this year marks the WTO's 30th anniversary, and almost 80 years ago, its precursor, the GATT, was founded as part of the Bretton Woods post-war system. The WTO sets the economic rules of the road for its 166 Member economies, including Japan. Members make decisions by consensus, which means that everyone must agree – or at least not disagree – to adopt a decision. Each Member has an equal voice, regardless of size, political system, or economic might, as well as the power to block any decision – this is not a "majority rules" system. No single Member dominates the system – not the United States, which accounts for 15.9% of global goods imports, nor China, with its share of 12.8%. Reaching consensus among 166 Members is not an easy task, and negotiating international agreements is a long-term endeavor. However, when consensus is achieved, it means that all Members are fully committed – they "own" the agreement and so it is more durable.   

Over the past three decades, open global markets, supported by the WTO, have fuelled trade growth, driving productivity, specialization, and competition. As a result, the share of people living in extreme poverty in low- and middle-income economies dropped from 40% in 1995 to under 11% in 2022, the most recent data. Never before have the living conditions and prospects of so many people improved so rapidly.

Japan itself is a powerful example of how trade can transform lives, having embraced trade-led growth as an engine of its postwar economic revival. Since joining the General Agreement on Tariffs and Trade (GATT) in 1955, Japan has played a pivotal role in shaping international trade policies and upholding the multilateral trading system with the WTO at its core.

These days, it is tempting to think that trade is just about tariffs. And of course the WTO is about trade in goods and the tariffs charged at the border. But trade, and the WTO, are about so much more, and the WTO is designed to manage a wide array of issues.  We are also about trade in services, including digitally delivered ones, which make up the fastest growing segment of global trade. In 2023, services exports totalled US$4.25 trillion, a 9% increase compared to the previous year, representing 13.8% of global goods and services exports. In addition, WTO rules compel governments to rely on international standards when adopting trade measures.  We protect intellectual property and fight illicit trade.  We also address how trade is managed at the border, to streamline customs processes, reduce red tape, and manage risk intelligently, including through the increased use of modern digital tools. In sum, the WTO is much more than just tariffs.

Having outlined the broader scope of the WTO, I will now highlight the key negotiating priorities identified by WTO Members that are shaping the Organization's agenda.

Ending Harmful Fisheries Subsidies

Let me begin with a subject that is especially important to demonstrating the success of the multilateral trading system in both economic and environmental sustainability: curbing the $22 billion spent annually in harmful fisheries subsidies.

One of our Members' most pressing priorities is to ensure the entry into force of the WTO Agreement on Fisheries Subsidies, successfully concluded in 2022 by consensus. This agreement is truly historic as the first WTO agreement with environmental and economic sustainability at its core. It contributes towards achieving UN Sustainable Development Goal 14.6 by prohibiting subsidies to illegal fishing, fishing of overfished stocks, and fishing in the unregulated high seas.

For this Agreement to take effect, two-thirds of our 166 Members – or 111 – must formally ratify it.  We need just 19 more to hit that target, and we are hoping to reach that goal by June. Ending the rapid deterioration of fish stocks is at stake.

The implementation of the Agreement will be supported by the WTO Fish Fund, which provides resources to assist developing and least-developed country (LDC) Members in fulfilling their obligations once they have accepted the Agreement.

The second priority related to harmful fisheries subsidies is concluding negotiations on additional, even deeper disciplines. Nearly all WTO Members, with the exception of just a few, have stated their readiness reach agreement based on the most recent text, which you can examine on the WTO website on the fisheries page if you are interested.  Even though most Members may not see the text as perfect, they support it because of its substantial value in curbing subsidies that contribute to overcapacity and overfishing. However, those Members that do not support it have expressed fundamental differences, and we must find a way forward. This is important not only for ocean sustainability and the food security of millions, but also for strengthening the multilateral trading system as a whole.

Japan, as one of the largest fishing nations and consumers of fisheries products, has a particularly strong interest in protecting the ocean and preserving the sustainability of marine resources, for the benefit of its own fisheries and consumers, and for the planet. In fact, Japan was one of the first to accept the Agreement on Fisheries Subsidies and made a generous contribution to the WTO Fish Fund. By continuing to lead, Japan can play a pivotal role in ensuring the entry into force of the Agreement and advancing more robust disciplines.

Dispute Settlement

The second priority is reforming the WTO’s dispute settlement system to ensure that WTO rules remain meaningful for the benefit of all Members. Japan has effectively utilized the dispute settlement system to safeguard its interests in numerous disputes. As the 6th most frequent complainant and the 10th most frequent respondent in the WTO, Japan has a significant vested interest in ensuring that the system remains robust and functional.

The WTO rulebook establishes a two-tiered dispute settlement system, where disputes are initially reviewed by WTO panels, with the option of appeal to a standing Appellate Body. However, the Appellate Body has not been operational since December 2019 due to a lack of consensus among WTO Members on appointing new Appellate Body members. The United States has been particularly vocal about its concerns regarding the Appellate Body’s functioning and what it sees as overreach in expanding substantive obligations.

However, the ability to appeal still exists in the WTO rulebook, and 32 cases have been appealed to a non-functioning Appellate Body – some call it "appeal into the void".

Members have been focusing their discussions on making the system more accessible and on addressing the question of appeal and review of decisions made by panels.  Members have made considerable progress, but further efforts are needed to resolve the outstanding issues. And WTO Members await word from the United States as to its position.

But in the meantime, the WTO continues to serve as the primary forum for resolving international trade disputes:

• Within the dispute settlement mechanism, eight disputes are ongoing, along with eleven active consultations.
• Members have developed alternatives to the Appellate Body, such as the Multiparty Interim Arbitration Arrangement (MPIA), which Japan joined in 2023.
• We have also observed an increase in negotiated solutions among Members, with the panel process often serving as a catalyst for these agreements. Since the Appellate Body stopped functioning, 27 disputes have been resolved by mutually agreed solutions, withdrawal of the complaint, or suspension of proceedings at the request of the complainant.
• In short, the dispute settlement work at the WTO remains robust.
• In addition, the WTO has plenty of tools for Members to use before they resort to dispute settlement. We have an active and vital committee system in which Members raise specific trade concerns and seek to resolve problems. The WTO structure also establishes periodic reviews of each Member's trade policies, providing the broader membership with the opportunity to monitor developments and press for change on issues that are important to them. 
• All of these tools show that the WTO is built to give Members the opportunity to resolve problems.

Agriculture

Third, it is vital that WTO Members make progress on agriculture reform. These talks began in early 2000 under the original mandate of the Agriculture Agreement and became part of the WTO's Doha Round.  Members adopted important decisions at subsequent ministerial coferences. More recently, at the 12th Ministerial Conference in June 2022, WTO Members adopted a ministerial declaration on the emergency response to food insecurity and a ministerial decision exempting World Food Programme food purchases from export prohibitions and restrictions.

WTO Members are currently negotiating agricultural trade policy reforms, with a view to making markets fairer and more competitive, while taking into account concerns such as food security and the environment. Food security is also a priority for Japan, as exemplified by the recent rice shortage crisis and effects of climate change on essential staples, including fish.

Agriculture is expected to be a central element on the agenda for our next meeting of Ministers in March 2026 because of its fundamental role in supporting food security and driving socio-economic development. Consensus has remained out of reach as to the process and timeline for these negotiations. Rebuilding trust and setting credible targets is essential to progressively restoring an effective negotiating process and achieving an agricultural outcome.

Multilateral work on e-commerce

Another critical decision point is whether to extend the moratorium on imposition of customs duties on electronic transmissions across borders. This moratorium has been in place consistently since 1998, through a series of temporary extensions, most recently at our 13th Ministerial Conference, and is set to expire next March. Japan has been a strong proponent of this moratorium. Developed and many developing members support its extension to guarantee stability and predictability for e-commerce trade, and as an important tool for development. By contrast, some developing members question it, fearing it reduces the ability to collect revenues and utilize policy space, and viewing it as perpetuating the digital divide. In an effort to reconcile these positions, we convened late last year an information session to review existing studies on the moratorium's impact, foster discussions on its scope and definition, and explore alternative taxation approaches. I urge Japan, as a strong proponent of the moratorium, to continue to engage in this dialogue and explore elements that could help establish common ground to advance.

In parallel, engagement continues under the multilateral Work Programme on Electronic Commerce, which focuses on bridging the digital divide experienced by developing countries. This work is critical to building trust among developing Members, assuring them that they will not be left behind as global rules on digital trade are developed. Members are focusing on infrastructure, connectivity, and internet access, as well as legal and regulatory frameworks, including consumer protection, privacy, and cybersecurity. The work of our Members is aimed at sharing national experiences, delving deeper into key themes, and reflecting on actionable ideas. The goal is to identify concrete steps and recommendations for Ministers' consideration at MC14.

Plurilateral initiatives

What I have just outlined pertains to our multilateral efforts, where all WTO Members are involved. Now, let me turn to the plurilateral initiatives – also known as coalitions of the willing – in which large groups of WTO Members actively participate. These initiatives represent the opportunity for like-minded Members to establish new and ambitious rules among themselves and break new ground within the WTO framework. They co-exist with the concept of multilateralism, are permitted by WTO rules, and do not reduce any WTO rights for non-participants.

In this regard, the priority for many Members is to find a way to incorporate the results of two plurilateral joint initiatives into the WTO rulebook.

The first, the Investment Facilitation for Investment (IFD) Agreement, has 126 WTO Members as parties, including 90 developing and 27 LDC Members, as well as Japan. It aims to foster sustainable development by improving the investment climate through greater transparency and predictability and to facilitate investment flows, particularly to developing and LDC Members. The proponents seek to incorporate it into the multilateral WTO rulebook as a plurilateral agreement, with its benefits applied on a most-favored-nation basis to all WTO Members. Doing so requires consensus among all Members. However, a few Members have expressed opposition, citing systemic concerns and a negative impact on multilateralism. The proponents continue work to chart a path to integrate these important disciplines into the WTO rulebook.

A second plurilateral negotiation is the Agreement on Electronic Commerce, in which Japan has been a strong leader and a co-convenor. Seventy-one WTO Members, including Japan, have concluded negotiations and presented the text for incorporation into the WTO framework. This agreement will benefit both consumers and businesses, especially MSMEs, by facilitating cross-border electronic transactions, reducing barriers to digital trade, and promoting innovation in e-commerce. It also includes provisions on cooperation and development. As a technological powerhouse with a thriving e-commerce market, Japan has a special interest in this Agreement. As with the IFD Agreement, a few Members oppose it on systemic grounds. It is now up to Japan and the other co-convenors to navigate a path forward with the opposing Members. There is much at stake for Japan.

There are also other plurilateral initiatives within the WTO, including those focused on environmental sustainability and trade in plastics, in which Japan actively participates.

Development

Two thirds of WTO membership are developing countries. Therefore, each of the workstreams I have just described carries a strong development dimension. Just a few months ago, WTO Members held a forward-looking retreat focused on leveraging trade as a tool for development and finding a path to address these issues. We will build on this successful engagement in the lead up to MC14 in March in Cameroon. 

Geopolitical context

Despite the benefits I outlined at the beginning of my speech and the potential advantages of negotiating priorities are achieved, global economic integration is viewed today by some with skepticism and caution. Trade measures and countermeasures may be announced and implemented within mere days, sometimes hours – and then as governments negotiate, they can be suspended or lifted. It's clear that this climate of uncertainty affects businesses that operate internationally and rely on complex supply chains. With the United States and China as its key trading partners and as a participant in global supply chains, Japan is particularly vulnerable to the impact of tariffs and other trade measures, even when they are imposed on others.

In my view, WTO Members navigating today's turbulent waters should remain level-headed in reacting and consider not just the immediate effects of imposing trade measures in response, but also their broader, long-term consequences on consumers, industries, and the global trading system. Instead, there is an opportunity for dialog to work through issues, including through the WTO. 

As governments and businesses make decisions, context is important. The challenges revealed over the past years are less about whether economic interdependence is dangerous and perhaps more about the consequences of overreliance on concentrated supply chains for certain critical products. The solution to this problem is not cutting off supply chains. Instead, the key is more robust and resilient supply chains and investment strategies that integrate more countries and communities, as well as small business and women-owned businesses, into the international economic mainstream. Such action ensures that the resulting gains are broadly enjoyed, benefitting economies as a whole.  

At the WTO, we refer to this as 're-globalization.' For Japanese companies, this approach presents a valuable opportunity to diversify investments and expand beyond traditional markets, strengthening supply chains and contributing to a more balanced and resilient economy. The ongoing Economic Partnership Agreement (EPA) negotiations between Japan and Bangladesh, along with Keidanren's call to explore EPAs with African countries, are important steps toward realizing this vision.

But re-globalization requires open and predictable markets. And, therefore, a stable and predictable trading environment, anchored by the multilateral trading system and the WTO, is more necessary today than ever. We were established and designed to promote transparency, stability, and predictability in global trade. Over the past 30 years, the WTO – an entity composed of its 166 Member economies – has been working diligently to uphold these principles. Despite recent developments, the WTO continues to cover 80% of global trade, showing its profound reach.

Our estimates show that a collapse of the trading order and division into two trading blocs could result in a significant double-digit loss in global GDP. This is a cost that the world simply cannot afford. Understandably, many countries in the middle do not want to be forced to choose one side or the other. The best way to prevent such fragmentation is through a robust multilateral trading system, supported by a strong and rejuvenated WTO that is fit for purpose. Therefore, rather than neglecting the WTO and its rules, WTO Members should collectively engage to reform it, modernize its rules, and ensure it is equipped to tackle today’s challenges and the concerns raised by Members. That is hard work, but it cannot be avoided.

Personal remarks and conclusion

Before I conclude, I would like to share a few more personal thoughts with the students in the audience.

As you are contemplating your future careers, allow me to offer you a piece of advice based on my own experience. You don't need to make all your career choices now, once and for all. Most likely, you will go through several iterations and reinventions in your lifetime, each of which will require different skills and building on what you did before. I started my career in large international law firms, where scorched-earth litigation was common. When I worked for the U.S. Congress as Chief Trade Counsel, passing legislation required building coalitions and consensus along and across party lines. And now, at the WTO, I see my role as a facilitator, listening to Members and helping them arrive at a meeting of the minds.

All these roles have required me to develop a wide variety of skills. Therefore, in addition to acquiring deep substantive knowledge and expertise, it's essential to constantly develop competencies valuable in any workplace: mastering your field, exploring new issues, delivering under pressure, working as part of a team, advocating but still listening, and communicating effectively and respectfully with people from different backgrounds. Be confident yet humble. After more years in the field than I care to acknowledge, I still learn something every day.

I also can't resist seizing the chance to highlight the WTO as an exciting place to work, where you can participate in resolving some of the world’s most pressing trade challenges. I encourage the students in the audience to visit our website and explore the opportunities available at the WTO, including our paid internship program. We are always on the lookout for the best and brightest talent. We need fresh eyes and curious minds to help improve the global trading system!

Ladies and gentlemen,

Today, the WTO and our Members stand at an important crossroads. Will they continue to build a global economy that is open, fair, integrated, and predictable, or will we head toward one that is capricious, fragmented, and divided? The multilateral trading order cannot be taken for granted; its strength and effectiveness depend on the active engagement of its Members. The direction our Members choose will shape the global economy for years, even decades, to come.

• If WTO Members value the WTO, they should show that the system works by delivering on its negotiating agenda.
• If they consider WTO rules inadequate or imperfect, they should collaborate to strengthen and improve them.
• If Members think that their interests are being harmed by measures taken by other Members, they should make full use of the WTO’s platform – whether through our vibrant committees, bilateral consultations, or the dispute settlement system – to address and resolve these issues constructively.
• And as governments consider how to respond to actions taken by others, they should remain calm and constructive to avoid a downward spiral that hurts everyone. 

I was struck by a powerful Japanese saying that I heard recently:  adversity is the seed of growth. It is undeniable that the WTO must be reformed to reflect how the world has been changing in dramatic ways over our 30-year existence. The Organization must evolve to remain relevant and effective. You, by generating ideas or pursuing a career in international trade, are an integral part of that effort.

So let’s seize this moment to collectively build a resilient and sustainable global economy – one that is anchored by a reformed and revitalized WTO.

Thank you for your gracious attention.  Now, let's have a discussion.

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