EU's Pacific alliance would not replace WTO, EU officials say

EU's Trade Alliance with Pacific Nations Aims to Support WTO, Not Replace It

By Philip Blenkinsop

BRUSSELS (Reuters) -The European Union's plan to cooperate with Pacific Rim countries would aim to overcome some of the difficulties of the World Trade Organization, but would not seek to replace it, EU officials said on Friday.

The WTO is struggling for relevance as geopolitical tensions rise and the United States imposes unilateral tariffs, flouting its WTO commitments.

European Commission President Ursula von der Leyen told reporters late on Thursday that "structured cooperation" with the 12-nation Comprehensive and Progressive Agreement for Trans-Pacific Partnership , or CPTPP, could be thought about "as a beginning of redesigning the WTO".

German Chancellor Friedrich Merz went further, saying the new trade grouping could gradually replace the WTO.

On Friday, however, EU officials said the plan did not entail setting up a rival to the WTO.

Instead, the Commission said cooperation with the CPTPP was a way to advance a modern, rules-based trading system when the WTO urgently needs reform.

"We are working closely with like-minded partners, including CPTPP countries, to advance meaningful, rules-based reform that upholds fair and open global trade," it said in a statement.

One area of work could be setting up a system to settle disputes, required because the United States has blocked appointments to the WTO's Appellate Body, the ultimate arbiter on global trade.

The EU-CPTPP cooperation would also be designed to send a political signal that a large number of countries support open and rules-based global trade.

The CPTPP is a 12-nation free trade agreement between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam, which Britain joined late last year.

(Reporting by Philip Blenkinsop; editing by Barbara Lewis)