🚨 WTO

Today Korean Social News for Beginners | 2025.11.23

0️⃣ The Role of the World Trade Organization and the Challenge of Restoring the Multilateral Trading System

📌 "Restoring WTO Functions Benefits Everyone" — Korea Emphasizes Multilateral Trading System at G20

💬 At the G20 Summit held in Johannesburg, South Africa on November 22, 2025, President Lee Jae-myung emphasized that restoring the functions of the World Trade Organization (WTO) is in the interest of all countries. Amid strengthening US protectionism, he stressed the importance of free trade and the multilateral trading system, and stated that Korea will cooperate for the success of next year's WTO Ministerial Conference in Africa. In particular, he presented plans to adopt the 'Investment Facilitation Agreement' that Korea has been leading as an official WTO agreement, expressing his will to actively create a stable and predictable trade environment. Despite the absence of major world leaders, Korea clearly stated its position to play a leading role in WTO reform and restoration of the multilateral trading system.

💡 Summary

• The WTO is the central organization for world trade that creates international trade rules and resolves disputes.
• Recently, the WTO's role has been threatened by the spread of protectionism and weakening of the dispute settlement body.
• Korea aims to create a stable trade environment through adoption of the Investment Facilitation Agreement and restoration of WTO functions.

1️⃣ Definition

WTO (World Trade Organization) is an international organization established to regulate and promote international trade, serving as a multilateral body responsible for negotiating trade agreements among member countries, resolving trade disputes, and reviewing trade policies. It was officially launched on January 1, 1995, under the Marrakesh Agreement and succeeded the General Agreement on Tariffs and Trade (GATT).

The WTO currently has 164 member countries and is truly the center of the global trade system, accounting for about 98% of world trade. Its headquarters is in Geneva, Switzerland, and its main goals are reducing trade barriers, resolving disputes, and creating a transparent trade environment.

💡 Why is this important?

• It creates a predictable and stable trade environment by unifying international trade rules.
• It provides a fair resolution mechanism when trade disputes occur, checking unilateral actions by powerful countries.
• It provides technical support and trade capacity-building opportunities for developing countries.
• It contributes to global economic growth and increased consumer welfare through expansion of free trade.

2️⃣ Current Status of the WTO and Key Issues

📕 Background and Development of the WTO

• International trade order organization began after World War II. Key developments are as follows:

  • In 1947, 23 countries signed the General Agreement on Tariffs and Trade (GATT), laying the foundation for international trade norms.
  • GATT greatly contributed to post-war global economic recovery through tariff reduction and removal of trade barriers.
  • Through the Uruguay Round negotiations from 1986-1994, new areas such as agriculture, services, and intellectual property rights were included in trade discussions.
  • In 1995, the WTO was launched as a more comprehensive international organization replacing GATT.

• The WTO has stronger authority than GATT. Key differences are as follows:

  • While GATT was a provisional agreement, the WTO is a formal international organization with clear legal status.
  • It comprehensively covers not only goods trade but also services trade (GATS) and intellectual property rights (TRIPS).
  • It has a binding dispute resolution mechanism through the Dispute Settlement Body (DSB).
  • Through the Trade Policy Review Mechanism (TPRM), it regularly reviews member countries' trade policies and ensures transparency.

📕 Recent Challenges Facing the WTO

• The resurgence of protectionism threatens the multilateral trading system. Key situations are as follows:

  • Since the Trump administration, the US has strengthened tariff increases and unilateral trade measures under "America First."
  • Measures bypassing WTO rules have increased, such as trade conflicts with China and high tariffs on steel and aluminum.
  • The trade environment has become unstable as countries increase non-tariff barriers to protect domestic industries.
  • The trend toward self-centeredness has intensified further with supply chain reorganization after the COVID-19 pandemic.

• The WTO dispute settlement body has been virtually paralyzed. Key problems are as follows:

  • The function has been suspended since December 2019 as the US continues to refuse to appoint members to the Appellate Body.
  • Without the Appellate Body, final rulings are impossible and dispute resolution is delayed.
  • If a dispute party objects to a first-instance ruling, it can be delayed indefinitely.
  • This has greatly weakened the WTO's core function of resolving trade disputes.

• Progress in new negotiations is difficult and consensus is delayed. Key problems are as follows:

  • Because the WTO operates on the principle of consensus among all members, negotiations can be blocked if even one country opposes.
  • The Doha Development Agenda (DDA) negotiations that began in 2001 have been drifting for over 20 years without progress.
  • Agreements in key areas such as agriculture and services are difficult due to large differences between developed and developing countries.
  • The development of norms for new issues such as digital trade and the environment is also delayed.

💡 Major Challenges Facing the WTO

1. Spread of protectionism: Increase in unilateral trade measures by major countries like the US
2. Paralysis of dispute settlement body: Dispute resolution impossible due to suspension of Appellate Body function
3. Delayed consensus: Difficulty in negotiation progress due to consensus system
4. Lack of response to new issues: Insufficient norms for new areas such as digital trade and environment
5. Resistance to reform: WTO reform discussions stagnant due to conflicting interests among countries

3️⃣ Tasks for Restoring WTO Functions

✅ Korea's Role and Investment Facilitation Agreement

• Korea is leading the adoption of the Investment Facilitation Agreement. Key contents are as follows:

  • The Investment Facilitation Agreement aims to simplify foreign investment procedures and increase transparency.
  • Over 100 countries are participating in negotiations led by Korea, receiving high interest.
  • Adoption as an official agreement is being pursued at next year's WTO Ministerial Conference in Africa.
  • Once the agreement is concluded, companies can receive a predictable and stable environment when investing overseas.

• International cooperation is needed to restore the multilateral trading system. Key directions are as follows:

  • Consensus on the importance of restoring WTO functions should be expanded at major international meetings such as G20.
  • Countries must be persuaded that complying with trade rules and refraining from unilateral measures benefits everyone.
  • Middle-power countries should unite to raise voices supporting the multilateral trading system.
  • Korea can play a bridging role as a major trading nation and democracy.

✅ WTO Reform Measures

• Normalization of the dispute settlement body is urgent. Key tasks are as follows:

  • Reform proposals for the Appellate Body should be prepared reflecting US concerns and appointment of members should resume.
  • Improvement measures such as shortening appeal review periods and clarifying authority should be discussed.
  • Alternative dispute resolution mechanisms such as interim arbitration methods can also be used.
  • Without restoring the dispute resolution function, restoring trust in the WTO is impossible.

• Flexibility in decision-making methods is needed. Key improvement directions are as follows:

  • While maintaining the consensus system, plurilateral agreement methods should be activated.
  • This is a method where interested countries agree first and then open it for other countries to join later.
  • Flexible negotiation methods are effective in new areas such as digital trade and environmental goods.
  • However, careful approaches are needed to ensure the principle of multilateralism is not undermined.

• Participation of developing countries should be expanded. Key measures are as follows:

  • Technical support and capacity-building programs for developing countries should be strengthened.
  • Special and differential treatment (S&D) should be improved to fit reality while providing substantial benefits.
  • Support should be provided to help least developed countries (LDCs) build trade capacity and integrate into global value chains.
  • An inclusive trading system should be created by reflecting the voices of developing countries such as Africa.

4️⃣ Related Terms Explained

🔎 GATT (General Agreement on Tariffs and Trade)

• GATT was the international trade agreement that preceded the WTO.
  • GATT (General Agreement on Tariffs and Trade) was a multilateral trade agreement signed by 23 countries in 1947 after World War II to rebuild the international trade order. The goal was to expand free trade by reducing tariffs and removing trade barriers.
  • GATT's basic principles include: First, the Most Favored Nation (MFN) principle. Trade benefits granted to one member country must be applied equally to all other member countries. Second, the national treatment principle, which means imported products should not be discriminated against compared to domestic products. Third, pursuing tariff reduction and elimination of non-tariff barriers. Fourth, the transparency principle requiring trade policies to be disclosed and made predictable.
  • GATT contributed to significantly lowering tariffs and expanding world trade through eight rounds of multilateral trade negotiations from 1947 to 1994. However, it was difficult to deal with new areas such as services trade and intellectual property rights, and the dispute resolution mechanism was weak. To overcome these limitations, the WTO was launched in 1995 as a more powerful international organization encompassing GATT.

🔎 Multilateral Trading System

• The multilateral trading system is a system where multiple countries trade according to common rules.
  • The multilateral trading system refers to the international trade order centered on the WTO where multiple countries agree on and comply with common trade rules and principles. It is characterized by creating trade norms through multilateral rather than bilateral negotiations, with all member countries having equal rights and obligations.
  • Advantages of the multilateral trading system include: First, small countries can have equal voice with large countries. Second, a predictable and stable trade environment is created through common rules. Third, fair resolution is possible through the dispute resolution mechanism. Fourth, trade benefits can be enjoyed without discrimination through the MFN principle.
  • Recently, the multilateral trading system has been challenged by the spread of protectionism, increase in bilateral and regional free trade agreements (FTAs), and weakening of WTO functions. Some countries like the US tend to bypass or ignore WTO rules, shaking the credibility of the system. However, the multilateral trading system remains the most important framework for maintaining a fair and transparent international trade order, and is particularly important for middle-power countries like Korea with high trade dependence.

🔎 Protectionism

• Protectionism is a policy that restricts trade to protect domestic industries.
  • Protectionism refers to a policy stance that seeks to protect domestic industries and jobs by restricting imports of foreign goods. It uses various means such as tariff increases, import quotas, and strengthening non-tariff barriers, and is opposed to free trade.
  • Background reasons for protectionism include: First, governments intervene when domestic industries face difficulties competing with foreign companies. Second, political pressure to protect domestic jobs increases during economic crises or rising unemployment. Third, protectionist measures are taken to pressure trading partners when trade imbalances deepen. Fourth, trade may be restricted under the pretext of national security or protecting strategic industries.
  • Problems with protectionism include: First, while it may protect domestic industries in the short term, it weakens competitiveness in the long term. Second, retaliatory measures from other countries can lead to trade wars, causing losses for both sides. Third, consumers pay higher prices, reducing welfare. Fourth, disruption of global supply chains has negative effects on the entire world economy. The recent strengthening of US protectionism has become a major factor weakening the WTO system and increasing uncertainty in the trade environment.

🔎 Investment Facilitation Agreement

• The Investment Facilitation Agreement is an international norm that simplifies foreign investment procedures.
  • The Investment Facilitation Agreement refers to an international agreement to reduce administrative and regulatory difficulties faced by foreign investors in investment destination countries and make investment procedures transparent and predictable. It is being pursued as a plurilateral agreement within the WTO framework, with Korea playing a leading role.
  • Main contents of the agreement include: First, increasing transparency of investment-related laws and procedures. All investment regulations should be disclosed and easily accessible. Second, simplifying investment approval procedures and shortening processing times. Third, establishing investor support systems such as one-stop services. Fourth, prohibiting discrimination between domestic and foreign investors and ensuring fair treatment.
  • Reasons why Korea is leading the Investment Facilitation Agreement include: First, as Korean companies' overseas investment increases, a stable investment environment has become important. Second, it can reduce administrative barriers and uncertainty when investing in developing countries. Third, it can contribute to WTO reform and restoration of the multilateral trading system while raising Korea's status. Fourth, it aims for adoption at next year's WTO Ministerial Conference in Africa. If this agreement is successfully concluded, global investment flows will become smoother, and developing countries will also be able to attract more foreign investment.

5️⃣ Frequently Asked Questions (FAQ)

Q: Why is the WTO important? How does it relate to our daily lives?

A: The WTO contributes to price stability and job creation by creating a stable trade environment, directly affecting our daily lives.

• The WTO creates stable and predictable trade environments by making international trade rules and resolving disputes. This directly affects our lives. First, when tariffs are lowered, import prices fall and consumers can buy various products more cheaply. For example, prices of imported products like coffee, fruits, and electronics remain at reasonable levels thanks to the WTO. Second, Korea is a country with high trade dependence that lives on exports. Korean companies like Samsung and Hyundai Motor can sell products overseas without discrimination because of the free trade environment guaranteed by the WTO. This leads to jobs and economic growth.
• Third, the WTO checks unilateral trade measures by powerful countries. Even small countries can fight on equal terms with large countries through the dispute settlement body. Without the WTO, powerful countries could pressure weaker countries at will. Fourth, the global supply chain operates smoothly so companies can produce efficiently and consumers can get the goods they need on time. As WTO functions have recently weakened, protectionism has spread and the risk of trade wars has increased, so the Korean government's argument that WTO recovery is in everyone's interest is very important.

Q: Why does the US show a negative stance toward the WTO?

A: The US believes the WTO is disadvantageous to itself and is dissatisfied with China's rise and dispute rulings.

• There are several reasons why the US shows a negative attitude toward the WTO. First, the US sees the WTO dispute settlement body as infringing on US sovereignty. When trade measures taken by the US are ruled illegal by the WTO, it must comply, which it views as infringement on its decision-making authority. The Trump administration in particular criticized that "the US receives unfair treatment at the WTO." Second, there is great dissatisfaction with China's rise. When China joined the WTO, it received developing country status, but now it has become the world's second-largest economy yet still enjoys preferential treatment, according to US claims.
• Third, the US believes its trade deficit continues because of WTO rules. In reality, it's due to economic structure and consumption patterns, but politically it's easy to make the WTO a scapegoat. Fourth, due to many complaints about Appellate Body rulings, it refused to appoint members, paralyzing the dispute settlement body. The US claims the Appellate Body exceeded its authority and rulings were biased. However, not all Americans oppose the WTO, and many experts and companies see the multilateral trading system as beneficial to the US economy. It is an important diplomatic task for Korea to persuade the US to return to the WTO.

Q: If the Investment Facilitation Agreement Korea is pursuing succeeds, what effects will there be?

A: The Investment Facilitation Agreement will help Korean companies invest overseas, contribute to developing country economic development, and help restore the WTO system.

• If the Investment Facilitation Agreement is successfully concluded, several positive effects are expected. First, Korean companies' overseas investment will become easier. When regulations and procedures in investment destination countries become transparent and simplified, companies can reduce uncertainty and invest with confidence. For example, when building factories in Vietnam or Indonesia, companies often face difficulties due to complex administrative procedures and unclear regulations, but these problems will be reduced with the agreement. Second, developing countries also benefit. When a transparent and predictable investment environment is created, more foreign investment can be attracted, leading to economic growth and job creation.
• Third, it contributes to restoring the WTO multilateral trading system. While the WTO has recently been unable to create new agreements, if the Investment Facilitation Agreement succeeds, it shows that the WTO is still valid and can create new norms. Fourth, Korea's international status rises. If an agreement led by Korea becomes an official WTO agreement, Korea can be recognized as a middle-power leader contributing to the formation of global trade norms. However, agreement negotiations are not easy as many countries' interests are intertwined. While adoption is targeted at next year's Ministerial Conference in Africa, sufficient consensus and preparation are needed.

Table of Contents

• Go to Guide