The global trading system, a source of prosperity, is under attack on various fronts. The
causes run deep and require a strategic response from the European Union and from the
main trading nations. The future of the system hinges on the answer to three questions, and
the scenarios associated with them:
• Can the World Trade Organisation be reformed?
• Is the United States’ scepticism about the system a new normal?
• Can China undertake reforms that would make its system more compatible with the
WTO?
The possible outcomes for the global trading system could be good or bad, depending
on how each of these issues is resolved. Under a good set of scenarios, the EU should persist
on its current course with some significant adjustments. We call this Plan A, which would aim
to preserve the multilateral trading system. Under a bad set of scenarios, the EU will have to
contend with a possible break-up of the multilateral trading system, requiring the formulation
of a Plan B. The EU needs today to put in place its Plan B, not only to prepare for a far less
favourable trading environment, but also to clarify the trade-offs implicit under Plan A. All
major trading nations must recognise that the alternative to making compromises is not the
status quo, but something much worse
