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9 February 2026

The US and the EU file submissions on WTO reform: Reassessing the most favoured nation (MFN) principle or addressing the enforcement gap?  

By Tobias Dolle, Stella Nalwoga, and Paolo R. Vergano

Both the US and EU recently filed submissions at the World Trade Organization (hereinafter, WTO) regarding WTO reform. These submission come ahead of anticipated discussions at the upcoming 14th WTO Ministerial Conference (MC14), scheduled from 26 to 29 March 2026 in Yaoundé, Cameroon. Major trading powers and key architects of the rules of the WTO, both the EU and the US appear willing to put into question core WTO principles, most notably the most favoured nation (MFN) principle. These discussions may ultimately have far-reaching implications for the future of the multilateral trading system. 

This article reviews the recent submissions on WTO Reform and offers an alternative perspective on some key aspects.

Context for WTO reform discussions

Discussions on WTO reform have been ongoing for more than a decade, driven by concerns over the paralysis of the dispute settlement system, limited progress in its rule-making function, the adequacy of WTO rules to address industrial subsidies and State intervention, and the role of special and differential treatment granted to developing countries. These debates have intensified amid rising tensions in the global trading system, particularly due to the current US Administration’s extensive use of tariffs as a policy tool to pursue trade and non-trade objectives in disregard of its WTO commitments. The US’ imposition of country- and sector-specific additional (‘reciprocal’) tariffs, and the subsequent rapid conclusion of bilateral ‘framework agreements’ with some trading partners, including the EU, China, India, Switzerland, and the UK, aimed at mitigating their effects, have further eroded the core WTO principle of non-discrimination.

In preparation of the 14th WTO Ministerial Conference, the discussions on WTO reform are facilitated by Norway’s Ambassador to the WTO, Petter Ølberg. On 12 December 2025, Ambassador Ølberg had shared with WTO Members a draft workplan on WTO reform for the period after MC14, which sets out the scope of the work for the areas where WTO Members have recently focused their initial efforts, namely “decision making, development and special and differential treatment, and level playing field issues”. 

How the US and the EU diagnose the WTO’s challenges

It is within this context that the US and the EU tabled their submissions. The US’ submission was circulated on 15 December 2025. In essence, the US argues that the WTO reform agenda must address additional issues, including concerns over the MFN principle, the role of the WTO Secretariat, and the application of the essential security exception. The US makes the assertion that systemic problems, including trade “imbalances” among WTO Members and “overcapacity and overconcentration of production in numerous industrial sectors” arising from the use of non-market policies by some WTO Members, lie largely beyond the WTO’s institutional capacity to resolve.

In its submission of 21 January 2026, the EU points out similar problem areas as the US. The EU argues that the structural challenges that exist, due to the lack of successive negotiating rounds to address modern trade challenges, such as the rise of the rise of digital trade and the use of climate-related measures with significant trade implications, have been “exacerbated by geopolitical tensions” and by “the weaponisation of trade and tariff measures”. However, the EU articulates its concerns in more cautious and procedural terms than the US, framing them as a need for reflection, rebalancing, and institutional adaptation in order to achieve ‘predictability, fairness and flexibility”, rather than as a fundamental critique of the WTO’s capacity. 

The US’ and EU’s call to reassess the MFN principle and reciprocity 

What’s striking is that both the EU and the US converge on the need to revisit the role of the MFN principle, while sharply diverging on how far such a reassessment should go. The non-discrimination obligation under the MFN principle, which cuts across all WTO instruments, requires, for example with respect to trade in goods, that WTO Members automatically extend any trade-related “advantage, favour, privilege or immunity” granted to any trading partner to all WTO Members with respect to ‘like’ products. In short, a WTO Member must treat all ‘like’ products imported into its territory from all WTO Members equally, unless specific derogations apply. 

In its submission, the US argues that the MFN principle no longer reflects today’s economic reality, referring to some WTO Members’ “unwillingness to pursue and uphold fair, market-oriented competition”. Without proposing any specific course of action, the US merely suggests that it is “time” to allow all WTO Members to conclude “mutually beneficial agreements that may not extend to every Member”. This framing is difficult to read as a purely forward-looking reform proposal. Rather, it appears designed to normalise and retrospectively legitimise US’ trade practices that have already departed from its WTO commitments, including with respect to the core MFN principle. 

The EU appears to adopt a more cautious and indirect approach. While the EU does not challenge the MFN principle as fundamentally as the US, it proposes that reform discussions include “reflections on the role of the MFN principle in today’s context, its link to reciprocity” and even “possible new links between commitments taken and the level of tariffs liberalisation”. 

Misdiagnosing the crisis?

The WTO agreements contain rights and obligations that apply to all WTO Members in general. The WTO Secretariat explains that these agreements, which form the legal foundation for global trade, are essentially, “contracts, guaranteeing WTO members’ important trade rights”. In essence, the concessions made by WTO Members were not offered in a vacuum, but rather in light of the MFN principle, which means that any concession was ‘priced’ against the expectation that commitments would be extended to all WTO Members on an MFN basis and that the overall level of ‘reciprocal’ commitments would be mutually advantageous. The MFN principle locks in the multilateral value of each Member’s concessions, avoiding constant bargaining, retaliation, and power-based discrimination among WTO Members. Consequently, if reciprocity has eroded, as the US and the EU argue, it is not because the MFN principle failed. Arguably, it is because the commitments undertaken were not properly implemented and/or enforced, and violations were not pursued. 

Next steps

On 5 February 2026, Ambassador Ølberg launched a ‘reform month’ aimed at discussing a post-MC14 workplan. The facilitator highlighted that the suggested workplan would remain “flexible” in order to allow WTO Members to add any reform-related topic in the future, adding that “the aim should be to agree on a workplan at the General Council meeting in March to be transmitted to the Ministerial Conference”.

Ultimately, the credibility and relevance of the WTO will depend on whether WTO Members move beyond endless reform debates and deliver concrete, enforceable outcomes that preserve and strengthen the multilateral trading system.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano 

Indonesia’s rules on cosmetics labelling get a makeover: The draft Food and Drug Supervisory Agencyregulation on ingredient origin and alcohol content

By Joanna Christy, Imelda Jo Anastasya, and Ignacio Carreño García

On 2 January 2026, Indonesia’s Food and Drug Supervisory Agency (i.e., Badan Pengawas Obat dan Makanan, hereinafter, BPOM) issued a draft Regulation on the Inclusion of Information on the Origin of Ingredients and Alcohol Content in Product Information, Labels, and/or Markings for Drugs and Food. In order to ensure that labels for food and drug products, including cosmetics, are “complete, objective, and not misleading”, the draft BPOM Regulation introduces new labelling requirements concerning the origin of the ingredients, the alcohol content, and the Halal status.

This article discusses the new labelling requirements for cosmetics, compares the draft BPOM Regulation with the current legal framework, assesses their alignment with the Association of Southeast Asian Nations (hereinafter, ASEAN)Cosmetics Directive, and highlights implications for businesses and consumers. 

Current labelling rules for cosmetics in Indonesia

In Indonesia, general rules on cosmetics labelling are provided by BPOM Regulation No. 18 of 2024 on Labelling, Promotion, and Advertising of Cosmetics (hereinafter, BPOM Regulation 18/2024), which requires labels of cosmetic products to include, inter alia, the name of the cosmetic, its benefits or intended use, directions for use, and product composition (i.e., the overall formulation of the ingredients and their proportions).

Head of BPOM Regulation No. HK.03.1.23.06.10.5166 of 2010 on the Inclusion of Information on the Origin of Certain Ingredients, Alcohol Content, and Expiry Limits on the Labelling of Medicines, Traditional Medicines, Food (hereinafter, Head of BPOM Regulation 5166/2010) clarifies that the information on the composition only concerns ingredients that are sourced from or are derived from animals. Additionally, Head of BPOM Regulation 5166/2010 requires labels to disclose information on the percentage of any alcohol content, and, where applicable, the phrases “contains pork” or “comes into contact with pork during the manufacturing process”. Compliance with these labelling requirements is a prerequisite for placing the products on the market. 

Mislabelling remains a prevalent issue within Indonesia’s cosmetics industry, with the actual composition of cosmetic products frequently differing from the information disclosed on the labels. In 2025, BPOM revoked nearly 50 permits for cosmetic products due to incorrect labelling. Given these compliance issues, BPOM prepared the draft Regulation, which foresees more detailed labelling requirements with stricter sanctions to enhance compliance and consumer protection. Once enacted, it would replace Head of BPOM Regulation 5166/2010.

A new look: Cosmetics labelling under the draft BPOM Regulation

The draft BPOM Regulation requires food and drugs, including cosmetics, to disclose on the label the list of all ingredients and the product composition. It also requires products, including cosmetics, that have obtained a Halalcertificate to be labelled as Halal, indicating that the product is “permissible” under Islamic law.

This requirement on Halal information implements Government Regulation No. 42 of 2024 on Implementation in the Field of Halal Product Assurance (hereinafter, GR 42/2024), under which cosmetics figure among the products required to obtain Halal certification and comply with Halal labelling requirements by 17 October 2026 (see TradePerspectives, Issues No. 20 of November 2025 and No. 16 of 9 September 2024). As part of the application to place a cosmetic product on the market, the Halal certificate must be submitted to the BPOM.

According to the draft BPOM Regulation, the Halal label must be “easily visible and legible” and may not be possible for it to be “easily erased, removed, or damaged”. Cosmetics derived from non-Halal ingredients (e.g., collagen sourced from pork skin) may still be placed on the market, as long as they display a Non-Halal Statement, which refers to a declaration that a product does not meet the Halal requirements. Cosmetics made from Halal ingredients, but not yet processed according to Halal standards, may be labelled as “made from halal ingredients and in the process of fulfilling halal processing”.

Non-compliance with any provision of the draft BPOM Regulation would result in administrative sanctions, including temporary prohibitions on product circulation, the revocation of a marketing authorisation, orders for return or re-export of the product to the country of origin, all of which are not included in the current Head of BPOM Regulation 5166/2010.

The increasing requirement of Halal labelling and related regulatory divergences

The mandatory Halal labelling requirement for cosmetics under the draft BPOM Regulation is the first of its kind in the ASEAN region and forms part of Indonesia’s broader Halal product assurance framework under GR 42/2024. In Indonesia, proper Halal labelling increasingly operates as a condition for market access. In other ASEAN Member States, Halal labelling for cosmetics is voluntary (e.g., Thailand) or only mandatory where the products contain animal- or alcohol-derived ingredients (e.g., Singapore).

In other regions, there is currently no mandatory requirement for cosmetic products to be Halal-certified or to carry a Halal label. In the EU, Halal is considered a voluntary product claim under Regulation (EC) No 1223/2009 of the European Parliament and of the Council of 30 November 2009 on cosmetic products. Any such voluntary product claim, such as “Halal certified”, must be supported by reliable evidence and the claim must not be misleading to the average EU consumer. In the specific case of a Halal claim, according to private certification bodies, the product and its manufacturing process must be free from haram (i.e., prohibited) substances, such as porcine-derived materials or specific types of alcohol.

Closer alignment with the ASEAN Cosmetics Directive?

With respect to cosmetic labelling, Indonesia, as an ASEAN Member State, committed to “undertake the necessary measures” to implement the 2007 ASEAN Cosmetics Directive, which establishes a harmonised regulatory framework and includes, inter alia, ASEAN-wide labelling standards for cosmetic products. ASEAN Member States are required to ensure that cosmetic products placed on their markets comply with Appendix II of the ASEAN Cosmetics Directive, which provides the relevant labelling requirements. The requirements include a “full ingredient listing”, meaning that all ingredients used in the cosmetic product, not only those derived from animal origin, must be listed on the outer packaging of cosmetic products, or, where no outer packaging exists, on the immediate packaging. Additionally, labels must indicate the presence of ingredients of animal origin.

Compared to the current BPOM Regulation 18/2024 and the Head of BPOM Regulation 5166/2010, the draft BPOM Regulation appears to be more closely aligned with the ASEAN Cosmetics Directive by requiring labels to indicate the full list of ingredients. Notably though, the draft BPOM Regulation goes beyond the ASEAN Cosmetics Directive by including requirements on Halal labelling. As Indonesia is currently the only ASEAN Member State to implement mandatory Halal labelling requirements for cosmetics, businesses placing their products on the market in different ASEAN Member States would have to adjust their labelling for the Indonesian market.

Consequently, this may result in additional compliance costs, potentially complicating the placement of foreign cosmetic products on the Indonesian market. Moreover, this new regulatory divergence caused by diverging rules on Halal labelling for cometic products within the ASEAN region appears to undermine the ASEAN Cosmetics Directive’s objective of harmonising cosmetics labelling standards across ASEAN.

Implications for businesses and consumers

On 7 January 2026, BPOM had invited stakeholders to provide comments on the draft BPOM Regulation until 12 January 2026, with such comments remaining confidential. While the draft BPOM Regulation may increase compliance costs due to additional labelling requirements, greater transparency may also enhance corporate reputation by enabling consumers to make more informed decisions. Businesses should closely monitor the related regulatory developments.

For any additional information or legal advice on this matter, please contact Paolo R. Vergano 

Thailand’s Food and Drug Administration proposes amendments to labelling rules for pre-packaged food to align with international standards

By Joanna Christy, Pattranit Chantaplaboon, and Ignacio Carreño García

On 23 December 2025, Thailand’s Food and Drug Administration (hereinafter, FDA) within the Ministry of Public Health launched a public consultation on the Draft Notification of the Ministry of Public Health (No. 2) Regarding Labelling of Pre-packaged Foods. The Draft Notification foresees, inter alia, to amend the labelling requirements for pre-packaged foods to align with international standards and current practices.

This article provides an overview of Thailand’s current labelling rules for pre-packaged foods and the proposed amendments, assesses the alignment of the proposed allergen labelling rules with the ASEAN General Standard for the Labelling of Pre-packaged Foods, discusses the trend towards digital labelling, and outlines the implications for businesses.

Amending Thailand’s regulatory framework for the labelling of pre-packaged foods

As part of Thailand’s food safety and consumer protection framework, particularly to regulate the labelling requirements applicable to pre-packaged foods (i.e., foods packed in containers for sale), the Ministry of Public Health issuedNotification of the Ministry of Public Health (No. 450) B.E. 2567 (2024) issued by virtue of the Food Act B.E. 2522 (1979) Regarding Labelling of Pre-packaged Foods, which entered into force on 19 July 2024. According to Clause 5 of Notification No. 450, labels for pre-packaged foods must be in Thai language and must indicate, inter alia, the following information: 1) The name of the food; 2) The allergen ingredients; 3) Food additives; 4) The food product’s shelf life; 5) The net weight or volume of the food product; and 6) Warning statements, such as storage or cooking instructions. 

The Draft Regulation proposes a series of amendments to Notification No. 450 to update the labelling regime in line with international standards and current practices. In relevant part, the Draft Regulation foresees to adjust both the scope and level of detail of mandatory allergen declarations, and introduces rules on digital labelling. More specifically, the Draft Notification foresees the following changes: 1) Clarification of the scope and types of pre-packaged foods that may not be exempt from labelling requirements, such as infant formula; 2) Update of the list of products required to display allergen information to include, inter alia, celery, sesame, and pistachios; 3) Regulation of the voluntary use of digital labels for food products, except for “sensitive foods”; 4) Requirement for food additives with multiple functions to indicate each applicable function. For example, modified starch used in a sauce mix must be declared as both a “thickener” and a “stabiliser”, where it simultaneously increases viscosity and maintains texture during heating; and 5) Requirement for multi-product packages to display a “Best Before” or “Expiry” date based on the earliest expiring item.

Pursuing greater alignment with international standards in allergen labelling

The Draft Notification updates the list of ingredients or substances that must be declared as allergens, requiring them to be displayed on the label. An allergen is a substance that can trigger an allergic or hypersensitivity reaction in susceptible individuals, even though it is harmless to the general population. 

Currently, Notification No. 450, allows the general declaration of the allergen “tree nuts and products thereof” without further specification. The Draft Notification provides that products containing nuts must specify the particular types of nuts present. For example, the label of a ‘mixed nuts’ chocolate bar would be required to indicate the specific nuts, such as that it contains almonds, cashew nuts, and pistachios. This aligns with the Codex General Standard for the Labelling of Pre-packaged Foods, which requires that specific tree nuts, such as almonds, cashew nuts, and pistachios, be “declared as allergenic foods using the specified name” when contained in food products. This requirement also aligns with Article 21 of and Annex II(8) to the EU’s Regulation (EU) No. 1169/2011 on the provision of food information to consumers. Notably the ASEAN General Standard for Food Labelling of Pre-packaged Foods, a non-binding regional reference to guide ASEAN Member States in harmonising national food labelling requirements, deviates from the international standard, by not expressly mandating the listing of the specific types of tree nuts. 

The Draft Notification also foresees to remove “lactose” from the list of allergens that must be displayed on the packaging. Currently, Notification No. 450 requires that products containing lactose bear the following statement: “Information for food allergy: contains milk and dairy products, including lactose, with the exception of lactitol” (emphasis added). The reference to “lactose” would no longer be required, which is in line with the Codex Code of Practice on Food Allergen Management for Food Business Operators, which states that food allergy “does not cover hypersensitivities with a non-immunological aetiology such as lactose intolerance” (emphasis added). 

The ASEAN General Standard for Food Labelling of Pre-packaged Foods requires food or food ingredients containing allergens, namely “milk and milk products (lactose included)”, to be declared on the label as an allergen. The ASEAN General Standard for Food Labelling of Pre-packaged Foods adopts a broader approach by expressly covering both allergens and intolerances. The Codex Code of Practice distinguishes between allergens and intolerances, classifying “lactose” as an intolerance.

The removal of “lactose” from the allergen declaration in Thailand’s Draft Notification’s reflects closer alignment with Codex CXC 80-2020, albeit at the expense of consistency with ASEAN standards. The removal of lactose from mandatory allergen declarations may raise consumer information concerns. The absence of an express declaration on the packaging may reduce the visibility of lactose-containing ingredients for consumers, who rely on clear labelling to make informed dietary choices. Businesses might, therefore, choose to continue voluntarily declaring that a product contains lactose in order to inform consumers.

The trend towards digital labelling

The Draft Notification foresees the introduction of voluntary digital labelling for all food products except for “sensitive foods”, such as infant formula and dietary supplements, which are excluded due to consumer safety concerns. While digital labels may be used voluntarily, certain information must still be displayed on the physical label and may not be replaced by digital labelling. Elements that must remain on the physical label include: 1) The name of the food; 2) The food serial number; 3) The net weight or volume of the food product; 4) The list of ingredients; 5) Allergen information; 6) Warning statements; and 7) The date of expiry or “best before” date. Other elements, such as the name and address of the manufacturer and storage or cooking instructions, may be provided online and accessible via the digital label.  

The Draft Notification reflects a broader regional and international shift towards the use of technology-enabled consumer information tools in product labelling. For example, Thailand’s FDA recently proposed a voluntary digital labelling scheme for bottled and mineral water for environmental objectives (see TradePerspectives, Issue No. 19 of 20 October 2025), and Singapore has issued Guidelines on Voluntary Electronic Labelling for Complementary Health Products.

Despite these trends, digital labelling is yet to be reflected under the ASEAN General Standard for Food Labelling and the ASEAN Guidelines on Nutrition Labelling. Common references remain limited to conventional front-of-pack labelling.Digital labelling is also becoming more popular and relevant in other markets. For example, since December 2023, the EU’s rules on the common organisation of the markets in agricultural products render the list of ingredients and the nutrition declaration mandatory for wine and aromatised wine products. Under specific conditions, the information may be provided online. However, the growing number of digital labelling regulations across various products creates a fragmented internal market.   

Implications for businesses and consumers

Aligning domestic rules with international standards would likely provide Thai businesses with greater regulatory predictability when exporting to other countries that implement the same international standard. At the same time, the proposed amendments may entail additional compliance costs for Thai businesses, particularly micro, small, and medium enterprises and particularly when trading within the ASEAN region, as they would need to adjust and update their product labels.

Once the Draft Notification has been enacted, companies would need to update their product labels to comply with the new rules. Businesses should closely monitor the related regulatory developments. 

For any additional information or legal advice on this matter, please contact Ignacio Carreño Garcia

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Imelda Jo Anastasya, Amanda Carlota, Ignacio Carreño García, Pattranit Chantaplaboon, Joanna Christy, Tobias Dolle, Alya Mahira, Stella Nalwoga, and Paolo R. Vergano contributed to this issue.

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