US opposition pushes trade court to brink of collapse
The World Trade Organisation’s (WTO) capacity to settle international disputes, a core function throughout the body’s 25year history, is on the brink of collapse after relentless US opposition.
The appellate branch of the WTO’s Dispute Settlement Body (DSB), sometimes dubbed the supreme court of world trade, was a target of US criticism before President Donald Trump took office. His predecessor Barack Obama’s administration began a policy of blocking the appointment of appeals judges over concerns that their rulings violated American interests. Trump’s trade team has escalated the fight.
Barring a breakthrough in the coming days, the court will cease functioning on Wednesday. The WTO appellate branch normally counts seven judges but has just three left — the minimum required to hear an appeal. Two retire on Tuesday.
WTO Director-General Roberto Azevedo warned on Friday that the organisation was facing a stark choice. “You could restore the impartial, effective, efficient two-step review that most members say they want,” he said. “Or open the door to more uncertainty, unconstrained unilateral retaliation, less investment, less growth, and less job creation.”
According to EU trade commissioner Cecilia Malmstrom, there can be no solution without US buy-in because the WTO works on consensus.
“This is a dispute between the 163 members of the WTO and the US,” she told the European parliament last month.
US WTO envoy Dennis Shea argued on Friday that Washington had “engaged constructively over the past year” to resolve the crisis, but would not relent until its concerns were fixed.
US concerns include allegations of judicial overreach, delays in decisions and bloated judges’ salaries.
But top US trade officials also insist the US constitution does not permit a foreign court to supersede a US one — and that WTO appellate judges assert such superiority in international trade law.
US threats to the WTO’s 2020 budget may mean a January 1 shutdown, placing global trade disputes in legal limbo.