WTO chief: 'Months' needed to fix disputes body

Andrew Cummings
December 12, 2019

At present, President Trump has been pushing to have his way instead of favoring diplomacy and economy. But the number was reduced to just one on Tuesday, when the terms for two of the last three remaining judges expired. Their departure will deprive the de facto Supreme Court of world trade of its ability to issue rulings. "T$3 he United States has been raising serious concerns with the Appellate Body's disregard for the rules set by WTO Members", he said, referring to longstanding complications by which the court's worldwide jurisprudence has often conflicted with protectionist strategies the U.S. pursues. But his decisions will go nowhere if the loser calls a higher court that does not work anymore. Without having to worry about possible sanctions, countries could use tariffs or be tempted to implement protectionist measures. Such increasing protectionism could create uncertainty and hinder trade. "Tomorrow, the court will not exist anymore".

Losing a global appeals court, Murphy said, was "really risky to American companies".

The jury should consist of seven judges.

There is also speculation that it may be related to a grudge held by the current trade representative, Robert Lighthizer.

USA officials have racked up 20 wins in their challenges to Chinese trade practices since the first US case against China in 2004, the Washington-based Peterson Institute for International Economics (PIIE) said in a blog post.

Months of talks to break the deadlock that has pitted the USA against the WTO's 163 other members have been led by New Zealand's ambassador David Walker. However, he also made it clear that the goal was to preserve the two-level system of a lower and appellate court.

Getting the WTO to reform is hard because it requires consensus from its 164 member countries. Trump is prepared to use the economic and political influence of the U.S. to disrupt things in a way smaller countries could not. Beijing has for long hoodwinked the WTO members with its market-distorting state-driven capitalism.

Zhang Xiangchen is China's ambassador to the WTO.

In a statement released Tuesday, Phil Hogan, said "this is a regrettable and very serious blow to the global...trade system".

Which is why a growing number of WTO members-except for the US -are beginning to take a hard look at the appeal-arbitration approach. The most famous one is the EU-Canada proposal of resorting to Article 25 arbitration under the DSU as an interim alternative. Trump alluded to both in his APEC CEO Summit address in Da Nang in November 2017 when he noted that while he was willing to "make bilateral trade agreements with any Indo-Pacific nation ... what [the United States] will no longer do is enter into large agreements that tie our hands, surrender our sovereignty and make meaningful enforcement practically impossible".

But the process has proved cumbersome. The Appellate Body is notorious for missing deadlines, a problem compounded by the loss of judges. It will govern within 90 days, but it took an average of 395 days to make decisions previous year. Moreover, the United States attack on the Appellate Body has put the WTO on a critical juncture. His predecessor, a more amenable president, Barack Obama, did not shy away from intimidating WTO judges.

"Labor hopes the government is prepared to develop a comprehensive plan for the reform of the WTO, including saving the dispute resolution system". This is a strong disincentive for the U.S. to follow through on its threat to withdraw.

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