European Trade Commissioner Cecilia Malmström warned on Monday 16 October of the risk of complete paralysis of the WTO due to the United States’ continued blocking of appointments to the vacant posts in the appellate body of the dispute settlement body.
The position of US President Donald Trump’s administration risks “killing the WTO from the inside”, Malmström warned in an interview in the Financial Times, arguing that the impasse, which has left vacant two of the seven seats on the WTO’s appellate body, the highest authority of the dispute settlement body, could lead to the breakdown of a system that is central to managing disagreements among the world’s most powerful trading nations.
Under WTO rules, appellate body cases are heard and decided by a panel of three judges. Judges hold office for a maximum of two four-year terms.
The expiry of the second term of office of Mexican Ricardo Ramírez-Hernández at the end of June, then the resignation of South Korean Hyun Chong Kim to take up a ministerial post in his country, have left two posts vacant. And with Belgium’s Peter Van den Bossche stepping down on 11 December at the end of this second term, a third post will become vacant.
Alongside Shree Baboo Chekitan Servansing from Mauritius, who will complete his first term in December 2018, this will leave in post Thomas R. Graham of the US and Ujal Singh Bhatia of India, whose second terms will end on 10 December 2019, and Hong Zhao of China, whose first term of office runs until 30 November 2020.
The US has rejected proposals from the EU and seven Latin American countries in August to begin a selection process to fill the growing number of vacancies in the appellate body.
The United States justifies its position by the failure of the WTO to address its objections to members of the appellate body signing off rulings in cases that are only concluded after the end of their mandates.
Successive US administrations have long complained about the appellate body, which they have said has exceeded its mandate by repeatedly ruling against key aspects of US trade law, highlights the Financial Times.
“Given that it has lost many appeals, the United States has the impression that rulings are skewed against it. It wants to bring pressure to bear so that the appointment of judges to sit on the appellate body works in its favour”, a source in Geneva told us on Tuesday.
WTO Director General Roberto Azevêdo warned that the appellate body was coming dangerously near the minimum number of judges that it need to be able to operate.
Azevêdo raised this issue with US Trade Representative Robert Lighthizer during a visit to Washington on 16 October.
The current impasse “is something that worries the whole membership”, Malmström told the Financial Times. “If there are specific concerns that the Americans have, OK, let’s hear them”, she said, “but we haven’t heard if there is anything specific, they are just generally not happy with the system”. (Original version in French by Emmanuel Hagry)