The World Trade Organization’s ability to resolve trade disputes between countries was effectively paralyzed Monday after the United States said it would not back the continuation of the appellate body. (Reuters)
Talking point: The WTO’s appeals body has been described as “probably the busiest international dispute settlement system in the world,” with the power to authorize sanctions if it finds a government in violation of its laws. Some of the most contested world trade issues—such as EU and U.S. subsidies to Airbus and Boeing and China’s state support for its companies—have been arbitrated through the almost 25-year-old WTO dispute settlement process. The body has relied on a panel of three judges (down from seven) who have fixed-term tenures; two will see their terms end Wednesday. For two years, the U.S. has blocked any new appointments to replace any, arguing that the WTO has overreached its powers. U.S. President Donald Trump claimed the WTO was set up “to benefit everybody but us,” adding, “we lose the lawsuits, almost all of the lawsuits in the WTO.” Foreseeing the demise, Canada and the EU agreed in July to arbitrate trade-related appeals between themselves.