Skip to content

US puts WTO into crisis mode

The US has put the WTO Appellate Body into crisis mode.

Since the advent of the Trump administration, the US has consistently blocked appointments and reappointments to the WTO Appellate Body.

As a result, the appellate body has now shrunk to four from its original seven members. In October this year, it is expected that this will go down to three members.

WTO rules specify that three members must server on a case, selected by rotation. This will be meaningless in a matter of months when the WTO Appellate Body shrinks to three; thus creating a nearly impossible workload. The next vacancies, for the US and Indian members, occur in December 2019, whereupon the appellate body will be only staffed by a lone Chinese appointment.

This situation is in keeping with the Trump administration’s focus on bilateral treaty making outside the WTO.

At play are a number of issues, most notably the longstanding desire of the US to amend the WTO rules to allow for a partial adoption of WTO decisions, and the ability to delete parts of a report based on agreement between the parties to the dispute, thereby increasing flexibility and power of signatories over the dispute settlement process as a whole and their disagreements in particular. This would strike a balance between multilateralism and a managed form of bilateral dispute resolution.

How these changes may play out is anyone’s guess. One thing is for certain that should a deal not be structure soon, the WTO will cease to functionally exist as we know it; thus forever putting in doubt the possibility of future global multilateralism in a post-Trumpism world.