Something is brain dead – The Appellate Body of the World Trade Organization's Dispute Settlement Mechanism, sometimes dubbed the "supreme court" of world trade.

At first, it was a story of reason and success. Decades ago, some 20 economies reached an agreement to reduce trade barriers. It proved effective, so more economies joined in and set up a rule-based system. They designated a panel of judges to rule on disputes if arbitration failed to settle them.

In a consensus-based organization, the rulings of the judges are legally binding, thus effectively obligating parties to change course. That's why the Appellate Body is widely seen as the WTO's crown jewel. In my six years as a correspondent based in Geneva, the Appellate Body was busy.

Economies filed complaints about each other, and accepted final rulings by well-respected judges, whether they liked it or not. China did the same.

But that crown jewel has lost its shine, through the efforts of no other but a leading member and main architect of the WTO. Yes, I'm talking about the U.S. Because of its non-cooperation in appointing new judges after sitting ones retire, as of December 11th, there is only one judge left to handle cases.

The current U.S. administration claimed the U.S. has lost almost all lawsuits within the framework. Fact is the U.S. has won nearly all the cases it brought before the panel, more than any other country. It did lose the majority of cases where it has been a defendant. But that's a fact of life for major WTO members.

What now? Arbitration may work, but it may not. There could be no justice for weaker nations. The multilateral system is weakened as a significant part of its enforcement mechanism is shut down. The Rule of Law in the world of trade may return to the law of the jungle.

These and other concerns prompted many nations to find solutions. The European Union's proposal to reform the appeals court won wide support from members, except the U.S. EU's former Trade Commissioner Cecilia Malmstrom said it was "a dispute between the 163 members of the WTO and the U.S."

China has also proposed reforms, but before any reforms can be adopted, the world needs trade and trade needs rules. By effectively killing the WTO Appellate Body, America has taken another step in eroding its greatness. Fine if you want to do that to yourself, but don't expect the world to be collateral damage.

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