US impasse on WTO judges risks a 'fundamental blow'

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A bitter impasse over appointing new judges to the World Trade Organization's appeals court threatens to deliver a "fundamental blow" to its key role in arbitrating trade disputes, the global body's chief said Wednesday.

The WTO's Dispute Settlement Body is battling with the effects of Washington's refusal to sign off on the appointment of new judges to its appellate chamber.

In August, the crisis worsened when the US for the first time balked at even renewing the mandate of an existing judge, meaning it could soon be reduced to just two members – less than the bare minimum three required to hear international trade disputes.

"It essentially paralyzes (the court)," WTO director general Roberto Azevedo told a panel at the International Monetary Fund's annual meetings on the Indonesian holiday island Bali.

"Some members would say 'What's the point in negotiating trade rules if there is nobody to say whether somebody is violating the rules or not?'"

The impasse comes as Washington's heated protectionist rhetoric has seen it slap heavy tariffs on Chinese products with Beijing responding in kind, escalating a trade spat that is taking center stage at the IMF meetings this week.

The head of the 164-member WTO said delays were already happening due to the under-resourced court's caseload and "there are some significant delays coming up."

A complete paralysis of the appellate court would be a "fundamental blow" to the WTO, he said.

"There are still many steps to get there," Azevedo added. "But at this point in time, I have to say I cannot see a light at the end of the tunnel. I just don't."

Azevedo, alongside International Monetary Fund chief Christine Lagarde, called on supporters of multilateralism and free trade to "raise their voices" in support of the WTO, saying "the trading system is not perfect, we never said it was. But it represents the best efforts of governments around the world working together for 70 years to find ways to co-operate on trade issues."

The appellate body, which offers a last resort to settle international trade disputes and avoid escalation between countries, normally counts seven judges. But the number has gradually dwindled amid Washington's refusal to agree to fresh appointees.

The US has complained that the 90-day limit for the judges to reach a verdict is consistently overstepped, while the appellate body allows judges to complete work on a case even after their mandate has lapsed, contrary to the US interpretation of WTO rules.

Azevedo said the WTO was considering other options should the appeals court come to a grinding halt.

"It's not like WTO members are crossing their arms and waiting to see what happens," he added. "They are actively thinking about option and different scenarios, even the worst case scenario."

Source(s): AFP