The future of the World Trade Organization

The actions of American representatives handicap the functioning of the WTO

By Jim Algie
Better Farming

When their terms expired in May 2019, the fourth and fifth remaining members of the World Trade Organization’s (WTO’s) beleaguered, appellate body made fond-but-anxious farewell speeches to the organization’s ambassadors in Geneva.

These members were Peter Van den Bossche, a Belgian-born law professor, and Ricardo Ramírez-Hernández, a Mexican trade lawyer. The pair served permitted extensions. However, the final end of their terms has left the WTO trade appeals with a bare-minimum three-person quorum.

The situation results from a long-running standoff with U.S. trade representatives about over-reach and delay in the WTO’s appeals process. Farewell speeches by Van den Bossche and Ramírez-Hernández are transcribed on the WTO’s comprehensive website amid expressions of hope that a pending dispute-resolution crisis in international trade might yet be averted.

The farewell meeting in early December for two of the remaining appellate judges stood in contrast to previous departures. Ujal Singh Bhatia of India and Thomas Graham of the United States simply signed a final decision in a seven-year-old dispute over Moroccan anti-dumping duties against Turkish hot-rolled steel. The case wrapped up basically because both countries agreed to withdraw, judging by text of the decision.

The Moroccan-Turkish dispute resolution may be the last such report for some time – or ever.

Hong Zhao is the sole, remaining appeals judge. She is a Chinese international trade expert and former minister counsellor to China’s WTO mission in Geneva. Her current appointment ends in November.

Without new appointments, the appellate body remains below its regulatory three-judge minimum and is barred from considering appeals.

U.S. representatives have maintained their veto on further appointments amid talk of restricted funding for the dispute resolution body itself. The U.S. policy of withholding approval for WTO judicial appointments began under the administration of former President Barak Obama. The “reform of the multilateral trading system” is a stated trade policy objective of the administration of current President Donald Trump.

However, the Trump administration’s rhetoric about trade has led to official expressions of doubt about the country’s future support for the WTO. In 2018, the U.S. provided just under 12 per cent of the organization’s CDN$269.8-million annual budget, published WTO documents show.

Canada, by comparison, provided $6.86 million or about 2.5 per cent. European Union nations, billed separately, covered a total of about 33.6 per cent of WTO spending.

U.S. Trade Representative Robert Lighthizer acknowledged at the WTO’s 2017 ministerial conference that the organization is an “important institution” that does an “enormous amount of good.” However, the Trump Administration has expressed skepticism toward multilateral trade deals, including those negotiated within the WTO, a Congressional Research Service report published in late December said.

“President Trump has also at times threatened to withdraw the United States from the WTO,” the report said. “During his United Nations General Assembly remarks in September 2019, President Trump claimed that the WTO ‘needs drastic change,’ and criticized China as declining to adopt promised reforms following WTO accession” in 2001. BF

    KarenMassier/iStock/Getty Images Plus photo

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