The US Ambassador to the World Trade Organization (WTO), Dennis Shea, announced in a speech to that body on Monday that the US would not back a proposal to appoint new judges to the panel. The move has effectively rendered the appellate body unable to function, meaning second-tier trade disputes can no longer be resolved moving forward.
According to the rules of the WTO, three appellate judges are required in order to review panel cases. Decisions of the WTO’s dispute settlement body require consensus, meaning no member present “formally objects to the proposed decision.” There are typically seven judges on the WTO Appeals Court with staggered four-year terms. For over two years, however, the US has been formally objecting to term renewals or new appointments, slowly diminishing the body. The Monday objection finally leaves the court with fewer than three members.
In his speech, Shea reiterated the US government’s problems with the appellate body that led it to carry on the blockage strategy. “[T]he United States has been raising serious concerns with the Appellate Body’s disregard for the rules set by WTO Members,” he said, referring to longstanding complications by which the court’s international jurisprudence has often conflicted with protectionist strategies the US pursues. Despite some countervailing successes at the court over the years, the US’ discontent has spanned administrations. Disagreement with the body has been especially strong in the Trump administration in no small part due to the ways it has tried to leverage trade in its clash with China.
The Director-General of the WTO, Roberto Azevêdo, spoke to the body on Monday about convening consultations to overcome the impasse. “A well-functioning, impartial and binding dispute settlement system is a core pillar of the WTO system,” he said. “Members will continue to resolve WTO disputes through consultations, panels, and other means envisaged in the WTO agreements such as arbitration or good offices of the DG … but we cannot abandon what must be our priority, namely finding a permanent solution for the Appellate Body.”