The World Trade Organization Loses Dispute Settlement Body


    10 December, 2019

    A group that decides on trade dispute appeals at the World Trade Organization (WTO) will not be able to do work after Tuesday.

    The terms of two judges on the WTO's Appellate Body end on December tenth. That leaves only one judge in the group – not enough to make decisions under WTO rules.

    File - a picture of the World Trade Organization (WTO) headquarters next to a stop sign, in Geneva, Switzerland.
    File - a picture of the World Trade Organization (WTO) headquarters next to a stop sign, in Geneva, Switzerland.

    Among the disputes still undecided are seven cases that were brought against the United States last year. They involve U.S. President Donald Trump's move to place import taxes on foreign steel and aluminum because they represent a threat to U.S. national security.

    The WTO's Dispute Settlement Body creates a panel that can help decide a trade case. However, if decisions are appealed, they must go to the Appellate Body for a final decision.

    Supporters of the WTO now say that nations can use tariffs and sanctions to limit imports, increasing protectionism and hurting trade.

    "We are in a crisis moment for our global trading system,'' said U.S. Representative Stephanie Murphy, a Democrat from Florida. "As of tomorrow, the court will cease to exist.''

    The loss of a global trade court of final appeals, Murphy said, is "really dangerous for American businesses.''

    The appeals court should have seven judges. But their numbers have slowly decreased. That is because the United States - under Presidents George W. Bush, Barack Obama and Donald Trump - has stopped new judges from being appointed to the court to protest the way the WTO operates.

    Trump and his top trade negotiator, Robert Lighthizer, are critics of the WTO. They argue that the trade organization holds back America's ability to answer unfair trading methods used by China and other countries.

    Many countries have criticized the WTO's system for settling trade disagreements. Critics say judges take too long to make a decision, and that they often overreach in their rulings. They also say the organization is not able to deal with the challenge of China's mix of market capitalism and state control.

    Getting the WTO to reform is difficult because it requires agreement from its 164 member countries.

    The departure of the judges was met with uncertainty or anger by several WTO countries.

    Zhang Xiangchen is China's ambassador to the WTO. He said in a statement that he was observing the event by wearing the black tie his wife had given him for funerals

    In a statement released Tuesday, Phil Hogan, said "this is a regrettable and very serious blow to the international...trade system." He is the European Union commissioner for trade.

    The EU and several countries have been working to set up an unofficial appellate body. It might make decisions about future trade disagreements using former judges. However, it would not be permanent and it is uncertain how many countries might agree to such a group.

    The WTO was set up in 1995 to improve international trade and settle trade disputes.

    But the process has proved difficult. The appellate panel is well-known for missing deadlines, a problem that worsened as it lost judges. It is supposed to rule within 90 days but last year needed about 395 days to make decisions.

    Since 1995, it is estimated that 592 cases have been brought to the WTO. The appellate body has made 120 decisions, covering 162 of those cases. Most of the rest of the cases were dropped or decided outside the WTO process.

    I'm Jonathan Evans.

    The Associated Press reported this story. Susan Shand adapted it for VOA Learning English. Mario Ritter, Jr. was the editor.

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    Words in This Story

    appellate - adj. having the power to review and change the decisions of a lower court

    panel –n. a group of people who answer questions, give advice or provide an opinion about an issue

    tariff – n. a tax on goods coming into or leaving a country

    sanctions – n. an action that is taken or an order that is given to force a country to obey international laws by limiting or stopping trade with that country, by not allowing economic aid for that country

    global - adj. involving the entire world

    challenge – n. a difficult task or problem

    blow –n. something that is done against something or that causes damage to something