WTO’s final dispute mechanism on cliff edge

By Song Lin Source:Global Times Published: 2019/12/5 21:18:41

US seeks new rules in favor of its own interests

A sign of the WTO on its headquarters in Geneva Photo: VCG

The Appellate Body, the global mechanism to settle trade disputes under the World Trade Organization (WTO), is at the edge of a cliff. As early as next Tuesday, it may lose the ability to reach a quorum and function, due to the US' obstruction of selecting new members to the body.  

If the body can't function, experts warn that the WTO may be paralyzed and China, the EU and all other members should work together to uphold the multilateral trade system.

China will stand with the majority of WTO members to resolve the Appellate Body crisis, and it is working on a solution to maintain the functioning of the dispute settlement mechanism and uphold the rule-based multilateral trading system, Gao Feng, spokesperson for China's Ministry of Commerce, told a regular briefing on Thursday.

China has been stepping up efforts to promote the resolution of the crisis, such as issuing a proposal with 115 other WTO members to start the election procedure, and China has also submitted a reform plan of the body with 40 members including the EU to strive for a consensus among WTO members, Gao said. 

It is clear that the US is trying to "kill" the WTO since the nation stubbornly believes that the organization's operations are no longer in line with Washington's interests, He Weiwen, a former senior Chinese trade official and an executive council member of the China Society for World Trade Organization Studies, told the Global Times on Thursday.

In terms of global trade rules, the US is now standing opposite all other members, experts said.

Currently, the Appellate Body only has three members, and two are set to finish their terms. Mexico, on behalf of more than 100 WTO members, proposed again to start the election procedure to fill the Appellate Body's membership on November 22. This move was again halted by the US, whose "systemic concerns regarding the Appellate Body remain unaddressed," read a statement of the WTO. 

The truth is that the US is attempting to ditch the WTO and form a new trade framework that will favor its own interests, He noted.

Without the constraint of WTO rules, the US, as a superpower, could pursue its own interests through coercion, said Tu Xinquan, dean of the China Institute for WTO Studies at the University of International Business and Economics in Beijing.

Meanwhile, it is bad news for other members, who are trying to find a solution, Tu said. 

"There will be a variety of interim arrangements crafted to mediate and arbitrate disputes," Alan Wolff, a Deputy Director-General of WTO, said in a speech on Tuesday.

"[Though] the WTO's authoritativeness would take a hit then …the dispute settlement system still exists, and members could still seek settlements through other procedures outlined in the WTO dispute settlement process," Tu noted.

An interim solution may be to have settlement panels, which are a step before the Appellate Body, make final decisions, He noted.

Resolving trade disputes is one of the core responsibilities of the WTO, its website said, and 592 disputes have been brought to the WTO. More than 350 rulings have been issued since 1995.
Newspaper headline: WTO’s dispute mechanism at risk

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