United States shuts down WTO appeal court

The Appeal Court of the World Trade Organization that acts as trade dispute settlement body for the members was shut down by the United States on December 9, 2019. The seven-member body that was cut down to a 3-member body in 2018 is now completely blocked by the United States.

Without WTO’s appellate body, the dispute settlement will return to pre-1995 GATT (General Agreement on Tariffs and Trade) status quo.

Highlights

The WTO dispute settlement body has provided 120 rulings out of 592 registered cases. Out of the 120, many were solved outside WTO as well. Experts in other countries also believe that the WTO system of settlement of disputes take too long to resolve.

The WTO appellate body judges and their ranks have been dwindled in the past under the other Presidents of the US as well. It includes George Bush, Barack Obama and Trump. Apart from US, other countries also believe that the WTO is ill-equipped to deal with the challenge posed by the Chinese unconventional blend of state control and capitalism. The alternate solution of reforming the system is difficult as it requires consensus from 164 member countries.

GATT

The GATT is a legal agreement among several countries. It was signed by 23 nations in 1947. In 1993, 76 members of GATT and European community came together to create World Trade Organization.

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