The head of the World Trade Organisation said on Thursday that member states are preparing for a shutdown of the body’s dispute settlement system, following months of deadlock triggered by the United States.
The WTO’s Dispute Settlement Body (DSB), sometimes dubbed the supreme court of world trade, is in crisis due to Washington’s refusal to approve any new judges for its appellate division.
President Donald Trump’s administration has accused the DSB of overstepping its authority by issuing broad rulings that he says violate national sovereignty.
WTO members ‘are working hard to find a solution to the appellate body impasse in time to avoid a paralysis,’ WTO director general Roberto Azevedo told reporters in Geneva.
‘But they are beginning to realise that they have to work also with a scenario where no solution is achieved,’ he added.
The WTO faces a December deadline when, due to mandatory retirements, the appellate body will not have enough judges to hear cases.
‘December is not six months away. December is here with us today,’ Azevedo said, underscoring the urgency of the crisis.
Trump’s trade office has previously argued that no foreign court can ever supersede t he US legal system, suggesting the US would never surrender final authority in trade disputes to a non-American entity.
‘If we don’t have a fully functioning dispute settlement system the work that we do will be compromised in many ways,’ Azevedo said.
Turning to next week’s Group of 20 summit in Osaka, Japan, Azevedo said he was hoping the leaders of the world’s largest economies would agree to action on reducing global trade tensions.
‘We don’t see any signs that this trend is abating,’ he said of the continuing tit-for-tat tariff battles triggered by Washington.
A meeting between Trump and Chinese president Xi Jinping in Osaka ‘would be a welcome sign,’ said Azevedo, Brazil’s former envoy to the WTO.
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