The World Trade Organization’s court of last resort, its appellate body, is about to implode.
“It’s dispute settlement that has been analogized to being the ‘crown jewel’ in the WTO system,” said Raj Bhala, Brennesein Distinguished Professor at the University of Kansas Law School and a Senior Advisor at Dentons. “For the first time in human history, we have an adjudicatory mechanism, a court, if you will, that actually, not only makes rulings about compliance with international agreements, in this case the WTO treaty, but also can authorize enforcement by the winning party if the losing party fails to comply.”
This system was favored by the U.S. when the WTO was set up decades ago. That policy has changed.
“The U.S. has turned its fire on the system,” said Bhala. “It’s asphyxiating it, strangling it to death, by not allowing any new appellate body members to be confirmed onto the appellate body to replace the existing ones whose terms are expiring.”
A minimum of three members are needed to hear a given case. Come December 10, there will only be one member still serving.
“I think what it really boils down to is a difference in philosophy of judicial interpretation,” said Bhala. “The U.S. really thinks that the appellate body ought to be much more constrained, almost robotic, in how it decides cases and that it should do no more than practice law with a dictionary and not use any judgment.”
It’s important to note that the actions that have led to this began under the Obama administration and have continued throughout the Trump administration, so there doesn’t appear to be a partisan purpose here.