'Bad news' for Australia as WTO faces crisis

Phil Hogan is the European Union's new trade commissioner

Instead, they are confronted with the "law of the jungle", as critics call it.

President Trump has threatened to withdraw the United States from the WTO if it doesn't change the way it settles disputes and fails to address its other concerns. Now that the term of two of the three remaining lawyers ends on Tuesday, this so-called Appeal Body can no longer make any pronouncements. WTO Deputy Director-General Alan Wolff said in a speech to a think tank in Beijing last month that "the dissatisfaction of the United States with the WTO dispute settlement system has been a smoldering resentment that finally led to action". With only a sole member left, the Appellate Body will be unable to hear new disputes after December 10.

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

The loss of a global trade court of final appeals, Murphy said, is "really risky for American businesses". "As of tomorrow, the court will cease to exist".

The loss of a global trade court of final appeals, Murphy said, is "really risky for American businesses". They argue that the trade organization holds back America's ability to answer unfair trading methods used by China and other countries. "If you have no rules, everyone can do what they want and that would be really, really bad, not least for the smaller and developing countries", European Union Trade Commissioner Cecilia Malmstrom said last summer. WTO members can still file grievances, but there can be no enforcement of a ruling if any state files an appeal. However, this proposal has not been taken up by WTO Members. "It's the fish that are going to save the WTO", said one ambassador.

In a statement released on Tuesday, EU Trade Commissioner Phil Hogan said: "This is a regrettable and very serious blow to the worldwide rules-based trading system". "Developed countries, on the other hand, can use their muscle power to get things done bilaterally", Dhar added. But that's just a stopgap. And it is uncertain how many countries could participate.


In 1995, developed nations around the world came together to create a means of creating rules for worldwide trade and settling disputes between countries without the use of damaging tariffs.

"The European Commission will soon unveil further proposals to make sure that the EU can continue to enforce its rights in global trade matters should others block the system", Hogan said.

WTO Director General (DG) Roberto Azevedo, at a press conference on Tuesday evening in Geneva, said the members will continue to resolve WTO disputes through consultations and panels.

But the process has proved hard. The Appellate Body is notorious for missing deadlines, a problem compounded by the loss of judges. It is supposed to rule within 90 days but a year ago needed about 395 days to make decisions.

Since 1995, 592 cases have been brought to the WTO (124 by the United States, the No. 1 complainant); the appellate body has issued 120 rulings, covering 162 of those cases.

However, the Trump administration has been the most aggressive in trying to rein in the WTO.

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