World trade without rules? US shuts down WTO appeals court

Legal Events

Global commerce will lose its ultimate umpire Tuesday, leaving countries unable to reach a final resolution of disputes at the World Trade Organization and instead facing what critics call “the law of the jungle.’’

The United States, under a president who favors a go-it-alone approach to economics and diplomacy, appears to prefer it that way.

The terms of two of the last three judges on the WTO’s appellate body neared their end at midnight Tuesday. Their departure will deprive the de facto Supreme Court of world trade of its ability to issue rulings.

Among the disputes left in limbo are seven cases that have been brought against Trump’s decision last year to declare foreign steel and aluminum a threat to U.S. national security and to hit them with import taxes.

The WTO’s lower court ? its dispute settlement body ? can hear cases. But its decisions will go nowhere if the loser appeals to a higher court that is no longer functioning.

Without having to worry about rebukes from the WTO, countries could use tariffs and other sanctions to limit imports. Such rising protectionism could create uncertainty and discourage trade.

“We are in a crisis moment for our global trading system,’’ said U.S. Rep. Stephanie Murphy, D-Fla, who sits on the House Ways and Means subcommittee on trade. “As of tomorrow, the court will cease to exist.’’

The loss of a global trade court of final appeals, Murphy said, is “really dangerous for American businesses.’’

The panel is supposed to have seven judges. But their ranks have dwindled because the United States ? under Presidents George W. Bush, Barack Obama and Trump ? has blocked new appointments to protest the way the WTO does business.

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