December 12, 2018 / 3:06 PM / 2 years ago

U.S. not swayed by WTO reform proposals

GENEVA (Reuters) - Proposals for reforming the World Trade Organization fail to deal with problems raised by the United States, the U.S. envoy to the WTO told its General Council on Wednesday.

Dennis Shea U.S. Ambassador to the WTO arrives for the General Council meeting at the World Trade Organization (WTO) in Geneva, Switzerland, July 26, 2018. REUTERS/Denis Balibouse

U.S. President Donald Trump’s administration says the WTO is dysfunctional because it has failed to hold China to account for not opening up its economy as envisaged when Beijing joined the body in 2001.

To force reform at the WTO, Trump’s team has blocked new appointments to its trade court, which is now rapidly running out of judges, meaning it will be unable to issue binding rulings in trade disputes. Trump has even threatened to withdraw the United States from the Geneva-based WTO.

U.S. Ambassador Dennis Shea has laid out a list of complaints about the way the judges in the WTO’s Appellate Body handle appeals in legal disputes.

While his complaints about judges overstepping their mandates and taking too long over cases has found some sympathy among other WTO members, his tactic of blocking new appointments to the Appellate Body has been widely opposed as it risks crippling a guardian of international law.

The European Union and Canada have led efforts to find ideas that could satisfy U.S. concerns, winning support from China, India and others, and put forward their proposals at Wednesday’s General Council meeting.

Shea told the session that their ideas acknowledged the U.S. complaints “to some extent” but that on closer reading they fell short by seeking only to change some rules to accommodate rule-breaking by WTO judges.

“Rather than seeking to make revisions to the permit what is now prohibited, the United States believes it is necessary for (WTO) members to engage in a deeper discussion of the concerns raised, to consider why the Appellate Body has felt free to depart from what WTO members agreed, and to discuss how best to ensure that the system adheres to WTO rules as written.”

EU Ambassador Marc Vanheukelen said the WTO’s dispute settlement system was essential to support negotiations on new trade rules, which is what the United States wants the WTO to prioritize above dispute settlement.

“We are deeply concerned that continued vacancies in the Appellate Body present a risk to the WTO system as a whole,” Vanheukelen said.

Shea was unmoved by the EU’s efforts.

“With respect to the proposal advanced by the European Union, China, and India, it is hard to see how it in any way responds to the concerns raised by the United States,” he said, according to a transcript provided to Reuters.

Asked by Reuters why WTO members should keep negotiating new trade rules if they could not enforce them, he declined comment.

Reporting by Tom Miles; Editing by Mark Heinrich

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