In another development likely to affect the bev/al industry, the World Trade Organization’s top court no longer has enough judges to handle big trade disputes between countries. Efforts to modernize WTO rules to meet challenges such as those posed by China have repeatedly failed.
Not only has the WTO been unable to agree on responding to China’s market-distorting state capitalism, but it’s been unable to agree on rules regulating e-commerce and other areas for years.
The Appellate Body – the WTO’s top court – reviews arbitration rulings. It’s supposed to have seven judges, three of whom sit on any case. But it already had four vacancies and on Tuesday terms for two other judges expired. The result: The Appellate Body has only one judge.
The dispute is largely between the EU, which prefers a global trade court, and the U.S., which prefers ad hoc arbitration for each dispute. And the U.S. has refused to allow the appointment of new judges.
The U.S. accused the court of interpreting WTO rules in a way that creates new obligations for WTO members, much as U.S. Supreme Court ruling can create new law in the U.S. The U.S. also objects to dumping, when a foreign supplier sells goods more cheaply at home than abroad.
It’s not just the Trump Administration that has had concerns. “For more than 16 years and across multiple US administrations, the United States has been raising serious concerns with the Appellate Body’s overreaching and disregard for the rules set by WTO members,” the U.S. delegation at a WTO meeting said recently.
Indeed, under President Obama, the U.S. opposed a second term for a South Korean judge and for an American chosen by a previous administration.