On Wednesday, the Trump administration tried to file an appeal with the WTO’s appellate body over a steel dispute with India.
We say “tried” because the panel – effectively the high court and final arbiter of international trade tiffs – is now crippled and thereby unable to decide cases. If you’re looking for culprits when it comes to explaining why the panel is incapacitated, you can point directly at the US.
Trump, you’ll recall, has blocked all new appointments, forcing the body to conduct its business with only a trio of active members out of a possible seven. Two of those three members saw their terms expire early last week.
Now, there aren’t enough members on the appellate body to hear appeals, including the one the US filed this week. So, the ruling in question – which apparently determined that the US erred in the handling of tariffs on Indian hot-rolled carbon steel products – is basically moot. Or at least that’s the way it sounds.
“Because the WTO appellate body no longer has a sufficient quorum of members to sign off on new rulings, the US move will effectively act as a veto of the ruling because the case was appealed into a legal void”, Bloomberg says.
Clearly, this is all kinds of nefarious, not to mention absurd. India isn’t pleased with the current state of affairs, and China’s delegation called this a “bad faith” effort to “intentionally delay” the case. “We encourage prompt unblockage of the Appellate Body by the United States to show to the public its genuine and sincere good faith in this appeal”, the Chinese said.
One person cited by Reuters who attended Wednesday’s proceedings called the situation “almost comical”.
Europe recently took steps to ensure this kind of thing doesn’t become a regular occurrence. The EC this month said it will punish nations that seek to take undue advantage of the paralysis in the appellate process.
Last month, reports indicated that the US might attempt to block the WTO’s budget, citing the White House’s consternation at the appellate body, as well as ostensible concerns tied to an effort on the part of Europe and Canada to establish an alternative arbitration mechanism.
The US is the biggest contributor to the WTO’s budget, and Trump has repeatedly threatened to pull the US out of the organization altogether.