The European Union (EU) unveiled a new proposal that seeks to stave off paralysis of the World Trade Organisation’s (WTO's) dispute settlement system by unblocking the appointment of its appellate body members, according to a statement Monday.
The proposal has the backing of Australia, Canada, China, Iceland, India, Korea, Mexico, New Zealand, Norway, Singapore and Switzerland.
“The appellate body function of the WTO dispute settlement system is moving towards a cliff’s edge,” EU trade chief Cecilia Malmstrom said in the statement.
“Without this core function of the WTO, the world would lose a system that has ensured stability in global trade for decades.”
The proposal will be presented at the WTO’s General Council on December 12.
For more than a year, the Trump administration has blocked appointments to the appellate body, which has the final say in upholding, modifying or reversing rulings that often affect some of the world’s biggest companies and billions of dollars in commerce. If the US continues its hold, the body will be paralysed in late 2019 because it won’t have the three panelists required to sign off on rulings.
The EU paper is important because it aims to shift the WTO’s nascent reform discussions toward negotiations on a concrete text.
The proposal won’t advance until the US and the rest of the WTO’s 164 members agree to amend the WTO dispute settlement understanding, which is considered to be a significant undertaking.
The proposal is unlikely to gain the backing of the US, which has criticised the appellate body for overstepping its mandate with aggressive interpretations of WTO rules.