Is the Multilateral Trade System on the Verge of Collapse?
AUWCL students, led by Professor Padideh Ala’i, discussed the complexity faced by the multilateral system, given the shifting of U.S. trade policy and global trend towards nationalism and anti-globalism.
AUWCL’s unique summer course on International Rule-Making and Dispute Settlement: WTO, WIPO and the Multilateral Trading System was held at the WTO and WIPO in Geneva, Switzerland in June 2019. Participants spent two weeks with senior staff of the WTO, trade negotiators, and Ambassadors discussing the challenges faced by the multilateral trading system. The most important challenges identified by the speakers included the future of the Appellate Body and the WTO dispute settlement system, the withdrawal of the U.S. from its traditional leadership role at the WTO, the continuing impact of China on the multilateral system, and the inability of the WTO to discipline or contain China’s non-market approach. According to the WTO Dispute Settlement Understanding (DSU), the standing Appellate Body of the WTO should have seven members with three sitting for each case. Each Appellate Body member has a term of 4 years, renewable once. For several years now, starting with the Obama Administration, the U.S. has blocked reappointment or appointment of new members, causing the Body to lose members so that there are currently only three Appellate Body members, two of whom will have their term expire in December 2019. At that point, the Appellate Body of the WTO will cease to exist. In view of the right to appeal of the DSU members, it is unclear what impact a non-functioning appellate body will have on the finality of decisions. Participants discussed the different perspectives on the circumstances for the current impasse, the role of judicial activism in times of anti-globalism, and the extent to which China has been able to use the system without being forced to change its trade practices.