U.S. Delays Effort to Restore WTO’s Key Decision-Making Power

(Bloomberg) -- The U.S. signaled it’s not yet ready to engage in a debate over how to revive the World Trade Organization’s dispute resolution system, which has been hobbled since 2019, until Washington works through President Joe Biden’s transition.

The U.S. delegation to the WTO, in a statement Monday seen by Bloomberg, said it’s “not in a position” to back a proposal on appellate panel members, citing Biden’s inauguration five days ago and the transition to his administration.

The move will further delay attempts to fill the vacancies on the WTO’s appellate body -- a seven-seat panel that has the final say on disputes that affect billions of dollars in commerce. The gridlock began after the Trump administration unilaterally opposed all new appointments to the panel, saying it had overstepped its mandate.

While the U.S. has indicated its intention to work with allies to address mutual international concerns, the fate of the appellate body could remain in a holding pattern as the president attends to more pressing domestic issues, such as combating the health and economic impacts of the Covid-19 pandemic.

Reform Proposal

Furthermore, the U.S. Senate has yet to confirm Biden’s nominee for U.S. Trade Representative, Katherine Tai, who is expected to lead the administration’s approach to WTO reform.

Next month, the EU plans to introduce a new proposal aimed at addressing U.S. concerns with the appellate body in an effort to engage Washington on substantive reforms to the WTO.

“We need a new EU-U.S. understanding on the reform of the WTO appellate body or on the dispute settlement system,” EU Director-General for Trade Sabine Weyand said earlier this month.

Weyand said the EU will build upon a roadmap developed by WTO general council chairman David Walker to clarify the WTO’s dispute settlement rules and potentially negotiate new ones to address the changes that have emerged since they were first agreed in 1995.