The terms of two of the last three judges on the World Trade Organization’s Appellate Body ended on 10 December.
Their departure will leave countries’ trade disputes open as the organisation will not be able to issue rulings. Its lower court will still be able to hear cases, but if a country appeals to the higher court, the lower court’s decisions will be irrelevant.
The organisation was established in 1995, and has been heavily criticised for missing deadlines and dragging cases. With its paralysis, countries could abuse sanctions to limit imports. In order to reform the WTO, consensus from its 164 member countries is required.
United States’ President Donald Trump is known as a critic of the WTO’s system, saying that it constrains the US’ ability to counter unfair trading practices, particularly by China. Other countries too have complained about the organisation’s way of work.
According to the EU commissioner for trade, Phil Hogan, the ending of the WTO is a “very serious blow to the international rules-based trade system.” As a temporary solution, the Union has been trying to set up an appellate body to arbitrate trade disputes. However, the number of countries that might join in is still uncertain.