EU Seeks to Break U.S. Stranglehold on WTO 

(Bloomberg) — The European Union on Monday will take steps to get around a stranglehold the U.S. has placed on the World Trade Organization’s appellate body, which would allow countries to continue to adjudicate disputes within the international system.

Trade ministers from the 28-nation European Union are expected to start the process of negotiating an interim solution if the adjudicative body of the WTO becomes hamstrung, as is expected later this year, according to internal documents seen by Bloomberg.

The U.S. is blocking new appointees to the seven-member WTO appellate body, which will lead to it being incapacitated in December because there won’t be enough judges to issue rulings. The EU is seeking to implement an arbitration process that would continue the “essential principles and features’’ of the appellate body, according to the memo.

The approach provides a legal alternative to the current process that would enable WTO members to voluntarily arbitrate their WTO dispute rulings. The idea is to produce a viable proxy to the appellate body, which has the final say in upholding, modifying, or reversing rulings.

If the EU approves the approach, it would be the first WTO member to formally do so.

“It would be perfectly within the rules for 163 WTO members — all members except the United States — to simply duplicate the WTO dispute settlement system, including the appellate body, as their chosen form of arbitration under the dispute settlement understanding,’’ said Jim Bacchus, a former WTO appellate body member, during a WTO conference last year.

To contact the reporters on this story: Nikos Chrysoloras in Brussels at nchrysoloras@bloomberg.net;Bryce Baschuk in Geneva at bbaschuk2@bloomberg.net

To contact the editors responsible for this story: Ben Sills at bsills@bloomberg.net, Richard Bravo, Andrew Blackman

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