Is the world trade order about to collapse? The U.S. is blocking new appointments to the World Trade Organization’s appellate body, the ultimate authority on trade disputes, which will cease to function on Dec. 10 absent a compromise. Critics in Europe, China, India and elsewhere agonize that this would mark the end of the WTO and plunge the world back to an economic state of nature last seen in the 1930s. But America’s intent is to modernize the WTO and enforce existing rules.
The WTO has three fundamental problems. First, it isn’t working efficiently to resolve disputes and modernize. There has been no new comprehensive round of trade negotiations since the WTO’s founding in 1995, partly because its rules require unanimity to approve the agreements. The WTO also fails to deliver timely redress of unfair trade practices. The case against Airbus for receiving unfair subsidies dragged on for more than 15 years before being finalized this fall.
Read the full article in the Wall Street Journal.