Divergence Across the Atlantic? US Skepticism Meets the EU and the WTO’s Appellate Body

Abstract

In 2019, the Appellate Body (AB) of the World Trade Organization’s Dispute Settlement System (WTO-DSS) lost its quorum. Instead of the required minimum number of three members, the AB’s membership fell to one member only as the US under Donald Trump blocked the appointment of new members upon the expiry of the terms of two incumbent ones. The AB’s paralysis produced a high level of shock in the EU. In this article, we take a closer look at the US’s decision to paralyze the WTO’s AB and the EU’s reaction to it. Its point is that it will not be easy to get the US back on board as the factors that drove its decision predate the Trump era. Long before Trump, the tradeoff upon which the US based its acceptance of the WTO-DSS unraveled. For US policy makers, the EU is partly to blame for this as it undermined the system’s prompt compliance assumption. More important even is the claim that the system’s AB created new obligations for the WTO members to the point where the acceptance of some WTO rules—notably regarding trade remedies—became politically unsustainable in the US itself.

Keywords

• trade disputes
• trade remedies
• transatlantic relations
• world trade organization