Deputy U.S. Trade Representative and top WTO envoy Dennis Shea told a meeting of the General Council that he was not ready to accept a proposal from the European Union and other members that would overhaul the WTO's Appellate Body, which has the final say on all legal battles fought in Geneva.
"The proposals would not effectively address the concerns that members have raised," Shea said at the meeting. "With respect to the proposal advanced by the European Union, China and India, it is hard to see how it in any way responds to the concerns raised by the United States."
Shea's statement struck an odd note, as the EU designed its reform bid to respond specifically to critiques lobbed by the Trump administration as it has stonewalled new judges from taking seats on the Appellate Body.
But he said that rather than the fix the Appellate Body's perceived ailments, the EU's proposal simply alters the body's rules to codify them.
"Rather than seeking to make revisions to the text of the Dispute Settlement Understanding to permit what is now prohibited, the United States believes it is necessary for members to engage in a deeper discussion of the concerns raised, to consider why the Appellate Body has felt free to depart from what WTO members agreed, and to discuss how best to ensure that the system adheres to WTO rules as written," Shea said.
Currently, the seven-seat Appellate Body is operating with just three members, the minimum number needed to hear a single appeal. If the deadlock is not broken before the next member's term ends in December 2019, the Appellate Body will essentially fold and open the door for a free-for-all trade battle among WTO members.
Shea and U.S. Trade Representative Robert Lighthizer have peppered the Appellate Body with criticism over the course of the deadlock, bashing the panel for failing to meet deadlines, allowing judges to finish work on cases even after their terms are up, and supposedly overstepping its judicial authority.
"We are deeply concerned that continued vacancies in the Appellate Body present a risk to the WTO system as a whole," the EU delegation said. "We therefore emphasize the urgent need to unblock the appointment of Appellate Body members."
The WTO operates by consensus, and so the U.S. has the power to single-handedly block any reform proposal from taking effect.
Even as he was rejecting the EU's proposal out of hand, Shea nevertheless said the Trump administration was willing to engage in more far-reaching discussion to address its criticisms.
"As we have stated many times in the Dispute Settlement Body, and as we have demonstrated to numerous delegations over the past year, we are ready to engage with other members on the important issues raised," he said.
--Editing by Aaron Pelc.
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