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U.S. Works to Fix WTO’s Dispute Settlement System

Trade officials from around the world recently pledged to mend the World Trade Organization’s dispute settlement system by 2024, according to The Wall Street Journal (subscription).

The basics: The WTO is a forum of 164 member countries that negotiate trade agreements, settle disputes and develop and monitor the implementation of trade rules and regulations.

  • In recent years, it has been less effective owing, to a significant degree, to a failure to appoint appellate body judges, hamstringing its dispute-settlement function.

What’s the holdup? Since 2019, the U.S. has blocked appointments, citing concerns of judicial overreach.

  • Officials have argued for more than a decade that the WTO appellate body oversteps its authority.
  • Meanwhile, WTO members have not negotiated new major market-opening trade agreements or modernized the WTO rulebook to reduce barriers and distortions in the international trade system.

The road ahead: The U.S. began signaling its desire to return the WTO to prominence last year, reflecting President Biden’s hope to work more closely with allies and other countries.

  • The U.S. has organized meetings of working-level representatives from WTO member countries and is encouraging member countries to meet informally every few weeks to discuss how to revamp the court system before official talks begin at the WTO.

The pledge: As a result, at a WTO ministerial meeting in June, top trade officials pledged to have a full and functioning dispute-settlement system accessible to all member countries by 2024.
What the NAM is saying: Following the June ministerial meeting, NAM Vice President of International Economic Affairs Ken Monahan said, “The NAM is encouraged by the commitment to WTO reform, but much work lies ahead to ensure a WTO that delivers broad trade liberalization, modernizes and enforces the WTO rulebook and improves enforcement tools.”

Related news: The WTO also announced recently a problematic IP waiver agreement, known informally as the TRIPS waiver, which allows countries to effectively waive intellectual property for COVID-19 vaccines—a move the NAM strongly opposes.

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