The Strategist

US leaves WTO without new arbitrators, challenges decision in favour of China

10/27/2020 - 02:07

Once again, the US has blocked nomination of new judges to the World Trade Organisation ( WTO) appeals court. Around the same time, Washington lodged an appeal against the arbitrators' ruling, which found that the $234 billion rise in US tariffs on Chinese imports was unjustified.

WTO/Jay Louvion (Studio Casagrande)
WTO/Jay Louvion (Studio Casagrande)
The USA appealed the ruling of the World Trade Organization court of arbitrators on China's allegation on the implementation of American protective duties as part of the trade war. Moreover, Washington again prevented 121 WTO member states' plan to restore the appointment of judges to appeal to that body.

Since 10 December 2019, when the term of office of one additional arbitrator expires, the operation of the company has been suspended (the allegation must be reviewed to reach a verdict by three judges). Still, despite the fact that the WTO 's largest dispute resolution body continues to exist, the enforcement of its decisions is, in fact, a voluntary matter, because the ruling of the appeal court is deemed final. 

China criticized the filing of the appeal, saying that this prohibits the US from upholding the verdict of the panel. Recall that the WTO has determined that the customs duties levied in 2018 by the United States on a range of Chinese products do not conform with international trade laws, because it has not been confirmed that such steps are warranted.

Two lists of commodities on which Washington levied duties of 25 percent were included in the Chinese lawsuit – first on shipments of $34 billion and then on $200 billion. Duties have been adopted by the US in relation to national regulations allowing the US to respond to infringements of technology transfer laws and to defend intellectual property. 

Meanwhile, on Monday, thanks to the inability of the US to comply with the arbitrators' ruling on a government subsidy demand for Boeing, the European Union was able to exercise its right to secure duties successfully: WTO representatives backed the retribution. It was previously decided that the overall volume of such countervailing duties could not be more than $4 billion annually. This was, in effect, the conclusion of the trial, which lasted for 16 years and included consideration of the charges and the efforts to compel the defendant to enforce the decisions taken.