The EUs announcement Friday that it was launching a parallel World Trade Organization court to circumvent the United States in Geneva is the clearest sign to date of a more muscular “geopolitical” Commission.
It is also the blocs riskiest bargain.
Last December, the worlds main trade court no longer had enough judges to function. The U.S. had been blocking the appointment of judges to the World Trade Organizations Appellate Body, the highest dispute-resolution panel, accusing the court of being too soft on its archrival China.
WTO nations that wanted to save the multilateral trade order wondered what to do next. Without the court to adjudicate disputes independently, global trade risked reverting to a system where economic muscle was all that mattered. Their response came on Friday, by setting up a parallel WTO court without the U.S.
Announcing the new agreement, EU trade chief Phil Hogan insisted it was only a temporary stop-gap. “Let me underline again that this remains a contingency measure needed because of the paralysis of the WTO Appellate Body. We will continue our efforts to seek a lasting solution to the Appellate Body impasse,” Hogan said.
Brussels believes it has scored a major victory to keep the multilateral trading system alive and prevent future trade wars, by agreeing to set up a binding trade dispute appeals arbitration with 16 other countries, including China and Brazil. The new system will function without the U.S., which has suffocated the WTOs built-in tribunal by vetoing any appointments of judges.
Fridays move inevitably puts the EU and China on the same side of the table in Geneva, as the two major trade powers that are trying to maintain the current WTO system and rules. Washington has argued that it makes no sense to rebuild a WTO court before members have agreed on radically new rules that take into account Chinas system of state capitalism.
Critics warn that the EU risks isolating the United States in Geneva. Brussels insists this is not its intention.
“This agreement is not directed against anyone. Its not the EU working with one other country against another but a group of countries working together to set up a temporary alRead More – Source
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