EU Joins 15 Nations to Forge End-Run Around Trump’s WTO Block

(Bloomberg) -- The European Union and a group of 15 nations that includes China and Brazil agreed Friday to settle their trade disputes using an appeal and arbitration system at the World Trade Organization.

The development comes three months after the Trump administration precipitated the paralysis of the WTO appellate body -- which acted as a sort of supreme court for trade -- by blocking all nominees to the seven-member panel.

The EU-led accord provides a legal structure for nations to appeal their disputes to a panel of three trade experts who apply the same procedures of the appellate body to reach a final judgment. As a practical matter, WTO members who sign on to such a system will basically undergo the same process as they would have via the appellate body.

“This agreement bears testimony to the conviction held by the EU and many other countries that in times of crisis working together is the best option,” EU Trade Commissioner Phil Hogan said Friday in a statement.

Parties to the agreement, include Australia; Brazil; Canada; China; Chile; Colombia; Costa Rica; the EU; Guatemala; Hong Kong; Mexico; New Zealand; Norway; Singapore; Switzerland; and Uruguay.

The U.S., which is not a member of the agreement, still has the power to veto any pending cases against it by appealing them into a legal void. The U.S. is facing several potential disputes, including challenges to President Donald Trump’s national security tariffs on steel and aluminum goods.

Four other major users of the WTO dispute settlement system are also absent from the agreement: Argentina, India, Japan and South Korea.

©2020 Bloomberg L.P.

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