Two of the WTO’s last 3 judges’ terms ended today ending the court’s ability to rule on future trade disputes.

Although the WTO is supposed to have 7 judges, the US had stopped making new appointments under the current president and past two presidents(President Obama and President Bush) because of disagreements regarding how the WTO will conduct itself.

The WTO was started in 1995 to help resolve trade disputes between different countries and help regulate global trade. But, the panel’s judges consistently missed decision deadlines and disputes that needed to be resolved within a few months were taking over a year to be resolved. The panel had also developed a reputation for overreaching in its rulings and had reached a point where it would no longer be able to deal with new issues such as the powerhouse of China and it’s mix of Communism with Capitalism.

Stephanie Murphy, a Democratic Representative from Florida who sits on the Ways and Means subcommittee on trade stated yesterday, “We are in a crisis moment for our global trading system. As of tomorrow, the court will cease to exist. The loss of a global trade court of final is really dangerous for American businesses.”’

Several countries responded to the new status of the WTO:

  • China’s ambassador to the WTO Zhang Xiangchen said that the shutdown is,”The most severe blow to the multilateral trading system since its establishment”.
  • Joao Aguiar Machado the EU ambassador to the WTO said,”The very idea of a rules based multilateral trading system is at stake. The EU will not support, and will not condone, a system slipping into power-based economic relationships”.
  • Phil Hogan the EU commissioner for trade said, “This is a regrettable and very serious blow to the international rules-based trade system”.

With the WTO no longer functioning there is global fear that trade disputes will enter the,”Law of the jungle” status where the bigger and more powerful countries will bully the smaller countries into unfair trading relations.