Switzerland pledges to defend under-fire WTO

Didier Chambovey, the Swiss Ambassador to the WTO, on Tuesday. Keystone / Salvatore Di Nolfi

Switzerland has announced its intention to fight for the future of the World Trade Organisation, after US moves led to the de facto neutering of the WTO’s highest dispute court.

On Tuesday in Geneva, the terms of two of the last three judges on the WTO’s appellate court ended, after the US continued its policy of blocking new appointments to protest how the WTO does business.

This leaves the body without its ultimate umpire, leaving nations more free to operate according to power politics rather than rules when doing trade – a situation amounting to “the law of the jungle”, as University of Bern professor Peter Van den Bossche told the Associated Press.

Swiss Ambassador to the WTO Didier Chambovey said on Tuesday that “the situation is serious”, but that it “did not mean the collapse of  the global trading system”. Several dispute mechanism options remain available, he said, including the WTO’s lower court.

Switzerland is also at the forefront of a declaration signed by 60 “friends of the system” which reaffirms the importance of following WTO rules and resolving conflicts in a peaceful way.

“We have accepted the need to analyse the worries raised by the US and to find solutions,” Chambovey said. However, he also made it clear that the goal was to preserve the two-level system of a lower and appellate court.

The 60 countries did not propose any concrete interim solution to replace the court, which normally has seven judges but has been progressively weakened over the past years.

The WTO’s dispute settlement process, including the Appellate Body, was meant to establish that written rules, not arbitrary power, governed global trade.

But the process has proved cumbersome. The appellate panel is notorious for missing deadlines, a problem that worsened as it lost judges. It is supposed to rule within 90 days but last year needed an average of 395 days to issue decisions.

Critics from the US and other countries say that cases take too long to resolve and that the Geneva-based agency is ill-equipped to deal with the challenge posed by the Chinese economy’s unconventional blend of capitalism and state control.