The Trump administration ratcheted up its pressure on the World Trade Organization by raising the possibility of blocking the approval of the institution’s biennial budget and effectively halting its work starting next year.
During a regular meeting of the WTO budget committee in Geneva on Tuesday, a U.S. delegate expressed concern about the organization’s payments to the appellate body, which the Trump administration says has overstepped its mandate, according to two people familiar with the matter.
The U.S. also expressed its concerns about funding being diverted to a proxy dispute settlement system recently championed by the European Union, Canada and Norway, the people said.
Because WTO decisions must be made by a consensus among all 164 members, the U.S.’s blocking maneuver would threaten the proper functioning of the organization responsible for overseeing the rules of global commerce. The members have until Dec. 31 to adopt a budget for 2020 and 2021 and they will take up the issue again next Tuesday.
If the U.S. unilaterally kills off funding, it could imperil the future of the WTO’s work and force countries to fundamentally rethink their reliance on it to negotiate trade deals and settle the surging number of disputes.
Spokesmen for the WTO and the U.S. Trade Representative declined to comment.
The move marks an escalation in the Trump administration’s approach toward the trade body, which President Donald Trump has threatened to withdraw from entirely. The Trump administration also blames the WTO partly for allowing China to grow into a rival economic power over the past two decades by flaunting the rules.
The U.S. contributes more money than any other single country to the WTO’s annual budget -- 22.7 million Swiss francs ($22.8 million) in 2019, according to WTO data. The total budget for 2019 was 197.2 million francs, the same as a year earlier.
Trump, U.S. Trade Representative Robert Lighthizer and other U.S. critics argue that the WTO dispute settlement system threatens America’s sovereign rights and has strayed from its mandate.
The U.S. plans to deliver a statement about the “systemic concerns regarding the compensation of appellate body members” at the Nov. 22 meeting of the WTO dispute settlement body, according to a document published Tuesday by the WTO.