Canada and Europe make deal to work around blocked World Trade Organization

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OTTAWA — Canada and the European Union have formalized a deal to set up a substitute appeals body for trade disputes, working around the United States’ refusal to allow new appointments to one that already exists at the World Trade Organization.

The WTO’s Appellate Body is down to three members from its normal seven and two of the remaining members’ terms expire in December.

The U.S. has been blocking new appointments in an effort to force other reforms at the trade organization, which President Donald Trump has said was set up to benefit everybody except the U.S. and which he’s threatened to pull out of altogether.

If the WTO’s appeals body can’t handle trade fights, Canada and European countries have agreed to take their appeals to three-member panels made up of people who used to sit on the Appellate Body.

Both say they’d rather get the World Trade Organization back in working condition but if they can’t, this deal will give them an alternative that works more or less the same way.

Canada has been in dozens of disputes arbitrated by the WTO in the 24 years it’s been around, including filing complaints about bans on products made from seals and answering them about Canadian jurisdictions’ favouring their own wine in their liquor-selling rules.