The World Trade Organisation is facing its biggest crisis since it replaced the post-world war General Agreement on Tariffs and Trade 25 years ago. It has been brought to a head by the United States blocking the appointment of new judges to sit on the appeal panel that oversees settlement of disputes between its 164 members, sometimes called the Supreme Court of World Trade. With the retirement of two judges, the panel has lacked a quorum to hear new cases and the WTO has suspended arrangements to settle disputes between member states. The global trading system no longer has an independent dispute settlement mechanism. There are two main issues here. One is the Trump administration’s profound dissatisfaction with what it sees as overreach by the judges in making new rules to cover perceived gaps in a rule book surely in need of updating, instead of confining themselves to interpreting existing rules. The other is a sclerotic dispute-settlement process. The annual report for last year showed that the average trade dispute took 3 ½ years to get through the panel stage and appeal. China blames US for the demise of WTO’s appeal court The US was instrumental in creating the WTO, with binding dispute settlement including the appellate body, which can rule in cases brought by member countries against others and authorise retaliatory tariffs. Its blocking of appointments, and thus paralysing the process, could make it easier for member countries to break the rules without fear of the consequences. That said, failure to update the rules since the WTO’s inception have led to shortcomings in a settlement process that may have worked from the outset for economies with clear separation between market and state, but not so well in economies such as China’s, where the dominance of state-owned enterprises is seen to make it difficult to apply WTO rules on subsidies, for example. There are fears that without a functional appeals system whose rulings are respected by WTO members, international trade disputes could spiral into damaging tit-for-tat tariff wars. The consensus-based organisation, whose members span wildly divergent stages of economic development, must revisit its failure to work out new rules for freer trade after China joined 18 years ago this month. Negotiations from 2001 were finally declared dead in 2015 with little to show for them. Amid the US-China trade war and an evolving tech war, and the threat of decoupling of the two economies that would do nothing for global growth, the three great trading powers – counting Europe – need to reconcile the European view of the Appellate Body as an activist court able to make rules, with the American view of its role as an enforcer of the rules.