U.S. objection over Venezuela threatens to halt WTO trade disputes

By Tom Miles

GENEVA (Reuters) - The World Trade Organization was forced to postpone a regular dispute settlement meeting on Tuesday after the United States refused to recognize Venezuela, diplomats said, potentially putting a long-term obstacle in the WTO's trade dispute system.

The United States is among some 50 countries that have recognized opposition leader Juan Guaido as Venezuela's interim president. A U.S. official said the WTO's dispute settlement body (DSB) could not legitimately consider an agenda item submitted by the “illegitimate Maduro regime”, referring to President Nicolas Maduro's government.

A WTO official said the monthly DSB meeting had been postponed “until further notice”. It was unclear how long the problem would last.

“If one country puts an item on the agenda of every meeting and another country refuses to accept that the agenda can be discussed... then it may take a long time before a meeting can actually take place,” one diplomat said.

The DSB oversees the process of trade disputes, formally adopting rulings and appeals. The system is already under threat because the United States is blocking the appointment of new appeals judges, casting the resolution of disputes into doubt.

Tuesday's meeting was due to hear Venezuela's request for the DSB to set up an adjudication panel to hear its legal challenge to U.S. sanctions - imposed by Washington to put pressure on Maduro.

“Because the Maduro regime is not the legitimate government of Venezuela, Maduros representatives are not the legitimate representatives of a WTO Member. Therefore, neither the agenda item nor the panel request would legitimately be before the DSB,” the U.S. official said, on condition of anonymity.

Guaido and his backers regard last years elections that gave Maduro a second term as fraudulent, while Maduro has denounced Guaido as a U.S. puppet who is seeking to foment a coup.

Other items on the WTO agenda included Russia's request for a panel to hear a complaint against the European Union's duties on certain steel products, and Thailand's request for a panel to rule on Turkish duties on air conditioners.

Dozens of other disputes are already underway and will need sign-off by the DSB in order for rulings and appeals to be legally valid. It was unclear if there was any way for such disputes to progress and get resolved if the DSB is unable to meet.

Diplomats in Geneva are aware that merely failing to agree on the agenda for a meeting can freeze an organization for the long term.

Just up the hill from the WTO, the Conference on Disarmament, the main U.N. nuclear negotiating forum, has been paralyzed for more than 20 years because of a stalemated agenda.