Dispute threatens WTO

Taiwan’s refusal to allow a Chinese judge on the World Trade Organization’s top legal panel is paralyzing the work of the global trade body, risking a crisis that could have far-reaching ramifications for disputes affecting billions of dollars of commerce, trade officials said Friday.

The standoff has angered China and other countries because the failure to agree on an agenda is preventing the WTO from taking up a number of other major disputes -- including an argument over Chinese restrictions on the sale of American movies, music and books.

The self-ruling island rejected demands Friday from the world’s biggest commercial powers to back down at a meeting called specifically to deal with the problem.

It has become an “extremely serious challenge to a system that is really the cornerstone of this organization,” said Bruce Gosper, an Australian ambassador who is chairman of the WTO’s dispute settlement body.

For the 151-member WTO, whose global free-trade talks have repeatedly stalled, the dispute system and its regular sessions, investigative panels, rulings and occasional sanctions have been a symbol of reliability. But many negotiators are warning that the continued failure of liberalization efforts could lead to a surge of new disputes.

“If this situation persists much longer, then we’ll have a crisis,” Gosper said.

Taiwan, which is excluded from most international organizations because of Chinese opposition, has seldom flexed its muscles in the WTO, which makes all decisions by consensus.

It joined the body in early 2002, just after China, which has claimed sovereignty over the island since the nationalist government left the mainland in 1949 during China’s civil war. Under Beijing’s insistence, the WTO admitted “Chinese Taipei” as a tariff territory, rather than a sovereign state.

In a surprise move, Taiwan blocked an entire dispute meeting Monday after failing to persuade WTO members to delay the naming of new judges to the seven-member WTO appeals body.

The meeting would have appointed four new members, including Beijing attorney Yuejiao Zhang as the first Chinese judge.

Taiwan has not publicly mentioned Zhang by name but insists that it has serious reservations about the “impartiality and qualifications” of one of the possible judges. The other three nominations are from the U.S., Japan and the Philippines.

The appeals body has special significance in the WTO system because it usually makes the last decision before the authorization of commercial sanctions that can amount to billions of dollars. Its rulings are final.