EU trade chief Phil Hogan said Thursday that the 28-nation bloc “cannot afford being defenseless if there is no possibility to get a satisfactory solution within the WTO." Since Wednesday the WTO's appellate body, whose decisions affect billions of dollars in trade, lost its ability to rule on new dispute cases. Without having to worry about possible penalties, countries could use tariffs or be tempted to implement protectionist measures.
Hogan said that with the proposal to change some EU trade rules will enable it to act even when the WTO cannot give a final ruling. Anticipating the end of the appellate body, the EU and Canada agreed this summer on a new trade dispute resolution system as a temporary backstop. The EU wants to expand it, but it's unclear how many countries might join.