(Bloomberg) -- The World Trade Organization suspended a meeting of its dispute settlement body after the U.S. rejected Venezuela’s request for a probe into Trump-era sanctions against President Nicolas Maduro’s government.
The highly unusual move, relayed by an official inside a closed meeting on Friday, risks grinding the WTO’s dispute settlement process to a halt and marks another example of how the Biden administration is continuing Donald Trump’s hardball tactics at the Geneva-based trade body.
The U.S. “exercised its rights as a WTO member to object to this illegitimate panel request because representatives of the Maduro regime do not speak on behalf of the Venezuelan people,” according to a statement issued by the U.S. Mission in Geneva. “The U.S. will reject any effort by Maduro to misuse the WTO to attack U.S. sanctions aimed at restoring human rights and democracy to Venezuela.”
The meeting ended prematurely after Venezuela refused Washington’s demand that the WTO remove Venezuela’s dispute request from the meeting agenda, according to the official attending the meeting. The impasse means that the WTO can’t hold any regular dispute settlement meetings unless and until the U.S. or Venezuela back down.
The impasse will provide an early test for the WTO’s new Director-General, Ngozi Okonjo-Iweala, who as a candidate touted her ability to bridge the deep levels of mistrust among WTO members.
2018 Sanctions
The trade dispute centers on a series of regulations and executive orders Trump issued in 2018 that prohibited access to U.S. financial markets by the government of Venezuela and transactions related to the purchase of Venezuelan debt.
Venezuela’s complaint alleged that the U.S. sought to “isolate Venezuela economically” and violated its rights under the General Agreement on Tariffs and Trade and the General Agreement on Trade in Services.
The Trump administration previously opposed Venezuela’s request for WTO dispute inquiry in 2019 and blocked WTO members from adopting the agenda of a WTO dispute-settlement meeting -- something that had not happened since 1999.
Though President Joe Biden has placed greater emphasis on multilateral cooperation than his predecessor, the move reflects his administration’s willingness to maintain certain Trump-era strategies that critics say risk undermining the international trading system.
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