The World Trade Organization was due to suspend its arrangements to settle disputes between member states last night. This represents the biggest threat to the trade body in its 25-year history, and has been forced on the organisation by the US. Two of the judges who sit on the panel that oversees trade disputes, the appellate body, will retire on December 10. With the US blocking new appointees this means there are no successors and, with just one judge remaining, the body will not be able to hear new cases. The global trading system is about to lose its independent arbiter.

There is a lot at stake. The roots of the WTO were laid in the ruins of the second world war when the US and its allies recognised the need for an international trading system to help curb protectionism and break down trade barriers. Its forerunner, the General Agreement on Tariffs and Trade, was set up in 1948. Almost half a century later, the WTO ushered in binding dispute settlement, including the appellate body. Panels of arbiters rule on breaches of existing WTO law in cases brought by one member country against another and can authorise retaliation in the form of higher tariffs. Almost all world trade — 98 per cent — is covered by WTO rules.

Experts fear the looming paralysis will make it easier for countries to break WTO rules without the fear of penalties. It also creates uncertainty for the 14 appeals cases already filed at the WTO. Ten of these are expected to have to await any resolution of the blockage over new appointments. Among these is the EU’s appeal on compliance by Airbus over alleged subsidies, part of the world’s largest trade dispute between the aerospace group and its US rival Boeing.