U.S. files appeal into WTO system it has broken

GENEVA (Reuters) - The United States on Wednesday fell foul of its own actions that have weakened the World Trade Organization after it filed an appeal in a steel dispute with India, even though WTO adjudicators are no longer able to handle such a case.

Washington has paralysed the WTO's Appellate Body, which acts as a supreme court for international trade, by blocking appointments for over two years. Two of the body's three members came to the end of their terms last week, leaving it unable to issue rulings.

The United States notified fellow WTO members that it had lodged the appeal, a Geneva trade official said. It planned to consult India to determine how to settle the dispute, possibly by finding "alternatives" to the WTO appeals process.

One person who attended Wednesday's meeting on the matter called it "almost a comical development".

"It seems that the United States is either seeking a correction of possible errors in the Panel Report from the Appellate Body, or intentionally delaying or mooting the case in a bad faith manner," China's delegation said in a speech.

"We encourage prompt unblockage of the Appellate Body by the United States to show to the public its genuine and sincere good faith in this appeal."

The U.S-Indian row arose from U.S. tariffs on hot-rolled carbon steel products from India. India argued the U.S. measures breached global trade rules and that Washington subsequently failed to comply with a WTO decision on the matter.

A three-person WTO panel largely rejected India's claims last month.

At the same meeting on Wednesday, 119 of the WTO's 164 member states proposed that the six Appellate Body vacancies be filled. The United States rejected this, saying the Appellate Body had abused its authority and members needed first to discuss how this had happened.

The European Union has agreed with Canada and Norway to allow appeals to go before former Appellate Body adjudicators, permissible under WTO rules, and wants to sign up other countries with which it has more active disputes.

(Reporting by Philip Blenkinsop and Stephanie Nebehay; Editing by Mark Heinrich)