U.S. blocks work on WTO ministerial statement ahead of meeting

GENEVA (Reuters) - The United States on Wednesday blocked efforts by the World Trade Organization to draft a declaration for ministers to agree on next month, a move that reflects President Donald Trump's view that the WTO does not give his country a fair deal.

Trump has been highly critical of the international trade system and of countries such as China and Germany that have built up large trade surpluses while the United States has a large deficit.

Trade ministers from around the world are due in Buenos Aires next month for the WTO's top-level meeting, which happens every two years. Organizers had hoped for a show of unity in a "ministerial declaration" backed by all 164 WTO members.

But U.S. officials told a closed-door preparatory meeting that they could not agree on sections of the text supporting the "centrality of the multilateral trading system" and the need to support "development". They declined to comment as they left the meeting. Others said it was no surprise but still a setback.

"No deal," one diplomat said as she left the meeting.

"They are going a bit beyond what a lot of the membership are going to be able to accept," another said.

"Members tried their best. There was a good faith effort made," WTO spokesman Keith Rockwell said. "The facilitators made progress in some areas but not enough. This is an issue that will now be taken up by ministers in Buenos Aires."

The United States has already thrown the WTO into crisis by blocking the appointment of new appeals judges until the system is reformed to Trump's satisfaction.

With cases backing up in the WTO dispute system, the organization is close to running out of the number of judges it needs to keep hearing appeals.

Speaking to reporters before the meeting on the ministerial statement, WTO Director General Roberto Azevedo said the U.S. misgivings about the functioning of the system were well known, but Washington needed to talk directly to other WTO members about the changes it wanted.

"That conversation is still in the very early stages as I understand it," he said.

U.S. Trade Representative Robert Lighthizer did not offer much detail on potential changes to the dispute system during Azevedo's meetings with him, Azevedo said.

Trump has said the United States gets a bad deal from the WTO, but Azevedo said statistically it had been very successful in disputes, and the WTO dispute system was an effective way of preventing trade wars.

"I think the system has fulfilled its role and I think that if we compromise the system, the threat of unilateral action, the threat of an escalating trade war, becomes very real. That is something I don’t have to tell you, it’s something that is well known by everyone."

(Reporting by Tom Miles; Editing by Gareth Jones)