'Bad news' for Australia as WTO faces crisis

Australia's global trade actions against India over sugar subsidies and Canada over wine exports are at risk as the World Trade Organisation faces its biggest ever crisis.

The crisis was triggered by the United States government complaining that the organisation's appellate judges had overstepped their mandate by setting legal precedents and by ignoring time limits for delivering decisions.

A scheduled meeting among the 164 WTO members that started on Monday in an effort to overcome the crisis was cut short on Tuesday.

The WTO's three-member appellate panel will no longer function because the terms of two of its members ran out on Tuesday after the US blocked the appointment of new judges.

The dispute has escalated while the US has been waging trade disputes with China and the European Union.

Labor trade spokeswoman Madeline King said the WTO appeals panel has "effectively ceased to exist".

"This is bad news for Australia, which has two disputes pending in the WTO: a claim against India over sugar subsidies and another against Canada in relation to our wine exports," she said.

"The US President has crippled the WTO's dispute resolution system at the same time as he has pursued his trade war with China.

"Australia must now urgently work with other countries to build consensus on how to resolve this crisis."

Ms King said Prime Minister Scott Morrison had failed to persuade Donald Trump to end the trade war with China and save the WTO.

"Labor hopes the government is prepared to develop a comprehensive plan for the reform of the WTO, including saving the dispute resolution system."