Appellate Body Archives - WITA

The World Trade Organization: An Optimistic Pre-Mortem in Hopes of Resurrection

Rachel Accorsi — Thu, 06 Aug 2020 13:49:40 +0000

EXECUTIVE SUMMARY

For decades, multilateral trade rules operated to keep government protectionist impulses in check. They provided a foundation of openness for international commerce, as well as a framework for liberalisation and integration. With the trade rules as a guarantor, capital and value chains spread across the globe.

The creation of the World Trade Organization (WTO) in 1995 saw these rules reinforced with a feature that is nigh unheard-of in international law: binding and non-optional dispute settlement. For the first time, an international panel of legal experts would have the final say on the legality of trade measures, whether those implementing them liked it or not. On 10 December 2019, a procedural blockade by the world’s largest economy, the United States, culminated in that 24-year experiment being put on hold, perhaps permanently.

The loss of the WTO’s Appellate Body does not mean the global trading system is in anarchy, but it does move it a significant step closer to unilateralism and transactionalism in trade policy. Moreover, the Appellate Body crisis is just one of the areas where the WTO is bleeding, and the WTO is just one symptom of a global trading system besieged.

Policymakers looking to restore predictability and order must grapple with a WTO that has struggled to negotiate new rules and enforce and monitor existing ones; which civil society distrusts; and on which business has largely given up as a source of solutions. The global consensus, based on the underlying wisdom of sacrificing some sovereign policy space to allow predictable, rules-based trade, has never been weaker. There are no easy answers, but one thing is certain: technocratic fixes from Geneva and ministerial press releases bereft of specifics will not be enough.

CONCLUSION

This Appellate Body crisis may abate, and the impending budget crisis may be averted, but the WTO’s challenges run deep. Unless the consensus on gradual liberalisation and rules-based trade can be rebuilt, the WTO will continue to fall short of the political will required to move beyond current impasses and inefficiencies. Ministerial calls for unspecified reforms, or reforms with no chance of securing consensus from the very players they target, will continue to sound hollow.

The United States has to be central to any future plan. No amount of technical work, statements of concern, or speeches in the General Council can fix a trading system to which the world’s largest economy is uncommitted. US allies and trading partners with an interest in maintaining a rules-based multilateral trading system will need to use collective and creative diplomacy to pressure the United States to return to a productive member of the WTO, if not a leader as it has been in the past.

Whatever the future of the WTO, governments who believe in rules-based trade must look inwards and begin rebuilding the interest and engagement of business and civil society. Business must be convinced to devote the time and resources to shape and inform trade policy, and civil society actors must be brought, however sceptically, into the tent. That is not going to be easy, but the decades of economic growth and prosperity enabled by predictable, rules-based trade, show that it is worth it.

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Dmitry Grozoubinski is a former Australian trade negotiator and diplomat, now based in Geneva where he serves as the Executive Director of the Geneva Trade Platform and founder of the consultancy ExplainTrade.

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Resolving the WTO Appellate Body Crisis, Volume 2

Emma Donahue — Mon, 01 Jun 2020 21:19:38 +0000

Further to the December 2019 paper, “Resolving the WTO Appellate Body Crisis: Proposals on Overreach”, this paper suggests additional approaches to reforming the World Trade Organization Appellate Body in order to restore a consensus in favor of its restoration and ensure ongoing, sustainable support for its operation.

That task is more essential than ever as a step towards reinvigorating the WTO so that it may serve as an effective forum for addressing the trade fallout from the coronavirus crisis. Members need not await the end of that crisis to make progress towards the goal of agreeing on steps to make the Appellate Body operate as intended in 1995. Should there be agreement on that goal, Members can advance solutions now, whether as part of provisional arrangements or through efforts to achieve a permanent solution.

The suggestions in this paper could be implemented either through decisions, agreed interpretations or amendments to the Understanding on Rules and Procedures Governing the Settlement of Disputes (the Dispute Settlement Understanding, or DSU). They include:

1) Providing clear guidance that Appellate Body reports do not constitute binding precedent, but may, as with panel reports, be cited for their persuasive value;

2) Replace the Appellate Body secretariat with clerks seconded from the WTO secretariat;

3) Provide guidance on the role of adjudicators and of the Appellate Body that emphasizes their role of assisting WTO Members in resolving disputes rather than making law.

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The role of WTO committees through the lens of specific trade concerns raised in the TBT committee

Emma Donahue — Fri, 01 May 2020 14:54:33 +0000

We analyse the content of 555 STCs raised in the TBT committee in the period 1995-2018. We find that: (i) STCs are used to acquire new and higher quality information than that provided merely by notifications; (ii) STCs are used as a monitoring tool, thus making members more accountable; and (iii) STCs facilitate the resolution of trade concerns non-litigiously. By reviewing existing literature, we provide evidence that all this is important because transparency and monitoring reduce trade costs, improve regulatory practices and build and sustain trust.

We also indicate the potential for some reforms to improve the efficiency of the system. These include: introducing a reporting system on the outcome of STCs, use of STCs raised in committees to fill the gap of missing notifications, systematic use of the STC mechanism at the stage of draft measures, building-in the dispute settlement system the requirement to raise the matter and discuss it within the relevant committee before filing a formal dispute settlement case.

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Report On The Appellate of the World Trade Organization

Zimar Batista — Sat, 01 Feb 2020 14:48:17 +0000

The Report highlights several examples of how the Appellate Body has altered Members’ rights and obligations through erroneous interpretations of WTO agreements. Several of these interpretations have directly harmed the ability of the United States to counteract economic distortions caused by non-market practices of countries like China that hurt our citizens, workers, and businesses.

The Appellate Body’s failure to follow the agreed rules has undermined confidence in the World Trade Organization and a free and fair rules-based trading system. Given persistent overreaching by the Appellate Body, no WTO Member can trust that existing or new rules will be respected as written. Indeed, WTO Members have not agreed to any substantive new rules since the WTO came into existence. The conduct of the Appellate Body has converted the WTO from a forum for discussion and negotiation into a forum for litigation.

The United States has always been a strong supporter of a rules-based international trading system and remains so. The United States is publishing this Report – the first comprehensive study of the Appellate Body’s failure to comply with WTO rules and interpret WTO agreements as written – to examine and explain the problem, not dictate solutions. WTO Members must come to terms with the failings of the Appellate Body set forth in this Report if we are to achieve lasting and effective reform of the WTO dispute settlement system.

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To view the full report, please click here

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Report on the Appellate Body of the World Trade Organization

Emma Donahue — Sat, 01 Feb 2020 13:56:05 +0000

For more than 20 years, the United States has expressed concerns that the dispute settlement system of the World Trade Organization – and in particular its Appellate Body – has not functioned according to the rules agreed by the United States and other WTO Members. This Report details those concerns and assesses the repeated failure of the Appellate Body to apply the rules of the WTO agreements in a manner that adheres to the text of those agreements.

Specifically, the Appellate Body has added to U.S. obligations and diminished U.S. rights by failing to comply with WTO rules, addressing issues it has no authority to address, taking actions it has no authority to take, and interpreting WTO agreements in ways not envisioned by the WTO Members who entered into those agreements. This persistent overreaching is plainly contrary to the Appellate Body’s limited mandate, as set out in WTO rules.

On a more fundamental level, this overreaching also violates the basic principles of the United States Government. There is no legitimacy under our democratic, constitutional system for the nation to submit to a rule imposed by three individuals sitting in Geneva, with neither agreement by the United States nor approval by the United States Congress. The Appellate Body has consistently acted to increase its own authority while decreasing the authority of the United States and other WTO Members, which, unlike the individuals on the Appellate Body, are accountable to the citizens in their countries – citizens whose lives and livelihoods are affected by the WTO’s decisions.

Report_on_the_Appellate_Body_of_the_World_Trade_Organization

To view the original report, click here.

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