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Most DSB members want to limit AB’s ways, procedures

Geneva, 14 Oct (Chakravarthi Raghavan) - The consultations held Monday by the chairman of the Dispute Settlement Body (DSB), Mr. Carlos Perez del Castillo of Uruguay, over the working procedures of the Appellate Body (AB) have been inconclusive and are to be continued with a view to clearly laying down the ‘consultation’ process of the AB, under Art. 17.9 of the Dispute Settlement Understanding before making any changes.

According to trade diplomats at the consultations, there is a near-consensus, if not a consensus itself, that any change in working procedures to be made by the Appellate Body has to be done only after consultations with the DSB chair, and such a consultation is a consultation with the DSB members through the chair.

And, given the strong views that have emerged within the membership over the pronouncements of the AB that it could do whatever it pleased, so long as it is not expressly prohibited from doing so, a large number of participants in the consultations said the DSB views should be done in writing as a decision and sent to the AB.

At one stage in these consultations, an idea came up for incorporating the clear views of the membership incorporated in a DSB chair’s ‘statement’ and conveyed to the AB.

This view, however, did not find favour with a large number of delegations, who privately note that in the Sardines case, when the views of the General Council (set down in the minutes of the Council in 2000) were cited, the presiding member dismissed them, asking ‘is there a General Council decision?’

The further consultation to be held by Perez del Castillo would enable members to agree on formulation of clear views on paper, to be conveyed to the AB, either as a decision of the DSB or an authoritative interpretation by the General Council.

At Monday’s talks, the EC and Canada sought to head off the authoritative interpretation route.

Some of the views in this consultation, also figured in an indirect way in the separate DSU review negotiations, where a number of proposals have been tabled to in effect restrict the way the panels and the AB are functioning.

Legal experts of member countries, who have been studying the AB decision in the Sardines case are astonished at the way the AB has insisted that it could do what it is not prohibited from doing.

One expert who did not want to be identified noted that the International Court of Justice at The Hague has clearly ruled that in any interpretation of an international treaty, if it affects the sovereignty of a State, the treaty has to be given a very restrictive interpretation. Unless it is clearly stipulated in the treaty, a treaty cannot be interpreted in a manner that affects the sovereignty of States.

This of course flows from a fundamental principle of international law, namely, that States cede sovereignty by adhering to a treaty, only by explicit means. An implicit ceding of sovereignty or an interpretation given to it by creatures created under a treaty and attempting to claim inherent rights, not in the treaty, are not valid.

The AB and the panels have been abusing and violating these principles, taking advantage of the DSU provisions for adoption of their rulings by an automatic consensus process (adopted by consensus unless panel and AB rulings are overruled by consensus). They have been abusing the system by their knowledge that in any dispute, one or the other, and more so the winning side, will not give consensus to change or modify the ruling.

The WTO itself has envisaged and reserved the right to provide interpretations to the Ministerial Conference or in its absence to the General Council, and the DSU also directs that the recommendations and rulings of the DSB (the negative consensus approach means that the panel and AB rulings, become automatically that of the DSB) cannot add to or diminish the rights and obligations of members.

However, with the powerful nations blocking authoritative interpretations through the fetish of the consensus, to which many developing nations cling, under a false assumption that they too can block a consensus, and insisting that even a decision to vote (provided in the same WTO article) to decide an issue, when a consensus solution cannot be reached, should be taken by consensus.

As a result the dispute settlement process, directed to promote settlement of disputes, has been running riot, and functioning rulelessly and creating ‘judicial law’ by its reports and recommendations.

This issue is being avoided in the DSU review process, by countries worried about opening up a pandora’s box is now coming to a head within major countries, where parliaments and soon even judicial authorities will begin to sit up and take notice, and the public may force disobedience.

But a number of proposals now on the table for the DSU review, and which figured in the formal DSU review negotiations meeting that took place Monday, show that several countries are approaching the problem sideways.

After the consultations last week, the DSB chair would appear to have circulated proposals to deal with the issue of the AB making new or additional working procedures, to what has now been set down in writing under the provisions of Art 17.9 of the DSU.

The proposals formulated by the DSB chair for consideration relate to any additional procedures that the AB may frame and would provide that in such cases, the AB would inform the DSB chair, who will seek the views of the members of the DSB, by providing them an opportunity to comment. These views would then be conveyed to the AB which should take such views into account while making amendments to the working procedures.

The idea of a chairman’s agreed text of a statement to be read out at the DSB, and then conveyed to the AB was not acceptable to a very large part of the membership, who noted the way preciously expressed near consensus views of the General Council in 2000 were brushed aside during the Sardines case hearings.

Two views have emerged: one, that the chairman’s statement should become an agreed decision of the DSB and conveyed as such to the AB, or there should be an authoritative interpretation of the meaning of Art.17.9 of the DSU.

The latter course was preferred by Ecuador, supported by Colombia and several others.

The EU and Canada did not favour a decision that would impose obligations on the AB, but rather a process that would set out what the DSB chair should do, when ‘consulted’.

This issue arose about the provision in Art. 17.9 for the AB to consult before framing procedures, and whether the views expressed should be made obligatory on the AB.

Perez del Castillo appears to have explained that in the draft formulation relating to the DSB chair consulting the members, the word ‘shall’ had been used to make clear that every DSB chair when he got a proposal from the AB has to mandatorily consult the membership, give them an opportunity to express their views, and convey them to the AB for it to take these views into account before finalising its working procedures.

The discussions in the DSU review process, also brought out the concerns and worries from the Latin American region, over the attempt of the panels and the AB to assert that they could do, by way of procedures or otherwise, whatever they had not been prohibited from doing by the DSU.

Third World experts note that this view of the AB, does not seem to apply to panels and the AB when it comes to the express prohibition of the DSU that no new rights and obligations shall be created by the rulings.

This apart, a number of delegations in the DSU review process pointed out that in their systems, the judiciary has to go by what is in the rules and law, and not the other way round.

Legal experts note that this is also a basic principle in all systems of law, though expressed differently in terms of the rights of citizens. In Anglo-Saxon systems, a citizen or person is supposed to be able to what the law does not expressly prohibit or take away, while under the Napoleonic code, one could do only what the law allows.

However, nowhere is a claim made by any judicial authority that it could do what it is not prohibited from doing, as the AB is now asserting as its right. – SUNS5212

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