Info Service on WTO and Trade Issues (May16/16)
24 May 2016
Third World Network
members challenge US over reappointment of Seung Wha Chang
Published in SUNS #8244 dated 20 May 2016
Geneva, 19 May (D. Ravi Kanth) - The six remaining members of the
World Trade Organization (WTO)'s adjudicating body, the Appellate
Body (AB), on Wednesday (18 May) spoke their mind against the unilateral
decision of the United States to block the reappointment of Mr Seung
Wha Chang on unjustifiable grounds.
The US decision has generated chilling "risks" for the "trust"
placed in the independence and impartiality of Appellate Body Members
on which the dispute settlement system depends, the members said in
a letter to the Chairman of the Dispute Settlement Body (DSB), a copy
of which was obtained by the SUNS.
In a strong letter to the chair of the DSB, Ambassador Xavier Carim
of South Africa, on 18 May, the six members of the AB - Mr Thomas
R. Graham, chair for the AB, Mr Ujal Singh Bhatia, Mr Ricardo Ramirez
Hernandez, Mr Shree Baboo Chekitan Servansing, Mr Van Den Bossche,
and Ms Yuejiao Zhang - challenged the reasons cited by the US for
blocking Mr Chang's reappointment.
The US has alleged that Mr Chang deviated from the covered agreements
in three cases which he had presided at the AB.
The three cases involve China's complaint against the countervailing
duties imposed by the US, China's dispute against allegedly inconsistent
anti-dumping and countervailing duties imposed by the US on several
Chinese products, and Panama's dispute against Argentina concerning
Buenos Aires' allegedly restrictive measures against goods and services.
Besides, Mr Chang also participated in several cases involving the
US as part of the three-member division.
Without naming the US, the AB members addressed their letter to the
US through the offices of the DSB chair and the WTO Director-General
who was clearly aware of the storm that was building up at the WTO,
several trade envoys told the SUNS.
"With regard to accuracy, no case is the result of a decision
by one Appellate Body Member, nor should interpretations or outcomes
be attributed to a single Member," the six AB members maintained.
The main criticism of the US is that Mr Chang deviated from the covered
agreements and entered in obiter dicta in the rulings.
"Appeals are heard and decided by three Members who are chosen
randomly to constitute the Division for each case," the AB members
"During a Division's consideration of a case, there is always
a formal, intensive exchange of views, in person in Geneva, between
the three Division Members and the Appellate Body Members who are
not on the Division," the six members argued.
In short, "Our reports are reports of the Appellate Body,"
Effectively, the AB members pointed a finger at the US by asking how
could it direct criticism at the doorstep of Mr Chang when decisions
in the three cases were decided by the full AB Division after consultations
with the rest of the AB members.
Further, the AB members said that they are guided by Articles 3.2,
17, and 19.2 of the Dispute Settlement Understanding in adjudicating
appeals and clarifying existing provisions of the covered agreements
"without adding to or diminishing the rights and obligations
provided in those [covered] agreements."
"We strive to adhere to that mandate when deciding complex issues
that arise in a variety of circumstances, frequently on matters of
first impression," the AB members said.
"Whether we have always succeeded is a subject we leave to the
WTO membership to discuss," the six members suggested, maintaining
that the WTO members are well within their rights to comment on the
AB reports as set out in Article 17.14 of the Dispute Settlement Understanding.
The AB members said they are open to "other informed and constructive
As regards the "trust that WTO Members place in the independence
and impartiality of AB Members," the six members said, "we
are concerned about the tying of an Appellate Body Member's reappointment
to interpretations on specific cases and even doing so publicly."
"The dispute settlement system depends upon WTO Members trusting
the independence and impartiality of Appellate Body Members,"
the six members emphasized.
"Linking the reappointment of a Member to specific cases could
affect that trust," they lamented.
Commenting on the work done by Mr Chang, the six members said "we
have the highest respect for Mr Seung Wha Chang as a person of integrity,
independence and impartiality."
"He [Mr Chang] has worked hard together with us to maintain the
quality of our reports and to foster constructive improvement of our
operations," the AB members stressed.
"We recognize that there is no right of reappointment,"
the six members argued, suggesting that they have no role in decisions
However, the AB members said that they "felt compelled"
to make their reasons known to the DSB chair.
The AB members copied their letter to the WTO Director-General Roberto
Azevedo who is yet to make a public comment on the "lawlessness"
created unilaterally by the United States in destroying the adjudicating
role of the trade body after severely undermining the negotiating
functions of the trade body, several trade envoys told the SUNS.
The DG was aware of the US action well before it became public but
he maintained a deafening silence until it blew up into a grave systemic
crisis, said a trade envoy who is familiar with the development.