Info Service on WTO and Trade Issues (Nov18/03)
5 November 2018
Third World Network
US continues blockage of AB appointments
Published in SUNS #8786 dated 1 November 2018
Geneva, 31 Oct (Kanaga Raja) - The ongoing impasse over the appointment
of Appellate Body (AB) members continues with the United States once
again blocking the consensus to launch the selection processes to
fill four vacancies on the seven-member adjudicative body.
At a meeting of the WTO Dispute Settlement Body (DSB) on Monday, the
US again said it was not in a position to agree to a joint proposal
sponsored by some 68 WTO Members that called for the simultaneous
launch of the selection processes to fill these four vacancies as
soon as possible.
Two Appellate Body members whose second and final four-year terms
have expired are Mr Ricardo Ramirez-Hernandez and Mr Peter Van den
Mr Ramirez-Hernandez's second term expired on 30 June 2017, while
that of Mr Van den Bossche expired on 11 December 2017.
Another vacancy pertains to Mr Hyun Chong Kim from South Korea who
had tendered his resignation with immediate effect on 1 August 2017,
prior to taking up his appointment as a minister in the Korean government.
The fourth vacancy concerns Mr Shree Baboo Chekitan Servansing, whose
first term ended on 30 September 2018.
A proposal on Appellate Body appointments was introduced by Mexico,
on behalf of the 68 co-sponsors, at the DSB meeting.
The co-sponsors of the joint proposal included Argentina; Australia;
Bolivia; Brazil; Canada; Chile; China; Colombia; Costa Rica; Dominican
Republic; Ecuador; Egypt; El Salvador; the European Union (28 member
states); Guatemala; Honduras; Hong Kong-China; Iceland; India; Indonesia;
Israel; Kazakhstan; Korea; Mexico; New Zealand; Nicaragua; Norway;
Pakistan; Panama; Paraguay; Peru; the Russian Federation; Singapore;
Switzerland; Chinese Taipei; Turkey; Ukraine; Uruguay; Venezuela;
and Viet Nam.
According to the joint proposal (WT/DSB/W/609/Rev.5), given the urgency
and importance of filling the vacancies in the Appellate Body, in
compliance with the DSU and so that it can carry on its functions
properly, the 68 co-sponsoring delegations proposed that, at its meeting,
the DSB takes a decision with regard to the following:
(1) to launch:
(i) one selection process to replace Mr. Ricardo Ramirez-Hernandez,
whose second four year term of office expired on 30 June 2017;
(ii) a second selection process to replace Mr. Hyun Chong Kim, who
resigned from the Appellate Body as of 1 August 2017;
(iii) a third selection process to replace Mr. Peter Van den Bossche,
whose second four year term of office expired on 11 December 2017;
(iv) a fourth selection process to replace Mr. Shree Baboo Chekitan
Servansing, whose four-year term of office expired on 30 September
(2) to establish a Selection Committee, consistent with the procedures
set out in document WT/DSB/1 and with previous selection processes,
composed of the Director-General and the Chairpersons of the General
Council, the Goods Council, the Services Council, the TRIPS Council
and the DSB, to be Chaired by the DSB Chair;
(3) to set a deadline of a 30-day period after the date of its decision,
for Members to submit nominations of candidates; and
(4) to request the Selection Committee to carry out its work in order
to make recommendations to the DSB within 60 days after the deadline
for submitting nominations of candidates, so that the DSB can take
a decision to appoint four new Appellate Body members as soon as possible.
Mexico said that the considerable number of Members submitting this
joint proposal reflects a common concern with the current situation
in the Appellate Body that is seriously affecting its workings and
the overall dispute settlement system against the best interest of
WTO Members have a responsibility to safeguard and preserve the Appellate
Body, the dispute settlement and the multilateral trading systems.
Mexico urged all Members to support the joint proposal in the interest
of the multilateral trade and the dispute settlement systems.
According to trade officials, the US again declared that it was not
in a position to agree to the joint proposal.
Repeating the same arguments as at earlier meetings, the US maintained
that the systemic concerns raised by it at previous meetings regarding
the Appellate Body have not been addressed.
According to trade officials, some twenty members took the floor,
with most of them reiterating their concerns over the continued impasse
regarding the appointment of new Appellate Body members.
They urged all members to show flexibility in order to resolve the
impasse as soon as possible.
Many members repeated statements that they had made at previous DSB
meetings on this issue.
According to trade officials, Brazil said that there was nothing in
the DSU requiring consensus from members to launch the AB selection
process and thus no legal basis for the US to block the process.
It asked whether it was legally justified for one member to cause
such disruption for the entire membership.
The scope and breadth of the consequences caused by the current impasse
were having concrete effects on the trade and systemic interests of
all members wishing to exercise their rights to resolve disputes,
Russia expressed grave concerns that the US has managed to create
chaos in the multilateral rules under the pretense of securing these
One member keeps the blockage of the Appellate Body for over a year,
even though there is no legal ground for such action, it said.
It supported Brazil's intervention and urged the US to clarify its
concerns and define the proposals which could address them.
Otherwise, in the absence of such proposals, it believed that in fact
these concerns do not exist. And thus the selection process should
The Group of Latin American and Caribbean Countries (GRULAC) expressed
deep concern over the situation reached, which it said affects the
good functioning of one of the central bodies of the WTO and implies
a flagrant breach of a legal obligation emanating from a covered agreement.
It said that a proper interpretation of Article 17.2 of the DSU, read
together with Article 2, does not warrant the view that positive consensus
is necessary to launch the selection processes.
Mexico, on behalf of the co-sponsors, expressed regret that for the
seventeenth occasion we have still not been able to start the selection
processes for the vacancies of the Appellate Body and have thus continuously
failed to fulfil our duty as Members of this organisation.
The US maintained that contrary to Brazil's claims, the DSU clearly
required consensus to launch the selection process for new Appellate
US STATEMENT ON ISSUANCE OF ADVISORY OPINIONS
The US made a long statement at the DSB meeting concerning the issuance
of "advisory opinions" by WTO panels and the Appellate Body
on issues not necessary to resolve a dispute.
According to trade officials, the US pointed to the concern it has
with the WTO's dispute settlement system, namely the practice by WTO
panels and the Appellate Body of issuing "advisory opinions".
The issuance of these advisory opinions was yet another example of
a failure by the Appellate Body to follow the rules set out by members,
In this context, the US pointed to five issues:
(1) the relevant text of the WTO agreements and the Dispute Settlement
Understanding (DSU) make clear that the purpose of the dispute settlement
system is to help members resolve a dispute, not produce interpretations
or make law in the abstract;
(2) the current DSU rules were drawn from the dispute settlement procedures
of the GATT, which did not provide for advisory opinions;
(3) WTO members have not given panels or the Appellate Body powers
to issue advisory opinions;
(4) there have been troubling instances of advisory opinions issued
by the Appellate Body, an approach which has been criticized by some
(5) there are serious consequences for the WTO dispute settlement
system from the failure of panels and the Appellate Body to only make
findings necessary to resolve disputes.
The US said that these advisory opinions add time to proceedings,
add to the complexity of rulings, risk adding to or diminishing members'
rights under the covered WTO agreements, and risk not taking into
account all the facets of an issue.
Ultimately, the failure of WTO adjudicators to follow DSU rules risks
further eroding support for the dispute settlement system and the
WTO as a whole, the US claimed.
According to trade officials, the EU said that it did not necessarily
agree with the US characterization of some Appellate Body findings
as advisory opinions.
It said that addressing the issues raised by the parties in a dispute
does not mean that they cannot provide clarity regarding the existing
WTO provisions, as permitted under Article 3.2 of the DSU.
Brazil pointed out that the US concerns regarding the Appellate Body
and the dispute settlement system did not justify "hostage taking"
with regards to the filling of the current vacancies on the Appellate
It said that Article 3.2 provided some leeway to provide clarity regarding
existing provisions of the WTO agreements.
Japan noted that members have different views on what constitutes
an advisory opinion and that constructive dialogue was needed among
members on the issue.
China said there was no reason to criticize panels and the Appellate
Body for "unnecessary rulings" as long as they addressed
all the issues raised by the parties.
According to trade officials, Canada, New Zealand, Chile and India
also commented on the matter.
STATEMENT BY HONDURAS ON FUNCTIONING OF AB
According to trade officials, members continued their discussions
on a Honduran proposal that was presented at the last meeting of the
DSB in September on fostering a discussion on the functioning of the
At that DSB meeting, Honduras had outlined some ideas on addressing
one of the concerns raised by the US regarding the Appellate Body,
namely the practice of allowing Appellate Body members whose terms
have expired to continue working on cases without the approval of
This practice is set out in Rule 15 of the Working Procedures for
In its non-paper (JOB/DSB/2), Honduras had outlined a number of options
for "objective and reasonable criteria" to be considered.
Regarding the issue of when an Appellate Body member can continue
to serve beyond the four-year term for the purpose of completion of
duties on an appeal:
a. An Appellate Body member shall be able to continue to serve on
cases where the oral hearing has occurred or started. [On a case where
a hearing has not been set, the outgoing Appellate Body member should
be replaced with an alternate Appellate Body member.]; or,
b. No member of the Appellate Body shall be assigned to a new appeal
later than 60 days before the final date of his/her appointment.
Regarding the issue of who decides if an Appellate Body member should
serve after his/her four-year term has expired:
a. The Appellate Body can continue to apply Rule 15 of the Working
Procedures which allows an Appellate Body member to complete his/her
work on ongoing appeals subject to approval by the Appellate Body
and upon notification to the DSB;
b. In the event WTO Members alternatively decide that the DSB should
approve the continuation of an Appellate Body member under Rule 15,
the reverse consensus rule could apply.
This would avoid a situation where an Appellate Body member who meets
the relevant criteria could be blocked by a single WTO Member;
c. In the event WTO Members decide that the DSB should approve the
continuation of an Appellate Body member under Rule 15, an alternate
approach could be that the positive consensus or positive consensus
minus the parties of the dispute could apply. (See SUNS #8765 dated
3 October 2018).
At the DSB meeting on Monday, Honduras said that it was consulting
with members on how to proceed with its initiative.
Honduras said it was aware that other WTO members were putting forward
proposals on this issue, and that its suggestion for an open-ended
meeting to discuss its proposal had been postponed as a result.
Honduras said it welcomed all proposals and was ready to engage.
According to trade officials, the US said that it looked forward to
hearing the views of other members on the options set out in the paper
by Honduras and other possible approaches that members are considering.
It however cautioned against continuing to allow the Appellate Body
to perm it continued service by members whose terms have expired.
Other members expressed support for the initiative by Honduras and
on the need to resolve the concerns raised by the US over the practice
of allowing Appellate Body members whose terms have expired to continue
working on cases without the approval of the DSB.