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TWN
Info Service on WTO and Trade Issues (Feb20/09) Geneva, 18 Feb (D. Ravi Kanth) -- The World Trade Organization's Director-General Roberto Azevedo on Monday (17 February) provided a bleak assessment about the possibility of reviving the Appellate Body (AB) and the future of the two-stage appeal system, trade envoys told the SUNS. At a closed-door meeting with select trade envoys from more than a dozen countries, Azevedo suggested that there is no light at the end of the tunnel as regards the possibility of resurrecting the Appellate Body, the highest adjudicating body for global trade disputes, anytime soon, said a trade envoy, who asked not to be quoted. Trade envoys from the United States, the European Union, China, Japan, Canada, Australia, Norway, Switzerland, India, South Africa, Singapore, Korea, and Brazil among others attended the brief meeting that lasted for about 25 minutes. The DG held the first round of consultations with trade envoys last December when he had suggested that high-level dialogue could improve matters for finding a solution to the Appellate Body crisis, said a trade envoy, who asked not to be identified. The Appellate Body was made dysfunctional by the US on 11 December 2019 on grounds that it failed to adhere to the Dispute Settlement Understanding. The US had consistently blocked the selection process for filling six vacancies at the AB. Against this backdrop, hopes were pinned on Azevedo's recent consultations in Washington for reviving the Appellate Body, said a trade envoy, who asked not to be quoted. However, Azevedo seemed utterly bleak at Monday's meeting at the WTO and it was not clear why he called the meeting, the trade envoy said. The DG, who has just come back from Washington after meeting with the US trade officials, revealed that there is no progress on the AB crisis, said a South American trade envoy, who asked not to be quoted. After his high-profile meeting with the US President Donald Trump in Davos on 22 January, the DG was expected to convince the US Trade Representative (USTR), Ambassador Robert Lighthizer, about starting consultations for reviving the AB, the envoy said. But the DG conveyed almost in unmistakable terms that the AB's revival is doubtful, said another envoy, who asked not to be quoted. "The US is not moving an inch for reviving the AB and it will not engage," the envoy suggested. Against the backdrop of the comprehensive USTR report on the Appellate Body last week, it is abundantly clear that the US will block all efforts for reviving the AB in the immediate short-term, the envoy suggested. The US wanted WTO members to address what it claims is the original sin as to why and how the AB had gone astray and deviated from the Dispute Settlement Understanding, an exercise that could take years to complete, the envoy said. Significantly, Azevedo commented on the ongoing efforts to craft a plurilateral multi-party interim arbitration mechanism under Article 25 of the DSU. The DG suggested that members must work towards a single approach for the multi-party arbitration mechanism, said an envoy, who asked not to be quoted. The DG's suggestion of a single approach implies the need for ironing out differences between the European Union and China on the one side, and Australia, Brazil, and Japan on the other, over the terms for the multi-party interim arbitration mechanism and the need for adjusting the mechanism to accommodate the US interest, the envoy suggested. The DG said at Monday's meeting that his office is open to members for consultations, suggesting that the interim multi-party arbitration mechanism should be acceptable to members, the envoy added. Three countries - Japan, Australia, and Brazil - apparently raised several reservations about involving former Appellate Body members as well as officials of the AB secretariat in the interim arbitration mechanism as proposed by the EU, said a person familiar with the discussions. Japan, Australia, and Brazil are also not eager to engage the former AB members or AB officials due to opposition from the United States, the person said. Japan, Australia, and Brazil have conveyed to the EU that without the US joining the interim arrangement, it may not become functional, said a trade official, who asked not to be quoted. Around 17 countries have signed the ministerial statement on the EU's arbitration mechanism in Davos on 24 January. The countries include Australia, Brazil, Canada, China, Chile, Colombia, Costa Rica, European Union, Guatemala, Korea, Mexico, New Zealand, Norway, Panama, Singapore, Switzerland, and Uruguay. The signatories to the ministerial statement said they remain committed to work with the "whole WTO membership to find a lasting improvement to the situation relating to the WTO Appellate Body." Brussels is ready to work with all members to make the multi-party interim appeal arrangement functional as a stop-gap arrangement until the Appellate Body becomes operational, said an EU trade official, who asked not to be quoted. As regards the underlining procedure that would be adopted for the operation of the mechanism, the EU's confidential proposal has suggested that "the appeal arbitration agreement under Article 25 of the DSU would closely replicate the AB review process, and would leave the panel proceedings largely unaffected." More important, on who ought to be the "appeal arbitrators", the EU's confidential proposal has suggested that "the objective is not to create a "second panel" but to preserve, as much as possible, the qualities and features of a Standing Appellate Body." Therefore, "appeal arbitrators must be persons who meet the standards for Appellate Body members, and give the same guarantees of impartiality and independence, and who have been "vetted" by the WTO Members," the proposal has emphasized. +
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