TWN Info Service on WTO and Trade Issues (Sept22/01)
9 September 2022
Third World Network

Trade: US continues to block Appellate Body appointments at WTO
Published in SUNS #9637 dated 31 August 2022

Geneva, 30 Aug (Kanaga Raja) -- The United States, for the fifty-seventh time, said it was still not in a position to agree to a joint proposal by 126 WTO members that called for the simultaneous launch of the selection process to fill seven vacancies on the WTO's Appellate Body as soon as possible.

At a meeting of the WTO's Dispute Settlement Body (DSB) on 29 August, under the agenda item of Appellate Body appointments, Mexico once again introduced the joint proposal on behalf of the 126 WTO members.

(Antigua and Barbuda, Dominica, and Saint Lucia are the latest co-sponsors of the proposal.)

According to the proposal (WT/DSB/W/609/Rev.22), given the urgency and importance of filling the vacancies in the Appellate Body, in compliance with the Dispute Settlement Understanding (DSU) and so that it can carry on its functions properly, the co-sponsors 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 2018,

(v) a fifth selection process to replace Mr. Ujal Singh Bhatia, whose second four-year term of office expired on 10 December 2019,

(vi) a sixth selection process to replace Mr. Thomas R. Graham, whose second four-year term of office expired on 10 December 2019, and

(vii) a seventh selection process to replace Ms. Hong Zhao, whose first four-year term of office expired on 30 November 2020;

(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 seven new Appellate Body members as soon as possible.

Mexico, speaking on behalf of the 126 WTO members, said that the extensive number of members co-sponsoring the joint proposal is a reflection of the common concern expressed by the members over the current situation in the Appellate Body.

According to Mexico, this situation is seriously affecting the overall WTO dispute settlement system against the best interest of the members.

More than 20 delegations took the floor to express their support for the joint proposal. Some of these members made interventions on behalf of groups of members.

They again stressed the importance of the WTO's two-tiered dispute settlement system in providing stability and predictability to the multilateral trading system.

Several members noted the commitment made by ministers at the WTO's 12th Ministerial Conference (MC12) "to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024," and pledged their support to secure an outcome within the stated time period.

In its statement at the DSB, the US said that members are aware of its longstanding concerns with WTO dispute settlement.

"Those concerns remain unaddressed, and the United States does not support the proposed decision," it said.

The US said that it supports WTO dispute settlement reform and "is working to achieve durable, lasting reform."

"The first step towards reform is to better understand the interests of all Members in WTO dispute settlement," it added.

A true reform discussion should aim to ensure that WTO dispute settlement reflects the real interests of Members, and not prejudge what a reformed system would look like, said the US.

The US said that it is prepared for continued and deepened engagement with Members on that important issue.

In response, Mexico, on behalf of the 126 co-sponsors of the joint proposal, said that the fact that a member may have concerns about certain aspects of the Appellate Body's functioning cannot serve as a pretext to impair and disrupt the work of the DSB and dispute settlement in general.

According to Mexico, there was no legal justification for the current blocking of the selection processes to fill the vacancies on the Appellate Body as soon as possible.

Mexico said that this is causing concrete nullification and impairment of the rights of many members.

The chair of the DSB, Ambassador Athaliah Lesiba Molokomme of Botswana, noted the commitment by WTO members at MC12 to conduct discussions with the view to having a fully functioning dispute settlement system accessible to all members by 2024.

She said it was her understanding that informal discussions in this regard are currently ongoing. She expressed hope that, going forward, members will be able to find a solution to this matter.

Also under this item, eleven members took the floor to strongly criticize Russia's invasion of Ukraine and expressed their support for, and solidarity with, Ukraine and its people.

In response, Russia said that none of the political issues raised by the eleven members were within the competence of the DSB, adding that the WTO was not a political organization.

OTHER ACTIONS

Meanwhile, under another agenda item, Turkiye informed members about the outcome of the dispute raised by the European Union over certain measures imposed by Turkiye concerning the production, importation and marketing of pharmaceutical products.

Taking into account that the WTO's Appellate Body is not presently able to hear an appeal, Turkiye, on 25 April 2022, had initiated arbitration proceedings under Article 25 of the DSU to review the findings of the panel in the dispute raised by the EU against Turkiye.

On 22 March 2022, both the EU and Turkiye had notified the DSB that they had agreed on the procedures for arbitration under Article 25 of the DSU (WT/DS583/10) to decide on any appeal of the panel's final report in this dispute.

The panel report was originally issued to both the EU and Turkiye on a confidential basis on 11 November 2021, but on 20 December 2021, the EU asked the panel to suspend its work, and the report was not circulated to the rest of the WTO membership.

At the request of both the parties, the dispute panel in this case did not itself circulate its final report to the WTO members, which would have made it public, but instead only transmitted it to the EU and Turkiye and allowed them to make the report public. Both Turkiye and the EU agreed to make public the panel's findings in this dispute.

In an Award (WT/DS583/ARB25) issued on 25 July, a panel of three arbitrators had generally upheld the findings of a dispute panel against Turkiye, and recommended that Turkiye bring into conformity with its obligations under the GATT 1994 its measures that were found to be inconsistent in the Award and in the Panel Report as modified by the Award. (See SUNS #9624 dated 27 July 2022).

Speaking at the DSB meeting on 29 August, Turkiye informed that the arbitrators had issued their award on 25 July and on the same day, in accordance with Article 25.3 of the DSU, the arbitrator's award was notified to the DSB and the relevant WTO Councils and committees.

Turkiye announced its intention to implement the recommendations and rulings of the arbitrators and the panel in the dispute in a manner that respects its WTO obligations.

However, Turkiye said that it needs a reasonable period of time to implement the recommendations and rulings and was ready to discuss this issue with the EU at the earliest available opportunity.

Welcoming the results of the appellate review, the EU said it expects that Turkiye will take the necessary steps to implement promptly the findings of the arbitrator.

It said that it stands ready to discuss and agree on a reasonable period of time for Turkiye to implement the rulings and recommendations. +