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TWN
Info Service on WTO and Trade Issues (Aug24/01) Geneva, 31 Jul (D. Ravi Kanth) — As members of the World Trade Organization (WTO) go on recess during the traditional summer break in Europe on 1 August, they remain rather uncertain as to whether they can reach an agreement on a binding appeal/review mechanism by the end of this year, said people familiar with the development. After the United States made the Appellate Body dysfunctional in December 2019 and continues to raise its concerns over the demands made by many members on restoring the highest adjudicating body in the two-tier dispute settlement system, doubts continue to persist if the US would agree to a robust appeal/review mechanism that would undergird the enforcement function of the WTO, said people familiar with the discussions. The US has already drawn its markers in its statement issued at the first Heads of Delegation (HoD) meeting on 30 May, as captured in document WT/GC/DSR/M/1. The US said that it has “an interest in a dispute settlement system that supports parties in the resolution of their disputes and that has legitimacy, not just here but also at home.” “In that context,” the US maintained, “we would like to explore further with delegations whether appeal/review is a necessary feature of a system that supports parties in resolving their disputes.” It added that it heard “points made about the need for consistency and the ability to correct legal errors.” However, “we do not view a standing Appellate Body as the only way of achieving those objectives,” the US said, adding that “consistency, if wrong, does not serve anyone’s interests.” “In addition, you can have a binding system without having a second tier – and by “binding”, we mean finality in the dispute,” the US argued. “We have seen how an appeal/review mechanism – and by extension the dispute settlement system – can stray from this foundational purpose,” the US said, citing a report that the USTR published on the Appellate Body in 2020 that identified several US concerns with that appeal mechanism. Interestingly, the US did not speak at the last HoD meeting held on 18 July. Given the rather ambiguous mandate provided by trade ministers at the WTO’s 13th ministerial conference (MC13) that concluded in Abu Dhabi on 2 March, who merely instructed their “officials to accelerate discussions in an inclusive and transparent manner, build on the progress already made, and work on unresolved issues, including issues regarding appeal/review and accessibility to achieve the objective by 2024 as we set forth at MC12”, it appears that everything in the ongoing discussions is “up for a toss”, said people familiar with the discussions. So far, progress on the appeal/review mechanism has been somewhat halting, with little or no clarity on what is going to be the shape of such a mechanism, as is evident from a restricted report issued on 24 July by the facilitator overseeing the ongoing dispute settlement reform discussions. The restricted report (WT/GC/DSR/M/3), seen by the SUNS, was issued following the last virtual HoD meeting on 18 July. According to the document, Brazil said, “It is worrisome that discussions so far have not resulted in concrete solutions.” It expects that “discussions will resume [at] a steadier pace after the summer break so [that] we can deliver the DS [dispute settlement] Reform by 2024.” According to Brasilia, “the appeal/review mechanism is the core issue of our reform discussions.” “In the last technical meeting on appeal/review on 15 July, the Co-Convenors mentioned they will provide a document summarizing the main proposals discussed so far,” Brazil said. Prior to the issuing of the report on 24 July, the facilitator, Ambassador Usha Dwarka-Canabady of Mauritius, informed members at a WTO General Council meeting that she has decided to cancel a HoD meeting that was scheduled to be held on 19 September. The facilitator told members that “it might be best to leave the experts to do some more substantive work so that when we meet during the HoDs in October, it would have been six months down the line, and we might have a clearer idea of where we are going and, in particular, what issues are moving towards maturity.” The facilitator said: “We can then move forward to start defining the contours of what an accessibility outcome would look like.” While some ideas are being floated by countries such as Panama for an early harvest on the issues concerning “accessibility”, several other members opposed such moves, insisting that there has to be a clear picture on what is going to be the appeal/review mechanism. In her report, the facilitator acknowledged that “we have seen a number of elements of convergence on accessibility, but it seems to me that we can only bake a cake when all ingredients are on the table.” “So, at some point, we need to make sure that we have all the proposals on the table,” she added. The facilitator welcomed “any great new ideas,” suggesting that members need to “have a timeline whereby everything is on the table” so as to “start thinking of the contours of how accessibility can be sketched out.” She emphasized the need for accelerating the work on the appeal/review mechanism. “CONFOUNDING” THE ISSUES On the appeal/review mechanism, the two co-convenors, Mr Joel Richards of Saint Vincent and the Grenadines and Ms Jessica Dickerson of Australia, informed members that experts have discussed the following items: a. Reducing or changing incentives to appeal; b. Clarifying Members’ expectations of adjudicators; c. Form of the mechanism; and d. Access to the mechanism. During the discussion on “reducing or changing incentives to appeal,” the two co-convenors said that “many Members underscored their interest in preserving the right of appeal so as to correct legal errors.” “This notwithstanding,” the co-convenors said, “several Members also emphasized the importance of establishing guardrails to reduce tactical or frivolous appeals.” According to the co-convenors, some Members noted that “there needed to be a degree of caution and some balance in not reducing legitimate incentives to appeal.” The report seems to somewhat confound the core issues, when the co-convenors maintained that “against this backdrop, there appeared to be some shared interest in exploring how Members could address incentives to appeal through: a. making better use of interim review at the panel stage; b. a political commitment to reduce appeals; c. adjusting the reasonable period of time (RPT) for compliance; and d. establishing parameters for the scope and standard of review.” It is not clear which countries are expressing “some shared interest”, as it looks rather confusing, said a legal expert who asked not to be quoted. Further, co-convenor Ms Dickerson of Australia said during the discussion “on the form of the (appeal/review) mechanism, Mr. Joel Richards and I encouraged Members to focus on interests and solutions, rather than on whether there should be a two-tier or single-tier dispute settlement system.” This observation by the co-convenors appears to raise questions as to whether they are echoing the concerns of the US, said the legal expert who asked not to be quoted. Subsequently, the co-convenors observed: “Many Members underscored that a standing adjudicative body met their interests, which included correctness of decisions, legitimacy, efficiency, predictability, and consistency.” “However,” the co-convenors said, “another perspective expressed was that a standing body did not guarantee correct decisions, and created a perception that the body had greater authority and legitimacy than other adjudicators such as panellists.” “It was suggested that it could be fruitful to consider the different features of the institutional design of the appeal/review mechanism, with a view to identifying potential reforms” and “to give an example of one such feature, experts could consider the appointment process for appeal/review adjudicators,” the co-convenors said. ACCESS TO MECHANISM According to the co-convenors, on the issue of access to the mechanism, “many Members said that automatic, compulsory access was essential to meet their interests.” Several members noted that “such access protected them against power dynamics and was particularly important for developing Members.” The co-convenors said, “Some Members observed that compulsory jurisdiction was vital for the system’s legitimacy and for Members’ trust in the system.” Without naming the member, the co-convenors merely said, “an alternative view expressed was that automatic access to an appeal/review mechanism was not essential to have a system that supported parties to resolve their disputes. Under this view, the parties could decide the features of the system [that] would be useful to them, which would go towards addressing a concern about the perceived superiority of the second tier and the consequences flowing from that perception.” “In view of the difficulty of finding a middle ground on this sub-topic,” the co-convenors said, “it was suggested by some Members that it may be more beneficial to focus on other ideas, including those that would reduce incentives to appeal/review, and by establishing guardrails with respect to the scope and standard of review.” “In this connection, some Members also considered it important to assess the overall package of reforms and not view the issue of access to the mechanism in isolation,” the co-convenors said. According to the co-convenors, “experts have now had a first discussion on all of the six sub-topics in the existing Work Plan.” They said a draft on the appeal/review mechanism “will be shared with Members before discussions resume in September.” In conclusion, the co-convenors informed members that “as you know, if we are to restore a fully-functioning dispute settlement system that is accessible to all Members this year, we must find a solution to Appeal/Review that meets the interests and addresses the concerns of all Members to the greatest extent possible.” Surprisingly, at the HoD meeting on 18 July, the US, the European Union, Japan, and India among others did not make any statements. In contrast, the countries that expressed their views included China, Indonesia, Bangladesh, Singapore, Samoa on behalf of the ACP (African, Caribbean, and Pacific) group of countries, Brazil, Pakistan, Panama, Uruguay, Cambodia, Chinese Taipei, Nigeria, South Africa, Switzerland, El Salvador, Argentina, Mexico, and Antigua and Barbuda, among others. +
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