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TWN
Info Service on WTO and Trade Issues (Jun25/18) Geneva, 24 Jun (D. Ravi Kanth) — For the 88th time, the United States on 23 June blocked a joint proposal submitted by Colombia on behalf of 130 countries at the World Trade Organization (WTO) for expeditiously filling all seven vacancies at the WTO’s Appellate Body (AB), thus continuing to perpetuate a systemic crisis in the resolution of global trade disputes, said people familiar with the development. For years, the US has not implemented several rulings adopted by the WTO’s Dispute Settlement Body (DSB), China said at a DSB meeting on 23 June. The US, however, stuck to its repeated claims that Washington’s longstanding concerns about the functioning of the Appellate Body remain unaddressed, a charge that was hardly shared by many members, said people familiar with the development. Aside from the US blocking the filling of vacancies at the Appellate Body, two dispute panels, involving trade frictions between China and Canada, were established following second-time panel requests. CHINA VS. CANADA China pressed ahead with its second request for the establishment of a dispute panel to rule on surtax measures imposed by Canada on certain products from China, including electric vehicles and steel and aluminum products, following its first panel request made a month ago. China disagreed with Canada’s claim that “there are no measures relating to surtaxes on certain solar products, critical minerals, semiconductors, permanent magnets and natural graphite imported from China”. It disagreed with this assertion since Canada’s measures are unified by their policy intent, i.e. “to protect Canadian workers and key economic sectors” against the importation from China of the products and materials cited, the administrative procedures by which they have been brought forward, the executive branch of the government that has notified them, etc., including those claimed by Canada as “not actual measures”. China said it considers that the Canadian measures are inconsistent with various provisions of the GATT 1994. Therefore, China said that “pursuant to Article 6.1 of the DSU [Dispute Settlement Understanding], China requests the DSB to establish a panel to review this dispute with standard terms of reference as set out in Article 7.1 of the DSU.” China said it remains “open for constructive discussions with Canada with an aim to resolving this dispute amicably and in accordance with WTO rules.” In response, Canada insisted that China has failed to identify the measures at issue, claiming that there are no surtax measures on solar products, critical minerals, semiconductors, permanent magnets, and natural graphite imported from China, said people familiar with the development. Arguing that its surtax measures on Chinese electric vehicles and steel and aluminium products are justified under several provisions of the GATT, Canada said that it remains open to engaging in constructive dialogue with China. Noting that it is a third party in the China-Canada dispute, the US suggested that China has already responded to Canada’s surtaxes by imposing countermeasures in the form of additional duties of up to 100% on Canadian agricultural and fishery products. The US alleged that it is “specious” for China to use the DSB to address violations of the WTO rules, while at the same time imposing countermeasures based on its unilateral decision. The DSB agreed to the establishment of the panel. Australia, the European Union, India, Japan, Korea, Malaysia, Norway, the Russian Federation, Singapore, Switzerland, Turkiye, the United Kingdom, Ukraine, and the United States reserved their third-party rights to participate in the proceedings. CANADA VS. CHINA Also, at the DSB meeting, in a second-time request for the establishment of a dispute panel concerning additional import duties imposed by China on certain agricultural and fishery products from Canada, Canada claimed that China conducted an “anti-discrimination” investigation. It said that the import duties imposed by China are tantamount to a “unilateral determination”, insisting that the countermeasures imposed by China are in violation of the WTO rules. Moreover, as the dispute concerns perishable products, it underscored the need for an urgent resolution. However, Canada said that it remains open to engage in constructive dialogue with China. Referring to its earlier statement made at a special DSB meeting on 5 June, China reiterated its opposition to Canada’s assertion that Articles 4.8 and 12.8 of the DSU shall apply to this dispute. China said it heard the comments made by the US, while insisting that it will vigorously defend itself in the proceedings. China expressed confidence that “its challenged measures will be found consistent with relevant WTO rules.” However, China said it “remains open to further engagement with Canada with a view to positively resolving this dispute.” The US again intervened to say that China’s countermeasures against Canadian farm and fishery products are inconsistent with the provisions of the GATT. The DSB agreed to the establishment of the panel. Australia, the EU, India, Japan, Norway, the Russian Federation, Singapore, Switzerland, Turkiye, the United Kingdom, the United States, and Viet Nam reserved their third-party rights to participate in the proceedings. AB APPOINTMENTS BLOCKED With 130 members uniting against the allegedly unilateral action of the United States in repeatedly blocking the appointment of seven members to the Appellate Body on an expeditious basis, the WTO’s enforcement function appears moribund. Consequently, with one arm of the WTO being paralyzed, there appears to be little hope that disputes that go beyond the panel stage will be resolved, with the exception of members referring them to the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). At the DSB meeting, in blocking for the 88th time the joint proposal tabled by Colombia on behalf of 130 countries, the US stuck to its oft-repeated charges, and claimed that it is being bound by rules that were not approved by the US Congress, said people familiar with the development. As the Trump administration seemingly embraces “unilateralism” and its “America First” trade policy, the multilateral rules and the rule of law appear to be a major casualty, with “lawlessness being the order of the day”, said people familiar with the development. At the DSB meeting on 23 June, Colombia said that the ongoing conversations about the reform of the dispute settlement system should not prevent the Appellate Body from continuing to operate fully, said people familiar with the development. China joined Colombia in conveying a strong message that it stands for “an independent, impartial two-tier dispute settlement system.” Meanwhile, the chair of the DSB, Ambassador Clare Kelly from New Zealand, recalled that the General Council (GC) chair, Ambassador Saqer Abdullah Almoqbel of Saudi Arabia, had recently consulted with delegations on advancing work in three key areas, including dispute settlement (DS) reform. She noted that in a communication on 6 June, the GC chair had informed members that his “consultations have confirmed readiness to preserve and build on the progress already made, and to advance only when the time is ripe to make meaningful progress on key unresolved issues with the engagement of all delegations.” In essence, the dispute settlement reform process is being put “on hold” and there is no clarity on when the discussions on DS reform will be resumed, said a person, who preferred not to be quoted. In a nutshell, the WTO remains in crisis without knowing what could be achieved at its upcoming 14th ministerial conference (MC14), to be held in Yaounde, Cameroon, on 26-29 March 2026, said people familiar with the development.
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