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TWN
Info Service on WTO and Trade Issues Geneva, 25 May (D. Ravi Kanth) — The new chair of the World Trade Organisation’s Dispute Settlement Body (DSB) on 22 May signaled his intention to resume the much-delayed negotiations on reform of the dispute settlement system (DSS), amid the 97th attempt by the United States since December 2019 to block the filling of all seven vacancies at the Appellate Body (AB), said people familiar with the development. At a meeting of the DSB on 22 May, the new chair, Ambassador Guilherme de Aguiar Patriota of Brazil, stated that it is his “intention to take stock of Members’ current positions on the work done thus far, on how to resume DS Reform discussions as soon as possible and on what basis further work should proceed.” Outlining the underlying rationale for resuming the DSS reform negotiations sometime in June, Ambassador Patriota drew members’ attention to the developments in the international trading system since 2024, “including heightened trade tensions, unilateral measures, uncertainty regarding the future of the multilateral trading system, decreased observation of WTO fundamental rules and principles.” Ambassador Patriota told members that these seemingly disturbing developments “may warrant reflection on whether some of the elements explored during previous work on DS reform still command convergence among members.” “Such DS Reform discussions,” he said, “generated a certain number of options, which in my view would need to be reconfirmed and, if possible, narrowed down.” Against this backdrop, Ambassador Patriota said “it may be useful to hear Members’ views on whether aspects of technical work previously undertaken could provide useful starting points for future engagement.” REFORM EFFORTS To recall, the facilitator overseeing the informal discussions on reform of the DSS, Mr. Marco Molina, the former deputy trade envoy of Guatemala, who conducted the informal DSS reform work, was abruptly called back by his government in February 2024, allegedly due to pressure from Washington on the Guatemalan government to stop his work, said people familiar with the development. Subsequently, the former Mauritian trade envoy to the WTO, Ambassador Usha Dwarka-Canabady, was appointed as facilitator in April 2024. However, members failed to finalize the DSS reform by end-December, despite claims of progress in the discussions by the former General Council (GC) chair, Ambassador Petter Olberg of Norway. For some inexplicable reason, the negotiations on DSS reform were seemingly pushed to the back-burner during 2025, with Ambassador Olberg having reportedly turned his attention to the controversial reform of the WTO by sidelining the crucial DSS reform, said people familiar with the development. It is in this context that the new DSB chair gave his overall assessment of what had happened in the DSS negotiations. Ambassador Patriota provided “some factual background,” suggesting that “recently, at MC14, Ambassador Clare Kelly (New Zealand), the then DSB Chair, updated Ministers on DS Reform work thus far.” He said that Ambassador Kelly “referred to the DS Reform process in 2024, overseen by the Facilitator – with discussions at expert-level organized by six Co-Convenors.” The new DSB chair informed members that “the technical exercise (conducted in 2024) focused on three areas, namely, appeal/review, accessibility and “work done thus far”,” suggesting that “the progress achieved is reflected in the December 2024 report of the Chairperson of the General Council contained in document JOB/GC/DSR/5.” In his report, the former GC chair Ambassador Olberg “concluded that, while technical work had progressed significantly, more remained to be done,” according to Ambassador Patriota. Last year, “Ambassador Kelly, then DSB Chair, together with Ambassador Almoqbel, as GC Chair, held joint DS Reform consultations,” Ambassador Patriota said. “They reported that Members overwhelmingly reaffirmed that DS Reform is a priority,” with some members having called for technical discussions to resume immediately after MC14 while others said work should take place only when it is constructive to do so in the post-MC14 period. Elaborating on the views shared earlier this month by “Ambassador Kelly, now as the GC Chair,” on possible ways forward on WTO reform, including on DS reform, the new DSB chair said that “in reference to my role as current DSB Chair, she encouraged Members to engage, “when the time is right, towards a fully and well- functioning dispute settlement system accessible to all Members”.” In short, said Ambassador Patriota, “I believe it is part of my duty as DSB Chair to seek Members’ views on this important matter.” “It is, therefore, my intention to take stock of Members’ current positions on the work done thus far, on how to resume DS Reform discussions as soon as possible and on what basis further work should proceed,” the DSB chair said. KEY REFORM AREAS Ambassador Patriota said that “members may wish to reflect in particular on certain elements emerging from the technical work carried out in 2024, as reflected in JOB/GC/DSR/5, where discussions in some areas appeared to identify possible avenues for convergence.” “In the area of appeal/review” – which is a difficult area due to continued opposition by the US to such a review mechanism – Ambassador Patriota said that “draft negotiating text was developed on reform ideas relating to the “material impact on implementation” gateway criteria (MII); and on certain standards of review that would justify appellate intervention.” He said that “discussions explored ways to enhance the interim review stage of panel proceedings to provide panels with a more meaningful opportunity to address factual or legal issues before circulation of final reports.” He added that “these examples are indicative of the effort put into DS Reform discussions in recent years, but, of course, they are not intended to prejudge the options or range of further future work.” Ambassador Patriota suggested that “technical discussions carried out in 2024 also addressed the issue of accessibility,” arguing that “Members engaged in substantial work aimed at strengthening the ability of developing and least-developed country Members to participate more effectively in the dispute settlement system.” The new DSB chair drew attention to the discussions held by Members on “capacity-building, technical assistance and access to legal support under the DSU (Dispute Settlement Understanding).” He said, “Mechanisms for enhanced dialogue between Members and the Secretariat regarding evolving needs in this area were also considered.” Ambassador Patriota said that “the current situation with respect to the functioning of the WTO’s Dispute Settlement Mechanism is far from ideal, and it is our collective duty to maintain constructive engagement with a view to achieving meaningful progress on DS Reform.” He informed members that he proposes “to start by hearing Members’ views on how to proceed in the post- MC14 period,” urging them to provide “guidance on what could serve as the starting point for any future discussions on DS Reform.” Ambassador Patriota aid that it is his intention “to convene an informal plenary meeting dedicated to DS Reform” immediately after the next formal DSB meeting on 23 June. In the meantime, he invited interested delegations to reach out to him informally to share their ideas on how best to proceed. He pointed out that he doesn’t “intend to have a structured consultation process, but I will be available for exchanges with any Member who wishes to express a view on this directly to me, informally. Such exchanges can be organised through the Secretariat.” “If you have immediate reactions, you are welcome to make them known,” and “if not, the suggestion is that you can reach out to me informally after this meeting.” The statement issued by the new DSB chair was later circulated on 22 May as document JOB/DSB/12. US BLOCKS AB VACANCIES Meanwhile, for the 97th time, the US blocked a joint proposal by Colombia, on behalf of 130 countries, to expeditiously commence “the selection processes for filling vacancies on the Appellate Body (AB).” Without naming the US, Colombia conveyed that the extensive number of members submitting the proposal reflects a common interest in the functioning of the Appellate Body and, more generally, in the functioning of the WTO’s dispute settlement system. In a rather defiant tone, the US apparently stated that it does not support the proposed decision. Washington reiterated that it has set out its fundamental concerns on WTO dispute settlement and that the proposal does not address those concerns. The US said that before any engagement would be productive, members must reflect on whether a reformed WTO dispute settlement system is viable, questioning the value of repeating this agenda item. The US told members that a more productive approach would be to introduce an item on dispute settlement reform that does not simply call for restoring the Appellate Body, with all its fundamental problems, said people familiar with the development. In response to the seemingly “my way or the highway” approach echoed by the US, 20 members sharply intervened to reiterate their support for the joint proposal and for the urgent need to restore a fully functioning dispute settlement system. It appears that several members underscored the need for continued engagement on dispute settlement reform in Geneva following the 14th Ministerial Conference (MC14) in Yaounde, Cameroon in late March. Many members who took the floor on this issue emphasized the importance of restoring a two-tiered dispute settlement system, with the United Kingdom saying that achieving a fully functioning dispute settlement system does not mean going back to the way things were before. Australia expressed sharp concern that almost 100 DSB meetings and 2,354 days have passed since the Appellate Body ceased functioning, yet members are no closer to appointing Appellate Body members nor to successfully concluding discussions on WTO dispute settlement reform. On behalf of the 130 members, Colombia expressed its regret for the 97th time that members have not been able to launch the selection processes to fill the vacancies at the Appellate Body. Colombia also said that “Ongoing conversations about reform of the dispute settlement system should not prevent the Appellate Body from continuing to operate fully, and members shall comply with their obligations under the Dispute Settlement Understanding to fill the vacancies as they arise.” Around a dozen members also highlighted the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), which provides the possibility of resorting to arbitration under Article 25 of the DSU in case of an appeal in disputes between any two or more participating members.
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