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TWN
Info Service on WTO and Trade Issues (Sep26/22) WTO:
DSS reform discussions spark deep divisions among members Geneva, 28 Sep (D. Ravi Kanth) -- Many members of the World Trade Organization on 25 September called for ensuring that the reform of the WTO's dispute settlement system (DSS) proceeds in tandem with the broader WTO reform discussions. This call aligns with the mandate that trade ministers gave at the WTO's 12th Ministerial Conference (MC12) in Geneva in June 2022, according to people familiar with the development. However, the United States struck a discordant note by suggesting that members hold vastly different perspectives on the reforms needed for a functioning dispute settlement system. This stance came as the US for the 100th time blocked the expeditious filling of all seven vacancies at the Appellate Body, said people familiar with the development. At an informal and subsequent regular meeting of the Dispute Settlement Body (DSB) on 25 September, the divide became explicit. On one side, the US and other developed countries appeared willing to push the DSS reform discussions to the proverbial backburner. On the other hand, many developing and least-developed countries sought to prioritize the issue of DSS reform, said people familiar with the development. To recall, ministers at MC12 clearly stated in paragraph 4 of the outcome document (WT/MIN(22)/24): "We acknowledge the challenges and concerns with respect to the dispute settlement system including those related to the Appellate Body, recognize the importance and urgency of addressing those challenges and concerns, and commit to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024." Yet, a group of major industrialized countries and the "Friends of the System" have seemingly turned the MC12 mandate upside down. They are pursuing nebulous WTO reforms that appear to contradict with the commitment set out in paragraph 3 of the outcome document that states: " ... We commit to work towards necessary reform of the WTO. While reaffirming the foundational principles of the WTO, we envision reforms to improve all its functions. The work shall be Member-driven, open, transparent, inclusive, and must address the interests of all Members, including development issues ..." Although trade ministers failed to agree on these broader reforms at the WTO's 13th Ministerial Conference (MC13) in Abu Dhabi in March 2024, and again at MC14 in Yaounde, Cameroon, in March this year, the General Council chair, Ambassador Clare Kelly of New Zealand, has continued the talks based on a chair's summary. Several members, who preferred not to be quoted, complained that while extraordinary importance is allegedly being attached to controversial WTO reforms that go against the MC12 mandate, the DSS reform discussions are being given a short shrift. DSS DISCUSSIONS During the regular meeting of the DSB, the chair, Ambassador Guilherme de Aguiar Patriota of Brazil, provided an account of recent exchanges, expressing hope for achieving convergence soon, said an Asian participant who asked not to be quoted. Approximately eight countries intervened after the chair's update during the regular session. Australia took the lead, presenting a nuanced assessment of the challenges facing the dispute resolution pillar of the WTO, the participant said. Immediately following the regular session, members held another informal DSB session on DSS reform. Jorge Castro of the WTO Secretariat presented the history of the dispute settlement system. Subsequently, delegates from Mexico, the United Kingdom, and Canada - who had served as facilitators during the process led by former Guatemalan deputy trade envoy Marco Molina in 2023-24 - shared their insights. Interestingly, Mr. Molina was suddenly recalled at the insistence of one major country that was unhappy with the facilitator process, said a participant who asked not to be quoted. The participant praised the chair of the DSS discussions for holding the informal session on DSS reform, noting that it provided a degree of satisfaction to members who view the topic as a central and integral part of the overall WTO reform work. Given the encouraging responses, the DSB chair plans to convene the next informative session on 27 October. Topics will include accessibility and possibly alternative means of resolution, such as the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), to which some 25 members are currently parties, the participant said. CHINA'S STATEMENT In its statement at the informal DSS discussions on 25 September, China said it "would like to thank you [the chair] for your updates on the previous meeting and for your consultations with Members on dispute settlement reform." Referring to its recent communication (WT/GC/REFORM/W/12), titled "Further reflections and suggestions on WTO reform", China stated, "we believe that dispute settlement reform should remain an important component of WTO reform." According to China, "a fully functioning and accessible dispute settlement system is essential to the stability and predictability of the multilateral trading system." Without naming the US - which has voided several panel rulings condemning Washington's trade measures - China said, "in this context, Members should pay due attention to the systematic impact of "appeals into the void", in particular the erosion of the rights and interests of developing Members, as just highlighted by the Australian delegate." China said it "supports the consultations under the auspices of the DSB Chair on restoring the functioning of the WTO dispute settlement system," adding that it is ready to engage fully in the DSS discussions. Commenting on the information session arranged by Ambassador Patriota, China said that it "welcomes your [the chair's] arrangement to hold this session immediately following our meeting today." Beijing said that it "believes this will be useful for all Members, particularly those whose delegates are relatively new to this important task," adding that such discussions provide "a valuable opportunity to gain a clearer understanding of the WTO dispute settlement system as a whole, including the options available and practices taken under the system, its current circumstances and challenges, as well as the work undertaken so far to restore its full functioning." "The issue must not be forgotten and the current dysfunctional state of DS due to blocked appointments to the AB by a single member must not be normalized," said another Asian trade envoy, who asked not to be quoted. "This broken piece of the multilateral rules-based trading system is part and parcel of the current WTO debacle and cannot be sidestepped," the envoy said, adding that "a lack of will to discuss alternatives, just as the rigid call for full restoration of the system, as per the Marrakesh Agreement, have equivalent effect." In effect, "both positions lead to the perpetuation of the impasse, betraying a level of conformity with the status quo of enforceable multilateral rules, seriously impacting the credibility of the WTO just when it is most needed," the envoy said. +
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