December 11th 2019: the end of history for the appellate body of the WTO?
On December 10th 2019, the Appellate Body (AB) of the WTO will remain with one judge only, Ms. Zhao Hong (China). This will impair the functionality of the AB as it requires three judges to operate. At the IGIR – IEEM IP Seminar in Macao, Peter van den Bossche discussed potential alternatives to a functional AB, for ensuring the existence of some sort of settlement scheme for matters of international trade.
December 10th 2019: the end of history?
Once the mandate of Amb Ujal Bhatia (India) and Mr. Thomas Graham (US) will expire, the WTO Dispute Settlement System (DSS) will be dysfunctional. Without the AB, the DSS will hardly be able to enforce WTO law (another view on these matters here, by Jens Hillebrand Pohl). What will Members resort to for dispute adjudication? Peter van den Bossche illustrates a number of alternatives that academics in the field have elaborated.
Alternatives to a dysfunctional DSS
Firstly, Members could resort to diplomatic solutions to the dispute, without relying on judicial adjudication. Caveats here are that (1) there is no strict enforcement, and (2) in the context the issues dealt by the DSB, it is rather rare that Members find amicable solutions. The stakes may be too high.
Secondly, there is the option for parties to continue using the DSS but agree ex ante not to appeal the panel report. I understand this to be the most problematic solutions of all. This solution 1) risks access to justice, and 2) overburdens the Panel making the entire system less efficient. Should the panel make a mistake, there needs to be a remedy available to the parties. Taking away the option for appeal would simply defeat the right of Members to a just report.
Additionally, this solution would also put more pressure on the panelists, who will receive longer submissions and will need to address all claims of the Members. Currently, to limit the weight on the shoulders of the panel, panelists can exercise judicial economy: they can choose to leave out some of the claims submitted by the parties, while addressing the core of the dispute. This will no longer be possible. With this solution, the whole system will be clogged and unjust.
Thirdly, Members could rely on the Interim Arbitration Procedure under art. 25 DSU. The EU has now concluded an agreement with Canada and Norway that if there are any future disputes that need to be appealed, and there is no functional AB, the appealing party will resort to art. 25 DSU. Former appellant body Members will then serve on this bench. I envisage two issues with this solution: (1) the EU has not sufficiently acknowledged the fact that the pool of former AB judges is very small and very geographically imbalanced [and this may create issues of bias within a dispute]; and (2) only two WTO Members signed off to such deals.
Fourthly, it could be possible for Members to rely on dispute settlement schemes provided for by Free Trade Agreements (FTAs). While this seems to be the most viable option of all, it also comes with some downsides. These dispute bodies are inexperienced, understaffed and underfunded (which is no surprise as they have not been used much). These bodies would have jurisdiction on disputes between two Members only, meaning that the same issue could be decided very differently by different tribunals under different FTAs. There could also be an issue of conflict of forums.
Can the WTO bypass the American boycott? There are some last resorts that could be relied upon. (1) During the next ministerial conference, the US could propose a last-minute fix, (2) the Members could agree to the US proposal to reduce the budget allotment to the AB by 87 to 90% [more on this here], however this would still result in a dysfunctional DSS and the impediment of the non-nomination of replacing judges would remain an issue; or (3) there could be a decision to appoint a judge by a majority vote. However, the this would problematic as decision-making by reverse consensus is at the core of the WTO (more on this here).
Perhaps Peter van den Bossche was right when, in his farewell speech to the AB, mentioned that this may be the end of a glorious experiment of the rule of law applied to international trade relations.
|Written by Virginia Debernardi, IPKM student 2019/2020 - more blogs on Law Blogs Maastricht|