Info Service on UN Sustainable Development (Oct18/06)
22 October 2018
Third World Network
Members warn demise of AB is the worst crisis facing the WTO
Published in SUNS #8776 dated 18 October 2018
Geneva, 17 Oct (D. Ravi Kanth) - A large majority of members of the
World Trade Organization on Tuesday warned that the worst existential
crisis facing their trade body at this juncture is the possible demise
of the Appellate Body (AB), the highest adjudicating arm for resolving
global trade disputes.
The US, which has blocked for more than one year a proposal from more
than 100 members for filling the vacancies at the AB, stuck to its
isolationist position that the dispute settlement system has gone
far beyond what was intended in the Uruguay Round commitments.
At the informal Trade Negotiations Committee (TNC) meeting on Tuesday
(16 October), the standoff between the large majority of members on
one side, and the US on the other, exposed the irrelevance and redundancy
of crafting new rules through plurilateral negotiations in electronic
commerce, investment facilitation, disciplines for micro, small, and
medium enterprises (MSMEs), domestic regulation in services, and trade
and gender at a time when the AB is going to disappear by December
On behalf of the African Group, South Africa said forcefully "that
unless and until Members come to terms with the growing threat to
the dispute settlement mechanism, not only existing rules but also
any discussion of new WTO rules or reform will become redundant."
"The DSM [dispute settlement mechanism] is the one matter on
which we need urgent engagement," said Ambassador Xavier Carim
of South Africa.
India said "the existential crisis facing the Appellate Body
is our gravest concern."
"With only 3 Members left, its effectiveness is compromised,
and with the continuing impasse, its future is a question mark,"
said India's Ambassador J S Deepak, according to trade envoys present
at the meeting.
"The looming paralysis and possible disappearance of the Appellate
Body will be the death knell of the dispute settlement system, which
in spite of its limitations, has served us well," India maintained.
In this context, India argued, "the topmost priority for the
Membership nee ds to be to break the impasse in the filling up of
the vacant positions of the Appellate Body members."
"A number of ideas have been floated to address the issues raised,
and we are open to engage on any or all of them; and to focus our
efforts on arriving at a breakthrough in this important area,"
"A swift and independent, two-stage dispute settlement system
is necessary, we believe, for fair enforcement of the rules of international
trade and preserving the credibility of the WTO," India argued.
"This needs to be at the top of the agenda in the coming weeks
and months!" India maintained.
China pointedly criticized the US for blocking the appointment process
for filling four vacancies at the AB. "The entire dispute settlement
system is in severe crisis," China said.
"Ever since August last year, more than 100 WTO members voiced
serious concerns by means of joint proposals, joint statements or
interventions at various occasions," China's trade envoy Ambassador
Dr Zhang Xiangchen said at the TNC meeting.
"Recently, EU, Canada and Honduras put forward some concrete
suggestions as well," China argued.
Malawi, on behalf of the ACP (African, Caribbean, and Pacific) group
of more than 90 countries, said "at this juncture it puts priority
support in the unblocking of the selection of AB members. Without
which the system will not function, therefore placing the merits of
negotiating new rules into question."
The ACP countries pointed out that "developing countries, including
the ACP Group, have in the past tabled proposals on the reform of
the WTO Dispute Settlement System but some of the members now calling
for reform blocked those proposals."
"Even though our concerns on the DSU still remain not addressed,
we do not think blocking the whole system is the way to handle things,"
The European Union said it is particularly worried about the situation
surrounding the Appellate Body. The EU argued that "the blockage
of appointments, hostage-taking of the dispute settlement system,
and its eventual crippling cannot be accepted as a "new normal"."
Japan cautioned that if "the Appellate Body ceases to operate,
the entire dispute settlement system could be brought to a halt."
Australia, Canada, and several other countries also called for addressing
t he gravest crisis at the WTO.
But the US, which called for reforms in the transparency and notification
functions of the Secretariat, and pursuing plurilateral negotiations,
remained unmoved by the calls for filling the vacancies at the AB.
The WTO's Director-General Roberto Azevedo said there is no progress
in ending the stalemate for filling the vacancies at the AB.
Consequently, the DG's repeated calls for crafting new rules to address
the 21st century challenges lacks credibility and integrity, said
trade envoys, who asked not to be quoted.