TWN Info Service on WTO and Trade Issues (Oct17/25)
31 October 2017
Third World Network
Impasse over AB selection process lingers on, US again criticised
Published in SUNS #8562 dated 27 October 2017

Geneva, 26 Oct (Kanaga Raja) - The impasse over the launch of the process for the selection of new Appellate Body (AB) members to fill current and upcoming vacancies on the Appellate Body continues with the United States again saying that it is not in a position to agree to the launch of this process until its concerns over the continued service of former AB members are addressed.

The impasse came at a regular meeting of the WTO Dispute Settlement Body (DSB) on 23 October during the discussions on Appellate Body matters, where several members criticised the US for not putting forward any proposals to address the concerns that it had raised.

This issue was also raised by members across all regions at an informal Heads of Delegations (HoD) meeting on 24 October, where, without naming the US, they called for strengthening the Dispute Settlement Understanding (DSU). (See SUNS #8561 dated 26 October 2017.)

The two AB members in question whose second four-year terms have expired or are expiring soon are Mr Ricardo Ramirez-Hernandez and Mr Peter Van den Bossche.

The second term of Mr Ramirez-Hernandez had already expired on 30 June. He is however continuing his work on the two ongoing appeals in which he is involved.

The second term of Mr Van den Bossche will expire on 11 December 2017.

Another vacancy pertains to Mr Hyun Chong Kim of South Korea who had tendered his resignation (with immediate effect) on 1 August prior to his appointment as a minister in the Korean government.

The European Union and a group of Latin American countries tabled revised proposals at the DSB meeting on 23 October in which they proposed that the DSB agree to launch the selection processes to replace Mr Ramirez- Hernandez, Mr Kim and Mr Van den Bossche.

The EU proposal set a deadline of 24 November 2017 for Members to submit nominations of candidates and for the DSB to take a decision to appoint the three new AB members as soon as possible.

The proposal by the Latin American countries (Argentina, Brazil, Colombia, Chile, Guatemala, Mexico and Peru) set a deadline of 29 November 2017 for Members to submit their nominations of candidates, and for the DSB to take a decision to appoint the new AB members no later than at its regular meeting scheduled for February 2018.

According to trade officials, the Chair of the DSB, Ambassador Junichi Ihara of Japan, reported on the efforts to overcome the current impasse.

The Chair said that he held informal consultations with members, at both the political and technical level, in order to find a way forward to the current impasse.

However, there has been no noticeable development so far, he said.

The Chair urged the members to show more flexibility and creativity so that the selection processes could be launched as soon as possible.

The European Union and Mexico (for itself, Argentina, Brazil, Colombia, Chile, Guatemala, and Peru) then introduced their revised proposals for the launch of the selection processes.

With respect to the proposals at issue (proposals by the EU and the group of Latin American countries), the US said, as mentioned at the last meeting of the DSB, "we are not in a position to support either of the proposed decisions."

In the US view, "we cannot consider a decision launching a selection process when a person to be replaced continues to serve and decide appeals after the expiry of their term."

As noted in past meetings, the DSB has a responsibility under the DSU to decide whether a person whose term of appointment has expired should continue serving.

The US considers that Members need to discuss and resolve that issue first before moving on to the issue of replacing such a person.

The US said it would welcome Mr. Ramirez's continued service on the appeals to which he was assigned prior to June 30.

"In fact, we do not understand any Member to object to his service on these appeals. In that circumstance, the DSB should take up its responsibility to adopt an appropriate decision."

The US said it has been discussing this issue informally with multiple delegations recently.

"Those meetings have been productive in that we believe we have heard a general recognition that the DSB has the authority to set the term of an AB member under DSU Article 17.2."

It follows that the DSB has a responsibility to decide whether a person should continue serving beyond that term.

"We also have heard a willingness of several delegations to work together to find a way forward. We therefore will continue our efforts and our discussions with Members and with the Chair to seek a solution on these important issues," said the US.

According to trade officials, more than two dozen members took the floor to reiterate their concerns about the continued impasse and the impact it could have on the WTO's dispute settlement system, as well as the credibility of the organization as a whole.

Many members said that there should be no linkage between discussing the US concerns and launching the selection process.

Several members explicitly called on the US to reverse its stance. The impasse was now a very serious concern that threatened substantial delays in the processing of disputes.

It also threatened to eclipse other issues at the upcoming WTO eleventh Ministerial Conference in Buenos Aires.

Several members criticized the US for failing to put forward any proposals to address the problems that it has identified.

According to trade officials, the members expressing one or more of these views included Australia, Pakistan, Singapore, Thailand, Canada, New Zealand, Switzerland, India, Chile (for the GRULAC), Hong Kong (China), Norway, Chinese Taipei, Turkey, Japan, China, Korea, Honduras, Russia, Guatemala, Israel, Uruguay, Venezuela, the Dominican Republic, El Salvador, Peru, Mexico (for itself, Argentina, Brazil, Colombia, Chile, Guatemala, and Peru), and Brazil.

The DSB Chair said he would continue his consultations. He called on members to step up their "conversations" on this issue.