Info Service on WTO and Trade Issues (May18/04)
4 May 2018
Third World Network
Longstanding impasse over AB appointments continues
Published in SUNS #8674 dated 3 May 2018
Geneva, 2 May (Kanaga Raja) - The United States has again blocked,
for the eleventh time, efforts to launch the selection processes to
fill three current vacancies on the seven-member Appellate Body (AB).
The impasse over this issue at the DSB has now been lingering for
more than 16 months.
The issue of launching the selection processes for filling these three
vacancies came up at a meeting of the WTO's Dispute Settlement Body
(DSB) on 27 April under the agenda item of Appellate Body matters.
At the meeting, the United States said that it was not in a position
to agree to a joint proposal co-sponsored by some 66 WTO Members that
called for the simultaneous launch of the selection processes to fill
the three vacancies as soon as possible.
Two Appellate Body members whose second and final four-year terms
have expired are Mr Ricardo Ramirez- Hernandez and Mr Peter Van den
Mr Ramirez-Hernandez's second term expired on 30 June 2017, while
that of M r Van den Bossche expired on 11 December 2017.
Another vacancy pertains to Mr Hyun Chong Kim from South Korea who
had tendered his resignation with immediate effect on 1 August 2017,
prior to taking up his appointment as a minister in the Korean government.
A joint proposal on AB appointments was tabled at the DSB meeting
by Argentina; Australia; Bolivia; Brazil; Canada; Chile; China; Colombia;
Cost a Rica; Dominican Republic; Ecuador; El Salvador; the European
Union (comprising 28 member states); Guatemala; Honduras; Hong Kong-China;
India; Indonesia; Israel; Kazakhstan; Korea; Mexico; New Zealand;
Nicaragua; Norwa y; Pakistan; Panama; Paraguay; Peru; the Russian
Federation; Singapore; Switzerland; Chinese Taipei; Turkey; Ukraine;
Uruguay and Viet Nam.
At the meeting, Iceland expressed its intention to co-sponsor the
According to the proposal (WT/DSB/W/609/Rev.3), given the urgency
and importance of filling the vacancies in the Appellate Body, in
compliance with the Dispute Settlement Understanding (DSU) and so
that it can carry on its functions properly, the delegations referred
to above, propose that, at its meeting, the DSB takes a decision with
regard to the following:
(1) to launch: (i) one selection process to replace Mr. Ricardo Ramirez
Hernandez, whose second four year term of office expired on 30 June
2017; ( ii) a second selection process to replace Mr. Hyun Chong Kim,
who resigned from the Appellate Body as of 1 August 2017; and (iii)
a third selection process to replace Mr. Peter Van den Bossche, whose
second four year term of office expired on 11 December 2017;
(2) to establish a Selection Committee, consistent with the procedures
set out in document WT/DSB/1 and with previous selection processes,
composed of the Director-General and the Chairpersons of the General
Council, the Goods Council, the Services Council, the TRIPS Council
and the DSB, to be Chaired by the DSB Chair;
(3) to set a deadline of a 30-day period after the date of its decision,
for Members to submit nominations of candidates; and
(4) to request the Selection Committee to carry out its work in order
to make recommendations to the DSB within 60 days after the deadline
for submitting nominations of candidates, so that the DSB can take
a decision to appoint three new Appellate Body members as soon as
Mexico introduced the joint proposal at the meeting, on behalf of
the 65 WT O Members, plus the delegation of Iceland who expressed
its intention to co-sponsor the proposal.
Mexico said that the considerable number of Members submitting this
joint proposal reflects a common concern with the current situation
in the Appellate Body that is seriously affecting its workings and
the overall dispute settlement system and is against the best interest
of its Members.
According to Mexico, WTO Members have a responsibility to safeguard
and preserve the Appellate Body, the dispute settlement and the multilateral
"Thus, it is our duty to proceed with the launching of the selection
processes for the Appellate Body members, as submitted today to the
DSB," it said.
Mexico pointed out that the proposal seeks to:
(i) start three selection processes: one process to replace Mr Ricardo
Ramirez-Hernandez, whose second term expired on June 30, 2017; a second
process to fill the vacancy occurred with the resignation of Mr Hyun
Chong Kim with effect from 1 August 2017; and a third process to replace
Mr Peter Van den Bossche, whose second term expired on December 11,
(ii) to establish a Selection Committee;
(iii) to set a deadline of 30 days for the submission of candidacies;
(iv) to request that the Selection Committee issues its recommendation
within 60 days after the deadline for nominations of candidates.
Mexico said the proponents are flexible in the determination of the
deadlines for the selection processes but they should take into account
the urgency of the situation.
"We continue to urge all Members to support this proposal in
the interest of the multilateral trade and the dispute settlement
systems," said Mexico.
In its statement, the United States said that as it has explained
in prior meetings, "we are not in a position to support the proposed
For at least the past 8 months, the United States has been raising
and explaining the systemic concerns that arise from the Appellate
Body's decisions that purport to "deem" as an Appellate
Body member someone whose term of office has expired and thus is no
longer an Appellate Body member, pursuant to its Working Procedures
for Appellate Review (Rule 15), it said.
During that period of time, the DSB has adopted by positive consensus
two reports signed by someone no longer an Appellate Body member,
and there currently remain five ongoing appeals where the term of
one or more of the persons appointed to the division has expired.
In one instance, the person's term expired almost ten months ago,
the Unite d States said. However, the Dispute Settlement Body has
not yet addressed the problem of persons continuing to hear appeals
well after their terms have expired.
Under the Dispute Settlement Understanding, it is the DSB that has
the authority to appoint Appellate Body members and to decide when
their term in office expires, and so it is up to the DSB to decide
whether a person who is no longer an Appellate Body member can continue
to serve on an appeal.
"We appreciate the recognition by Members at the last meeting
of the fact that addressing this issue is a joint responsibility of
all Members, and we appreciate the willingness they expressed to engage
on this issue," said the United States.
The United States said it remains resolute in its view that Members
need to resolve that issue as a priority.
"We therefore will continue our efforts and our discussions with
Members an d with the Chair to seek a solution on this important issue,"
CONCERNS OVER APPELLATE BODY IMPASSE
Colombia (for the GRULAC, a group of Latin American and Caribbean
countries), Canada, Pakistan, Hong Kong-China, Russia, Venezuela,
Switzerland, Thailand, Chinese Taipei, Singapore, Norway, Australia,
Brazil, Ecuador, Turkey, India, Panama, Honduras, Korea, New Zealand,
Japan, China, the Philippines, Guatemala and the EU all took the floor
on this issue.
According to trade officials, they reiterated their concerns with
the continued impasse over the appointment of new Appellate Body members,
and urged all members to show flexibility in order to resolve the
deadlock as soon as possible.
Several members highlighted the dangers that the continued impasse
in the Appellate Body pose not only to the dispute settlement system
but the WTO a s a whole, and that members had an obligation under
the WTO rules to initiate the process.
Other members reiterated that the US concerns and the issue of appointment
of AB members should be treated separately.
Several members also called on the US to share its views and develop
ideas on how to resolve its problem.
India said it supports the proposal to commence the selection process
to fill current vacancies in the Appellate Body as a matter of priority.
It recognised that the dispute settlement system of the WTO is the
central pillar in providing security and predictability to the multilateral
India said the wide use of the WTO dispute settlement system in the
23 years of its existence is testament to Member's trust in the independence
and effectiveness of the system.
"It would be a severe blow to the rules-based trading system
if one of its central pillars were to lapse into ineffectiveness,"
India said that it deeply regrets that the DSB has been unable to
fulfil its legal obligation under DSU Article 17.2 to appoint Appellate
Body members as vacancies arise.
This is a serious and urgent concern for the multilateral trading
system an d threatens to undermine the rights and obligations of the
"We, therefore, urge all Members to engage constructively to
resolve this issue as soon as possible."
India said it remains committed to working with other interested members
with a view to finding a way to allow the selection process to start
and be completed as soon as possible.
China noted that members have been unable to launch the Appellate
Body member selection processes for over a year and no progress has
been made. The reason for this impasse is widely known both inside
and outside the WTO.
Noting that the member who blocked the process in the name of systematic
concerns laid out some of its reasoning in the previous DSB meeting,
China said that it would like to respond to those assertions.
China noted that in the last two DSB regular meetings, the US asserted
that China's interpretation of the word "rotation" "exhibits
fundamental misunderstanding of the DSU".
However, said China, a careful reading of DSU Article 17 suggests
otherwise. Article 17 of the DSU, entitled Appellate Review, lays
out the basic rules for the Appellate Body.
While Paragraph 2 to Paragraph 14 of this article each focus on one
specific aspect of the appellate review, Article 17.1 serves as the
introductory paragraph with general rules and as a basis for subsequent
According to China, among the five sentences in this paragraph, the
fourth sentence set forth the requirements of rotation, which means
that the Appellate Body members do not enjoy life tenure or serve
in one case throughout the term.
Following Article 17.1, the specific rules on the rotation of the
Appellate Body members' terms are provided in Article 17.2.
China said that if these rules are interpreted as suggested by the
US, then the definition of "rotation" shall be narrowed
to the rotation of members among different divisions only.
Such reading will render the structure and the content of Article
According to China, another assertion by the US in the previous DSB
meeting was that unlike similar rules of many other international
adjudicative bodies, the transitional rules of Rule 15 was not based
on the dispute settlement system's constitutive texts, namely the
Therefore, the US believed that the AB made an improper analogy of
Rule 15 to rules of other international tribunals and repeated this
conclusion in previous DSB regular meetings.
China said it conducted a brief survey of transitional rules of international
adjudicative bodies and found that for the African Court on Human
and People's Rights, a rule similar to Rule 15 is included in Article
2.2 of the Rules of the Court, rules that were adopted by the court
Moreover, said China, whether or not Rule 15 is part of the constitutive
text should not prevent members from implementing such rule, or including
such rule in the DSU as an amendment after negotiation.
The DSU itself was the result of Uruguay Round negotiation. In fact,
the WTO did not exist before 1995. The entire multilateral trading
system was the fruit of hard negotiations.
The US stated that "The United States remains resolute in its
view that Members need to resolve that issue first before moving on
to the issue of replacing such a person. We therefore will continue
our efforts and our discussions with Members and with the Chair to
seek a solution on this important issue."
Contrary to what the US has said, China said, "we do not see
any efforts by the US to seek resolution or even any constructive
engagement of the US in a meaningful discussion. Without such engagement,
any discussion will not be productive".
Noting that there are currently three vacancies in the Appellate Body,
China reiterated its concerns that the unreasonable blockage placed
by the US will profoundly undermine the functioning of the system
and credibility of the multilateral trading system.
This may eventually result in the complete paralysis of the WTO. Without
such system and its enforceable dispute settlement mechanism, trade
rules will be manipulated, China warned.
Unilateral and protectionist actions such as Section 301 investigations
or Section 232 investigations and the subsequent measures will become
prevalent, it said.
All of these will give rise to trade wars and further escalation of
the situation, China further said.
Canada said it deeply regrets that the DSB has been unable to fulfil
its legal obligation under DSU Article 17.2 to appoint Appellate Body
members as vacancies arise.
Canada agreed that it is time to start a process or, if necessary,
several processes to select new Appellate Body members for the three
Canada said that like other members, it is disappointed that the US
has linked the start of the Appellate Body selection processes to
the resolution of certain procedural concerns it has shared with members.
Canada invited the US to engage in discussions with interested members
with a view to expeditiously developing a solution to the concerns
that it has raised.
Korea said truly, it its not only the Appellate Body itself but the
entire system that becomes weakened by the current deadlock situation.
Australia reiterated its serious concerns regarding the longstanding
impasse which has prevented the appointment of Appellate Body members.
Russia said it is deeply concerned about the continuing US blockage
of the selection process and the fact that the US links it with the
resolution of the "problem".
For the past half a year, the US has neither put forward the concrete
problem nor the possible ways to resolve it.
This leads to the inability of the WTO Members to engage in a meaningful
discussion and move towards the resolution of this issue, said Russia.
Such unilateral actions kill the trust in the multilateral process
and contributes to the chaos in multilateral rules even though they
are taken under the pretense of compliance with the existing rules.
Russia said there is always room for improvement. But such improvement
should not be contrary to the well-functioning of the dispute settlement
mechanism and of the WTO system as a whole.
Russia called on the US to provide a clear picture of the problem
at issue and its potential solutions or stop the blockage.
Japan emphasised that it is the responsibility of the entire membership,
ac ting as the DSB, to ensure the proper functioning of the WTO dispute
settlement system in a manner consistent with the DSU.
Singapore reiterated its serious systemic concerns on the lengthy
delays in launching the Appellate Body selection process.
"With four out of seven Appellate Body positions to be filled,
and with the term of another Appellate Body member set to expire in
5 months' time in September 2018, we are facing an imminent paralysis
if the vacancies are not filled," it said.
Given its heavy workload and significance, a fully-staffed Appellate
Body i s crucial to the proper operation of the WTO dispute settlement
mechanism, which in turn is an integral part of the rules-based multilateral
The continued impasse adversely affects the credibility and functioning
of the WTO, and it is essential that all current and future vacancies
in the Appel late Body be filled without any further delays. Systemic
issues which had been raised can be discussed in a separate process,
Brazil said it has been now more than 16 months since we first started
discussions on the current process to fill the vacancies in the Appellate
Body. Unfortunately, no progress has been achieved.
Brazil remains extremely concerned with the current impasse and its
effects on the proper functioning of the Dispute Settlement System
and, more fundamentally, on this Organization and the multilateral
In fact, the underlying question is whether a rules-based system -
which Brazil understands is what the WTO is all about - can survive
without the guarantor of these same rules.
Brazil said it took good notice of recent documents containing concerns
regarding the multilateral trading system.
There are certainly issues that can be improved in the WTO in general
and i n its dispute settlement system in particular. For that, we
need to be mindful of the significant achievements of the current
system so far and at the same time goodwill to identify and improve
specific issues of concern, it said.
In this sense, Brazil said it is ready to engage in conversations
with interested Members and encouraged the prompt submission of concrete
ideas and proposals to overcome this unfortunate impasse.
According to trade officials, the chair of the DSB, Ambassador Sunanta
Kangvalkulkij of Thailand, said it was regrettable that members were
still not in a position to launch the selection process for the three
Appellate Body vacancies.
She said her door was open should any delegation wish to share ideas
on how to resolve the matter. She also said it was her intention to
consult with some delegations informally on the matter.