Info Service on WTO and Trade Issues (Feb19/03)
Geneva, 30 Jan (Kanaga Raja) – With the US continuing to block the selection process to fill four vacancies on the seven-member Appellate Body, the impasse at the World Trade Organisation continues with no sign it could end soon.
At a meeting of the WTO Dispute Settlement Body (DSB) on Monday (28 Jan), the US again said that it was not in a position to agree to a joint proposal sponsored by some 71 WTO Members that called for the simultaneous launch of the selection processes.
Two Appellate Body members whose second and final four-year terms have expired are Mr Ricardo Ramirez- Hernandez and Mr Peter Van den Bossche.
Mr Ramirez-Hernandez’s second term expired on 30 June 2017, while that of Mr 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.
The fourth vacancy concerns Mr Shree Baboo Chekitan Servansing, whose first term ended on 30 September 2018, and his re-appointment for a second term was blocked by the US.
A proposal on Appellate Body appointments was introduced by Mexico, on behalf of the 71 co-sponsors, at the DSB meeting.
The co-sponsors of the joint proposal are Argentina; Australia; Bolivia; Brazil; Canada; Chile; China; Colombia; Costa Rica; Cuba; Dominican Republic; Ecuador; Egypt; El Salvador; the European Union (28 member states); Guatemala; Honduras; Hong Kong (China); Iceland; India; Indonesia; Israel; Kazakhstan; Korea; Liechtenstein; Mexico; New Zealand; Nicaragua; Norway; Pakistan; Panama; Paraguay; Peru; the Russian Federation; Singapore; Switzerland; the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; the Former Yugoslav Republic of Macedonia; Turkey; Ukraine; Uruguay; Venezuela; and Viet Nam.
According to the joint proposal (WT/DSB/W/609/Rev.7), given the urgency and importance of filling the vacancies in the Appellate Body, in compliance with the DSU and so that it can carry on its functions properly, the 71 co-sponsoring delegations proposed 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;
(iii) a third selection process to replace Mr. Peter Van den Bossche, whose second four-year term of office expired on 11 December 2017; and
(iv) a fourth selection process to replace Mr. Shree Baboo Chekitan Servansing, whose four-year term of office expired on 30 September 2018;
(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 four new Appellate Body members as soon as possible.
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 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 trading systems.
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.
The proposal seeks to:
(1) start four selection processes: one process to replace Mr Ricardo Ramirez-Hernandez, whose second term expired on 30 June 2017; a second process to fill the vacancy occurred with the resignation of Mr Hyun Chong Kim with effect from 1 August 2017; a third process to replace Mr Peter Van den Bossche, whose second term expired on 11 December 2017; and a fourth process to replace Mr Shree Baboo Chekitan Servansing, whose four-year term of office expired on 30 September 2018;
(2) to establish a Selection Committee;
(3) to set a deadline of 30 days for the submission of candidacies; and
(4) to request that the Selection Committee issues its recommendation within 60 days after the deadline for nominations of candidates.
The proponents are flexible in the determination of the deadlines for the selection processes, but they should consider the urgency of the situation, said Mexico.
Mexico continued to urge all members to support the proposal in the interest of the multilateral trade and the dispute settlement systems.
The US said that as it had explained in prior meetings, “we are not in a position to support the proposed decision.”
Repeating the same arguments that it had made in previous DSB meetings, the US said the systemic concerns that it has identified remain unaddressed.
According to trade officials, some sixteen members, either speaking on their own behalf or on behalf of groups, made statements on the appointment of AB members.
They reiterated their concerns over the continued impasse regarding the appointment of new Appellate Body members.
They urged all members to show flexibility in order to resolve the deadlock as soon as possible.
According to trade officials, several members welcomed the informal process launched by the General Council chair, Ambassador Junichi Ihara of Japan, to resolve the impasse over the launch of the selection processes for new Appellate Body members as well as the appointment of Ambassador David Walker of New Zealand to serve as facilitator for the discussions.
They said that the proposals that were presented at the informal General Council meeting at the level of Heads of Delegation on 17 January to hear the views of members, as well as the comments made on the proposals, were a good basis for moving the discussions forward.
They underlined that these talks must be de-linked from the issue of launching the selection processes to fill the vacancies on the Appellate Body.
Echoing the statement made by Mexico on behalf of 71 WTO Members, China said that ensuring the integrity and functioning of the Appellate Body is not only the collective obligations of Members, but also serves the common interests of the whole Membership.
China expressed regret that the collective efforts by these Members were once again frustrated by a particular Member’s persistent blockage of the selection process which is without any legitimacy.
China cited Article 17.2 of the DSU which clearly states that: “vacancies shall be filled as they arise.”
The choice of using “shall” is more than adequate to suggest the Member’s duty to launch the selection process.
There shall be no legitimate reason for any Member to block it, and it shall not be subject to any other pre-condition than a vacancy.
Even so, China noted that Members have made earnest efforts to respond to the concerns of the Member and safeguard the dispute settlement system.
It said that various proposals have been tabled to address the current impasse including the joint proposals co-sponsored by the EU, China, and other Members which were discussed at the General Council meeting of 12 December 2018 and the informal General Council meeting of 17 January 2019.
Such efforts have already formed a solid basis for future consultations, it said, adding that it is time for the Member concerned, the United States, to table its constructive proposals so as to substantiate the discussions.
China believes that when Members have different views on any specific concern, constructive and solution-oriented discussion is the only way to move forward.
China called on all Members to have meaningful and substantive participation in the relevant process and strive to solve the current AB selection impasse without further delay.
Expressing support for the statement made by Mexico on behalf of the 71 WTO Members, Korea said that it shares the deep concerns and the sense of urgency regarding filling the vacancies in the Appellate Body.
The EU said that WTO Members have a shared responsibility to resolve this issue as soon as possible and to fill the outstanding vacancies as required by Article 17.2 of the DSU.
It thanked all Members that have co-sponsored the proposal to launch the appointment processes, and invited all other Members to endorse this proposal, so that the appointments can be made as soon as possible.
The EU also recalled that concrete proposals have been submitted to the General Council (WT/GC/W/752/Rev.2 and WT/GC/W/753/Rev.1) with a view to unblocking the Appellate Body appointments.
These proposals constitute a serious effort to address the concerns that have been voiced in connection with the appointments. They are now being discussed under the auspices of the Chairman of the General Council, it said.
The EU invited all Members to engage constructively in these discussions so that the vacancies can be filled as soon as possible.
Mexico, on behalf of the 71 WTO Members, expressed regret that for the twentieth occasion, “we have still not been able to start the selection processes for the vacancies of the Appellate Body and have thus continuously failed to fulfil our duty as Members of this Organisation.”
The fact that a Member may have concerns about certain aspects of the functioning of the Appellate Body cannot serve as a pretext to impair and disrupt the work of this body, it said.
It said there is no legal justification for the current blocking of the selection process, which is causing concrete nullification and impairment for many Members.
Mexico noted that as Article 17.2 of the DSU clearly states, “vacancies shall be filled as they arise.”
By failing to act today, we will maintain the current situation which is seriously affecting the workings of the Appellate Body against the best interest of all of its Members, said Mexico.
According to trade officials, the Chair of the DSB, Ambassador Sunanta Kangvalkulkij of Thailand, said that this matter requires political engagement on the part of all WTO members.
Taking note of the process that Ambassador Walker is now facilitating, she said that Ambassador Walker would report back to the membership on his consultations with members at the meeting of the General Council on 28 February.