TWN Info Service on WTO and Trade Issues (Nov16/04)
1 November 2016
Third World Network

DSB holds second dedicated session on AB reappointment process
Published in SUNS #8343 dated 28 October 2016

Geneva, 26 Oct (Kanaga Raja) -- The WTO Dispute Settlement Body (DSB) on 26 October held a second dedicated session on possible changes over the reappointment of Appellate Body (AB) members.

The first dedicated session was held on 26 September (see SUNS #8321 dated 28 September 2016.)

These sessions have come following the US veto of the reappointment of Appellate Body member Seung Wha Chang of South Korea to a second term of office.

At the second dedicated session on 26 October, Brazil, India, Korea and Mexico put forward a joint proposal which would limit future appointments to the Appellate Body to a single term.

While several members expressed support for the joint proposal, the US rejected it, saying that the proposal would "fix something we don't agree is a problem."

According to trade officials, Brazil, India, Korea and Mexico put forward a joint proposal, in the form of a non-paper, which would limit future appointees to the Appellate Body to a single term.

According to trade officials, the joint proposal suggests that the DSU be amended so that persons appointed to the Appellate Body serve for one non-renewable term.

Under the current DSU rules, Appellate Body members are appointed to a four-year term, with the possibility of reappointment for a second term of four years.

The four proponents of the proposal did not indicate how long the single term should run, saying that this should be decided later.

The joint proposal includes a draft General Council decision to amend the first sentence of Paragraph 2 of Article 17 of the DSU to the effect that all future appointments of the Appellate Body members shall be for a non-renewable fixed term.

The proposed new wording for the first sentence of Paragraph 2 of Article 17 of the DSU is as follows: "The DSB shall appoint persons to serve on the Appellate Body for one non-renewable term of [X] years."

The four proponents noted that at the first meeting of the dedicated session, a non-paper on reappointment of AB members was circulated (by Korea), which listed several options for dealing with the issue.

The four proponents said that in order to contribute further to this discussion, they would now like to focus on one specific option: the possibility of amending the first sentence of Paragraph 2 of Article 17 of the DSU to the effect that all future appointments of AB members should be for a non-renewable fixed term.

Brazil said the proponents were advocating a limited, "almost surgical," change to DSU rules.

According to trade officials, India said the idea was to provide a simple solution to a difficult "philosophical" issue, namely, how to ensure the accountability of Appellate Body members to the WTO membership while at the same time safeguarding the impartiality and independence of the Appellate Body and the WTO dispute settlement system.

The US, however, said that it heard nothing that persuaded it of the need to change the current system. Far from it, the recent actions with regards to Mr. Chang validated the design of the DSU, it maintained. The role assigned to WTO members with regards to the DSB and Appellate Body is critical, the US said.

However, the US did not agree that there was any issue of independence or impartiality arising out of the reappointment process.

Brazil argued that the real problem was not the reappointment mechanism itself but the fact that it was misused and that unilateral parameters were set by one member to assess the performance of one Appellate Body member.

This essentially opens the door to other members adopting similar unilateral parameters in determining whether or not to reappoint an Appellate Body member, it added.

According to trade officials, the EU, Indonesia and Switzerland expressed support for the joint proposal.

Australia, Ecuador, Guatemala and Paraguay said that they had some questions about the proposal.

China, Canada and Chinese Taipei said that they were still considering the initiative.

According to trade officials, the DSB Chair noted that members were "clearly not of one mind" as to whether the proposal could move forward but that there were broader issues raised which evidently needed further discussion.

He said that he would make himself available for further consultations ahead of the third dedicated session to be held on 23 November. +