TWN Info Service on WTO and Trade Issues (Jul20/01)
1 July 2020
Third World Network

Director of Appellate Body division moved to a new “division”
Published in SUNS #9149 dated 30 June 2020

Geneva, 29 Jun (D. Ravi Kanth) – The Director-General of the World Trade Organization, Roberto Azevedo, has shifted the director of the Appellate Body (AB) Division to lead from 1 July a new “Division” responsible for “Knowledge and Information Management, Academic Outreach and the WTO Chair’s Programme”.

The move to shift the director of the AB Division, Mr Werner Zdouc, to an innocuous new “Division” is being interpreted as a clear signal that the AB, the highest adjudicating body for global trade disputes, will continue to remain dysfunctional, said trade envoys, who asked not to be quoted.

Mr Zdouc has been specifically targeted by the United States for the past three years, with former Appellate Body member Thomas Graham (from the United States) having voiced serious criticism of Mr Zdouc last year, said a trade official, who asked not to be quoted.

In a one-page letter sent to trade envoys on 26 June, and seen by the SUNS, Azevedo wrote that “as of 1 July, the WTO Secretariat will establish a Division responsible for Knowledge and Information Management, Academic Outreach and the WTO Chair’s Programme.”

“This move will see the WTO joining other institutions in making knowledge management an important feature of their organizational structure and practice while streamlining and updating related fields of information management and having an organized focal point for academic collaboration and outreach,” he claimed.

Azevedo said that the new division “will be established with no impact on the headcount and will draw on the resources readily available in the Secretariat by transferring staff members already carrying out the related tasks.”

The DG, however, did not indicate from which divisions the staff will be deployed to the new division.

The DG subtly announced, in the second paragraph, that “Mr Werner Zdouc (who is currently the director of the AB Division) is being reassigned to head this Division.”

Azevedo, however, remained silent on what happens to the AB in the absence of Mr Zdouc.

“Consequently, the creation of this new Division will not have any budgetary impact on the Organization,” Azevedo said, knowing that next year’s budget will have a zero-Swiss franc increase, said trade envoys.

The DG further claimed that “the management of knowledge and information is of utmost importance for individuals, businesses and international institutions alike.”

“It is important for the WTO to adopt a strategic approach to gathering, consolidating and preserving knowledge to be used, passed on and made accessible,” Azevedo said.

But he did not indicate how this knowledge will be useful for an Organization without a two-stage dispute settlement mechanism.

At a time when the enforcement mechanism of the WTO has been made dysfunctional, after the US repeatedly blocked the launch of the selection process at the DSB for filling the six vacancies in the AB, the DG claimed that “in its 25th year, the WTO has generated valuable information, knowledge and practices which are important for the work and advancement of the rules-based system.”

“It is important that this is managed in a systematic way in a structured framework,” the DG said, adding that “to this end, the new Division is being created through the amalgamation of units engaged in information management and collaboration with academia and the establishment of a unit dedicated to knowledge management.”

Lastly, the DG argued that “the new Division will incorporate the Library and the Information Management Section from the Languages, Documentation and Information Management Division, and the Chair’s Programme from the Institute for Training and Technical Cooperation and will establish the Knowledge Management Section building upon expertise drawn from the Economic Research and Statistics Division.”

More importantly, the DG has appointed the director of the AB division, Mr Zdouc, as the director of this new division, while the staff of the AB division are already being shifted to other divisions on secondment, said a trade envoy, who asked not to be quoted.

Effectively, Azevedo seems to be signaling that the Appellate Body is unlikely to be resurrected anytime soon and even if it is brought back to life, Mr Zdouc will not be heading that refurbished AB, the trade envoy said.

Significantly, the Appellate Body has become dysfunctional on Azevedo’s watch, and now this move “seals the casket of the AB very tight,” said another trade envoy, who asked not to be quoted.

Mr Zdouc was severely criticized by former AB member Thomas Graham last year. But other AB members openly praised Mr Zdouc as a man of unimpeachable integrity and credibility.

Without naming the retiring AB member Thomas Graham, who had been cited in a Bloomberg news story for raising opposition to working with a WTO official at the Appellate Body Division, China had said last year that “Appellate Body member by taking oath on the first day of his or her office is expected to preserve the professional ethics, independence and impartiality.”

“He or she shall fully comply with rules, including the Working Procedures, be unaffiliated with any government and abstain from any involvement in political matters which may compromise the integrity and authority of the Appellate Body,” China had argued.

On 3 December 2019, two serving and one retired AB member – Ujal Singh Bhatia, Hong Zhao, and Shree BC Servansing – wrote a letter to the WTO Director-General, saying that “regarding recent media articles, we have deep concerns about the breach of confidentiality and the misrepresentations disseminated about meetings between Appellate Body Members and the Director-General.”

“We reject any insinuations about the competence and neutrality of the Director of the Appellate Body Secretariat [Mr Werner Zdouc] and we have full confidence in his professional qualities,” the three AB members had said, arguing that “we disagree completely with these media reports and hope that measures will be taken to refute this misinformation.”