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TWN
Info Service on WTO and Trade Issues (Oct24/09) Geneva, 11 Oct (D. Ravi Kanth) — Ahead of a Heads of Delegation meeting at the World Trade Organization on 11 October, the co-convenors engaged in the dispute settlement reform discussions presented a rather ambivalent and “muddling” progress report on the crucial “appeal/review” mechanism, which is expected to replace the binding Appellate Body, said people familiar with the development. As part of a transparency exercise, the facilitator overseeing the discussions on the reform of the WTO’s dispute settlement system, Ambassador Usha-Dwarka Canabady of Mauritius, on 8 October sent a report to trade envoys enclosing the findings of the co-convenors. The two-page report sent to trade envoys by email, seen by the SUNS, suggests “muddling” progress until now. The report raised critical questions as to whether “a fully and well-functioning dispute settlement system accessible to all Members” can be delivered by 2024, as per the decision adopted by ministers at the WTO’s 13th ministerial conference (MC13) in Abu Dhabi earlier this year, said people familiar with the development. FINDINGS To start with, on access to the proposed “mechanism”, the co-convenors noted that “most Members maintain that it is essential to their interests that access to appeal/review is automatic and does not require the consent of the other disputing party.” But they maintained somewhat ambiguously that “expert discussions are continuing but are closely linked to discussions on other sub-topics, particularly the Form of the Mechanism.” On “Clarifying Members’ expectations of adjudicators”, the co-convenors said that “experts are discussing a range of possible reforms, including ideas to make the Appeal/Review process more efficient and less costly.” On the crucial issue concerning the “form of the mechanism”, the co-convenors suggested that “most Members have expressed that a standing body supports their interests, such as with respect to correctness, predictability, consistency and legitimacy.” This implies that the majority of the members want a “standing body” like the Appellate Body, barring one major industrialized country, said people familiar with the discussions. Again somewhat ambivalently, the co-convenors pointed out that “experts continue to explore reform ideas that have the potential to address concerns about the structure and functioning of the appeal/review body.” On “reducing/changing incentives to appeal”, the co-convenors said “experts are discussing several reform ideas that could contribute to reducing the number of frivolous or tactical appeals.” However, they did not spell out what these reform ideas are and why they are needed at this juncture, said people familiar with the development. On “Scope of review,” the co-convenors suggested that “experts are exploring possible reforms that could serve to narrow the number and/or breadth of claims that would be considered by the Appeal/Review adjudicators.” The underlying message from the above paragraph suggests that attempts are allegedly underway to circumscribe members’ right to raise claims as they deem fit for the resolution of a dispute, said people familiar with the development. As regards “Standard of review”, the co-convenors said that “experts are considering the standard that the Appeal/Review adjudicators should apply in reviewing the panel’s decision.” Without clarifying who are the “experts” that are being repeatedly referred to, whether they come from industrialized countries or developing countries, and whose interests they represent in the discussions, the co-convenors are abjectly confounding the discussions, said people familiar with the development. The co-convenors said they have identified “four potential reforms that, at this stage of the discussions, show promise in terms of their potential to address some interests and concerns of Members, and which therefore appear to require deeper engagement so as to make further progress.” According to the co-convenors, these possible reform ideas are: “a. narrowing the claims that would be reviewable on appeal/review to those that would have a material impact on the respondent’s implementation obligations; b. clarifying adjudicators’ role with respect to reviewing the panel’s objective assessment of the facts of the case; c. making changes to the existing interim review stage of the panel process such that it provides a more meaningful opportunity for the panel to correct factual or legal errors; and d. clarifying Members’ expectations of appeal/review adjudicators, such as with respect to timeframes, output, word and time limits for parties’ submissions, use of previous reports, and judicial economy.” The co-convenors seem to be articulating the reform ideas of select powerful members to ensure that the standard of review is severely restricted, said people familiar with the development. Suggesting that there have been rich discussions on different items of accessibility, such as capacity building, technical assistance, and litigation costs, the co-convenors noted that “Members have engaged in very rich discussions with a deeper understanding of the landscape and a greater level of granularity.” They particularly mentioned “an updated proposal on cross-retaliation from Colombia, which had been submitted on or around 18 September as requested by the Facilitator and Co-Convenors.” According to the co-convenors, “areas of strong convergence which have now emerged are as follows: (a) On Capacity Building, it is clear that Members broadly agree with the principles which underpin paragraphs 1, 2, 3 and 6 of the Accessibility chapter of the Informal Consolidated Text. There is more detail that could be included to ensure that reforms are specific and tailored to requirements, and such additional elements are now being captured through informal consultations with proponents. (b) Likewise on Technical Assistance, Members broadly agree with the principles articulated in paragraphs 1 and 4 of the Accessibility chapter of the Informal Consolidated Text. However, areas for development include, amongst others: ensuring there is a dialogue between the Secretariat and Members (i.e. mirroring paragraph 3 on Capacity Building); the ITTC providing more detailed reporting for reasons of transparency and accountability; and whether and how the scope of the Secretariat’s disputes-related services pursuant to Article 27.2 of the DSU could be widened including any budgetary implications. (c) Finally, Members have discussed in detail the issue of Litigation Costs. It is clear that there are strong interests in: seeking to reduce litigation costs; having those costs met via a new Dispute Settlement Fund or similar; and developing country Members and LDCs having a choice of service provider (i.e. not limited solely to the ACWL which was established 20 years ago to assist developing countries or law firms recommended by the ACWL). It is equally clear that there are strong concerns regarding the political reality for potential donors being asked to capitalize a fund for Members to bring disputes against themselves; the practical reality of establishing a new fund when existing funds and mechanisms are chronically under-funded and facing increased competition; and a pragmatic desire to maintain or strengthen existing mechanisms. The discussion has been constructive and experts have explored whether some interests are or can be met outside a new fund, but differences appear very wide apart.” In short, there appears to be little or no clarity as to whether there will be a binding appeal/review mechanism by the end of the year, as per the MC13 mandate, said people familiar with the discussions.
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