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TWN
Info Service on WTO and Trade Issues (Nov25/09) WTO:
Reform of dispute settlement system an "eyewash", say trade
envoys Geneva, 21 Nov (D. Ravi Kanth) -- Trade envoys remain sharply concerned over the "stepmotherly" treatment being accorded to reforming the World Trade Organization's dispute settlement system ahead of the WTO's 14th ministerial conference (MC14), to be held in Yaounde, Cameroon, in the last week of March next year, said people familiar with the development. In sharp contrast, seemingly unwarranted reforms that seek to change the consensus principle, the special and differential treatment (S&DT) framework, and "level-playing-field" issues are being placed on a higher pedestal, while dispute settlement reform is almost being abandoned, said people familiar with the development. The chair of the WTO's Dispute Settlement Body (DSB), Ambassador Clare Kelly of New Zealand, on 19 November held a small-group meeting with around a dozen countries to consult on the way forward, said people familiar with the development. A trade envoy, who asked not to be quoted, said that until now, consultations on dispute settlement reform have been merely an "eyewash" to create the appearance that the issue is being addressed, even though everyone is aware that these efforts are tantamount to being a "charade." Dispute settlement reform is being "divorced" from the overall WTO reform discussions beginning this year in an apparent attempt to appease the United States, according to people familiar with the development. The US believes that "sovereignty" prevails over any rulings issued by dispute panels and sees no future for a binding two-tier dispute resolution mechanism to enforce rulings arising from violations of WTO agreements. While the entire WTO reform discussion was framed to address US concerns, dispute settlement reform was given short shrift to prevent members from linking it to the other reform tracks, said people familiar with the development. Effectively, "spiking" the dispute settlement reform discussions is a signal that the global trade body will not have a binding role in enforcing the rules in the future, said a trade envoy, who asked not to be quoted. Against this backdrop, on 20 November , SUNS sought clarity from the DSB chair, Ambassador Kelly, regarding members' concerns. The chair was asked to comment on the following questions: 1. Is it accurate that there will be no outcome on reforming the Dispute Settlement System at MC14? 2. Are you preparing a report to conclude that the consultations have been unsuccessful? 3. There is a growing perception that these consultations are merely an "eyewash". What is your response to this criticism? 4. Some trade envoys contrast your process with that of former General Council Chair Ambassador David Walker of New Zealand, who produced a compromise solution that was ultimately blocked by the US. They argue that there has been no similarly sincere effort to hold negotiations thus far. Do you agree with this assessment? 5. Would you agree that without dispute settlement reform, the core enforcement function of the WTO is being undermined? In response to the above questions, the DSB chair said that "as consultations on dispute settlement reform are ongoing, it is not possible to comment on what conclusions might be drawn from them." However, the seemingly secondary status being accorded to dispute settlement reform implies that a large majority of members are being asked to accept reforms that they do not want. These reforms are being pushed by the so-called "Friends of the System" group, which is led by countries such as Singapore, Switzerland, and Norway, among others. It remains to be seen whether the DSB chair will indicate if any decision or outcome on dispute settlement reform will be sent to MC14 during the upcoming regular meeting of the DSB on 24 November. While the agenda for the meeting is packed with previously unimplemented rulings - largely by the US - a large group of countries has requested that vacancies in the Appellate Body be filled on an expeditious basis. Colombia, on behalf of over 130 countries, has once again placed a proposal on Appellate Body appointments on the DSB agenda. The countries include: Afghanistan; Angola; Antigua and Barbuda; Argentina; Australia; Bangladesh; Benin; Plurinational State of Bolivia; Botswana; Brazil; Brunei Darussalam; Burkina Faso; Burundi; Cabo Verde; Cambodia; Cameroon; Canada; Central African Republic; Chad; Chile; China; Colombia; The Gambia; Ghana; Guatemala; Hong Kong, China; Iceland; India; Indonesia; Israel; Kazakhstan; Kenya; Republic of Korea; Lao People's Democratic Republic; Lesotho; Liechtenstein; Madagascar; Malawi; Malaysia; Maldives; Mali; Mauritania; Mauritius; Mexico; Republic of Moldova; Morocco; Mozambique; Myanmar; Namibia; Nepal; New Zealand; Nicaragua; Niger; Nigeria; North Macedonia; Norway; Pakistan; Panama; Paraguay; Peru; the Philippines; Qatar; Russian Federation; Rwanda; Saint Kitts and Nevis; Saint Lucia; Senegal; Seychelles; Sierra Leone; Singapore; South Africa; Switzerland; the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu; Tanzania; Thailand; Togo; Tunisia; Turkiye; Uganda; Ukraine; United Kingdom; Uruguay; the Bolivarian Republic of Venezuela; Viet Nam; Zambia; and Zimbabwe. Given its repeated opposition to the proposal for the past seven years, the US is expected to block the proposal for the 91st time on grounds that Washington will advance its interests while preserving US sovereignty, said people familiar with the development. Colombia has stated many times that "the extensive number of members submitting the proposal reflects a common interest in the functioning of the Appellate Body and, more generally, in the functioning of the WTO's dispute settlement system." Yet, the request from these countries has been repeatedly rejected by the US while citing extraneous reasons, according to people present at the DSB meetings. These countries noted that the US justification is that it is reflecting on the extent to which it is possible to achieve a reformed WTO dispute settlement system that advances US interests while preserving US sovereignty. Last month, the US said that "it has been among the most active participants in WTO dispute settlement but is of the view that its legal successes have often failed to translate to real results for the affected industry", noting that respondents "often delay or do not repair the breach or that measures taken to comply are often unsatisfactory," said people familiar with the DSB proceedings. Interestingly, while a legitimate request from more than 130 countries for filling the vacancies on the Appellate Body is being blocked by one member on the consideration of its own interests, the WTO Director-General and the "Friends of the System" group constantly cite one member for blocking the incorporation of the Investment Facilitation for Development Agreement (IFDA) into Annex 4 of the WTO Agreement on legitimate and principled grounds, said people familiar with the development. +
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