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TWN
Info Service on WTO and Trade Issues (Jun24/13) Geneva, 24 Jun (D. Ravi Kanth) — The facilitator overseeing the work on the reform of the World Trade Organization’s dispute settlement system (DSS) on 20 June presented a report on various aspects of the central issue concerning the “appeal/review” mechanism, which could replace the binding Appellate Body and thereby attenuate the “enforcement” function of the multilateral trade body, said people familiar with the development. Without a robust enforcement function undergirding the two-tier dispute settlement system, which is seen as the “jewel in the crown” of the Marrakesh Agreement that established the WTO in 1995, the value/purpose of negotiating any new agreements at the WTO could become meaningless and redundant, said people familiar with the negotiations. The decision reached by trade ministers at the WTO’s 13th ministerial conference (MC13) in Abu Dhabi on 2 March states: * “Recalling our commitment made at our Twelfth Session to conduct discussions with the view to having a fully and well-functioning dispute settlement system accessible to all Members by 2024, we take note of the works done thus far. * We recognize the progress made through this work as a valuable contribution to fulfilling our commitment. We welcome all submissions from Members that help advance our work. * We instruct officials to accelerate discussions in an inclusive and transparent manner, build on the progress already made, and work on unresolved issues, including issues regarding appeal/review and accessibility to achieve the objective by 2024 as we set forth at MC12.” At a heads of delegation (HoD) meeting on 20 June, the facilitator, Ambassador Usha Dwarka-Canabady of Mauritius, presented a report on how technical negotiations were carried out during the last fortnight. “Since we last met, work has commenced among experts, facilitated by the six co-convenors,” she informed members. The six co-convenors assisting the facilitator are: Mr Joel Richards (Saint Vincent and the Grenadines) and Ms. Jessica Dickerson (Australia) for appeal/review; Mr. David Stranger-Jones (United Kingdom) and Ms. Claudia Diaz Paulino (Mexico) for accessibility; and Mr. F rat Yeltekin (Turkiye) and Mr. Stacy-Paul Healy (Canada) for any other issues to be considered at the later stage. The HoD meeting was attended by WTO General Council chair Ambassador Petter Olberg of Norway, and Ms Angela Ellard, the WTO deputy director-general, who had earlier worked at the United States Congress as Majority and Minority Chief Trade Council and Staff Director. The facilitator said the meetings held with the co-convenors “have been quite productive, not least because the co-convenors have a very clear picture in their own heads of how they want to move forward.” The six co-convenors had issued a technical work plan on 10 June. They suggested that “the technical work on the topics of Appeal/Review and Accessibility are structured around several sub-topics.” Under the Appeal/Review mechanism, the following sub-topics have been listed for further discussions. These include: (1) Access to the mechanism; (2) Scope of review; (3) Standard of review; (4) Form of the mechanism; (5) Reducing/changing incentives to appeal; and (6) Clarifying members’ expectations of adjudicators. The list of sub-topics seems to be a radical departure from the Uruguay Round negotiations. Following an organizational meeting on 13 June, the co-convenors sent an email to members on 14 June inviting experts to attend the meeting on the Appeal/Review mechanism on 19 June. The email, seen by the SUNS, suggested that the meeting will focus on the following sub-topics of the Appeal/ Review mechanism: (1) Scope of review Discussions under this sub-topic may include, without limitation, possible filters/criteria/admissibility tests for claims (such as clarifying appeal/review adjudicators’ role with respect to the panel’s assessment of the facts) and for appeal/review generally (such as leave to appeal). (2) Standard of review Discussions under this sub-topic may include, without limitation, the standard that appeal/review adjudicators should apply when reviewing claims that fall within the scope of their review. According to the email, “the co-convenors will provide a recap of the previous discussions with respect to these sub-topics. Experts that have previously put forward proposals or ideas with respect to these sub-topics may wish to outline them. Experts will also have the opportunity to outline any new proposals or ideas.” Subsequently, another meeting was held on 21 June to discuss the issue of “accessibility”. Under the rubric of “accessibility”, several sub-topics were raised for further discussions: (1) Meaning of accessibility to demandeurs Discussions under this sub-topic may include, without limitation, effective access to and use of the dispute settlement system; and an inclusive, equitable and accessible mechanism. (2) Costs and administrative burdens (including a funding mechanism) Discussions under this sub-topic may include, without limitation, pre- and actual litigation costs; concrete examples of unnecessary administrative costs and burdens; and funding mechanism(s) to increase capacity and enhance participation. QUESTIONS However, it is not clear how well equipped these co-convenors are with the negotiating history of the Uruguay Round negotiations during 1986-1993, said a negotiator who asked not to be quoted. “During the dispute settlement negotiations in the Uruguay Round, the negotiating participants proposed numerous reforms of the GATT dispute settlement system to provide more stringent rules in the operation of the mechanism,” according to the negotiating history of the GATT Uruguay Round (page 2669 in Volume II of Terence P Stewart’s book on the topic). It is also not clear from the list of topics and sub-topics suggested by the co-convenors on the appeal/review mechanism, whether paragraph 14 of Article 17 of the Dispute Settlement Understanding (DSU) will be safeguarded, said people familiar with the discussions. Paragraph 14 of Article 17 of the DSU states: “An Appellate Body report shall be adopted by the DSB and unconditionally accepted by the parties to the dispute unless the DSB decides by consensus not to adopt the Appellate Body report within 30 days following its circulation to the members. This adoption procedure is without prejudice to the right of Members to express their views on an Appellate Body report.” In short, there appears to be considerable confusion whether the negative consensus principle that undergirds the adoption of Appellate Body reports will be eschewed and reverted to the GATT practice of positive consensus where any one member can block consensus on the adoption of a report. To recall, the United States was apparently the principal architect for bringing in the principle of negative consensus in the adoption of Appellate Body reports so as to make it a binding mechanism, said people familiar with the development. “The co-convenors recognize that how we run the process is integral to the very nature of the outcome,” said Claudia Diaz Paulino, one of the co-convenors from Mexico, at the HoD meeting on 20 June. She said: “In order to achieve substantive results, the co-convenors consider it critical to ensure that the process and the methods of our work respond favourably to the needs of members so as to build and maintain trust and preserve an atmosphere of transparency and inclusivity, which are essential to the conduct of the work going forward.” In conclusion, the discussions on the reform of the dispute settlement system show how one powerful member can allegedly get away with its demand for an “atrophied” appeal/review mechanism without paying any price, said a negotiator, who asked not to be quoted. +
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