U.S. continues block of Appellate Body appointments

The latest opposition stopped a proposal by 73 WTO members to end an impasse as the U.S. continues to voice its concerns about the functioning of the panel itself.    The U.S. continued its opposition to the appointment of new World Trade Organization (WTO) Appellate Body (AB) on Monday, blocking a joint proposal by Mexico and 72 other WTO members.
   That proposal called for the establishment of a selection committee for new AB members, nomination of candidates within 30 days and the issuance of committee recommendations within 60 days, according to a Geneva trade official.
   The Appellate Body has four vacancies, with two current members on the seven-position panel expected to depart in December and which would render the AB inoperative.
   During a meeting Monday of WTO’s Dispute Settlement Body (DSB), the U.S. said it has identified systemic concerns with the AB that remain unaddressed, according to a readout of the United States’ statements at the meeting.
   Citing concerns it outlined in the 2018 U.S. Trade Policy Agenda, the U.S. said it has repeatedly raised concern that appellate reports have overstepped the text of WTO rules in various areas, such as antidumping duties, subsidies, countervailing duties, safeguards and standards and technical barriers to trade, which restricts the United States’ ability to regulate in the public interest or protect against unfair trade.
   The AB also has issued advisory opinions on issues not necessary to resolve a dispute and reviewed panel fact-finding, despite WTO rules limiting appeals to legal issues, the U.S. noted.
   Further, the AB has asserted panels must follow its reports, though WTO members haven’t agreed to a system of precedent, and the AB has continually disregarded the 90-day mandatory deadline for appeals, the U.S. said.
   The U.S. will continue to insist WTO rules be followed by the WTO dispute settlement system and will continue efforts and discussions for a solution, the readout describes the U.S. as saying.
   The U.S. noted “at least one member” said the U.S. should table its own proposal to address its AB functionality concerns, yet added that it “has made its views on these issues very clear,” that if WTO members support a rules-based trading system, then the AB must follow rules agreed to at the start of the WTO in 1995.
   The Office of the U.S. Trade Representative didn’t respond to a request for comment on whether it is considering submitting a formal WTO proposal to address the United States’ AB-related concerns, but the readout indicates that U.S. concerns might have more to do with the implementation rather than the text of the WTO’s AB rules.
   “Rather than seeking to make revisions to the text of the Dispute Settlement Understanding [DSU] to permit what is now prohibited, the United States believes it is necessary for members to engage in a deeper discussion of the concerns raised, to consider why the Appellate Body has felt free to depart from what WTO members agreed to and to discuss how best to ensure that the system adheres to WTO rules as written,” the readout says.
   Fourteen WTO members recently tabled a proposal that seeks to prevent AB rulings from affecting domestic laws and that would allow outgoing AB members to complete rulings on pending appeals beyond their terms’ expiration dates, among other things.
   The U.S. for more than a year also has called for WTO members to correct the situation in which the AB acts as if it has the power to allow ex-AB members to continue to decide appeals even after their terms have expired, the U.S. mentioned during the meeting.
   “This so-called ‘Rule 15’ is, on its face, another example of the Appellate Body’s disregard for the WTO’s rules,” the readout says.
   Eighteen WTO members during the DSB meeting said WTO members have an obligation under DSU Article 17.2 to fill AB vacancies as they arise and that the question of filling vacancies and the question of addressing U.S. concerns regarding the AB are two different issues that should not be linked, the Geneva source said.
   The U.S. during Monday’s meeting noted the members’ position, yet questioned whether the members agree that WTO rules make clear that the DSB — not the AB — has responsibility to decide whether a person whose term has expired should keep serving on any pending appeals and whether those members agree the AB has breached the requirement that AB proceedings not last longer than 90 days.
   According to the Geneva trade official, the U.S. said that members should engage in a deeper discussion on why the AB felt it could depart from WTO rules and how to ensure the AB adheres to existing WTO rules, rather than seek to make changes and allowing the AB to do what it isn’t allowed to do.
   In December, an informal process was launched at the WTO to overcome the impasse of the selection of AB members, wherein members have debated AB reform.
   The leader of that process, Ambassador David Walker of New Zealand, is expected to provide an update of those efforts during Thursday’s WTO General Council meeting.