The facilitator overseeing the work on the World Trade Organization’s dispute settlement reform presented a report June 20 on various aspects of the central issue concerning the “appeal/review” mechanism that could replace the binding Appellate Body and thereby attenuate the enforcement function of the multilateral trade body, said people familiar with the developments.
Without a robust enforcement function undergirding the two-tier dispute settlement system, which is seen as the jewel in the crown of the Uruguay Round trade agreements that created the WTO in 1995, the value purpose of negotiating any new agreements would become meaningless, said people familiar with the negotiations.
At the head of delegations meeting, the facilitator, Ambassador Usha Dwaraka-Canabady of Mauritius, presented a report on how technical negotiations were carried 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: Joel Richards (Saint Vincent and the Grenadines) and Jessica Dickerson (Australia) for appeal/review; David Stranger-Jones (United Kingdom) and Claudia Diaz Paulino (Mexico) for accessibility and Firat Yeltekin (Türkiye) and 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 Deputy Director General Angela Ellard.
The facilitator characterized the work by 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.”
Sub-Topics
Earlier, the six-convenors issued a technical work plan on June 10. 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 are being listed for further discussions.
The sub-topics include:
Following an organization meeting on June 13, the co-convenors sent an email to members was on June 14 inviting experts to attend the meeting on Appeal/Review mechanism June 19.
The email 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-conveners 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 June 21 to discuss the issue of “accessibility”. Under the rubric of “accessibility”, several sub-topics are raised for further discussions. The sub-topics include:
(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 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.
It is, however, not clear how well equipped these co-convenors are with the negotiating history
of the Uruguay Round negotiation during 1986 and 1993, said a negotiator who asked not to be quoted. “During the dispute settlement negotiations in the Uruguay Round, the negotiating articipants 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).
It is also not clear from the list of topics and sub-topics suggested by the co-convenors on appeal/review mechanism whether paragraph 14 of Article 17 of the Understanding on Rules and Procedures government the system of disputes 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 circulation to the members.”
In short, there is considerable confusion whether the negative consensus principle that undergirded the adoption of the Appellate Body reports will be eschewed and reverted to the GATT practice of positive consensus where any one member can block consensus.
To recall, the United States was apparently the principal architect for bringing negative consensus for adopting the Appellate Body report so to make it a binding mechanism, said people familiar with the developments.
“The co-convenors recognize that how we run the process is integral to the very nature of the outcome,” said Mr Diaz Paulino, one of the -co-convenors from Mexico.
He says: “In order to achieve substantial 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 of the work going forward.”
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