Many World Trade Organization members called for preserving the two-tier dispute settlement system, including the binding Appellate Body, at the first formal meeting on dispute settlement reform, said people familiar with the discussions.
At the Head of Delegations meeting, the new facilitator, Ambassador Usha Dwaraka-Canabady of Mauritius, explained the process she will follow in the coming days and months.
In her “urgent” email sent to members earlier this week, Ambassador Canabady, who participated in one or two dispute settlement panels in the past, informed members that “the focus of the 30 May 2024 DS Reform HoDs meeting should be on how to resolve the questions of appeal/review and accessibility.”
“To that end,” she said, “I suggest we frame the discussion around the following questions:
1) Being mindful of the interest-based negotiating modality that Members have been using to make progress on dispute settlement reform, describe your delegation's interest on appeal/review, including possible characteristics and ideas for developing convergence and 2) What steps are necessary to make the dispute settlement mechanism more accessible to all Members?”
Technical Work
In the email, seen by WTD, the facilitator informed the members of the appointment of six co-convenors for the technical work required under the DS Reform process. The six co-convenors include:
The facilitator wrote that “through this exercise, we received thirty-seven responses, representing 124 WTO members.”
It is not clear whether the facilitators have substantial institutional knowledge about the DS reform discussions, which had been conducted by the former informal facilitator, Marco Molina of Guatemala, till the last week of January, said a person who asked not to be quoted.
Until now, there is little clarity on the large volume of work almost finalized by the previous informal facilitator and whether it will be used by the six co-convenors, the person said.
At the WTO’s 13th ministerial conference that was concluded, trade ministers agreed to conclude reform discussion and have “a fully and well-functioning dispute settlement system accessible to all Members” this year.
The central issue in the reform talks is whether Washington will agree to the restoration of a two-tier dispute settlement system with a binding appellate body as being demanded by many members, said people familiar with the negotiations.
The last US statement concerning DSS reform came in a US intervention at last week’s Dispute Settlement Body meeting.
In that statement, Washington made two pertinent observations. First, it maintained that “as we undertake our work with the Facilitator, we must bear in mind that re-launching the Appellate Body selection process will not address the concerns – and calls for the restoration of the Appellate Body undermine our collective efforts for reform.”
Second, the United States said, “As WTO Members continue our efforts to better understand each other’s interests in WTO dispute settlement, the United States remains focused on achieving a reformed system that meets the interests of all Members to the greatest extent possible. The United States has been working with Members to advance this goal, and we look forward to continued engagement.”
Washington has already drawn a red line in the DSS discussion by saying that “calls for the restoration of the Appellate Body undermine our collective efforts for reform,” said one member, who asked not to be quoted.
At the HoD meeting, many members out of the 46 delegations that took the floor said that the restoration of the two-tier dispute settlement system is the core priority.
China, which is a regular user of the WTO’s dispute settlement system, said it supports the facilitator’s work plan, “in particular prioritizing appeal review and accessibility, the two issues identified in the MC13 Ministerial Decision and also hold the key to the success.”
On the most important item concerning the Appeal/Review mechanism, China said “like many others, it is China’s core interest to retain an independent, impartial, binding, two-tier dispute settlement system.”
Given the paucity of time, China has suggested that members should not “let perfect be the enemy of good.” China also set a deadline for finding a solution to Appeal/Review by July.
The Chinese trade envoy, Ambassador LI Chenggang stressed “the critical importance to find a solution to appeal review by July. Achieving that goal, albeit difficult and challenging, could boost members’ confidence and mutual trust, pave the way for resolution of other tough issues and successful conclusion of the reform by 2024.”
Several other developing countries, including India, Indonesia, and African countries issued
strong statements at the meeting in support of a binding two-tier dispute settlement system. While India is understood to have focused on the issue of accessibility and capacity-building issues, Indonesia issued a strong statement calling for a binding dispute settlement system.
Indonesia’s trade envoy, Ambassador Dandy Eshwara said “the restoration of a fully and well-functioning dispute settlement system accessible to all Members by 2024, is the priority of many of us, if not all.”
Ambassador Eshwara said the co-convenors with their expertise “will be able to facilitate us in seeking common solutions, especially in addressing the priority issues.” He expressed the hope that the co-convenors “can also bridge the different views on many outstanding issues in the latest consolidated text.”
Indonesia called for a “technical-level pre-negotiation meeting on appeal/review mechanism and accessibility” before embarking on hard negotiations.
Several other industrialized countries in varying levels of emphasis called for the restoration of the two-tier dispute settlement system at the meeting, said participants who took part in the meeting.
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