Smart Governance, October 06, 2021
Resurrection of the Appellate Body of the World Trade Organisation (WTO) lacks political will or action creating shaky ground for international trade, CUTS International Secretary General Pradeep S Mehta said while moderating a session at the WTO platform in Geneva recently.
“The WTO’s crown jewel has become more a crown of thorns in the past few years. We need to find a way to get the sheen of the crown jewel back,” Mr Mehta said.
The Appellate Body of the World Trade Organization is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought on by WTO members.
Experts expressed their views around the theme titled “Time to Agree, Not Disagree: Imperative of Reforming the WTO’s Appellate Body”.
Mr Mehta emphasised that a two-tiered dispute settlement mechanism with an AB at its centre is essential for predictability and security in international trade, which are the core objectives of the WTO.
Mehta pointed out that the Appellate Body was only clarifying the rules because the members had failed to negotiate outcomes on the gaps themselves.
He observed that judicial authorities frequently act as guides to the political and legislative organs. He also suggested that the international community look at other international fora like the ICJ, with proper amendments, for resolving trade appeals.
Sweden’s National Board of Trade Director-General Anders Ahnlid in his remarks said that a two-tiered WTO dispute settlement system is particularly important for developing countries.
He noted that going back to the General Agreement on Tariffs and Trade (GATT) years, with its form of dispute settlement which allowed losing parties to block adoption of the Panel report, was not an option.
Anders observed that the dispute settlement system had worked for the EU and it was not dissatisfied with the system, but it broadly supported reform proposals.
Researcher Juliana Peixoto Batista of the International Relations at FLACSO, Argentina, noted that the WTO’s dispute settlement mechanism had become a victim of its own success.
She noted that the architecture of the WTO was designed at a unique moment in history. Juliana said that a legalistic approach could only play a limited role in solving what was essentially a political crisis.
The root cause of US discontentment with the Appellate Body was that judges were filling in gaps in the legal rules, said Heinrich Foundation Senior Research Fellow Stephen Olson said.
He added that while the election of President Biden had raised hopes that the US may recommit itself to the WTO, such hopes have not been realised yet.
The current US administration remains preoccupied with the pandemic and infrastructure related issues, with limited bandwidth for trade related reforms.
In the panel discussion and Q&A session that followed, various aspects relating to AB reform and larger questions around the crisis of multilateralism were discussed.
The US has stated that the AB was stepping outside its jurisdiction by making rules.
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