Several Countries Take Issue With US Blockage of WTO Appellate Body Member Selection Process
Members of the World Trade Organization Dispute Settlement Body (DSB) during an informal meeting Sept. 15 urged the U.S. to delink the appointment of new Appellate Body members from its concerns over the issuance of rulings by Appellate Body members whose terms had expired, according to a Geneva trade official. The U.S. on Aug. 31 blocked proposals to launch a WTO selection process to fill the two current vacancies on the seven-member appellate panel, raising issue with the fact that Ricardo Ramirez-Hernandez, whose Appellate Body term expired June 30, was still working on ongoing appeals proceedings. The U.S. had said that the DSB should start discussing how to handle the current challenges facing issuances of rulings before launching the selection process for new Appellate Body members (see 1708310008).
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Most of the more than 30 country delegations taking the DSB floor took issue with the U.S. approach to the Appellate Body issues, the Geneva official said. The U.S. “largely repeated” an Aug. 31 statement about its concern that only one of three judges examining an appeal filed by the EU in a case against EU antidumping duties on fatty alcohols from Indonesia, was still a current member of the Appellate Body when the ruling was circulated on Sept. 5, even though WTO rules require three members to review an appeal, the official said. The U.S. also said during the Sept. 15 meeting that it was the DSB’s, not the Appellate Body’s, responsibility to decide whether to allow Ramirez to continue to work on outstanding appeals. He is still reviewing two appeals.
Mexico, Japan, Indonesia and South Korea said the Appellate Body’s Working Procedures for Appellate Review allow Ramirez to continue hearing appeals he was assigned, and China, South Korea and Mexico said the Appellate Body has applied that rule several times with no protest from members. In one winning U.S. case brought against Indian local content requirements for solar products, adopted by the WTO in October, the U.S. allowed a judge to continue reviewing an appeal even though his appellate term had expired, the EU noted during the Sept. 15 meeting.
Peru suggested consideration of “legal tools” to “force” the start of the selection process for the vacant Appellate Body slots, the Geneva trade official said. Chile, representing the UN regional group the Group of Latin America and Caribbean Countries (GRULAC), as well as Argentina, Mexico, Colombia and Costa Rica, said the continuing delay in starting the selection process for new Appellate Body members is in violation of WTO rules, saying the WTO Dispute Settlement Understanding obliges members to fill Appellate Body vacancies as they arise. The EU, Mexico, Peru, Australia, Brazil and Guatemala said the U.S. must put forth “concrete proposals” to address its Appellate Body concerns, noting it would be “difficult or impossible” to move forward unless the U.S. clearly states how WTO members can address its concerns, the Geneva official said.
The current stalemate of filling Appellate Body vacancies poses a “serious threat” of undermining the WTO’s dispute settlement system, which is a central pillar to the multilateral trading system, several delegations said during the Sept. 15 meeting, including GRULAC, the Dominican Republic, Norway, Israel, Egypt, Uruguay, El Salvador and Nicaragua. “The United States replied that it was notable no WTO member that took the floor raised any fundamental objections to the concerns raised by the US or said that these concerns were not worthy of consideration by the DSB,” the Geneva official said. “Acknowledging that it did not come with any proposals, the US said [it] was important to hear the views of other members and have a more comprehensive sense of initial positions.” The U.S. noted this wasn’t the first time a member raised issue with the continued service of a judge on an appeal review past their term’s expiration, even though the issue hadn’t been raised recently.
Speaking more generally about the WTO's dispute settlement regime during a Sept. 18 discussion at the Center for International and Strategic Studies in Washington, U.S. Trade Representative Robert Lighthizer expressed concerns related to "issues with the staff" and transparency, and related to the Appellate Body's interpretation of WTO's Dispute Settlement Understanding (DSU), a set of rules governing the settlement of WTO disputes. "We think the Appellate Body has not limited itself to what's precisely in the agreement," he said. Speaking of the Trump administration's overall stance on WTO dispute settlement, Lighthizer said the DSU "has evolved in such a way that it creates new obligations and has reduced a lot of our benefit. So, coming to grips with that, both in the procedural realm, but also just practically, is really just what we have to worry about in the DSU, and it's a fundamental part of the WTO. It raises a lot of very major issues for the WTO." DSB Chairman Junichi Ihara during the Sept. 15 informal DSB meeting said members should continue dialog, adding he would continue to consult with delegations to find common ground.