Abstract
The current crisis engulfing the multilateral trading system has crystalized in the dispute over the (re-)appointment of the members of the World Trade Organization’s Appellate Body. While the legislative arm of the organization has never lived up to its potential, its dispute settlement arm with the Appellate Body at its apex was seen as a lodestar for other international courts and tribunals. The United States has taken issue not only with individual decisions of the Appellate Body (as well as individual Appellate Body members), but with the institution as such. The article recounts the important institutional redesign that has led to the Appellate Body becoming the World Trade Organization’s institutional “centerpiece”. These very same developments are now destined to lead to the Appellate Body’s downfall with potential reverberations for the entire World Trade Organization’s dispute settlement process. Moreover, it threatens the institution as a whole, unless some last minute compromise can be found between various competing visions of global economic governance.
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Notes
- 1.
Jackson (1998, p. 67).
- 2.
Article XXIII:1 GATT. A similar provision exists with respect to the consultation stage, see Article XXII:1 GATT.
- 3.
See Hudec et al. (1993, pp. 1–113). The authors call the GATT dispute settlement “accomplishments […], if not unique, are at least rare in the history of international legal institutions”, see id. at p. 97. See also Jackson, supra note 1, at p. 64.
- 4.
- 5.
Hudec, supra note 4, at pp. 31–34.
- 6.
For an overview of the disputes, see Jackson (1978). See also Hudec, supra note 4, at pp. 53–57, 130.
- 7.
Hudec, supra note 4, at pp. 137–138.
- 8.
GATT Contracting Parties, see General Agreement on Tariffs and Trade (GATT) Punta del este Declaration, 20 Sep 1986, GATT B.I.S.D.
- 9.
Jackson, supra note 1, at p. 68.
- 10.
Marrakesh Agreement Establishing the World Trade Organization, 15 Apr 1994, 1867 U.N.T.S. 154, Annex 2: Understanding on rules and procedures governing the settlement of disputes, Article 2.1 [hereinafter DSU].
- 11.
See id. at Articles 16.4, 17.14 and 22.6, respectively.
- 12.
Panel Report, Australia—Subsidies provided to producers and exporters of automotive leather—Recourse To Article 21.5 of the DSU by the United States, para 6.48, WT/DS126/RW (21 Jan 2000). The result was heavily criticized by WTO members, including both parties to the dispute and appellate proceedings were only not instituted as both parties had agreed not to do so. See Van den Bossche and Zdouc (2017, p. 208).
- 13.
DSU, supra note 10, at Articles 6.1, 16.4, 17.14, and 22.6.
- 14.
Petersmann (1997, p. 186).
- 15.
See generally Ehlermann (2002).
- 16.
- 17.
DSU, supra note 10, at Article 17.2.
- 18.
Id. at Article 8.
- 19.
Id. at Article 17.1.
- 20.
Appellate Body, Working Procedure for Appellate Review, at Article 4(3), WT/AB/WP/6 (16 Aug 2010) [hereinafter Working Procedure].
- 21.
Id., at Article 4(1). See also Steger (2015, p. 457).
- 22.
Unterhalter (2015, p. 471).
- 23.
- 24.
DSU, supra note 10, at Article 3.2.
- 25.
- 26.
Van den Bossche (2006, p. 7).
- 27.
Dispute Settlement Body, Establishment of the Appellate Body, Recommendations by the Preparatory Committee for the WTO approved by the Dispute Settlement Body on 10 February 1995, para 11–12, WT/DSB/1 (19 June 1995).
- 28.
Appellate Body Report, United States—Import of Certain Shrimp and Shrimp Products, para 107, WT/DS58/AB/RW (22 Oct 2001).
- 29.
Appellate Body Report, United States—Final Anti-Dumping Measure on Stainess Steel from Mexico, para 162, WT/DS344/AB/R (30 Apr 2008).
- 30.
Cho and Kurtz (2014, p. 187).
- 31.
See generally Wagner (2011).
- 32.
Peter Van den Bossche, From Afterthought to Centrepiece: The WTO Appellate Body and its Rise to Prominence in the World Trading System 67 (Faculty of L., U. of Maastricht Working Paper, 2005). See also 67–79 for the reasons of the AB’s increased prominence.
- 33.
Weiler, supra note 16, at p. 200 et seq.
- 34.
See generally Ehlermann (2002).
- 35.
Appellate Body Report, United States—Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R (29 Apr 1996).
- 36.
- 37.
Ramírez-Hernández (2018).
- 38.
Lighthizer (2017a) [hereinafter Robert Lighthizer].
- 39.
Steinberg (2004, p. 271).
- 40.
Cohen (2018).
- 41.
Jackson, supra note 1, at p. 67. But see Steinberg, supra note 39, at pp. 256–257.
- 42.
One could read the AB’s finding in Japan–Alcoholic Beverages II, stating that “[t]he WTO Agreement is a treaty—the international equivalent of a contract”, in such a light. Appellate Body Report, Japan–Taxes on Alcoholic Beverages, p. 15, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R (4 Oct 1996).
- 43.
Steinberg, supra note 39, at p. 250.
- 44.
- 45.
See generally Bogdandy and Wagner (2006). Article III WTO Agreement is a positive reflection of the division of functions within–and thus the constitutional design of–the WTO. It outlines the–albeit rather limited–executive (Article III:1 and III:4), as well as the legislative and adjudicative functions (Article III:2 and III:3, respectively). Article III:5, together with Article V, concerns the external relations of the WTO.
- 46.
Van Damme (2009, p. 313).
- 47.
See in this sense remarks by the WTO AB Chair Ujal Singh in 2018 on the occasion of the release of the 2017 AB Report. World Trade Organization (2018b).
- 48.
World Trade Organization (2018a). The latter element is geared towards improving the relative position of developing countries within the WTO and international trade in general.
- 49.
DOHA WTO Ministerial 2001, Declaration on the TRIPS Agreement and Public Health, 20 November 2001, WT/MIN(01)/DEC/2 (20 Nov 2001).
- 50.
Id. at para 1.
- 51.
Id. at para 5 b.
- 52.
Beall and Kuhn (2012).
- 53.
WTO Declaration on the TRIPS Agreement and Public Health, supra note 49, at para 6.
- 54.
Gathii (2002, p. 316).
- 55.
WTO Declaration on the TRIPS Agreement and Public Health, supra note 49, at para 4.
- 56.
World Trade Organization (2017a).
- 57.
See trade facilitation agreement, Nov. 28, 2014, Articles 1 and 5, 7, 8–12, and 13–22, respectively.
- 58.
- 59.
World Trade Organization (2015).
- 60.
See generally Neufeld (2014).
- 61.
World Trade Organization (2017c).
- 62.
Id.
- 63.
This idea was already included in the 2001 Doha Ministerial Declaration, which called for the “the reduction or, as appropriate, elimination of tariff and non-tariff barriers to environmental goods and services”. See Ministerial Conference, Ministerial Declaration, at para 31, WT/MIN(01)/DEC/1 (20 Nov 2001).
- 64.
Australian Government, Department of Foreign Affairs and Trade (2019). For a more expansive definition of environmental goods, see OECD and Statistical Office of the European Communities (1999, p. 9). The OCED posits: “The environmental goods and services industry consists of activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and eco-systems. This includes cleaner technologies, products and services that reduce environmental risk and minimise pollution and resource use”.
- 65.
Asia-Pacific Economic Cooperation (2012).
- 66.
Araya (2016).
- 67.
World Trade Organization (2014).
- 68.
- 69.
- 70.
Sell (2017).
- 71.
Kihara (2019).
- 72.
World Trade Organization (2019).
- 73.
Lund et al. (2019).
- 74.
Dispute Settlement Body, Negotiations on Improvements and Clarifications of the Dispute Settlement Understanding, TN/DS/W/82/Add.1 (25 Oct 2005).
- 75.
DSU, supra note 10, at Article 3.2.
- 76.
See in this sense Robert Lighthizer, supra note 38.
- 77.
See only Executive Branch Strategy Regarding WTO Dispute Settlement Panels and the Appellate Body: Report to Congress Transmitted by the Secretary of Commerce 7 (30 Dec 2002), cited in Stewart (2017).
- 78.
Lighthizer (2017b).
- 79.
Jackson (2000, pp. 6–10).
- 80.
Lighthizer, supra note 78.
- 81.
Id.
- 82.
See in this regard General Council, Procedures to Enhance Transparency and Strengthen Notification Requirements under WTO Agreements—Communication from Argentina, Costa Rica, the European Union, Japan, and the United States, JOB/GC/204 & JOB/CTG/14 (1 Nov 2018). In response, WTO Members acknowledged the importance of a transparent multilateral trading system, but also pointed out capacity constraints, in particular for developing countries. See also World Trade Organization (2017d).
- 83.
Lighthizer, supra note 78.
- 84.
See on the approach towards scientific evidence and uncertainty in the TPP/CPTPP, Wagner (2017).
- 85.
USTR Lighthizer was more specific in his criticism towards China on a different occasion, see Robert Lighthizer, supra note 38.
- 86.
Id.
- 87.
Mitchell (2019):
While the Chinese side has focused on drafting new laws and regulations related to technology transfer and intellectual property protection, US negotiators are demanding an overhaul of Chinese industrial policies, regulatory approvals and concrete steps to combat alleged instances of state-sponsored corporate cyber espionage.
See also Wolf (2019), Mitchell and Dunkley (2019), Rappeport and Landler (2019).
- 88.
United States (2018).
- 89.
Robert Lighthizer, supra note 38.
- 90.
See generally on the appointment process Elsig and Pollack (2014).
- 91.
General Agreement on Tariffs and Trade, 30 Oct 1947, 61 Stat. A-11, 55 U.N.T.S. 194, Article IX.
- 92.
Hufbauer (2011).
- 93.
DSU, supra note 10, at Article 17.3 and Rule 2(3) and Rule 6(2), respectively of Appellate Body, Working Procedure, supra note 20.
- 94.
See generally Elsig and Pollack, supra note 90.
- 95.
- 96.
United States (2016) [hereinafter Statement].
- 97.
Id. at pp. 3–5.
- 98.
World Trade Organization (2016).
- 99.
Id.; Baschuk (2016).
- 100.
World Trade Organization, supra note 98.
- 101.
Id.; Baschuk B, supra note 99.
- 102.
Appellate Body, Appellate Body Annual Report for 2016, at 103, WT/AB/27 (16 May 2017) [hereinafter Annual Report]. See already Unterhalter, supra note 22, at p. 467.
- 103.
Annual Report, supra note 102, at p. 104.
- 104.
Id.
- 105.
Annual Report, supra note 102, at p. 102.
- 106.
Statement, supra note 96, at p. 9.
- 107.
Trebilcock et al. (2012, p. 174).
- 108.
Correct as of June 2019.
- 109.
Institute of International Economic Law, Georgetown University Law Center (2018).
- 110.
Charnovitz (2017).
- 111.
See e.g. Payosova et al. (2018). See Robert Lighthizer, supra note 38.
- 112.
- 113.
Salles (2017). Salles cites three previous cases in which the parties had agreed not to appeal: DS126, DS 335 and DS383.
- 114.
Hillman J, supra note 112, at pp. 8–9.
- 115.
See in this sense, Lighthizer, supra note 78.
- 116.
Kuijper, supra note 112, at pp. 10–11.
- 117.
World Trade Organization, Joint Communiqué of the Ottawa Group on WTO Reform, Communication from Canada, WT/L/1057 (25 Jan 2019).
- 118.
On this particular issue, see Paine (2018).
- 119.
See generally General Council, Communication from the European Union, China, Canada, India, Norway, New Zealand, Switzerland, Australia, Republic Of Korea, Iceland, Singapore, Mexico, Costa Rica and Montenegro to the General Council, WT/GC/W/752/Rev.2 (11 Dec 2018).
- 120.
General Council, Communication from The European Union, China, India and Montenegro to the General Council, WT/GC/W/753/Rev.1 (11 Dec 2018).
- 121.
United States, supra note 88.
- 122.
Id.
- 123.
In the context of the–failed, due to US opposition—re-appointment of former AB member Servansing in September 2018–one senior official was reported as saying that “the Americans are not being very lucid about what they want and what exactly it is that they will settle for. They have pointed to their grievances, but not laid out in any meaningful way what exactly are the changes they are looking for”. See Freedman (2018).
- 124.
Robert Lighthizer, supra note 38. For an almost identical view, see Stewart (2018).
- 125.
McDougall (2017).
- 126.
Lester (2018).
- 127.
Fabry and Tate (2018).
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Wagner, M. (2020). The Impending Demise of the WTO Appellate Body: From Centrepiece to Historical Relic?. In: Lo, Cf., Nakagawa, J., Chen, Tf. (eds) The Appellate Body of the WTO and Its Reform. Springer, Singapore. https://doi.org/10.1007/978-981-15-0255-2_5
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DOI: https://doi.org/10.1007/978-981-15-0255-2_5
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