WTO Appellate Body is facing a resource crunch. US to blame?

 Joe C Mathew   New Delhi     Last Updated: November 21, 2017  | 21:29 IST
WTO Appellate Body is facing a resource crunch. US to blame?

It's a crisis of sorts for the World Trade Organisation's (WTO) Appellate Body (AB). The authority that hears appeals on decisions taken by the dispute resolution panels in the WTO system is running short of members.

Instead of the seven member panel, AB is functioning with just five members at the moment. It will be reduced to four soon, as the four year term of one more member ends in December 2017. Replacements to the vacant positions are getting delayed, primarily due to the opposition from the United States, it is alleged.

Dispute settlement is one of the very effective mechanisms under the 164 member country WTO system. Countries approach WTO if they believe that another member country had infringed their rights under the agreements. Specially appointment expert panels hear such complaints and deliver the verdict based on interpretations of the agreements and individual countries' commitments. The AB has the powers to uphold, modify or reverse such legal findings and conclusions of panels and hence plays a key role in WTO's dispute redressal mechanism. Once adopted by the Dispute Settlement Body (DSB), AB's reports are binding on the countries that are parties to the dispute. With insufficient members, AB is finding it near impossible to dispose of such appeals on time. If allowed to continue unchecked, this may lead to the collapse of the AB system, experts say.

"The appointment process takes place through consensus. All WTO members need to agree on any decision", says Shailja Singh, Legal Consultant (Assistant Professor), Centre for WTO Studies, Indian Institute of Foreign Trade, Delhi. She adds that the US has of late been opposing fresh member appointments to fill the vacancies.

"The United States has for the past one year, not participated constructively in the appointment / re-appointment of WTO's AB members. This issue gained prominence last year when the US refused to support the re-appointment of the then member from Korea on the grounds that it will not support any individual with a record of restricting trade agreement rights or expanding trade agreement obligations", Singh points out.

The impact of declining member strength and resultant increased workload was flagged by Ujal Singh Bhatia, Chairman, AB some months ago. He said that the increasing number of cases brought for appeal means the AB is facing difficulty in meeting the requirement of "prompt" resolution of disputes, a major feature that distinguished the WTO dispute settlement system from other international adjudicative systems. "In recent years, the WTO dispute settlement system has substantially ceded ground on this distinction," he had pointed out.

Speaking at a public event to present the AB's 2016 Annual Report, Bhatia said the AB is now recognised as a "mature and well-respected international tribunal" which has dealt with a diversity of trade-related issues ranging from environmental protection and renewable energy subsidies to animal welfare and food safety.  "Its 146 adopted reports, along with more than 300 panel reports, constitute tens of thousands of pages of jurisprudence which is as wide in its reach as it is deep in its probing of the meaning of the covered agreements," he had pointed out.

The problem with delays in the WTO dispute resolution system is multifold as it can cast doubt on the value of the WTO's rules-oriented system itself.  As Bhatia points out, "delays compel WTO Members to look for other solutions, potentially elsewhere. And in this, it is the weaker countries that stand to lose the most."

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