By Sharon Atieno

There have been several calls for reforms at the World Trade Organization (WTO), at the centre of it being the Appellate Body.

The main concern with the highest dispute settlement body is the replacement of judges whose terms have ended. Several attempts by WTO members to select new judges to fill the vacated positions have been blocked by the United States of America.

The Appellate Body consists of seven persons with a three-member quorum; at the moment the quorum has been reached. By the end of December, the terms of two of these members will come to an end.

If no replacement is done, the Appellate Body will be rendered ineffective as appeal cases cannot be heard by one judge.

Recently, Mexico, speaking on behalf of 75 members, introduced a proposal to start the selection processes for the four vacancies. However, the US claims that it cannot support the proposal because its concerns have not been addressed.

The appointment of the appellate judges like most decisions undertaken by the WTO is on consensual basis by all WTO members, therefore, if one presents an objection, no appointment can be done.

Some of the concerns raised by the US include: the period of time for the Appellate Body to give its report which most times goes over the provisional 90 days as per WTO rules, overreaching of the Appellate Body, and authorization of the Appellate Body’s members to decide appeals even after their term of office has expired.

The US claims that the concerns raised: “undermines the legitimacy of the system and damages the interests of all WTO members who care about having agreements respected as they were negotiated and agreed. “

Since its inception in 1995, over 570 disputes have been referred to the dispute settlement body of the WTO. However, by the end of 2018, the Appellate Body had circulated 159 reports.

While giving the 2018 annual report of the Appellate Body, the Chair of the Appellate Body, Ujal Singh Bhatia noted that in 2018 there was a rise in complex appeals.

In 2018, the Appellate Body circulated 9 reports which covered sensitive issues traversing prohibited and actionable subsidies, animal welfare, domestic tax regimes and unfair trade.

“These indicators would appear to suggest that WTO Members consider the appellate system to be a key pillar of a robust and effective dispute settlement mechanism,” he said.

Though the impasse has been going on for over two years, between 2017 and 2018, WTO members deliberated on several procedural and substantive issues concerning the functioning of the Appellate Body.

The issues include: the Appellate Body’s reports not meeting the 90-day deadline, value that WTO adjudicators should place on previous panel and Appellate Body reports as well as the role of the Appellate Body in addressing issues relating to municipal law and in reviewing a panel’s objectivity in its assessment of the matter before it.

Moreover, the members have also reviewed the operation of Rule 15 of the Working Procedures for Appellate Review, which allows an Appellate Body member whose term has expired to complete the disposition of any appeal to which he or she was assigned while a member.

 

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