World Trade Organization, WTO dispute settlement

New data: extending appeals judges’ mandate is common practice at WTO

A confidential note obtained by Borderlex shows that extending the mandate of World Trade Organization Appellate Body judges has been common practice in Geneva for many years. As the crisis over the nomination of new judges deepens, Washington doesn’t seem to have addressed that fact.


With the World Trade Organization’s top court now down to just four judges, the need to persuade the US to stop blocking appointments to the seven-member Appellate Body has become even more urgent. If Washington continues to shackle WTO efforts to fill vacancies, there will be just one appeals judge at this time next year.


Shadow over Buenos Aires


But it’s common practice at the WTO and other international tribunals for judges to continue working after their terms have ended to complete work on their open cases, according to a confidential document obtained by Borderlex.


The stalemate has, not surprisingly, already come up at WTO’s ministerial conference in Buenos Aires.


“We need to collectively and expeditiously resolve this impasse,” Indian Commerce Minister Suresh Prabhu said yesterday, while South Korean Trade Minister Kim Hyun-chong urged governments to “promptly fill all the vacancies”. One newspaper reported that the Appellate Body crisis and fears that Washington is trying to dismantle the WTO dispute system is “one of the main subjects on the sidelines in Buenos Aires”.


But the Trump administration has been inflexible on the issue, arguing that judges shouldn’t be involved in appeals at the WTO after their terms have expired. The US never formally opposed this pragmatic practice before, even though the confidential WTO ‘information note’ obtained by Borderlex shows that it’s been used in 15 disputes between 2000 and 2017.


Ten of those appeals rulings involved the US, the 11-page WTO document shows. In fact, in the first two appeals to be adjudicated by judges whose terms had ended – both lodged by the EU and both faulting the US – the terms of two judges on the three-person panels had expired.


In 2000, two judges worked 40 days past their terms on the appeal of a ruling against US antisubsidy duties on certain lead and steel products, the WTO note says. Two others stayed on 23 days after their terms lapsed in 2002 to wrap up work in a dispute challenging Section 211 of the US Omnibus Appropriations Act.


In 2008, an AB member worked 138 days beyond the end of his term to finish work on a dispute involving the EU’s ban on hormone-treated beef from the US – another appeal Washington won.


The US never complained that judges had worked on these appeals after their terms had ended.


The Appellate Body has the final authority to uphold, modify or reverse WTO dispute rulings. Rule 15 of the Working Procedures for Appellate Review says “a person who ceases to be a member of the Appellate Body may … complete the disposition of any appeal to which that person was assigned while a member, and that person shall, for that purpose only, be deemed to continue to be a member of the Appellate Body”.


President Donald Trump has repeatedly accused the WTO and its dispute arm of bias against the US, which helped create the body in the 1990s. Ironically, the US actually wins more cases than any other major user of the WTO system.


Preventing consensus


Last year – before Trump was elected – Seung Wha Chang stayed on 108 days after his term expired to complete work on an appeal of a ruling backing the US’s challenge of Indian solar subsidies. Four months earlier, Washington blocked Chang’s reappointment to a second four-year term, saying the Korean judge had made “wrong” decisions and issued verdicts that went beyond what was necessary to resolve a dispute based on the parties’ specific arguments.


It wasn’t the first time the Obama administration had foiled attempts to appoint AB judges. In 2011, the US Trade Representative’s Office refused to support a second term for Jennifer Hillman because she had purportedly failed to defend US perspectives. And in 2013-2014, the US blocked consensus for the selection of Kenyan James Gathii, a chaired professor at Loyola University Law School in Chicago.


But it was the US refusal to accept Chang’s second term that sparked an outcry from the appeals body itself. The six remaining judges said they were concerned “about the tying of an Appellate Body member’s reappointment to interpretations on specific cases and even doing so publicly.” All 13 living former WTO appeals judges — including three from the US — warned that linking an adjudicator’s position on a particular decision to reappointment would jeopardize the credibility and integrity of the organisation’s dispute settlement mechanism.


The US hasn’t budged, however, opposing moves to replace one appeals judge whose term ended in July and another who resigned in August. The WTO must first formulate a legal framework to “deal with reports being issued by persons who are no longer members of the Appellate Body”, the US says.


Many suspect the US is trying to hobble a system that relies on a neutral arbiter for transnational trade disputes. With Peter Van den Bossche’s second term ending yesterday – though the Belgian will stay on to complete work on the EU’s appeal of a compliance panel ruling on Airbus aid – it’s crunch time to figure out a solution or risk the judicial wheels at the WTO slowing to a snail’s pace. Or even stopping.


International and regional tribunals


Washington hasn’t addressed the fact that it’s been common practice for years for AB members to continue work on appeals after their terms lapse. Nor does the US seem to acknowledge that Rule 15 of the Working Procedures allows this very practice.


As the WTO note points out, so do several other global tribunals, including the International Court of Justice, the International Tribunal for the Law of the Sea and the International Criminal Court. Many regional tribunals, such as the EU Court of Justice, the European Court of Human Rights, Mercosur’s Permanent Review Tribunal and Comesa’s Court of Justice, also empower judges to remain in office until they are replaced, and to complete work they began before their terms ended.


But the transition provisions under Rule 15 are more limited than those of some other tribunals they don’t extend an appeals judge’s term of office.


“Instead, the functions of the individual whose term as an Appellate Body member has expired are limited to completing ‘the disposition of any appeal to which that person was assigned while a member’ and that person is deemed to continue to be a member only for that limited purpose,” the WTO note says. “For example, an Appellate Body member who completes the work on an appeal pursuant to Rule 15 does not participate in exchanges of views regarding appeals that were filed after her/his term expired.”

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