Latest news, World Trade Organization, WTO dispute settlement

WTO dispute settlement: All options still open as formal negotiations begin  

A standing appellate body to adjudicate disputes in the World Trade Organization “may not be the only way” to restore legitimacy to the WTO dispute settlement system. 

This was the view expressed yesterday by Usha Dwarka-Canabady, the recently-appointed facilitator for talks aimed at securing reform of the WTO dispute settlement system by the end of the year.

The comments by Mauritius’s WTO ambassador, indicate that she has not yet ruled out the US’s push to prevent a second-tier review body becoming a feature of the new-look dispute settlement system.  

This is despite pressure from the vast majority of members to re-create an appeal system functioning in a manner similar to the existing appellate body.

The latter has been non-functional since 2019, when the US began an ongoing policy of blocking appointments to replace retiring panel members. 

Following a meeting of WTO ambassadors this week in Geneva, Dwarka-Canabady said the discussions revealed a “strong appreciation for the dispute settlement system overall’” as a core element of the system. 

Push for agreement by end of year 

Yesterday’s talks were the first in what is intended to be a series of monthly discussions at the level of heads of delegation on the dispute settlement issue. The next meeting has already been scheduled for 20 June. 

The process aims to deliver on the mandate delivered at the 12th ministerial conference in 2022 to restore a properly functioning dispute settlement system ‘by 2024’. 

Following the failure of ministers to progress the issue at the MC13 meeting last February, the hope now is to reach a deal at the WTO general council meeting in December.  

There is no realistic prospect of any deal before then, given the sensitivity of the issue for the United States – which holds its presidential election in November. 

Dwarka-Canabady, inherited a 51-page draft text drawn up by former Guatemalan official Marco Molina following a set of informal negotiations last year. 

That text describes the key question of an appeals or review mechanism as a ‘work in progress’. 

Members challenged to ‘develop convergence’ on appeals body issue 

The Mauritian ambassador made clear at yesterday’s meeting that she intended to grasp the nettle of the appeals body issue straight away. 

She said she challenged each member to “describe your delegation’s interest on appeal/review, including possible characteristics and ideas for developing convergence”.  

Following the meeting, Dwarka-Canabady said there was “a strong interest by almost all members in maintaining a two-tiered dispute settlement system to build credibility for the system”. 

The diplomat also referred to the US’s objections over the functioning of the appellate body. 

These include claims of judicial ‘overreach’ on the part of appeals body panels, the accountability of dispute settlement and appellate body panels and the length of time taken to resolve disputes. 

A Geneva-based trade official said the ambassador “noted a strong interest in having binding and consistent decisions, but also that a standing appellate body may not be the only way to address legitimacy”. 

Focus on accessibility to DS system

Another key theme in the discussions is “accessibility’” – namely the ease or otherwise with which poorer countries can access the dispute settlement system.  

The Molina text called for an increase in funding for the WTO secretariat to pay for enhanced legal advice for developing countries seeking to bring disputes against other members.  

Groups of national experts will now work on the dispute settlement reform question between heads of delegation meetings.  

Dwarka-Canabady said this technical work should remain ‘interest-based’ – i.e. focused on desired outcomes, rather than specific proposals for the text of the new agreement.

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