If we want trade agreements to be enforceable, there needs to be a dispute settlement process that functions. The WTO process works well because you have a Secretariat and a Director-General to oversee it. By contrast, as I understand things, NAFTA Chapter 20 has broken down in the panelist selection stage. Will the TPP avoid the NAFTA problems?
The drafters have certainly tried in the TPP dispute settlement chapter. I haven't looked at every DS chapter in every FTA, but this is certainly the most complex panel composition process I've come across. They have worked hard to ensure that a responding party cannot block the appointment of panelists.
But have they succeeded? To start the process in a particular dispute, both the complainant and respondent are supposed to appoint one panelist. Here's the part describing what happens if the responding party refuses to appoint a panelist, from Article 28.9.2:
(c) If the responding Party fails to appoint a panellist within the period set out in subparagraph (a), the panellist not yet appointed shall be chosen by the complaining Party or Parties:
(i) from the responding Party’s list established under Article 28.10.11 (Qualification of Panellists and Roster Members); or
(ii) where the responding Party has not established a list under Article 28.10.11 (Qualification of Panellists and Roster Members), from the roster of panel chairs established pursuant to Article 28.10.3 (Qualification of Panellists and Roster Members); or
(iii) where no roster of panel chairs has been established pursuant to Article 28.10.3 (Qualification of Panellists and Roster Members), by random selection from a list of three candidates nominated by the complaining Party or Parties.
I found the last contingency to be a little unclear. If we have to go to "random selection" from a list of three people nominated by the complainant, who oversees this random selection? Can the complainant itself oversee the process?
Of course, if all TPP parties submit a list of candidates ((c)(i)), or the roster of panel chairs is established ((c)(ii)), we never get to this point.
After you have the first two panelists, the parties are supposed to appoint a chair. But if they can't, and the two panelists can't do so either (I'm simplifying here), there is this option in Article 28.9.2(d)(ivbis):
... where the two panellists fail to appoint the chair of the panel in accordance with paragraph 9.2(d)(iii) within 55 days of the delivery of the request for the establishment of the panel, either disputing Party may elect to have the chair of the panel be appointed by an independent third party from the roster established pursuant to Article 28.10.3 ...
Who is this "independent third party"? Maybe the WTO Director General? An Appellate Body Member? Could anyone play this role?
It's really hard to say at this point how many TPP complaints will be brought (there are certainly lots of WTO-plus obligations that could be the basis of a complaint), and how difficult the panel composition process will be. We may or may not ever get this deep into the panel composition provisions.
