As we now know, the United States has informed the chairman of the WTO Dispute Settlement Body that it cannot support the reappointment of South Korean national Seung Wha Chang to the Appellate Body. The United States justifies its position by the fact that it “ will not support any individual with a record of restricting trade agreement rights or expanding trade agreement obligations”.
The myth at issue here is based on the mistaken view that such rights and obligations are written in a crystal clear way in the WTO Agreements. Therefore, the role of Appellate Body Members is just to read them and apply them to the facts of the case. Nothing could be further from the truth.
In my area of research (i.e., WTO law of subsidies), I could point to many instances where WTO texts are not only far from being crystal clear but verge on being incoherent. For example, attaching to the SCM Agreement an Illustrative List of Export Subsidies predating the SCM and whose items do not necessarily conform to the general definition of a subsidy contained in the SCM. Another example concerns the issue of whether the SCM Agreement applies to an agricultural export subsidy as a whole, or whether it applies only to the extent that the subsidy exceeds a member’s commitment levels as specified in its schedule. One the funniest example is found in footnote 9 of the SCM relating to the expression “appropriate countermeasures”. This footnote reads: “ This expression is not meant to allow countermeasures that are disproportionate in light of the fact that the subsidies dealt with under these provisions are prohibited ”. As underlined by Lawrence, “The first reaction of most people who read this footnote is «huh?». It is as clear as mud”. This confused and badly drafted footnote is at the source of a lot of subsequent problems. I am not versed in the subtleties of the “zeroing” issues which are at the origin of the United Sates position. I can however bet that many provisions at issue are “as clear as mud”.
In such a context, what is the likely consequence of the United States’ attitude? It will exacerbate one the most regrettable tendencies of the Appellate Body, namely using the pretext of “judicial economy” in order to avoid tackling hard interpretive issues. Put yourself in the position of Appellate Body Members and it is not difficult to guess that they will invoke more and more “judicial economy” to avoid being accused of creative ruling. So, one could expect to see in the rulings more and more phrases like “We need not decide, in this case…”.
My point is that the United States justification is a pretext since the US Administration knows very well that in hard issues there is no reading of the texts that could attain the mythical goal of “not restricting trade agreement rights or expanding trade agreement obligations”. Does this mean that Appellate Body Members are hands free in their rulings? Certainly not! Without imposing on AB Members a mythical goal, it is the role of the WTO legal community to act as a counter power in order to check that AB rulings are legally coherent.
ADDENDUM:
I have just read the Statement of the United States at the May 23 DSB meeting on the reappointment of Mr Chang. It is interesting to note that the theme of "restricting trade agreement rights or expanding trade agreement obligations" is mentioned in a general way ( through quoting Article 3.2 and 19.2 of the DSU) without any concrete example. The main criticisms seem to be that the AB looses its time on issues that have not been raised on appeal and that AB rulings have become a pretext for writing "academic" treaties beyond the resolution of the case at issue. However, since these alleged developments (that I have not detected in AB rulings on subsidies) are by definition obiter dicta, they cannot be said to have normative value in order to restrict rights or expand obligations. It seems therefore that the United States is not itself sure of how to criticize Mr Chang. First, we hear through declarations by officials the "restricting rights and expanding obligations" version. Second, we hear now in this Statement a second NEW version which is not really coherent with the first one:
The Appellate Body is not an academic body that may pursue issues simply because they are of interest to them or may be to certain Members in the abstract. Indeed, as the Appellate Body itself had said many years ago, it is not the role of panels or the Appellate Body to “make law” outside of the context of resolving a dispute– in effect, to use an appeal as an occasion to write a treatise on a WTO agreement.
During the hearing, the Appellate Body devoted considerable time to an issue that the parties and the third parties agreed had not been raised on appeal, involving an item that was not on the record, that had not been raised by either party in its arguments, and had not been examined by the panel and was not the subject of any panel findings.
It is also important to consider whether these types of actions have contributed to the complexity of the disputes and thereby exacerbated the workload problems facing the Appellate Body that have made it difficult for Members to get their trade disputes resolved in a timely manner.
