This is a guest post from law professor Jens Lehne:
As readers of this blog are well aware, since 2017 the US has blocked all appointments to the WTO Appellate Body, which will lead to the incapacitation of the Appellate Body in December of this year, when the terms of two of the remaining three Appellate Body members end. The US justifies its blockage with accusations of judicial overreach, claiming that "the Appellate Body had been acting contrary to the unambiguous text of the [Dispute Settlement Understanding (DSU)]",[1] or, put differently, that the Appellate Body "had breached and continued to breach the clear rules of the DSU".[2]
The focus of the US has been on six distinct issues of procedure and interpretive approach, namely (1) the continued service of Appellate Body members after the expiration of their term (the Rule 15 issue), (2) the 90-day deadline for circulating Appellate Body reports, (3) appellate review of facts, (4) appellate review of municipal law, (5) advisory opinions, and (6) precedential effect of Appellate Body reports. To back up its allegations, the US has presented extensive legal arguments before the Dispute Settlement Body (DSB) between February and December 2018, running to more than 40 pages in the minutes of the DSB meetings.
In a new book published at the end of last month under the title "Crisis at the WTO: Is the Blocking of Appointments to the WTO Appellate Body by the United States Legally Justified?", an open access publication freely available for download at http://www.carlgrossmann.com/?p=11930 and https://oapen.org/search?identifier=1005793, I analyze in detail the allegations and arguments of the US with regard to these six issues of procedure and interpretative approach.
When answering the question posed in the book's title, one has to bear in mind that under Art. 17.2 of the DSU member states have a legal obligation to fill vacancies on the Appellate Body as they arise, an obligation the US violates by blocking the appointment process. In view of the obviousness of the breach of Art. 17.2 of the DSU by the US and the severity of its consequences, only clear and serious breaches on the part of the Appellate Body, and not just debatable interpretations, could possible justify the obstruction by the US.
The book finds that only with regard to one of the six issues, the 90-day deadline, the Appellate Body has undisputedly disregarded the wording of the DSU (namely Art. 17.5 of the DSU), but that it was forced to do so for reasons mainly beyond its control, a fact repeatedly acknowledged by the membership, including, at least until the start of the current appointment crisis, the US. As far as the other five issues are concerned, the text of the DSU is simply not as unambiguous as the US asserts. Regarding four of these (Rule 15, advisory opinions, appellate review of facts, precedential effect), the book concludes that no case can be made for a clear breach of the DSU or other WTO agreements, and, indeed, that the legal arguments of the Appellate Body on all of these issues are more convincing than those of the US. Only with regard to one of these issues (appellate review of municipal law), the Appellate Body has arguably gone beyond what is permissible under the DSU (more precisely, under Art. 17.6 of the DSU), but that misinterpretation of the DSU does not reach the level of a clear breach. In sum, from a legal point of view these six issues, whether viewed individually or as a whole, do not even come close to justifying the US blockage of all appointments to the Appellate Body.
In addition to the analysis of the allegations and arguments of the US, forming the central part of the book (Chapter IV), the publication provides, as a basis for the analysis, a brief overview of previous appointment crises (Chapter II) and a detailed chronological account of the current crisis, from the beginning of 2017 until the summer of 2019 (Chapter III). The final part of the book (Chapter V) goes beyond narrow legal arguments and asks about possible motives of the US for the blockage. It argues that the US actions can be explained to a large part by the fact that the WTO dispute settlement system and the Appellate Body have developed differently than expected by the US at the close of the Uruguay Round in 1995. More specifically, first, the Appellate Body has played a more important role than expected both in terms of quantity (number of appeals) and quality (acting more like a court than a mere dispute settler), second, the US has been sued more often and lost more often than anticipated, and, third, the legislative branch of the WTO (treaty-making by the member states) has failed to produce significant results, leaving the WTO's judicial branch (the dispute settlement system) unchecked.
Furthermore, the book contends that, on the one hand, the Trump administration's criticism of the Appellate Body is a continuation of the policies of past US administrations, but, on the other, its blocking of all appointments is still a sign of a major policy shift. Most notably, the Trump administration prefers power-based over rule-based international trade relations, and, consequently, is not interested in legally binding dispute settlement. In light of these preferences, it seems unlikely that the Trump administration will unblock the appointment process in any foreseeable future, and it would be very surprising if it would give up the politically convenient argument that the Appellate Body has "broken [the rules] with impunity",[3] regardless of the legal merits of this claim, because the incapacitation of the Appellate Body furthers its presumed objective of undermining legally binding dispute settlement.
[1] Minutes of the General Council meeting of 7 May 2019 (WT/GC/M/177), para. 4.154.
[2] Minutes of the General Council meeting of 23-24 July 2019 (WT/GC/M/179), para. 5.137.
[3] Minutes of the General Council meeting of 7 May 2019 (WT/GC/M/177), statement of the US, para. 4.154.
