Bernard Hoekman sends along this summary of a newly released paper:
The Appellate Body crisis usually is presented as the U.S. against the world. Many WTO Members have made clear that they regard a dysfunctional AB as a serious problem for the trading system. One reason is that, depending on how WTO Members interpret the text of the Dispute Settlement Understanding, panel reports may no longer be adopted automatically if disputing parties appeal panel findings to an AB that is in limbo, thereby leaving the matter unresolved. The main fear is that without the AB, the WTO dispute settlement system will lose much of its predictability, and may eventually collapse.
Possible responses to the crisis have been the subject of much discussion. Most proposals presume the goal should be to maintain as much of system as possible. This is the case for the proposal to move forward expeditiously with new appointments to the AB that is supported by 88 WTO Members (counting the 28 EU member states as one). While this clearly illustrates that the majority wants to keep the AB in place, it leaves open the question how Members view the performance of the AB and the US argument that the AB has exceeded its mandate.
What do WTO Members think about the AB and the role it plays (should play) in resolving trade disputes? A recent paper, Fiorini et al. 2019, part of a Bertelsmann Stiftung-supported project on WTO reform, reports on the results of a recent survey of WTO Members’ perceptions of the AB. Responses reveal strong support for the basic design of the dispute settlement system but also that the United States is not alone in perceiving that the AB has gone beyond its mandate.
Data on use of WTO dispute settlement resolution and engagement in WTO deliberations regarding the AB crisis suggest dispute settlement is primarily of significant interest to the major trade powers, more open (“globalized”) economies and richer countries. Notwithstanding the high profile nature of the AB dispute, a majority of WTO delegations (75%) did not respond to the survey, consistent with observed participation rates in WTO dispute settlement and deliberations on the AB.
Among those that did respond, there is strong support for the basic features and design of the WTO dispute settlement system. There is broad agreement that the two-stage process negotiated in the Uruguay Round is appropriate and desirable. At the same time, the survey responses show significant polarization in perceptions regarding the performance of the AB between government officials based in Geneva and those in capitals, and between respondents representing (or based in) developing countries and others. Overall, there are significant differences in views regarding the manner in which the adjudicating bodies have exercised discretion. Although no other WTO Member supports the approach of the United States in blocking new appointments to the AB, the survey suggests that the US is not alone in perceiving that the AB has gone beyond its mandate.
Fiorini, M, B. Hoekman, P C Mavroidis, M Saluste and R Wolfe (2019) “WTO Dispute Settlement and the Appellate Body Crisis: Insider perceptions and Members’ revealed preferences,” Bertelsmann Stiftung working paper at https://www.bertelsmann-stiftung.de/fileadmin/files/BSt/Publikationen/GrauePublikationen/MT_WTO_Dispute_Settlement_and_the_Appellate_Body_Crisis_Survey.pdf
