The Appellate Body is dead.
But not all hope is lost. Instead, we could still bring it back, and there are at least three different ways:
1.
The first is launching the Appellate Body appointment process by forcing a vote through the General Council as per Article IX.1 of the WTO Agreement. This option has been discussed in detail in papers by Prof. Hillman and me, with the only disagreement between us being whether it’s “ugly” (Prof. Hillman) or “good” (yours truly). In case you do not have the time to read either paper, the following is my summary:
“To sum up, my suggestion for solving the AB crisis is very simple. The Members shall first put the issue of AB appointment on the agenda of the meeting of General Council, then try to have the issue decided by consensus. If the U.S. does not block the consensus, then all is well. If, however, the U.S. decides to continue its blockage, the Members can invoke the voting provisions under Article IX.1, which provides that “[d]ecisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant Multilateral Trade Agreement”. As there is no special majority requirement for this issue, the matter can be decided by simple majority, which is much easier to obtain than the two-third majority requirement for DSU amendments or the three fourth majority requirement for official interpretations.”
2.
The second is the brilliant proposal by Prof. Steve Charnovitz, who suggested two years ago that the Appellate Body Working Procedures be amended so that, when the membership falls short of the minimum numbers, an appeal will be automatically completed upon the filing of the notice of appeal. However, this proposal has not been taken up by WTO Members, or even the Appellate Body itself, as Prof. Charnovitz noted in his aptly-titled blog post “The Missed Opportunity to Save WTO Dispute Settlement” published 2 weeks ago.
While I share with Prof. Charnovitz the belief in his proposal, I beg to differ with his assessment that the opportunity has been missed. Instead, I would argue that an opportunity, in fact a perfect opportunity, has been made rather than missed when the membership of the Appellate Body further shrunk from three to one.
Let me explain a bit more here. Prof. Charnovitz concluded his Dec 10th blog post with “the biggest irony”, i.e., “I have recently been informed by a WTO insider that the Appellate Body — which is so commonly and wrongfully accused of considering itself above the rules — was unwilling to adopt my rescue plan because they believed it was against the rules.” Given the recent press coverage of internal division with the Appellate Body, one might well speculate that the proposal was declined because the three Appellate Body members could not agree among themselves. However, with the departure of two members on Dec 11th, the Appellate Body now only has one member left, which makes it much easier to adopt the Charnovitz Solution.
“But you need a division to make a decision!” I can already see trade lawyers pointing finger at me.
Well, that is not quite the case. It is true that, according to both Art. 17.1 of the DSU and Art. 3.1 of the Working Procedures for Appellate Review, “decisions relating to an appeal shall be taken solely by the division assigned to that appeal”. But the same Art. 3.1 also states that, “Other decisions shall be taken by the Appellate Body as a whole.” This is confirmed by Art 17.9 of the DSU, which states that “Working procedures shall be drawn up by the Appellate Body”.
As neither the DSU nor the Working Procedures specify that a quorum required for the Appellate Body to make such decision, it must logically follow that the Appellate Body may make the decision regardless of the number of members left. I know that there are people who'd say, “but the reasonable reading has to be that the decision be made by the seven members of Appellate Body as a whole”. But such interpretation is actually quite unreasonable, as that would mean that decisions can only be made when the Appellate Body has full capacity of seven members; yet when the Appellate Body is in critical shortage of manpower, like it is now, it, ironically, can not make changes to its Working Procedures to keep itself from dying. Such interpretation is too unreasonable to be valid.
Thus, despite the current solo membership, the Appellate Body, as an institution, is still alive and well functioning, at least for the purpose of amending the Working Procedures. If the sole member of the Appellate Body so pleases, she still has the full power and authority to amend the Working Procedures as suggested by Prof. Charnovitz, or, as I would suggest, with the following minor twist:
Rule 20 of the Working Procedures be amended to state that,
“In the event of five or more expired terms in the Appellate Body membership, the Appellate Body will be unable to accept any new appeals. Under such extreme circumstances, the Appellate Body may declare in advance that, the ‘completion of the appeal’ will occur automatically on the same day that any new appeal is lodged.”
3.
Meanwhile, if, upon the departure of her colleagues, the solo Appellate Body member becomes bored and wants to get some work done in her remaining one year term, I'd venture a third option so that she can continue to accept and decide appeals.
The option also involves amending Rule 20 of the Working Procedures, where I would add a part (e) under sub-para (2) as follows:
“In the event that the membership of the Appellate Body falls short of the minimum number required to form a division hearing an appeal, every notice of appeal shall include a statement that the Appellant agrees to the following special rules governing the appeal:
(i) that the division shall compose of one Appellate Body only, and such division shall be deemed as having the full power and authority of a normal division with three members;
(ii) that, given that there is only one division member, the Appellant understands that the member would need much longer time to decide the appeal, and agrees that the proceedings may last as long as the member deems necessary to complete the appeal, and the report shall still be deemed as one issued within 90 days as per Art. 17.5 of the DSU.”
I’m sure that most if not all WTO Members would be very happy to agree to such special terms, as this is the only way to keep the Appellate Body going under the current circumstances. I could imagine some Member reluctant to go along with such arrangement, but I guess such Member has nobody other than itself to blame for ending up in such a mess. And, if such Member doesn't like my solution, it can always protest by not filing appeals!
