This is a guest post by Philippe de Baere, Henry Gao, Todd Friedbacher, Iain Sandford, Nicolas Lockhart, Isabelle Van Damme, Tania Voon, Alan Yanovich[1]
Ever since countries first agreed rules to regulate international trade, they have disagreed about what the rules mean. International trade disputes raise sensitive political and economic issues that touch vested interests in the disputing countries. The resolution of these disputes has long since been handed by countries to an independent arbiter, who decides based on the agreed trading rules. Countries accept that they will not always agree with the arbiter’s decision, but they see value in an independent person resolving trade tensions amicably.
Since 1995, the WTO dispute settlement system has played an important global role in resolving trade disputes. However, the WTO dispute settlement system has been thrust into crisis, just as trade tensions have flared around the world. The United States has blocked the appointment of new decision-makers to the WTO’s top adjudicator, the Appellate Body. The WTO has also capped its budget. The Appellate Body’s work is now officially paralyzed.
The Director General has taken a step in the right direction with the announcement of “intensive consultations” with Members to find a way forward. The vast majority of Members – if not all – still want dispute settlement that delivers binding, timely, and independent decisions. Temporary solutions are available to unblock the impasse, at least for the vast majority of Members. A pathway to a long-term solution for all Members should also be found.
At the end of last year, the debate on the future of WTO dispute settlement took on a distinctly personal tone. Several media reports tried to lay the blame for the crisis on the current director of the Appellate Body Secretariat. At the same time, several past and present Appellate Body members defended the director’s role.
The premise of the criticism is that, over the past 13 years, 18 Appellate Body members have been unable to exercise independent judgment, in deciding the 70 appeals that they – and not the director – signed in that time. Instead, they have simply succumbed to the director’s powers of persuasion. This is an unlikely explanation.
Over the years, WTO Members have consistently appointed capable and independent individuals to serve on the Appellate Body. Indeed, anyone who has appeared at Appellate Body hearings knows that its members show a formidable and tenacious grasp of the issues.
More importantly, personal attacks on Secretariat staff – who are prohibited by WTO rules from defending themselves – are an unhelpful distraction. The Director General’s decision to launch consultations should mark a shift to the substantive debate about the future of WTO dispute settlement.
Part of that debate should be about the support provided to WTO adjudicators. Currently, the WTO’s Secretariat staff administer the dispute process and advise adjudicators on substantive issues. Some commentators have challenged this support role as a threat to independent adjudication. However, the WTO is like many other jurisdictions, in which adjudicators have similar administrative and substantive support. Support staff typically take on the drafting burden, while the adjudicators make the decisions and direct the drafting. This allocation of tasks between support staff and decision-makers is common in all walks of professional life.
In the case of the Appellate Body, our own experience, including in the Secretariat, confirms that the Appellate Body members make their own decisions, and the Secretariat implements them. Indeed, Appellate Body members argue vigorously about appeals – everything from important systemic questions to the choice of particular words. Disregarding the Secretariat’s position is routine.
Of course, if WTO Members are unhappy with the balance between the Secretariat and the adjudicators, they can change the Secretariat’s role. In that case, though, the Members would have to enhance the adjudicators’ role to cover the considerable support provided by the Secretariat. Serving as an adjudicator would become a full-time occupation for extended periods, which would need to be recognized in the terms of appointment, and could exclude many candidates for the role.
Whatever role the WTO Secretariat plays in dispute settlement, its staff – individually and collectively – must remain faithful to the principle of neutrality. The independence of the system is the very feature that makes it valuable to all Members.
The WTO dispute settlement system that emerges from this crisis will be different, and there is an opportunity for WTO Members to make a two-tiered system more efficient and streamlined to meet 21st century needs. Members should seize that opportunity.
[1] We are WTO academics and practitioners, many of whom have served as staff of the Appellate Body Secretariat.
