This is a guest post from law professor Geraldo Vidigal:
I just had an exchange with Henry Gao on his post below and thought it could be useful to develop on the issue here. Gao argues that the WTO Ministerial Conference should move to appoint a WTO Director-General by majority (if I understand him well, by outvoting the United States) and infers from this that it should also appoint WTO Appellate Body members (ABMs) by majority. In the latter view, Gao is not alone. Other highly regarded authorities in the field have proposed that the WTO Ministerial Conference (or perhaps the General Council) should appoint ABMs by majority. That, I propose, is unwarranted under WTO rules and would undermine rather than preserve the rule of law in international trade relations.
In our longer pieces on the topic, Gao and I agree on the basic applicable rules. The Agreement Establishing the WTO (AEWTO) allows the Ministerial Conference and the General Council to decide by majority ‘where a decision cannot be arrived at by consensus’. ABMs, however, are appointed by the DSB, and decisions of the DSB under the DSU must be made by consensus. The DSU specifies that DSB consensus takes place ‘if no Member, present at the meeting of the DSB when the decision is taken, formally objects to the proposed decision’. Where we differ is on the existence of a sort of right of last resort for the Ministerial Conference to substitute its own will for that of the DSB and appoint ABMs itself, on grounds that the DSB has failed to reach consensus (authors differ on how exceptional the situation needs to be to justify this procedure).
One may find justification for this last-resort mechanism in the obligation (‘shall’) of the Ministerial Conference, under Article VI:1 AEWTO, to ‘carry out the functions of the WTO and take actions necessary to this effect’. This provision grants the Ministerial Conference ‘the authority to take decisions on all matters under any of the Multilateral Trade Agreements, if so requested by a Member, in accordance with the specific requirements for decision-making in this Agreement and in the relevant Multilateral Trade Agreement’. This would also presumably give the Ministerial Conference the authority to determine what is ‘necessary’ to carry out the functions of the WTO. It may then decide that overriding the decision-making structure of the AEWTO-system is necessary.
However, the requirement in the provision itself is that decisions be ‘in accordance with the specific requirements for decision-making’ in WTO Agreements. AEWTO footnote 3, which applies to the rules on decision-making by the Ministerial Conference and the General Council, provides that ‘[d]ecisions by the General Council when convened as the Dispute Settlement Body shall be taken only in accordance with the provisions of paragraph 4 of Article 2 of the Dispute Settlement Understanding’ – the provision that requires consensus. Whether or not this was intentional, the AEWTO-DSU system that protects the DSB consensus rule when it makes a decision provided for in the DSU seems watertight.
Gao (and others) suggests that there is precedent for other organs interfering in dispute settlement affairs by invoking discussions on ABM appointments by the General Council and Ministerial Conference, as well as the debates within the General Council, in 2000, on the acceptability by panels and the AB of amicus curiae submissions. Besides the fact that neither resulted in a decision, in neither case did Members as a group suggest that the General Council or the Ministerial Conference should be able to adopt decisions that the DSU entrusts to the DSB (and that are, under the AEWTO-DSU system, protected from majority decision-making). Although DSU Article 2.1 entrusts the DSB with the administration of the rules and procedures of the DSU, it does not entrust the DSB with issuing interpretations of the DSU or any other agreements. Issuing interpretations remains a matter for the Ministerial Conference and the General Council. If the General Council decided to adopt under Article XI:2 an interpretation clarifying that amicus curiae submissions can or cannot be received, it would be acting entirely within its right to interpret the WTO Agreements. (It could even invalidate a provision of the Appellate Body Working Procedures, if it interpreted the DSU as not permitting this provision.)
This then leads to another argument: that the Ministerial Conference or General Council could adopt an Article XI:2 interpretation ‘interpreting’ the articulation between their powers and those of the DSB differently from that which the AEWTO and the DSB go to great lengths to establish. The Appellate Body itself has followed the International Law Commission in stating that authoritative interpretations by a body competent to adopt them are to be ‘read into the treaty for purposes of its interpretation’. Even here, however, Article XI:2 specifies that these interpretations are not to ‘be used in a manner that would undermine the amendment provisions in Article X’. Article X, in turn, provides that the ‘decision to approve amendments to the [DSU] shall be made by consensus and these amendments shall take effect for all Members upon approval by the Ministerial Conference’. The DSU provides that the DSB may only make DSU-mandated decisions by consensus; the DSU can only be modified by consensus.
The defense of ‘majority’, ‘qualified majority’ or ‘consensus minus one’ decisions, against the text of the Agreements, is at heart an argument for treating the current situation as exceptional and requiring an exceptional response. This is understandable but is unlikely to lead to the sort of salvation of the organization its proponents suggest. Behind seemingly procedural issues (the iron-cast consensus requirement for DSB decisions but also the practice of consensus for the adoption of agendas, which makes even the making of non-consensual decisions dependent on their acceptance by the outvoted party) is an overall culture of consensual decision-making, which justifies the particular weight that WTO decisions and recommendations carry. This procedure preserves a balance between small and large Members, prevents large Members from weaponizing the organization against each other, and provides the decisions that Members do reach with authority that is rarely enjoyed by majority decisions.
At the best of times, any decision adopted at the WTO against the principle of consensus would be highly problematic. Disagreement between India and the United States prevented the conclusion of the Doha Round in July 2008. Venezuela, Nicaragua and Bolivia successfully blocked consensus at the 2015 Ministerial Conference in Bali until they obtained a paragraph implying that the US embargo on Cuba should end. Besides the fact that these Members are likely to consider the prospect that they may be the ones to be outvoted the next time an exceptional situation is invoked to justify departing from the consensus rule, there is a qualitative difference between the preference for consensus, in the Ministerial Conference and General Council, and the obligation to adopt decisions by consensus, in the case of the DSB acting pursuant to the DSU. The key precedent from the ICJ in Peace Treaties supports the proposition that even an outright violation by a state of its obligation to appoint an arbitrator to an adjudicatory body ‘cannot alter the conditions contemplated in the Treaties for the exercise [the] power of appointment’. In order to be validly established, the adjudicator had to be ‘constituted in conformity with the will of the parties as expressed in the arbitration agreement’. In the case of the WTO, where there is at least significant doubt that one could characterize the US’s blocking of consensus as a violation of an obligation, composing the Appellate Body against the text of the WTO Agreements would likely undermine, not preserve, respect for the rule of law in international trade.
