For the United States, the malfunctions of the Appellate Body (AB) of the World Trade Organisation (WTO) dispute settlement mechanism are to be attributed to the remuneration system of the AB judges. At the same meeting of the Dispute Settlement Body (DSB) on 22 November in Geneva, they again vetoed the appointment of new judges.
During the meeting, US Ambassador Dennis Shea blocked, for the 29th time, the proposal to appoint new judges to the AB of the dispute settlement mechanism – a proposal supported this time by more than 70% of WTO members. On 10 December, with the expiry of the terms of two of its members – Thomas Graham and Ujal Bhatia – the Appellate Body will not have the minimum of three members necessary for it to function.
This US veto, which has been in place since President Trump’s arrival in the White House, is not accompanied by any clear proposal from Washington, which, moreover, refuses to commit itself to reforming the AB.
In particular, the United States points to the problem of meeting the timelines of the AB arbitrators, who struggle to meet the deadlines set out in the organisation’s rules, which require appeals to be published within 60 to 90 days. These include the increasingly complex cases submitted to the AB since its inception – and an increased number of WTO members (164). However, this problem was addressed in the report on the functioning of the AB, presented on 15 October by New Zealand Ambassador David Walker, Chairman of the DSB, and received coldly by the United States (see EUROPE 12350/16).
On the other hand, according to the American ambassador, the cause of these delays is rather to be found in the remuneration structure of the members of the Appellate Body and the compensation paid to former members of the AB who would possibly continue their activity after the end of their mandate, in accordance with the working procedures of the Appellate Body (see EUROPE 12321/15, 12271/16, 12264/16, 12262/12). At the meeting, Mr Shea explained to members that the mechanism for granting high compensation to AB members could encourage judges to draw out appeal proceedings, reported a source close to the talks. A “systemic” problem that, without proper control, undermines the rapid resolution of disputes, the ambassador said.
The New Zealand Ambassador assured that he was continuing his consultations to identify a solution for the processing of pending appeals after 10 December. As of the day of the meeting, 13 appeals had been filed, whose decisions were still pending. (Original version in French by Hermine Donceel)