NFTC Puts Forward Suggestions of How to Satisfy US in WTO Appellate Impasse

The U.S. delegation to the World Trade Organization rejected a proposal from countries on how to reform the appellate body (see 1912090031), saying that without understanding how the appellate body's overreach problem developed, there's no reason to believe that restating the constraints on the appellate body's authority will work. In December, when the appellate body ceased to exist because of U.S. refusal to allow new appointees, the National Foreign Trade Council hired Tailwinds Global Strategy's Bruce Hirsh to put forward ideas of how to resolve the impasse

Hirsh said the time needed to hash out the how-we-got-here question is not there. “The longer the lapse in the system’s operation, the greater the risk of an erosion of respect for the WTO rules it is intended to enforce, and the greater the challenge of restoring the system to full operation, given the WTO’s consensus-based decision-making,” he wrote. Hirsh's report does not represent the NFTC's views, the organization said.

Still, Hirsh agreed that there are ways that the Walker Principles reform proposal could be beefed up to satisfy American complaints. He said, for instance, the 90-day time limit for appellate body deliberations could only be extended if both the prosecuting and the defending countries agree to it.

He noted that Walker said the WTO should say that the appellate body can only address issues raised by the two countries “only to the extent necessary to assist the Dispute Settlement Body in making the recommendations or in giving the ruling provided for in the covered agreements in order to resolve the dispute.”

Hirsh said the WTO could add as a clarification that “even if an issue is raised by a party, an adjudicator (whether at the panel or appellate stage) may not opine on that issue if the issue does not relate to a measure or claim within the terms of reference of a dispute.”

The appellate body has tried to define broad terms in the Dispute Settlement Understanding, such as what is a “public body.” Hirsh said: “Guidance could further emphasize that the rules of interpretation of public international law do not authorize panels or the Appellate Body to expand or narrow the meaning of broadly worded provisions or general terms.”

And Hirsh sided with the American complaint that the antidumping rulings at the WTO have not honored the language in the original Dispute Settlement Understanding, which clearly say: “Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations.” Instead, the appellate body has been concluding that there is only one permissible interpretation of antidumping provisions under customary rules of interpretation in public international law.