Is the WTO Appellate Body in Limbo? The Roots of the Crisis in the WTO Dispute Settlement Body and the Available Routes Navigating the Quagmire

In its over 25 years' history, the dispute settlement mechanism of the World Trade Organisation (WTO) has been touted as one of the most active and successful international adjudicatory systems in relation to other international dispute settlement fora. The process in the engagement of the system presents a tripartite structure consisting of consultation, panel and appellate stages, and the enforcement proceedings. The functions of these processes help to promote the trust and confidence of the member states in the WTO trade dispute settlement system. Now the Appellate Body (AB) is paralysed following the incapacitation and consequential suspension of the appellate function of the WTO Dispute Settlement Body (DSB), because of the insufficient membership caused by the United States blockade on the appointment process of AB members. The paper discusses the trajectory of the WTO dispute settlement reform from the GATT regime, the root cause of the suspension of the Appellate Body, and the options available for the disputants in and outside the WTO system. It concludes that the system possesses policy defects if the attitude of a single state can render the AB non-functional and should be transformed when the appellate system is resuscitated.

The Collapse of the Appellate Body as a Determining Factor of the WTO’s Future

The World Trade Organization (WTO) is one of the leading institutions involved in global economic regulation. Its purposes are to ensure multilateral cooperation on the liberalization of international trade, harmonize existing standards and requirements, and peacefully resolve trade disputes between countries. Since 11 December 2019, dispute resolution has been handicapped due to the consistent blocking of the appointment of members to the WTO Appellate Body (AB) by the United States. This has reduced the multilateral trading system’s (MTS) predictability and threatens its final decay. In this article, the fundamental and formal causes of the collapse are described, and its circumvention mechanisms and effectiveness are discussed. At the same time, an assessment is given of the possibility to overcome the collapse in 2021, considering the change of the U.S. president and other events. Special attention is paid to Russia’s position and its current and potential losses. Finally, the issue of dispute resolution through regional trade agreements is proposed for discussion. The fundamental reasons for the collapse were the shifting balance of power in the world order and the WTO’s inflexibility in adjusting the rulebook and its procedures. The main reasons for the U.S.’ dissatisfaction are objective but based on formalities; the blockage of the AB is an overreaction. Moreover, the U.S.’ position on this issue has not changed with the new president. As a result, there is abuse of the current situation as WTO members file appeals “into the void.” Existing tools to circumvent the collapse are partial and not yet popular among WTO members. Russia needs to resume the AB’s work to complete previously started high-profile disputes and to defend its interests in the future.

‘Two Roads Diverged in [Soft]wood’ Targeted Dumping, Differential Pricing Methodology, and Zeroing: US – Canada Anti-Dumping in Softwood Lumber

The United States and Canada have a long-standing series of disputes over softwood lumber that until now have focused on alleged subsidies and countervailing duties (CVDs). The United States changed things up this time around and the US Department of Commerce (USDOC) found dumping after applying the Differential Pricing Methodology to softwood lumber from Canada. The panel found that the USDOC erroneously aggregated export price differences when applying the differential pricing methodology (DPM), but departed from the WTO Appellate Body's previous ruling in US–Washing Machines regarding the use of zeroing and the inclusion of differential prices under Article 2.4.2 of the Anti-Dumping Agreement. To date, the United States and Canada have not been able to resolve the long-standing softwood lumber dispute, and this time the focus shifts from subsidies and countervailing duties to anti-dumping duties. It remains to be seen what happens in this specific dispute on appeal – if, and when, the WTO Appellate Body starts to function again. It will also be interesting to see whether this panel decision encourages parties to argue for, and future panels to permit departures from, Appellate Body rulings with which they disagree.

General Principles of Procedural Law in the Practice of the WTO Appellate Body

The method of identification of general principles and their function as a source of law have long been object of doctrinal debate. This topic is now under the programme of work of the International Law Commission. Relatedly, international courts and tribunals have relied on general principles of procedural law derived from national legal systems in their practice and reasoning, but the methodology employed by adjudicators in importing these sources from domestic law remains obscure. This research examines the use of general principles of procedural law in WTO dispute settlement, in particular by its Appellate Body. The aim is two-fold: first, to study the methodology employed in the identification of general principles of procedural law in the case law of the WTO Appellate Body; second, to examine the functions performed by general principles in the practice of this international jurisdiction.

Living without the WTO Appellate Body – Procedural Developments in International Trade Dispute Settlement

The current column covers selected procedural and institutional developments in international trade dispute settlement in 2020. During the reporting period, World Trade Organization (WTO) dispute settlement has been facing unprecedented challenges due to the collapse of the Appellate Body. While this calls for a systemic reflection in the WTO forum regarding the future not only of appellate review but of the entire dispute settlement system, the current unavailability of the Appellate Body has triggered WTO Members into improvising temporary solutions. At the same time, some of them have equally seemed to turn to free trade agreements (FTAs) or otherwise to pursue solutions outside of the multilateral forum.

China’s NME status at the WTO: analysis of the debate

Purpose Although officially ended in July 2020, China’s dispute about its non-market economy (NME) status at the World Trade Organization (WTO) is far from being resolved. The NME status enables China’s counterparts to disregard Chinese prices in antidumping proceedings and instead use the so-called surrogate country methodology. This paper aims to structure and analyze the complex debate, which emerged with the disputes China has filed against the European Union and the USA at the WTO, and therefore provide a point of reference for future analysis of and debates about China’s NME status. Design/methodology/approach The analysis is based on the existing academic literature on the topic and on the legal WTO-related documents (e.g. multilateral agreements, China’s Accession Protocol, legal findings of the WTO dispute panels). Findings Four different interpretations of the respective legal documents about China’s NME status are discussed and strong and weak aspects of these interpretations are pointed out. Also, several misunderstandings and mistakes appearing in the debate are clarified. Practical implications As the question of China’s position at the WTO and its NME status has not been resolved yet and some authors believe that China will pursue its case again once the WTO Appellate Body revives its functionality, the analysis of the debate can serve as a point of reference for the academic debate and the future research on this topic. Moreover, it offers an introduction to China’s NME position at the WTO for the newcomers to this topic. Originality/value Although China’s NME status has been much discussed, there is no literature review that would structure the debate and point out some of the (dis)advantages of the respective arguments and interpretations. Rather than adding to the large corpus of literature about the NME status, this study takes this corpus as the object of its analysis.

Pemblokiran Penunjukkan Anggota Appellate Body Berkenaan Dengan Pemenuhan Right To Access To Justice Dalam World Trade Organization

Sistem penyelesaian sengketa World Trade Organization (WTO) menjadi sangat penting jika menyangkut right to access to justice dalam perdagangan internasional. Sebagai bagian dari sistem penyelesaian sengketa WTO, Appellate Body (AB) turut berperan dalam pemenuhan right to access to justice bagi negara-negara anggota WTO. Keberadaan AB telah menjamin dan memperkuat konsistensi serta kepastian terhadap penafsiran aturan perdagangan internasional. Namun, peran AB tersebut terancam karena Amerika Serikat. Sejak tahun 2017, Amerika Serikat telah memblokir proses penunjukkan dan penunjukkan kembali anggota AB. Per 11 Desember 2019, AB tidak dapat melakukan peninjauan banding karena kurangnya kuorum divisi. Berdasarkan aspek prosedural, institusi penyelesaian sengketa harus dapat berfungsi agar mampu memenuhi right to access to justice. Pemblokiran yang dilakukan oleh Amerika Serikat telah menciderai pemenuhan right to access to justice negara-negara anggota WTO.

United States—Anti-dumping Measures Applying Differential Pricing Methodology to Softwood Lumber from Canada

This dispute, brought by Canada against the United States, constitutes another chapter in three separate sagas: the enduring softwood lumber dispute between the two North American nations; the debate over the acceptability of the practice of “zeroing”; and the fight over the value and role of World Trade Organization (WTO) Appellate Body precedent. Notably, the panel departed from established Appellate Body decisions finding, inter alia, that zeroing was permissible under a weighted average-to-transaction (W-T) methodology. This departure is remarkable, not just because it runs counter to prior jurisprudence, but also for the reasoning supporting it and the circumstances in which it occurred. Indeed, the Panel Report was issued in the midst of a crisis of the WTO dispute settlement system arising from the United States’ decision to block the reappointment of Appellate Body members. The United States justified this action, which eventually resulted in the Appellate Body losing its quorum to hear new appeals on December 10, 2019, on the basis of complaints, among others, that the Appellate Body had championed an approach to precedent that the United States found incompatible with the intended role of dispute settlement within the WTO. While members worked feverishly to formulate a compromise that might respond to the United States’ criticisms and soften the effect of the Appellate Body's approach, the Panel suggested its own. Thus, it found room to depart from prior precedent (which the United States argued had been wrongly decided) while paying lip service to the Appellate Body.