Since its inception, the World Trade Organization (“WTO”) has never been short of naysayers. This reached a whole new level after the fateful Ministerial Conference in Seattle in 1999, when ill wishes for the organization became fashionable, at least among some quarters. But it sailed through the treacherous waters and managed to launch a new round of negotiations in Doha two years later.
Then came the collapse of the Doha Round in 2008, when the demise of the organization became the talk of the town, even among some insiders. Yet again, the WTO soldiered on.
Fast forward ten years.
“The WTO Appellate Body is dying”, said some in 2018, and they might be right this time.
And what a slow and painful death it has been!
The first heavy blow was thrown by the US in mid-2016, when they refused to support the reappointment of Prof. Seung-wha Chang, a leading WTO scholar. While rather painful, this proved to be non-fatal, as the US later changed its position and supported the appointment of Mr. Hyun Chong Kim to replace Prof. Chang. However, when Mr. Kim was tapped as the Minister of Trade by the new government under President Moon Jae-in in July 2017, he resigned from the position. Since then, the US has been blocking the selection of new AB members by the WTO’s Dispute Settlement Body (“DSB”). As the terms of one Appellate Body member after another expired without replacement, the AB is inching closer and closer to its ultimate doom.
As of Jan 2019, the Appellate Body is left with only three Members, which is barely sufficient for the DSB-mandated quorum to hear a case. Moreover, the terms of two of these Members are scheduled to end this December, which will leave the Appellate Body completely paralyzed.
When that happens, the consequences would not be limited solely to the Appellate Body, but the entire WTO dispute settlement system. This is because Panel and Appellate Body reports are not binding on their own, but must be formally adopted by the DSB before they have legal effects. At the same time, according to Article 16.4 of the Dispute Settlement Understanding, “[i]f a party has notified its decision to appeal, the report by the panel shall not be considered for adoption by the DSB until after completion of the appeal”. This means that the losing WTO Member in any case can essentially block the adoption of the panel report by simply lodging a short notice of appeal. With the wrench thrown into the process, the adoption of the panel report will be postponed indefinitely.
Moreover, the ripples of the Appellate Body blockage will be felt beyond the narrow confines of the multilateral trading system. As the only binding international dispute settlement system operating at a truly global level, the WTO dispute settlement system has been praised as the “Crown Jewel” of the WTO and regarded as the beacon of hope for a rule-based international system by all international lawyers in the otherwise hopeless realm of international law. When the Appellate Body dies, such hope will be gone too.
While the ultimate end seems to be certain, this doesn’t necessarily mean that the only option left is accepting the fate. Instead of fading quietly into the background, like some of their colleagues have done, the remaining three Appellate Body members should at least try to “rage against the dying of the light” before the light is put off. At least, we need a strong-worded admonition against the rogue behaviour of the US from the three remaining AB members, or better still, from all current and former Appellate Body members. While such swan song might not be able to prevent the inevitable, it will provide the saving grace for international lawyers and international law by letting the world know that they have refused to “go gentle into that good night”.