‘Lockout’ at WTO’s Appellate Body
Due to repeated US blockage, the dispute settlement mechanism now has only one judge in office
GENEVA — The Appellate Body of the World Trade Organization is facing its first “lockout” crisis in nearly 25 years.
The body, the de facto court of appeals at the WTO, will be unable to hear any new cases because it only has one judge left from Dec 11 due to repeated blockage of the nomination of its members by the United States.
At a regular meeting of the WTO Dispute Settlement Body on Nov 22, Mexico, on behalf of 117 WTO members, suggested again that the selection process for new judges in the Appellate Body be initiated to fill current and upcoming vacancies.
In reaction, the US said it did not support the proposal for starting the selection process, as the “systemic” concerns it previously raised had not been addressed.
According to Mexico, it was the 29th time that the Latin American country, representing numerous WTO members, made similar proposals over the past two years, and it was the 29th time that the US blocked it with a veto.
The Appellate Body has seven judges elected for a 4-year term, and they can be re-elected once. In the selection process, WTO members follow the consensus principle, which means that the nomination of the Appellate Body members can only proceed smoothly with the agreement of all 164 members.
Since 2017, the US has unilaterally opposed the launching of any selection process for new judges, citing the so-called “systemic” problems of the dispute settlement mechanism.
Due to repeated blocking from the US, only three judges remained in the Appellate Body, and as the term of two of those ended on Dec 11, the body now has only one judge in office.
As any trade appeal must be heard jointly by three judges, the Appellate Body will be unable to accept any new cases due to lack of judges, and will fall into an effective “lockout” state.
Some WTO members have expressed concerns over the impact the “lockout” of the Appellate Body will have on the international economic and trade order. At the Nov 22 meeting, a Norwegian representative warned “winter is coming”.
“This will make the dispute settlement mechanism unable to operate normally, seriously undermining the authority and effectiveness of the multilateral trading regime,” China’s Foreign Ministry spokesperson Hua Chunying said on Dec 9 at a routine press conference.
As the “supreme court” of international trade, the Appellate Body not only has the final say on international trade disputes, its rulings are also enforceable.
The WTO may authorize trade retaliations against members who refuse to enforce the rulings of the Appellate Body. For this reason, the WTO is dubbed an international organization with “teeth.”
Without the Appellate Body, the WTO would only be able to issue a panel report on a dispute without enforcement.