WTO Releases Host of Reform Proposals on Appeal Mechanism
The World Trade Organization released an updated draft of its dispute settlement reform text, outlining a host of reform ideas regarding the appeal mechanism's scope of review, standard of review, form, incentives to appeal, expectations from members and accessibility.
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The document was released following the Dec. 16-17 WTO general council meeting, at which an update was given on reform talks (see 2412180014).
Concerning the scope of review, the negotiators issued two reform ideas: limit appeals "to those errors of law that would, if established, have a material impact on the respondent's implementation obligations with respect to a measure" and create a mechanism that grants permission to appeal. The negotiators said the first reform idea has been moved to drafting and clarified that it would require adjudicators to make an "assessment of all claims at the outset."
The text also includes two reform ideas on standard of review: impose a high or limited standard of review that gives "some deference to the panel" or a standard of review under which an appellant must show that the panel was guilty of gross misconduct, bias or serious conflict of interest, departed from a fundamental rule or manifestly exceeded its powers. For the first standard of review, the appellant must show that the panel's decision was "clearly erroneous" or "plainly unreasonable" or unreasonably interpreted the "customary rules of interpretation of public international law."
Simon Lester, a trade researcher and co-founder of WorldTradeLaw.net, said in response to the proposal that he's "not a fan of the second" proposal and has questions on the first. Regarding the first proposed standard of review, Lester questioned the scope of "the panel's decision on a legal issue" vs. the "panel's interpretation" of public international law.
The third category discussed in the text was the form of the mechanism. Under this section, the negotiators suggested using an ad hoc selection of adjudicators drawn from a "pool, roster or list" or increasing the number of standing adjudicators. In addition, the negotiators suggested using a "mix of standing and ad hoc adjudicators," adding additional adjudicators in lieu of a separate appeal stage at the interim review stage or reviewing a panel's conclusions by a committee of WTO members.
Lester said he finds the first suggestion "to be the most interesting," given that the U.S. objections to the Appellate Body has been with the "institutional nature of the Appellate Body." Using ad hoc arbitrator appointments could handle this concern, Lester said.
In the section on reducing or changing the incentives to appeal, the text suggested having members give a "collective, non-legally binding, political commitment to file appeals only in 'exceptional circumstances.'"
As for the use of interim review, the negotiators suggested requiring the substance of a claim relating to the panel's assessment of the facts to be raised with the panel at the interim review stage as an admissibility requirement to bringing an appeal. The text also suggested requiring or incentivizing members to raise the substance of a claim on a panel's legal interpretation or application of the law with the panel at the interim review stage.
Discussing the need to clarify members' expectations of adjudicators, the text suggested clarifying that previous reports are not binding on adjudicators.
Lastly, the text touched on access to the mechanism, suggesting that access by agreement of the disputing parties should be established on a "one-off or ongoing basis." The proposal would seemingly make appellate review optional, Lester said.