WTO: Still no fix for the appellate body

By Jamil Chade

In today’s tense and polarized climate, achieving success in a multilateral forum should be saluted. And that’s exactly what the WTO’s D-G Ngozi Okonjo-Iwaela did last Monday (September 5) in Rotterdam. Reflecting on last June’s Ministerial Conference (MC12), she said: “At the WTO ministerial, we were able to strike real agreements with Russia, Ukraine, the United States, and China among the 164 countries around the table. This is no mean feat. I’m highlighting it because it shows that multilateralism can work. There is [a lot of] gloom and doom, but [this] is a place where we’ve shown that global cooperation and solidarity can work,” she said. The irony is that she delivered her remarks at the Africa Adaptation Summit, a gathering on climate change ignored by the West, and at a time when progress on many fronts, on the ground at the WTO, is proving exceedingly difficult.

If MC12 undeniably demonstrated the willingness of countries to keep talking and working together multilaterally in spite of major rifts, diplomatic sources tell The G|O that the optimism that prevailed at the Conference’s conclusion is now being tempered in light of recent developments. On August 29, the hope of finally reaching an agreement that would break the paralysis of the Appellate Body, the WTO’s supreme body for ruling on trade disputes, was dashed by Washington. China, the world’s second-largest economy, still claims exemptions as an ‘emerging economy’ 21 years after it joined the organization, and the US wants this status amended.

Against this backdrop, the US restated its long-held position that it does not support the proposed decision to allow the nominations of new judges. Instead, Washington reiterated its stance that the entire settlement system be reformed first. The US administration considers that in its current form, the Appellate Body does not serve the real interests of its members.

Tabled by Mexico, the push to restart the Appellate Body’s operations was supported by 125 countries, with 20 delegations taking the floor to express their support. They reiterated the importance of the WTO’s two-tiered dispute settlement system to the stability and predictability of the multilateral trading system. Several of them also noted the commitment made by ministers at the WTO’s 12th Ministerial Conference to engage in discussions aimed at securing a fully functioning dispute settlement system by 2024, pledging their support for a resolution within the prescribed time period.

Frustration was evident at the meeting, as Mexico insisted that the concerns of some members shouldn’t serve as a pretext to disrupt the work of dispute settlement in general. “Dr Ngozi came out of the Ministerial Conference with important political capital. But she may burn it rapidly. Summer is definitely over,” a European diplomat told The G|O. The EU has been pushing for a quick resolution of the issue, which now appears unlikely before 2024.

-JC