WTO Dispute Settlement Body (DSB)

WTO Members have discussed WTO reform since the collapse of the WTO Appellate Body (AB) in 2019, which was caused mainly by the US opposition to appointing new AB members. The US attacked the AB for its performance and its interpretation of WTO rules. The US has also consistently criticized the WTO’s incapability to reach agreements and reform itself. Nonetheless, this Western discomfort towards the organisation and the AB began at the Third Ministerial Meeting in Seattle (1999) when developing countries opposed the Global North’s attempt to open new trade negotiations. This push continued during the Fourth Ministerial Conference in Doha(2001), where the membership loosely agreed on a mandate for “Global and Sustainable Development”, albeit one without clear expectations to cut a deal in line with such a mandate of achieving a fair balance between trade and development at the multilateral trading system. One ministerial conference after the other, there was a failure to agree on Western driven “Development Agenda” until the Members agreed on the Trade Facilitation Agreement and the agricultural subsidies exports prohibition in Bali (2013) and Nairobi (2015), respectively. However, and even after the collapse of the AB, a criticised agreement on fishery subsidies (2022) was reached with a sunset clause of 5 years, making it in turn a chimera because of the short term.

Dispute settlement at the World Trade Organisation (WTO) is in urgent need of reform. For nearly two decades, the USA had accused the Appellate Body of judicial overreach and action against the institution escalated under both the Obama and Trump administrations. In November 2022, the quasi-judicial system that has long been referred to as the ‘jewel in the crown’ of the WTO lost its appellate function as the term of its final Member, Dr Hong Zhao, expired. With the US refusal to reappoint members to the Appellate Body, the WTO’s dispute settlement system has been slowly asphyxiated. The WTO’s two-tier dispute settlement system was designed to ensure that Members had access to transparent, independent and timely decision-making.

The adoption of imprecise and relaxed SDT provisions that can easily provide leeway for countries to evade SDT obligations will only work contrary to the stated objective of the Agreement to promote and attain sustainable and inclusive socio-economic development among State Parties. Just as Amartya Sen correctly puts it, “the central issue of contention is not globalization itself, nor is it the use of the market as an institution, but the inequity in the overall balance of institutional arrangements—which produces very unequal sharing of the benefits of globalization”