On 11 December 2023, it will be four years since the World Trade Organization's (WTO) Appellate Body (AB) was fully functional. Indeed, on 11 December 2019, the terms of two Appellate Body Members (ABMs), Amb. Ujal Singh Bhatia and Mr. Thomas R. Graham, expired. This left Dr. Hong Zhao as the sole ABM in a paralysed AB until 30 November 2020 when her term ended. With this, came the fall of a unique institution in international dispute settlement and the weakening of the WTO's dispute settlement system (DSM), which has been termed the WTO's "crown jewel". The AB's demise was triggered by the United States' (US) refusal to permit the appointment of ABMs. The US has very vocally and consistently stated that the AB had, essentially, become a law unto itself and overstepped its legal mandates set out in the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and as a subordinate institution of the Dispute Settlement Body.
The introduction of the World Trade Organization (WTO) in 1995 was considered a historic milestone for the rules-based trade order instituted in the aftermath of World War II. In particular, the Dispute Settlement Mechanism (DSM), a rules-based dispute settlement system designed to ensure fair resolution of trade disputes among WTO members, was hailed as a "crown jewel" of the new system. Although not devoid of criticism, the two-tier system of the DSM had a relatively excellent start to life. Considered one of the most active international dispute mechanisms, especially since the turn of the millennium, the DSM has handled 621 disputes brought to the organisation, with over 350 rulings issued since its inception in 1995. However, the system's success has waned in recent years, effectively "grinding to a halt" with the U.S. spearheading its sabotage. Although the US was a major architect for its introduction in 1995, it opposed the appointment of new Appellate Body members, through successive US administrations and there are now no Appellate Body members since 2019. The demise of the Appellate Body created an impasse in the WTO that is yet to be resolved despite several efforts from WTO members. A primary criticism of the current system by the U.S. is that the Appellate Body has overstepped its limits and created new rules not envisaged by the WTO, an approach that the U.S. maintains does not support its interests. In this analysis, we argue that the proposed reforms to the WTO's DSM by the U.S. are self-serving, aligning with a consistent pattern of hegemonic powers shifting the goalposts and changing the rules when they face adverse consequences—the "bite"—of a regime they erstwhile championed.
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.
Supporting moot court competition through funding initiatives is one way to offer support. Another way is to offer knowledge and expertise on substantive law as well as presentation skills.
The utility of trade remedy measures has been questioned, particularly due to their negative impact on the domestic market. This is particularly so because the price effect these measures have is primarily borne by consumers in the domestic market. Where the targeted products are intermediate or capital products, increased prices would adversely impact industrialization and development by the imposing country. Thus trade remedy measures may have counterintuitive consequences.