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Business Coalition Urges Trump Administration to Adopt WTO Reforms

Posted December 09, 2019


A coalition of more than two dozen business groups have called on the White House to support reforms to the World Trade Organization’s Appellate Body, which is expected to effectively shut down after December 10 as a result of an ongoing U.S. blockade over judicial appointments.

Background


The Trump administration, which has threatened to leave the WTO, has refused to consider nominees to replace the four vacancies on the panel. The U.S. says panel members have overstepped their mandate by failing to meet its 90-day deadline to decide on appeals; permitting panel members to serve beyond their terms; and by issuing opinions on matters not necessary to resolve a dispute.

With the departure of Thomas Graham, an American lawyer who has served on the WTO panel since 2011 and whose term ends tomorrow, the seven-member Appellate Body will no longer have a quorum to rule on pending WTO appeal cases.

Proposed Reforms
 

Spearheaded by Americans for Prosperity, a conservative advocacy group affiliated with Charles Koch, the business coalition is urging the White House to embrace a three-part plan to renovate the WTO appeals process consisting of the following:

  • Adopt the “Walker Principles” developed by the WTO-appointed special facilitator, New Zealand Ambassador to the WTO David Walker. The Walker Principles address six issues highlighted by the United States: ensuring that appeals are completed within 90 days; Appellate Body members do not continue to serve beyond their terms; precedent from past cases is not binding on future cases; facts and municipal law are not subject to appeal; the Appellate Body does not issue advisory opinions; and Appellate Body decisions do not add obligations or take away rights provided in the WTO rules.
  • Create an oversight and audit committee to ensure compliance by the Appellate Body with the Walker Principles. This committee would meet at least once per year, or whenever requested by a party involved in an Appellate Body ruling. The committee would be comprised of the chairs of key WTO committees along with four independent trade law experts. The committee would review the Appellate Body’s performance and, when asked, determine whether a specific ruling violated the Walker Principles.
  • Create term limits for members of the Appellate Body secretariat of not longer than eight years, equal to the maximum term for a judge. This would rebalance power within the appeals process, giving primacy to the reasoning of Appellate Body members and ensuring that staff help to write decisions, not make them.

Warning that “America’s economic interests will be harmed if there is no internationally agreed upon mechanism for combatting unfair trade practices of other nations,” the group argues that despite its flaws, “the WTO dispute settlement system is worth saving.” To that end, it urges the Trump administration to “put forward a specific, detailed U.S. proposal aimed at reforming the dispute settlement system so that global trade rules can be predictably enforced.”

Canada’s Perspective


The Government of Canada believes the need to modernize the WTO is urgent and in this regard it has been working with a number of other countries (Australia, Brazil, Chile, European Union, Japan, Kenya, South Korea, Mexico, New Zealand, Norway, Singapore and Switzerland), known as the Ottawa Group, to address specific challenges that are putting the multilateral trading system under stress.

Over the cours of three ministerial meetings of the Ottawa Group, discussions have focused on safeguarding and strengthening the dispute-settlement mechanism; reinvigorating the negotiating function, including how the development dimension can be best pursued in rule-making efforts; and strengthening the deliberative function of the WTO, or the way in which WTO committees operate.

 

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