WTO Members Briefed on Informal Dispute Settlement Reform Talks

· June 2022 ministerial mandate of having a fully and well-functioning dispute settlement system accessible to all members by 2024.

· An online template was created for the submission of proposals, of which 70 have been received from members to date.

· Guatemala, speaking on behalf of 127 members, introduced for the 64th time the group's proposal to start the selection processes for filling vacancies on the Appellate Body.

· Members need to clarify and adopt a shared understanding of the essential security exception under Article XXI of the General Agreement on Tariffs and Trade.

· China echoed the concerns of Hong Kong, China and said the security exception should not serve as the basis to "safe harbour" protectionism nor justify interference in other members' internal affairs.

At a meeting of the Dispute Settlement Body (DSB) on 31 March, WTO members were briefed on informal discussions taking place regarding reform of the organization’s dispute settlement system.

Discussions concerning dispute settlement reform

Marco Molina, Deputy Permanent Representative of Guatemala to the WTO, reported in his personal capacity on informal meetings he was asked to convene by a group of WTO members on the issue of dispute settlement reform. The objective of these meetings was to have substance-based discussion to find practical solutions to the concerns identified by members, with the aim of fulfilling the June 2022 ministerial mandate of having a fully and well-functioning dispute settlement system accessible to all members by 2024.

Mr Molina said that between 6 and 14 February he had over 40 bilateral meetings with delegates and regional coordinators representing more than 130 WTO members, which was followed by an informal meeting on 17 February open to all WTO members. An online template was created for the submission of proposals, of which 70 have been received from members to date. Informal discussions were also started in small groups and open to all members for talks on the proposals put forward; so far 45 delegates have participated in the small group meetings.

Mr Molina noted that all WTO members received a calendar of meetings running up to the first week of July. The expectation is to include agreed solutions in a "green" table before the summer break which will serve as the basis to start a drafting exercise when WTO members come back from their summer break and concluding before the end of the year. He said the substantive progress made during the initial discussions, together with the flexibility that members will need to show to reconcile different interests and concerns, will mark the pace of the discussions and influence the ability to deliver results.

More than 30 members took the floor to comment, with some speaking on behalf of groups of members. Many members expressed support for the informal process now underway, with some raising questions about the nature and the inclusiveness of the discussions.

Appellate Body appointments

Guatemala, speaking on behalf of 127 members, introduced for the 64th time the group's proposal to start the selection processes for filling vacancies on the Appellate Body. The extensive number of members submitting the proposal reflects a common concern over the current situation in the Appellate Body which is seriously affecting the overall WTO dispute settlement system against the best interest of members, Guatemala said for the group.

More than 20 delegations took the floor in support of the proposal, some speaking on behalf of groups. They reiterated the importance of the WTO's two-tiered dispute settlement system to the stability and predictability of the multilateral trading system and the need to resolve the deadlock. A number of delegations noted the ministerial commitment to secure a fully functioning dispute settlement system by 2024 and pledged their support for achieving this within the prescribed time period.

The United States repeated that it does not support the proposed decision to commence the appointment of Appellate Body members as its longstanding concerns with WTO dispute settlement remain unaddressed. The first step towards reform is to better understand the interests of all members in WTO dispute settlement, it said. The United States has been engaging with members to advance this goal and looks forward to continued engagement, it added.

For the 127 members, Guatemala came back to say ongoing conversations about reform of the dispute settlement system should not prevent the Appellate Body from continuing to operate fully, and members should comply with their obligation under the WTO's Dispute Settlement Understanding to fill Appellate Body vacancies as they arise.

Surveillance of implementation

The United States presented status reports with regard to DS184, "US — Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan", DS160, "United States — Section 110(5) of US Copyright Act", DS464, "United States — Anti-Dumping and Countervailing Measures on Large Residential Washers from Korea", and DS471,"United States — Certain Methodologies and their Application to Anti-Dumping Proceedings Involving China."

The European Union presented a status report with regard to DS291, "EC — Measures Affecting the Approval and Marketing of Biotech Products."

Indonesia presented its status reports in DS477 and DS478, "Indonesia — Importation of Horticultural Products, Animals and Animal Products."

Other business

Under other business, the United States made a statement regarding the panel report in DS597 – "United States — Origin Marking Requirement". It said that the challenged actions with respect to Hong Kong, China, were based on well-grounded determinations implicating US essential security interests relating to democracy and human rights and did not merely involve “political issues or domestic affairs” as asserted by Hong Kong, China. Members need to clarify and adopt a shared understanding of the essential security exception under Article XXI of the General Agreement on Tariffs and Trade, the US said, and it intends to raise this critical issue as part of members' discussions on fundamental WTO reform.

Hong Kong, China reiterated that the United States did not demonstrate that its measure is justified on the grounds of national security. The panel pointed out that while the multilateral trading system allows sufficient flexibility for members to adopt measures they considered necessary for the protection of their security interests, it also ensures that this flexibility is exercised within the limits intended by its drafters, said Hong Kong, China.

China echoed the concerns of Hong Kong, China and said the security exception should not serve as the basis to "safe harbour" protectionism nor justify interference in other members' internal affairs.

New DSB chair

Before the close of the meeting, members elected Ambassador Petter Ølberg of Norway as chair of the DSB for the upcoming year. Many members thanked the outgoing chair, Ambassador Athaliah Lesiba Molokomme of Botswana, for her service over the past year.