US Blocks Early Decision in Pending Cases before Appellate Body

India Appellant is 3 Out of 14 Pending Cases

To have one member from December 11; India has 3 pending appeals before it

The US has finally spiked the World Trade Organization’s Appellate Body, the highest adjudicating body for resolving global trade disputes. It shall remain dysfunctional after December 10, when it will be reduced to one member, said trade envoys.

As a parting shot, the US on Tuesday blocked an initiative under Rule 15 of the Working Procedures for Appellate Review for adjudicating pending 14 appeals with the retiring members who had already conducted proceedings.

The chair for the WTO’s Dispute Settlement Body (DSB) Ambassador David Walker has pursued the initiative under Rule 15 by consulting with India, the US, China, the European Union, Japan and Canada to ensure that the Appellate Body completed work on appeals in the pipeline.

At a specially-convened DSB meeting on December 3, Ambassador David Walker of New Zealand informed members that there is no consensus for pursuing the pending appeals under Rule 15.

The US refused to approve the DSB chair’s initiatives for pursuing the 14 pending appeals under Rule 15. As a result, the Appellate Body will be reduced to one member.

Pending appeals

India has three pending appeals before the Appellate Body. In two of them, India challenged panel rulings involving the US that sought the termination of export subsidy schemes in India, and Japan, which won a case against New Delhi’s safeguard measures against Japanese steel products.

The third appeal is by the US against a panel ruling in favour of India that Washington had violated core global trade rules by providing billions of dollars of subsidies and pursuing mandatory local content requirements. All three appeals will now go into limbo due to the unilateral US’ actions that ensured the Appellate Body remains dysfunctional from December 11.

The US also ensured that the deadlock is complete at the Appellate Body and cannot be unlocked anytime soon.

Global criticism

As the crisis became unsavoury due to news reports about the concerns raised by an outgoing American member on the Appellate Body about a WTO official, two serving and one retired member of the body — Ujal Singh Bhatia, Hong Zhao, and Shree BC Servansing — wrote a scathing letter to the WTO’s Director-General, Roberto Azevedo, on December 3.

The US, however, dismissed the criticisms levied against its actions on the pending appeals by saying that several members seem to argue that the Appellate Body should continue to breach the rules under the DSU to deem Appellate Body members whose terms have expired to continue being members.