Secondly, in his understanding, the members in charge of these appellate bodies will complete the follow-up work of the appeal cases that have ended the hearing.
Thirdly, for those members who submit or want to submit a notice of appeal before December 10, if they want to hold an appeal hearing, they need to wait for the appellate body to resume operation.
Unfortunately, WTO members are about to face the situation that only one member of the appellate body remains after December 10, the EU representative present said in a statement. Unlike normal circumstances, the appellate body will not be able to replace outgoing members or reassign pending appeals to other members, because a WTO member has been blocking new appointments since 2017. The European union representatives directly named the United States in their subsequent statements.
If the United States deliberately paralyzes the Appellate Body of the WTO, which will lead to the regression of Global trade laws, the WTO itself will face a more difficult problem: on the 4th, the WTO will continue to discuss the annual budget, and the United States threatened to refuse to pass the WTO budget, which may cause the whole WTO to stop in 2020.
China and the EU point out that there are different opinions and actions
The first financial reporter got the speech records of EU and other countries at the meeting on the 3rd. Among them, the EU has pointed out the internal disputes over the past two years, and pointed out that the current behavior of the US side has puzzled the EU.
The EU pointed out that it is understood that it is permissible to prevent the judges of the appellate body from recruiting new members of the WTO and at the same time oppose the current judges of the appellate body from continuing to complete their work after the end of their term of office in accordance with Article 15 of the working procedure of the appellate mechanism of the WTO itself (hereinafter referred to as Article 15).
The EU also noted that, as the United States indicated in August 2017, the article 15 approach contributes to the effective completion of appeals, and welcomed the departure of appellate body members to continue to serve two pending appeals. However, at present, the United States hinders the dispute settlement mechanism from fulfilling the responsibilities that the United States once agreed to and belonged to the dispute settlement mechanism.
The EU believes that this undermines the stability of the dispute settlement system and frustrates all parties involved in the appeal.
In his statement, the representative of China pointed out that at present, 14 appeals had not been withdrawn by the parties and that the appellate body should conclude these work in accordance with the existing rules.
China pointed out that in the past two years, due to the illegal obstruction of the United States, the delivery capacity of the appellate body has been seriously damaged, resulting in an unprecedented number of pending appeals.
China stressed that Article 15 is fully in line with the WTO rules for dispute settlement. Since more than 20 years ago, Article 15 has been applied in more than 20 occasions, and has formed a practice agreed by all WTO members. Before August 2017, the United States had never opposed it.
Even after August 2017, if it is in the interests of the United States that a final ruling by this rule is made, it does not seem to be an issue for the United States. China pointed out that by challenging Article 15, the United States has abandoned its previous commitments and risks undermining the entire dispute settlement system.
The US sides response to this was evasive. The U.S. side pointed out that the 15 responses heard today mean that members have not reached consensus on some basic issues.
The US side said that in the absence of consensus, the US side agreed that all parties should contact each other in an appropriate way on the issue of appeal, as some members have already proposed.
The U.S. side refers to the current bilateral arbitration treaties concluded between the EU and Canada and Norway, and hopes that such voluntary bilateral treaties can lead 164 WTO members to reach multilateral agreements on arbitration.
The United States and China should cooperate with foreign countries to paralyze the WTO
The appellate body is the Supreme Court responsible for adjudicating trade disputes in the WTO system. According to relevant laws, the Appellate Body of WTO has seven Permanent judges. However, in recent years, due to the deliberate obstruction of the United States in starting the process of recruiting new judges and re-election of judges, since January 2018, there are only three justices left in the appellate body, respectively from China, the United States and India, which are also the bottom line for the operation of the appellate body.
Among them, the terms of Graham from the United States and bhatya from India will expire on December 10, 2019, while the terms of Zhao Hong, a Chinese judge, will end in November next year. This means that there will be only one judge left in the Appellate Body at that time, and if the new procedure cannot be started before then, the body will be paralyzed. If the appellate body is paralyzed, most of the WTO appeal cases will become a dead cycle. Usually, the losing party will choose to appeal the report of the expert group. In the case of the paralyzed appellate body, the appeal will never be final. The losing party can also veto the report of the expert group at will without any restriction.
Balshevsky, a former US trade representative and senior international partner of Wilmer Hale law firm, summed up this consequence in an interview with the first financial reporter. For example, he could not appoint a new judge in mid December. What we can see is that the appeal body will complete the previous case, but only the panel will be left after that.
Next, either the members reach a consensus that there is no appeal mechanism or relationship; or the members reach a mutual agreement that the dispute settlement appeal mechanism can not be used in the future. Barshevsky pointed out that for international trade, this will be very chaotic, which means there will be no rules, no laws, no standards, no consistency, the (WTO) system has no reliability, and will bring disastrous consequences.
In addition to the U.S. representatives obstruction of the new and re-election of judges, even within the appellate body, judge Graham from the United States is doing things. As mentioned earlier, in accordance with the principle of Article 15, a judge who has completed his term of office may continue to hear unfinished cases (but not new ones).
But in recent times, Graham, 77, has repeatedly told WTO officials that unless the Secretary-General of the appellate body, Werner zdouc, resigns, he will not agree to continue to consider the appeal dispute after the end of his term. If Graham is determined to step down on December 11 and there are only two judges in operation, no appeal pending will be finally decided. According to foreign media reports, WTO Director-General asiedo has no intention of letting zedok resign.
However, compared with Grahams infighting, the WTO is facing a greater test: from the end of November, the United States showed signs of not planning to pay the 2020 and 2021 budgets at the WTO budget discussion meeting. During the same period, the United States was also in arrears with its huge contributions to the United Nations.
At the regular meeting in November, the US side described in detail its dissatisfaction with the salary system of the judges of the appeals body. The core points put forward by the US side are two points: first, as a part-time post, the judges of the appeal body only need to come to work when handling cases, but their annual income is more than 300000 Swiss francs (about 2.15 million yuan), which is much higher than the income of the deputy director general of WTO, who is still a full-time post.
Second, the workload is not large, but the subsidy is still much. The representative of the United States pointed out that only 5-6 decisions are made by the appellate body every year. According to the relevant incentive mechanism of WTO, the more time the judges of the Appellate Body spend on appeals, the more overtime pay they can get. For former judges who have left but are still adjudicating on appeals, the benefits may be more substantial.
At the meeting, American officials raised their core query, that is, the incentive mechanism of WTO on the salaries of members of the appellate body has had a significant impact on the financial affairs of WTO.
The first financial reporter found that the WTO budget in 2019 was 97 million Swiss francs, of which the largest contribution came from the United States, with a contribution of 22.7 million Swiss francs (22.8 million US dollars). This is also the scale of the 2018 WTO budget. It is reported that for the 2020 and 2021 budgets, the WTO also hopes to maintain this scale. However, because the budget must be approved by all 164 members of the WTO before it can be released, for example, the United States is determined to block it, which may lead to the stop of the WTO in 2020.
At present, according to foreign media reports, in exchange, the United States requires that the budget of the appeals body be slashed from 791000 Swiss francs to nearly 87%. At the same time, the salaries of the judges of the appeals body should also be slashed to no more than 100000 francs. Members of the European Union, India, Turkey and other countries all object to this. According to the first financial reporter, the WTO will welcome the budget committee meeting again on the 4th local time. As barshevsky pointed out in an interview with the first financial reporter, the fact that the appellate body is not allowed to appoint new judges and possibly fail to pass the WTO budget will make people feel that the US government is trying to starve the organization. Source: First Financial Editor: Wang Xiaowu NF
At present, according to foreign media reports, in exchange, the United States requires that the budget of the appeals body be slashed from 791000 Swiss francs to nearly 87%. At the same time, the salaries of the judges of the appeals body should also be slashed to no more than 100000 francs. Members of the European Union, India, Turkey and other countries all object to this.
According to the first financial reporter, the WTO will welcome the budget committee meeting again on the 4th local time. As barshevsky pointed out in an interview with the first financial reporter, the fact that the appellate body is not allowed to appoint new judges and possibly fail to pass the WTO budget will make people feel that the US government is trying to starve the organization.