WTO Releases Draft Text on Dispute Settlement Reform, No Proposal for AB

A draft text on World Trade Organization dispute settlement reform efforts was released Feb. 16, ahead of the 13th Ministerial Conference, which is set to be held Feb. 26-29. In all, the text includes 11 sections, covering issues including alternative dispute resolution procedures and arbitration, panel proceedings, compliance and transparency. Notably, the text doesn't include any discussion of the appeal or review mechanism, which is seen as the largest sticking point in reform talks.

The section on the appeal mechanism only contained a line reading "[Work in Progress]," as did the section on entering the deal into force and transitional provisions.

One of the text's sections established procedures for discussing legal interpretations at the WTO. The proposals in the section drew attention from Sunayana Sasmal, research fellow at the University of Sussex, who said that the title "looks particularly interesting with potentially important implications for some of the biggest problems DS has had," though she added that "practice will not be easy." Simon Lester, who has previously worked at the WTO Appellate Body Secretariat, said in an email that the provision was "new and interesting," but he too expressed doubt on how much of a practical impact it will have.

This section said that the chair of the Dispute Settlement Body will forward "circulated adjudicative reports or notified arbitration awards" to the chairperson of the relevant WTO bodies, who will, in turn, consult with members if the report or award has "interpretations relevant to the work of those bodies." If a report or award is relevant, the committee chairs will create an event on the agenda of the body's first formal meeting after the date of adoption of the report or award. The text said that the timing of such a meeting will be linked to the reform efforts' provisions on compliance.

The text said that this agenda item is a chance for members to "discuss the technical and policy implications of the provisions interpreted in adopted DSB reports, and arbitration awards notified to the DSB, that are relevant to the work of a WTO body."

The section on WTO legal interpretations also said that an "Advisory Working Group" will be established, which will be for members to "discuss, build consensus and provide guidance on legal interpretations developed by adjudicators." The working group will not "relitigate disputes or function as an" appeals mechanism. The section said that nothing bars the DSB from referring a legal interpretation to the working group.

The group will be established "within three months after the date of the request made," and any member may request a "discussion of any legal interpretation developed in past disputes" within six months after the group is established. The outcome of such discussions will be reported to the DSB along with any recommendations, which are to be made by consensus.

The first section of the text laid out alternatives to dispute settlement, including mediation. One part of this section concerned the appointment of "good officer, conciliator or mediator." Under the text, the director-general can appoint a "representative to provide good offices, subject to the agreement of the parties." The partes can pick the conciliator or mediator from a "pre-established list," which the DSB can adopt at any time; the "indicative list maintained under" the Dispute Settlement understanding; experts from relevant international organizations; the list of serving chairpersons of WTO bodies; names proposed by the Director-General; any other means that can facilitate the selection of a mediator.

The section defined "good offices" as the "participation of an impartial and independent third person," who will "provide support, including logistical support, such as the provision of a venue for meetings, and administrative assistance, to facilitate dialogue between the parties with a view to reaching a mutually agreed solution."

The text also defined the procedure for the conciliator or mediator, finding that the mediator will confirm the "general parameter" of the mediator's role before the first consultation meeting, adding that the mediator will assist in an "impartial and transparent manner." Within 60 days of the receipt of the request for consultations, the mediator may be terminated via mutual agreement from the parties or by the conciliator or mediator.

Lester said that the "parts about use of good offices, mediation, etc. are interesting," though he's "not sure how willing WTO Members are to use these options." Nations defending their practices want to show domestic stakeholders they "fought as hard as they could, which is why they end up in litigation rather than settling things," he said.

The draft text also laid out the procedures for panel proceedings, which included shortening the dispute settlement time-frames. Lester said he supports this concept and hopes members "can agree to this," though there will be "some objections" since some nations "prefer to have more time."

Lester said that without a solution to the appellate body crisis and the "issue of second-tier review," he's not sure "this package will be able to go forward," though he said he's not aware of what's being said in Geneva.