Thursday, November 24, 2011

Judicial appointments in the WTO

The appointment of two new Appellate Body members in the WTO was announced recently. It said,

The appointments were made according to the Dispute Settlement Understanding (DSU) which stipulates that the Appellate Body shall “comprise persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the WTO agreements generally.” The DSU also requires that the Appellate Body membership be broadly representative of the WTO membership. Candidates were nominated by WTO Members and interviewed by a Selection Committee comprising the Director-General, and the Chairpersons of the General Council, the DSB, the Council for Trade in Goods, the Council for Trade in Services and the TRIPS Council. The appointments were made by the DSB on the basis of the Selection Committee’s recommendation and following consultations with WTO Members."

Appointments to the WTO Panel and Appellate Body are crucial for the Dispute Settlement Mechanism of the WTO, that is hailed as one of the highlights of the rule-based multilateral system.

An interesting insight into the issue of factors weighing in the minds of decision makers in recommending names to the Body is found here in relation to the second term of Jennifer Hillman's in the Appellate Body of the WTO. Titled "WTO Judicial Appointments: Bad Omen for the Trading System" the piece states,

"The office of the US Trade Representative has taken the little noticed but highly unfortunate step of blocking Jennifer Hillman’s second term on the WTO Appellate Body. This is a bad omen, both for the World Trade Organization and the United States.

The Appellate Body (AB) decides appeals from panel decisions in trade disputes. Since its creation in 1995, the AB has decided about 80 cases, and is now widely regarded as the most successful international court in history. The WTO doesn’t call them "judges," but in fact that’s what the AB members are. The seven judges are appointed for four-year terms, by consensus of WTO countries, and each judge can be reappointed once. While any WTO country can nominate a judge to the Appellate Body, by unwritten tradition the United States, the European Union and Japan always have a representative on the AB, while nominees from other countries rotate. Again by unwritten tradition, a judge who serves one term and is willing to serve again is reappointed automatically. Both traditions are now in jeopardy.

The United States has never before blocked its Appellate Body appointee from serving a second term. Since the USTR has offered no explanation for blocking Hillman, suspicions are bound to arise that the United States is displeased with her decisions on the AB and wants to name a judge who is more attentive to US positions in future cases.

These suspicions are bound to erode confidence in the WTO judicial system, and create a chilly reception for Hillman’s successor appointee. "Judicial independence" is a hallowed American concept, now enshrined in the WTO: "The Appellate Body shall comprise persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally. They shall be unaffiliated with any government…"

The issue of judicial independence is at the key of the debate. Are appointments to the panel and Appellate Bodies "political" appointments ? Are the members supposed to pursue a political line or a stand of a particular country or are they expected to deliver reports on the basis of the rule of law and judicial interpretation. Negotiating in trade negotiations is  different from interpreting an agreement in a judicial process. While the former would take into account the member's domestic interest in the context of global trade, the latter would involve interpretation of rules laid down based on judicial principles as well as objectivity. Is it fair of a member country to expect a Panel member from that country to give a report favourable to the policy or interests of the member country? Principles of judicial independence and the rule of law mandate otherwise.

An interesting piece on judicial independence and the WTO dispute settlement bodies by Tomer Broude's paper "'Judges Shalt Thou Make Thee in All Thy Gates':* Reforming Judicial Office in the WTO Dispute Settlement System" lays out in detail the appointment process. While comparing the dispute settlement appointments with the ICJ and ECJ, it suggests reforms in the Dispute Settlement Bodies,

The comparison between the attributes of judicial office in the WTO, on the one hand, and those of the ICJ and ECJ, on the other, leads to the general conclusion that the WTO dispute settlement system is generally less judicially independent than its comparator judicial bodies (insofar as independence is determined by the design of judicial office). In some respects (although by no means all), judicial efficiency in the WTO is also hampered by certain elements of judicial office. This is caused by the following principal attributes of the WTO dispute settlement system:

(a)  Panels
- Relatively broad and diluted qualification requirements for Panelists;
- Trade diplomats serving concurrently as Panelists;
- Political control (i.e., by Parties, Membership and/or Director-General) of 
ad hoc Panel appointment;
- Dispersed judicial decision-making in Panel system;
- Shortage  of qualified Panelists in specific issue-areas, combined with
nationality requirements of Panel composition;

(b)  Appellate Body
- Potential for ‘downgrading’ of Appellate Body Member professional stature 
due to non-stringent formal qualification criteria;
- Political screening and control of Appellate Body Member appointment;- 40 -
- Short term of Appellate Body Members’ tenure;
- Limit on re-appointment of Appellate Body Members beyond one additional 
- Lack of established Appellate Body Member dismissal mechanism;
- Insufficient number of Appellate Body Members.

When considering the reform of judicial office in the WTO in response to these weaknesses, it is legitimate to first ask whether the potential for relatively low independence and efficiency  – in comparison with the ICJ and ECJ – does in fact provide sufficient cause for introducing changes in the WTO dispute settlement system. In other words, it should not be taken for granted that further judicialization of the WTO system is an entirely positive development. Most of the weaknesses of judicial office in the WTO are the result of the GATT’s diplomatic heritage. They demonstrate that the WTO dispute settlement system was not conceived by WTO Members as a fully judicial body – indeed it has been depicted as a ‘quasi-judicial’ body. The tension between diplomatic and judicial dispute settlement traditions in the WTO is acute. Introducing changes to the system that would tip the scales in favour of judicial decision-making is not a step that many would take lightly."

While concluding, it states,

"The reform of judicial design in the WTO dispute settlement system will never be high on the agenda of trade negotiators. Immediate economic interests will always take precedent over long-term construction. This is quite evident in the low intensity of work under the Doha Declaration Work Programme with regard to the improvement of the dispute settlement system. Nevertheless, one hopes that this issue will be included in the Doha negotiations results or beyond. The making of judges ‘in all our gates’ – in a balanced and independent manner – is vital for the achievement of governmentally sound judgements that will be, and be perceived as, truly just."

The issues of judicial independence, rule of law, objective interpretation of law are judicial principles that are well accepted. The dispute settlement mechanism of the WTO is respected as a rule based system where countries, irrespective of political and economic clout, can seek redressal. How the mechanism would develop in the future is an interesting area one would wait and watch.

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