How did we get to this point? The U.S. government has blocked all new appointments to the Appellate Body, to protest what it claims to be “persistent overreaching” by Appellate Body members in their rulings. The United States also threatened to cut its contribution to the WTO budget, to stymie the Appellate Body and a European Union proposal that other countries could use former adjudicators to decide disputes.
Our research suggests U.S. attacks on the Appellate Body may be misdirected. We show that WTO adjudicators are not the only ones at the helm when it comes to WTO rulings. Instead, both the WTO Secretariat in Geneva and WTO member states themselves are largely responsible for the direction the world’s trade tribunal has taken. Here’s what’s really happening.
The Appellate Body is not as independent as U.S. complaints suggest
The United States regularly complains that “the Appellate Body has felt free to depart from what [WTO] Members agreed to.” This criticism is misleading. The evidence suggests the WTO’s permanent Secretariat staff, and the diplomats and private lawyers representing WTO members, have as much of a role in shaping the rulings as the adjudicators themselves.
The Secretariat has a permanent staff of lawyers and trade experts, in contrast to adjudicators — the first-level panelists appointed to a single trade dispute, or Appellate Body members who serve a set term. The Secretariat helps select panelists, sets timetables, and even drafts rulings. Secretariat staff try to reduce the complexity of the legal issues by producing a mini-report or “issues paper” for the adjudicators to consult — even before they meet to discuss the facts of the case. And Secretariat staff participate in all closed-door proceedings involving the litigant governments. They even draft the questions that adjudicators ask of those governments. Staff also sign off on adjudicators’ pay, which generally varies by the number of days of work.
Just how big is the Secretariat’s role? To figure this out, we used computational methods to analyze the final text of WTO panel rulings. We created profiles of the individual writing style of WTO panelists and the Secretariat members assigned to each case. This analysis shows Secretariat members are the more likely authors of nearly all WTO panel rulings — and this influence has been growing over time.
Recent news reports confirm that WTO staff also have influence within the Appellate Body: Earlier this week, an Appellate Body member complained that the Appellate Body director tried to lobby Appellate Body members, and “steer internal documents and reports toward his own subjective interpretations.”
WTO members are also to blame
Appellate Body members and their Secretariat don’t act in a vacuum: They are responding to the demands of the WTO’s members. Diplomats and private lawyers acting on behalf of these members have been litigating trade disputes expansively, filing massive briefs and appealing 70 percent of panel reports, often using a “kitchen sink” approach by submitting all possible claims in a case.
These same WTO members have also failed to provide the Appellate Body with corrective feedback or treaty updates. In the WTO’s 25-year history, its members have been unable to negotiate an update to the treaty. This has forced adjudicators to resolve 21st century trade disputes with a treaty drafted when most people had never heard of the Internet.
As WTO disputes and past rulings have gotten longer and more complex, adjudicators have had to increasingly rely on the expertise of the Secretariat staff. But the effect has been to decrease the role of adjudicators, and increase that of the bureaucracy created to advise them. Although adjudicators must still sign off on each ruling, the assistants have increasingly been wielding the pen.
Delegating to the Secretariat has consequences
This has consequences for accountability — Secretariat staff are highly experienced trade experts, but their role is hidden. The WTO treaty painstakingly defines the qualifications, independence, national origin and appointment process for adjudicators. The same is not true of Secretariat staff assigned to each dispute — the rulings even don’t mention the names of assigned staff.
The Secretariat is also reshaping the way that the WTO does business, in ways that are tied to the U.S. criticism. The Secretariat values coherence and continuity in how cases are resolved, over and above the resolution of the dispute at hand, and tends to view the WTO as a bona fide international court. The Secretariat is also likely to view past precedent as influential — a practice that the United States has consistently condemned.
Ironically, U.S. and European countries initially pushed for the creation of the Secretariat as a solution to a previous problem: the perception that some panels of adjudicators had “gone rogue” in the WTO’s predecessor organization, the General Agreement on Tariffs and Trade (GATT). In response, in 1981, governments created a legal office in the Secretariat to “advise” adjudicators and provide them with “legal support.” The course correction took on a life of its own.
Our analysis suggests U.S. ire at individual adjudicators may be misdirected. This could be a good time to take a second look at the Secretariat’s mandate, and the behavior of diplomats and private lawyers litigating WTO disputes. Trade negotiators also have work to do — updating and clarifying the legal texts that WTO adjudicators have to work with can provide critical guidance for the WTO Appellate Body.
Similarly, procedural fixes focused on adjudicators alone will not resolve the Appellate Body crisis. Improving the system will involve behavioral change by the broader community revolving around the Appellate Body, including the Secretariat. If the WTO’s appellate system comes to a halt on Dec. 10, it will partly be due to a mistaken view of how this organization actually functions.
Krzysztof J. Pelc is an associate professor in the Department of Political Science at McGill University.
Joost Pauwelyn is a professor at the Graduate Institute of International and Development Studies, in Geneva, and the Georgetown University Law Center, in Washington.