The SITC, as part of the NUJS Online Lecture Series, hosted a panel discussion on July 4, 2020. The panelists were Ms. R.V. Anuradha (Partner, Clarus Law Associates), Dr. James Nedumpara (Head, Centre for Trade and Investment Law, Indian Institute of Foreign Trade, New Delhi) and Mr. Deepak Raju (Senior Associate, Sidley Austin LLP). The session was moderated by Ms. Pramiti Parwani (LLM, The Graduate Institute, Geneva). The topic for the discussion was ‘Current Crisis at the WTO’.
The panelists spoke about the Appellate Body (AB) crisis at the WTO and the subsequent formation of the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). The seven-member AB requires a minimum of 3 members to constitute a panel to hear an appeal. However, in December 2019, with the retirement of two judges, only one member of the AB remains. While the AB cannot hear any new appeals, panel proceedings continue. Thus, the right to appeal panel disputes is temporarily paralyzed. An interim solution has been found in the MPIA, an arrangement under Section 25 of the Dispute Settlement Understanding (DSU) which allows arbitration as a dispute resolution mechanism.
Mr. Deepak Raju first highlighted the history of the WTO crisis. He then discussed arbitration under Article 25 of the DSU, specifically examining the provisions of the MPIA. He discussed the MPIA’s attempt to recreate a standing appellate body, the position of the Secretariat in the MPIA, its relationship with the Director-General and the WTO, and the issue of its funding. He also touched upon measures and countermeasures that might be adopted by the proponents of the MPIA while dealing with parties that misuse its provisions in light of Article 23 of the DSU, which effectively prohibits the use of such countermeasures.
Dr. James Nedumpara illustrated how the crisis was not just limited to an appellate body crisis, but could also signal a crisis in the multilateral trading system as a whole. He stated that the inability of the WTO to conclude agreements, like the Doha Round, was the biggest crisis. He highlighted several issues with the MPIA, and examined whether it is rational for an interim measure like this to continue for a long time and become the new normal. He also discussed whether or not India should adopt the MPIA. He examined the value of panel reports after the MPIA came into force.
Ms. Anuradha highlighted how the MPIA could lead to greater unilateralism, undermining the entire dispute resolution mechanism. She critically examined the issues raised in the prior discussions and put forth several other criticisms. She expounded on how the EU, while making its proposal regarding the enforcement of international trade rules, drew legitimacy for its actions from the Draft Articles on Responsibility of States for Internationally Wrongful Acts, something that is not a part of customary international law. She scrutinized the merit of an alternate arrangement of not appealing to an AB and instead negotiating how the process of negotiation. She also discussed whether countries would, in fact, be able to break the persisting deadlock and reach a compromise on an alternate solution.
Further, the panelists discussed voting as an option instead of consensus; whether MPIA would function akin to the ISDS, and whether it would be possible for countries to resist the move away from multilateralism.
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