Permanent Mission of the European Union to
the World Trade Organization (WTO)

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EU Statement by Ambassador João Aguiar Machado at the General Council meeting, 9 December 2019

Geneva, 09/12/2019 - 00:00, UNIQUE ID: 191209_15
Local Statements

ITEM 5 - INFORMAL PROCESS ON MATTERS RELATED TO THE FUNCTIONING OF THE APPELLATE BODY – REPORT BY THE FACILITATOR AND DRAFT DECISION ON THE FUNCTIONING OF THE APPELLATE BODY (WT/GC/W/791)

  • The European Union thanks Ambassador Walker for his statement and for his draft decision presented to us today for approval.
  • This informal process has lasted for almost a year. Faced with the blockage of Appellate Body appointments by the United States, the rest of the Membership has very clearly and very concretely demonstrated, by the many proposals that have been made and by their open engagement in this process, its willingness to address the concerns raised by the United States.
  • We commend the outstanding work done by Facilitator Ambassador Walker. We firmly believe that his draft decision could have been the right basis for unblocking the appointments.
  • However, as we have just heard, the United States is not ready to unblock on the basis of the revised draft decision as presented today.
  • At the same time, the United States has not formulated any single proposal or counterproposal of its own.
  • Let us be clear today as to where this leaves the WTO Membership.
  • In two days from now, we will have an unprecedented situation in the World Trade Organization, which will no longer be able to deliver binding resolution of trade disputes and will no longer guarantee the right to appeal review.
  • This is in clear breach of the WTO contract in force since 1995.
  • Let us be clear about what in fact will happen in two days. The actions of one Member will deprive other Members of their right to a binding and 2-step dispute settlement system even though this right is specifically envisaged in the WTO contract. The actions of one Member will have that result for the rights of all other Members.
  • More fundamentally, the very idea of a rules based multilateral trading system is at stake. The European Union firmly believes in a multilateral trading system where rules can be enforced, where disputes can be submitted to adjudicators, and where rulings of ad hoc panels can be appealed before a standing appeal instance that gives guarantees of quality and independence. 
  • While the European Union itself is the world’s largest trading block, it will not support, and will not condone, a system slipping into power-based economic relationships.
  • There have been almost 600 disputes brought to date before the WTO. The immense majority of these disputes have been positively resolved, either through consultations or through adjudication. These 600 cases are only the tip of the iceberg. The very existence of an effective dispute settlement system has helped to prevent countless breaches of the rules.  While some WTO Members have in fact never availed themselves of the dispute settlement system, and many Members have only litigated a few cases since 1995, the system clearly benefitted to all Members, including the smaller economies.
  • While this item focuses on the dispute settlement function of the WTO, the stakes are obviously higher and cut across all functions of the WTO. It has sometimes been said that the dispute settlement crisis is merely a manifestation of the concerns with the inadequacy of the substantive WTO rules to address today’s challenges.
  • The EU supports the reform and upgrade of the WTO in all its functions. But we should remedy the current situation by boosting the WTO’s negotiating arm rather than chopping off its dispute settlement arm.
  • At this juncture, the EU would like to convey a clear message of openness and determination. We will continue supporting all efforts leading to the unblocking of Appellate Body appointments. We want a system that works for all WTO Members and that includes all WTO Members.
  • The European Union has always been open, and remains open, to discuss constructive proposals to improve the functioning of the dispute settlement mechanism and, in particular, of the Appellate Body. Nevertheless, at this point, where the Appellate Body is about to become non-operational as a result of the actions of one Member, the EU wishes to emphasise that it has served well all Members in an independent, highly professional and, given the circumstances, very efficient manner. The European Union, therefore, would like to commend all the present and past members of the Appellate Body on their work, as well as the staff working on the Appellate Body’s secretariat.   
  • Pending such resolution, the EU is also determined to preserve its rights as enshrined in the WTO Agreements, notably the right to an appeal review. We will therefore continue preparing contingency measures that would apply in case the appointments remain blocked. We owe it to our citizens and our businesses, because it is them, ultimately, that benefit from the system.

 

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