Saturday, 10 November 2007

First Chinese in the WTO Appellate Body

According to a leaked report, the WTO Selection Committee for AB
members has recommended Prof. Zhang Yuejiao, along with 3 other
candidates, be appointed as AB members in 2008. If the recommendation
is adopted by the WTO Members, this will be the first time a Chinese
citizen is ever appointed to the "World Court on Trade".

In addition to Prof. Zhang, there are two other new Members from Asia,
i.e., Bautista (Philippines) and Oshima (Japan). As there are now
three members from Asia, the interesting question is which one
represents the Asian seat. Obviously that would not be Japan, as
Japan's seat is among those reserved for three of the quad countries
and Japan usually does not regard itself as part of Asia for various
reasons. As between China and the Philippines, I suspect that China
will probably hold to this seat for a long time, if not forever,
considering that China is the 3rd largest trader and has not had
anyone serving as Panelist yet (excluding those from HK and Chinese
Taipei). Thus, it seems the truly Asian (including Oceania) seat would
be that of the Philippines. This could mean that, in addition to Japan
and China, citizens of other Asian countries, such as Korea, Malaysia
or Singapore, could one day have their citizens appointed as AB
members.

When the WTO AB was first established in 1995, 3 of the 7 seats were
allocated to three of the "Quad countries" while the directorship of
the AB Secretariat allocated to Canada, the fourth Quad member. As
China now claims the AB seat in its own right rather than as a
rotational Asian seat, it seems that China is filling the vacuum left
by Canada, which has dropped out of the top four traders lately, and
becomes a new Quad member.

4 comments:

Peter Gallagher said...

Hi Henry,

I think this regional-allocation approach is wrong in principle and in fact.

As a matter of fact, I don't believe that there is any provision for regional allocation of AB seats. WTO has, so far, avoided the worst aspects of UN regionalism (I remember how crippling it was in UNCTAD in the '70s and '80s).

But it's encroaching and should be strongly resisted: for the sake of the freedom to appoint the best person. In my experience, regional allocation quickly becomes an opportunity for the majors to run the show. Pretty soon they think they're obliged to do so.

Since the WTO clearly does not work when that happens (Seattle, Cancun, Potsdam), it's better not to create the opportunity.

'Balance' can be achieved without carving up the globe: a balance of experience, for example.. I would be delighted to see a Chinese law expert appointed to the AB panel for this reason.

Best wishes,

Peter

Henry Gao 高树超 said...

Thanks for the insightful comment, Peter. While I fully agree with you that meritocracy would be the best approach in an ideal world, I think the WTO is not quite there yet given the current political tensions in the organization. Let me try to offer some arguments (many of which you probably have thought of already) by playing the devil’s advocate:

1. Generally speaking, the Members with the highest volumes of trade are also the most frequent litigants in the WTO DS. This has been true for US and EC, and it probably will also be true for China. DSU Art. 8.3, however, makes it very difficult for citizens from such countries to serve as panelists. Thus, in some way, the allocation of the AB seats among the big powers is probably a way to compensate them for the inability to have their citizens serve on the panels.
2. Furthermore, by having their citizens sitting on the AB, the big powers get some sense of “ownership” to the AB, which in turn makes it easier to “sell” the AB reports to the domestic constituencies. On the contrary, an AB that is composed entirely of foreigners could easily be subject to attacks in the domestic political sphere (as evidenced by the frequent attacks in the US congress against the “faceless foreign judges” in Geneva).
3. Third, by stating “regional allocation quickly becomes an opportunity for the majors to run the show”, you seem to imply that the AB Members are biased in their rulings by favoring their respective home countries. If that weren’t the case, the major powers should not be able to “run the show” just by appointing their own citizens. This, however, has not been proved by any empirical evidence. On the contrary, some Members of the AB seem to be particularly unsympathetic to the protectionist sentiments in their home countries.
4. Another reason why regional allocation makes sense is that the world is not composed of only Europe and the Americas. There are other regions too. If only European or American Members are appointed to the AB, they probably would not be able to understand the dynamics in the other regions as well as people from those regions. Even though the WTO rules are equal for everyone, it is the result of compromise between many Members. Thus, the European or American perspective on a particular issue might not always be the proper perspective, let alone the only perspective. Thus, from the point of view of ensuring the healthy development of WTO jurisprudence, it is better to include Members from other regions.
5. While an allocation of AB seats based on the balance of experience seems to be a good idea in the abstract, it is more difficult to justify it if we also look at the reality: many Members, for one reason or another, joined the GATT/WTO only very recently and have not been very active in the multilateral trading system. Thus, if we do not give the candidates from these countries the opportunity to participate in the work of the AB, they might never build up the experience that we can use as the basis in allocating the seats.


Best regards,

Henry

Peter Gallagher said...

"...the allocation of the AB seats among the big powers is probably a way to compensate them for the inability to have their citizens serve on the panels"

Well, that's an intriguing argument. One that I hadn't thought of. But I have to say I don't like it a lot. What it implies is that if you don't have the opportunity of a 'friend at court' (because you can't sway the balance of the Panel with a sympathetic appointee) then you should have an opportunity of a 'friend at the superior court'. I don't think this should be so, for the following reasons.

The 'game' of Panel selection -- like the selection of judges on lower courts in many jurisdictions -- has the sanction of history if not of common sense. It's one of the reasons we now have automatic Panel enrollments if the parties can't agree quickly. But attempting to 'stack' the AB to establish 'balance' in decisions is very undesirable for two reasons.

First, it could have an adverse impact on the overall quality of the AB: they're supposed to be professionals while the Panelists are really 'peers'

Second, it may not work anyway. With experienced jurists, you cannot assume that their politics or nationality will govern their decisions. Witness the surprises that have cropped up on superior courts all over the world when a conservative government (say) appoints a conservative judge to the High Court only to find that he/she turns out to be a radical liberal on matters that had not formed part of her/his record on the bench.

Finally, since the President of the AB appoints three members of the college of seven to review each case what guarantee is there that 'your' cases will be adjudicated by 'your' appointee? None. Possibly 'less than none' if the President is concerned by the prospect of (or perception of) influence. And: "what sauce for the goose...". If you expect 'your' appointee to exercise a benign influence on 'your' cases, shouldn't you expect a malign influence from the appointments of other major economies (when it suits them?).

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"...by having their citizens sitting on the AB, the big powers get some sense of "ownership" to the AB, which in turn makes it easier to "sell" the AB reports to the domestic constituencies. On the contrary, an AB that is composed entirely of foreigners could easily be subject to attacks in the domestic political sphere (as evidenced by the frequent attacks in the US congress against the "faceless foreign judges" in Geneva)."

I think this is a correct observation about one level (a pretty low level) of the dialog in the United States (I'm not sure if it applies in China). But it's a sad commentary on the reluctance of governments to be more forthright in defence of the multilateral system from which the 'big' powers draw just as much benefit -- possibly more -- than the small. If the US or China had actually to resolve their foreign trade disputes on a bilateral basis, dragging foreign policy considerations into every dispute however minor, they'd be in BIG trouble. They draw considerable foreign policy benefit from the disputes system; and they should own up to it.

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"... by stating "regional allocation quickly becomes an opportunity for the majors to run the show", you seem to imply that the AB Members are biased in their rulings by favoring their respective home countries."

Well, I think you were doing this in your first argument ;-). But I want to say in my own defense that I was not limiting this observation to the AB. I was thinking of the WTO in general. If we had 'regional allocation' across the Organization -- as UNCTAD and other UN bodies once had -- I suspect that the major powers would eventually assert a 'major power' role in all the Councils of the Organization. I'm arguing that this would lead to the sort of unproductive rancor that we've seen in other organizations and in Seattle and Cancun.

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"Another reason why regional allocation makes sense is that the world is not composed of only Europe and the Americas. There are other regions too."

Quite right. Once one region asserts it's 'regional rights' then any other region would be mad not to (to paraphrase 'Catch-22'). So we end up with a vicious spiral of regionalism. Are we all better off? I don't think so. We'll have invented a new, enormously wasteful topic of discourse for the WTO that will advance not-one-damn-thing that matters in the real world.

Leadership, to me, means having a care not only for one's self -- that is, seizing personal advantage -- but also caring for the well-being of the whole organism even when this conflicts with the narrow interests of 'number one'.

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"While an allocation of AB seats based on the balance of experience seems to be a good idea in the abstract, it is more difficult to justify it if we also look at the reality: many Members, for one reason or another, joined the GATT/WTO only very recently and have not been very active in the multilateral trading system. Thus, if we do not give the candidates from these countries the opportunity to participate in the work of the AB, they might never build up the experience that we can use as the basis in allocating the seat."

Another intriguing argument. But the experience that is relevant to the AB is experience in the jurisprudence of international law and (possibly) constitutional law etc. You don't need to serve on the AB to get it. No one ever does get it there (the AB is not for 'capacity building').

On the other hand, I think many possible future members of the AB may have gathered some of their experience by working in the Legal Services of the WTO (including in the AB Secretariat). In the case of these -- often temporary -- appointments we don't need regional balance, but some regional imbalance in favor of developing countries. That's what I suspect we have.

Debra Steger said...

Hi Henry,

If the impasse continues over the appointment of the 4 Appellate Body Members, this could cause a real crisis in the WTO dispute settlement system and in the legitimacy of the WTO itself. If ever there was a time for Members to call for a vote, this is it. Article IX of the Agreement Establishing the WTO allows a fallback to a majority vote if consensus is not achievable.

I wonder if there is any Member out there willing to step up to the plate and call for a vote on this important decision.

The WTO Appellate Body should not be used as a political football. It is potentially very harmful to the system.

Best regards,

Debra