MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING HANOI LAW UNIVERSITY NGUYEN THI NGOC PHUNG 452917 PARALYSIS OF THE WTO APPELLATE BODY - OPTIONS TO OVERCOME BACHELOR’S GRADUATION THESIS HANOI- 2024 MINISTRY OF JUSTICE MINISTRY OF EDUCATION AND TRAINING HANOI LAW UNIVERSITY NGUYEN THI NGOC PHUNG 452917 PARALYSIS OF THE WTO APPELLATE BODY - OPTIONS TO OVERCOME Major: International Trade and Business Law SUPERVISOR Ngo Trong Quan, LLM. BACHELOR’S GRADUATION THESIS HANOI- 2024 STATEMENT OF AUTHORSHIP 1 herewith formally declare that I myself have wnifen the Bachelor's Thesis independently. the conclusions and data inthe Bachelor's Thesis are rdhfil and reliable / Confirmation of supervisor Author of Bachelor's Thesis ACKNOWLEDGEMENTS ‘This research work would not have been finished without the essistence of persons towhomI am extremely grateful First and foremost, I would like to convey my heartfelt thanks to my supervisor, Ngo Trong Quan, for his unwavering support of my studies end research, aswell as bispatience, inspireion and vast knowledge. His edvice was invaluable to ae during the research and writing of this thesis.
My deep eppreciation goes to all the teachers and staff members at Faculty of International Trade and Business Lew at Hanoi Law University for their herchvork end dedicetion Their invaluable insight end entlusissm in international lew left 4 strong impression on me from the frst day atthe university I would like to express my profound gratitude to my family end friends for their support end encouragement Notwithstending all those support and knowledge shered-withme, any exxor in this thesis is mine LIST OF FIGURES AND TABLES Figue1. The number of nationals of countries who are Appellate Body members (em 1995 ~203 16 Figure 2. Summary of options to overcome the Appellate Body paralysis 58 Figue 3. Flow Chast of the WTO Dispute Settlement Process n Figure 4.Number of WTO disputesinvolving the US es respondent end compleinent, 1995-2019 B Figure5.
Key procedures for setting WTO disputes vie MPLA 14 LIST OF ABBREVATIONS Appallete Body DsB Dispute Settlement Body DSM Dispute Settlement Mechanism psu Dispute Settlement Understanding DG Disector - General EC European Community eta Et alia (and others) EU European Union GATT General Agreement on Tariffs and Trade 1994 Idest that) Tra Thiđem ‘Multi ~Perty Interim Appeal Arbitration Arrangement PP. Pagel pages pare /paras. Pacagrephy paragraphs SCMA. Subsidies and Countervailing Measwes Agreement UAE United Arab Emirates us United States ‘Working Procedures for Appellate review World Trade Organization ‘TABLE OF CONTENTS STATEMENT OF AUTHORSHIP.
LIST OF FIGURES AND TABLES. LIST OF ABBREVATION: TABLE OF CONTENTS INTRODUCTION. Reasons for selecting the research topic. Scientific and practical significance.
Subject matter and scepe of research. Thesis structure ‘MECHANISM AND THE APPELLATE BODY 1. The WTO Dispute Settlement Mechanism. Historical background Dispute settlement methods 1.14, Dispute setlement procedures.
The Appellate Body.23, Appellate review CONCLUSION OF CHAPTER 1.THE PARALYSIS OF THE APPELLATE BODY 2. Rule 15 of the Working Procedures for Appellate Review. Disregard of the 90-day deadline. The problem of aivisory opinions 2.24, The scope of Appellate Review 2.
The precedential value ofAppellate Body Reports. The consequences CONCLUSION OF CHAPTER AB CHAPTER 3. OPTIONS TO OVERCOME THE PARALYSIS OF THE APPELLATE BODY a@bet 3. Reform of the Appellate Body.
Good offices, conciliation, and mediation 4. Multi-Party Interim Appeal Arbitration Arrangement 4.No - Appeal Pacts 3. Disadvantages CONCLUSION OF CHAPTER 3. ANNEX 1 ANNEX 2 ANNEX.
INTRODUCTION 1 Reasons for selecting the research topic ‘The World Trede Orgenizetion (WTO) is an international orgenizetion and platform that regulates trade selations between its member states. The WTO Dispute Settlement Mechanism (DSM) is @ crucial pert of this orgenizetion, allowing states to resolve their disputes azising out of international trade relations agreements, The DSM is the inheritance of dispute resolution regulations that hay: had a positive cffectforin the neesly 50-year history ofthe General Agreement on Teriffs and Trede (GATT 1947. Lesmning from the inedequaciesin the past, procedural improvements have been introduced into the new DSM, which contributes significantly to improving the judiciel nature of this procedure and strengthening the binding nature of dispute resolution decisions. Therefore, the DSMis considered the most productive international dispute resolution process and one af the most noteworthy festures of the WTO This mechanism is made up of two tiers panel and Appellete Body (AB), ‘which are seguleted by e speciel agreement consisting of rules and procedures for the adjudication of disputes- the Dispute Settlement Understanding (DSU), ‘The AB has a seat in Geneve endis « permanent body where cach eppedl is considered by three out of seven members appointed by the DSB and broadly representing WTO membership.
The AB is en initiative making the WTO's DSM different from its GATT predecessor, to enhance the feimness and justice of dispute resolution. It has been instrumental in clesifying constructive ambiguities in agreements made by the WTO, filling in gaps in legal documents, scrutinizing the pene!'s controversial ruling, and consolideting legel principles from the panel's diverse andl dissenting reports? Inthe context ofrising trede protectionism recently, the DSM in general, and the AB in particule, heve faced en unprecedented crisis. Though unprecedented in its range end impact, this i not the first time the international trade dispute system Jneroducti tothe đe esohton ma nen nthe WTO (Giới điệu cơ chế gigyittrenh chấp wong WTO), rwulable at ps fngannvto so daayen de /1 74g Boyvi-co-dụ-ghigyystrncdiực Đơn ‘mo acces on 207122003, Đảm Vin den Bossthe end Wem Zdouc (2017), The Law and otc af the Wor Tae Orgentaton sth “Bdtion, Cunge Universiy Dresp. 221 Jamas J Nedamapra trả Pra Shards) (2019), “The cris the WTO AB: iupictins fr hư nd the mithuetl hăng systems", Centre for Tae cud bwestment Law Discusion Paper,G).P-2 1 hhas faced attacks from its members.
Since 2016, the US hes blocked the appointments of AB members on tvo grounds G) the AB is not functioning according to its nandste, and (9 the AB isnot pesforminga satisfactory job # On 10 December 2019, the AB lostits minimum quorum required dus to the expiration ofthe four-year term cf tro of the three lest standing mem bers Up to date, there ere no members of the AB because the term of the lest siting AB member expired on 30 November 2020.6 ‘The absence of the AB leaves appealed disputes in the no-acion stetus, which mey ead to either the continustion of the inconsistent practices or retalitory actions by the negetively affected member without WTO euthorizetion. Both scenarios have negative remifications on the efficiency of the WTO, pushing the orgenizetion to the trink Acknowledging the grevity of this issue, WTO members have sterted &scussion on a fully operational dispute resolution mechanism thet is availabe to all members by 20247 ‘This esearch is timely end responsive for two main reasons, First, the demise of this orgenizationis# serious problem because it could hinder member steed access to justice. Thus, « study on the roots of paralysis as well as its consequences and eppropriate solutions meets this urgent need. Second, scholarly writings on this topic in Vietnam are rare end not well-updated The author therefore chooses the topic “Paralysis of the WTO Appellate Body - Options to Overcome’ for gracustion thesis 2.
Literature review ‘There is substentel foreign literature on the history ofthe WTO andits dispute resolution system, Asfor thebackground of the WTO dispute ettlement mechenism, Mervyn Martin's book addresses the formetion end development of the dispute resolution mechanism in GATT 1947 and the WTO.' To clarify the characteristics, functions, end missions of botkes in the dispute resolution system, the suthor saslyzed about 80 WTO cases in nearly 10 years (1995-2004). One of the most “parca Son of tomate Law (2018), ed Sates Canes to Block New AB Mebers forthe ‘Wer Trade Orguuzation, Fideng the Colapst ofthe Appelite Process", American Jounal of heereticnal Lene, 113@),p. £22 SAB Mebers, avuihble st: htpedhme ono zgiotgbdvEatop eis vi members deerp elite, access on 14/130003 thự ‘Mees told “inch te atin reac” indspnesttlement reform aes evel at Eạc hy tre srgoelsibew be) ee 1243 êm acces on 22127023, * Mera Maren QUIS), WTO Dgpte Sramese nông trả Deơtlgpaee”,ANaƒ Đưnasfenoi “Thấy Law Series, (13) pp. 325 ~ 339 comprehensive analyses of the issue of enforcement mechanismsis the book by Peter Ven den Bossche and Wemer Zdoue, which offers a comprehensive overview of dispute resolution mechanisms with reference to specific DSU provisions.
In particular, the fifth edition promptly updated the WTO crisis and made œ single proposal, which was the Multi-Perty Interim Appeal Arbitration Arrangement (MPLA) in 2020? ‘The problems of AB paralysis were discussed in several papers. Mirct Jens Lebne provided a chronology of AB paralysis and reviewed the five reasons stated bby the US for the blockage, including (i) Rule 15 of the WP of Appellate Review, @ 90-day deadline; (ii) Advisory opinions, Gv) Appellate review of fects and municipal lew and (9) Precedential effect of AB reports.!9 Second an asticle by the American Society of International Law explains why the US vetoed the process of selecting AB members."! The paper questions and critically analyzes whether long- standing concerns by the US are legally grounded. Tard Lukes F, Innesebner and Tenia Singla suggested using ad-hoc arbitration instead of reviewing proceedings before the AB” Forth, former AB member Jennifer Hillman discussed three novel proposals, includinga seperate system for trade remedies, arbitration under Asticle 25 of the DSU, and procedural amendments Last, recent works by Bemard M. Hoekman and Petros C.
Mavroidis,§ and Peter Van den BosschelẴ, evaluate the pros and cons of reforming proposals In Vietnam, there are also some studies using descriptive anelysis to evaluate the chellenges of using the DSM and give preliminary proposals.Remarkable works Pets Van den Bossche ud Wem Zdouc 2021) Te Law cud Potcy ofthe World Trade Organization: Tent Cases, vt Merial, hs Bainon, Cekrdgt Univesty Ress. "en Lele G018), Criss atthe WTO" I the Blocking of Appoinments tthe WTO AB by the Uhated States Legally Jed”, Ce] Grossaaim Publishers, Bain, ng "So 4 pp. 932-831 pra ‘hmersimer Lies Fai and Sigh Tua G019), “The AB Deadlock athe WTO: TôntZy ng Sohtions ‘Wahi the DSU and Beyond”, Ditto del Conmercio Buerwzionale, (1), yp. 73 — 108, thi a pen combracte3300054 acces an 2312/1013 "Jmfer Hila 015),“Tiree qproachestofvengthe World rade Organizations AB: the good the bad, ad the vậy, Dunne of Ddơmaelenal Economic.
Low Lawes Em, pp 1 - 15, ND kề chr eel ecrnchNirs wprosches a Sgt eld wade its ‘he good he bad-and the ugh/access on 227122033. ˆBemwnd M Hodanan md Pos C. 1-20 Pru Ven den Bossche (2023), “Cn the WTO Dispute Setlemme System Be Revived” Options for ‘Aadressing « Major Govemance File ofthe World Tade Orguuzstion”, World Trade buona Working ‘Paper, @Q). include an asticle by Trinh Hai Yen et al.
on the sole of appellate institutions, 15 and Nguyen Mai Linh on the practical epplication of the WTO's intemational trede spute resolution mechanism in Vietnam’ These documents identify three challenges thet DSMis facing: () the ctspute resolution deadline, (i) the appointment of AB members, end (i0) the content of the AB's judgment. Both ofthese publications cover solutions such es No-Appeal Pacts (NAPs) and Appeal arbitration procedures However, Nguyen Mai Link's aiiele adds other solutions that do not use the AB appeal procedure by either: @ a “flosting panel report” which means not approving the panels report, or (i) commitment not to appsal before the dispute occurs or before the penelissuesits report.Other authors such as Vir Thi Kim Oanh et al. # and Pham ‘Thanh Tùng etal. analyzed the crisis of the AB end shered the seme opinion thet seformingDSM in general and AB, inpesticuler, seems to be one of the most optimal solutions On the other hang VuKim Nganet al recommended thet the Mult-Pasty Interim Appesl Agreement (MPLA) be considered as an appropriate new proposal that was widely supported by WTO members Most of the above writings in Vietnem were published from two to five years ago end therefore may not be relevant in the current context.