บทความ

A Reflection on the Selection of the Appellate Body Membership
By Sorayut Chasombat, Minister Counsellor, the Permanent Mission of Thailand to the WTO, 3 March 2014




Where does Thailand stand in the WTO Dispute Settlement System?
Thailand is the founding member and strong supporter of the World Trade Organization (WTO). Being one of the top 20 of the global trading nations, Thailand is actively engaged in supporting the WTO Dispute Settlement System through the regular use of the system including participating in the review of the relevant dispute settlement rules and procedures. As of 3 March 2014, Thailand has been an active participant in the WTO dispute settlement mechanism as claimant (16 cases), respondent (3 cases) and third party (65 cases). In the article below, Sorayut Chasombat, Minister Counsellor, Permanent Mission of Thailand to the WTO offers his reflection and insight on the WTO Appellate Body.

1. How do we break the deadlock on the selection process of a WTO Appellate Body member to replace Mr. David Unterhalter (South Africa) whose term ended since 11 December 2013?

Eight months have passed since we started the selection process of a WTO Appellate Body member to replace Mr. David Unterhalter (South Africa) whose term ended since 11 December 2013, but so far the Selection Committee and WTO membership have not been able to finish the job yet. After the consultations, in which 62 WTO members have expressed their opinions about the suitability of the candidates, none of the four candidates would enjoy the support of the Membership of the Dispute Settlement Body (DSB).

In fact, on 26 February 2014, the DSB was officially informed by the Selection Committee that it could not select a successful candidate and therefore made a suggestion that a new selection process be open and be carried out by the new Selection Committee as soon as practicable.

What do I think of the whole process? Is there a way out? Yes definitely there is a way out. I have to stress here that I had opportunities to meet with all of the four candidates namely Mr. James Thuo Gathi (Kenya), Mr. Yenkong Ngangjoh Hodu (Cameroon), Ms. Joan Fitzhenry (Australia), and Mr. Abdel Hamid Mamdouh (Egypt) and found them to be persons of recognized authority, with demonstrated expertise in law, international trade and the subject-matter of the covered agreements suitable to be appointed as member of the Appellate Body. I am therefore rather disappointed that the Selection Committee could not agree on a successful candidate.
At this stage, I would encourage the outgoing Selection Committee (who are chairpersons of the General Council, Goods Council, Services Council, Trips Council, Dispute Settlement Body, and the Director-General of the WTO) and interested WTO members to intensify the consultations in order to find the early solution.
 
My suggestion is that if all things are being equal, in terms of the qualification and quality of the candidates, which I believe so, then the broad representation aspect should be given a priority.
But in case that after the exhaustion of all the consultations and still the solution could not be found, I won’t object to the idea that there should be an opening of the process for further nominations of additional candidates. But this would be my last choice.

The other day, while taking a break from the public viewing of the Panel’s deliberation of Cool at Room S2 at WTO building, I met with some colleagues. As usual, we exchanged a bit of information on the state of play of WTO issues. Then, the topic of the selection for a new member of the Appellate Body came up. I was asked if it is appropriate for us to break the deadlock by voting. I said the WTO operates on a consensus basis therefore I am not in favour of voting. But then what is the next step?

I further offered my analysis that even if we open the process for more candidates but there is still no guarantee that we will get a consensus. In the end, I think that we all should work in a spirit of sportsmanship to break the deadlock. What do I mean by the spirit of sportsmanship? I mean that members should more flexibility. Members should compete in the selection process in a friendly manner particularly members should not try to block candidates just for the sake of blocking.

I heard from membership statements at the Dispute Settlement Body meeting that the four candidates are highly qualified. And yet we are unable to pick any one of them for the post. I find this an irony. If all four candidates are highly qualified, which I believe they are because I have met and interviewed all of them, surely we must be able to pick a successful candidate.

2. Thailand’s experiences in fielding a candidate for the Appellate Body in 2012

In 2012, Thailand was pushing to raise her international profile by nominating Dr. Thanes Sucharikul, former Ambassador, for the post of the Appellate Body member at WTO. The post was left vacant by the resignation of Mr. Shotaro Oshima from Japan and being eyed at by four candidates from Asian countries: Japan, Korea and Thailand. In my opinion, all candidates were so well-qualified for the job that the Selection Committee would have a hard time in making a decision at the end of the selection process. But things were simpler. There was no hung jury then. The Selection Committee was able to finish the job on time. Interviews of candidates were conducted on 25-26 April 2012 by Pascal Lamy, the former Director General of WTO and five key chairpersons of WTO Committees. On 11 May 2012, as scheduled, the Selection Committee forwarded the name of the successful candidate, Mr Seung Wha Chang from Korea, to the Dispute Settlement Body of the WTO for approval.

In theory candidates will be competing on their own merit. The word “lobbying” is frowned upon by purists within the WTO circle. However, it is naive to believe that there is no “lobbying” going on by those concerned albeit in a low-key manner. At this level of competition, no candidate will be successful without a certain form of help from their governments. After all candidates cannot nominate themselves. WTO law requires that candidates will be persons of recognized authority with demonstrated expertise in law, international trade and the substance of WTO agreements.

Why is it so important that a few countries have decided to send their candidates to compete in the selection process? It is important because the Appellate Body is the highest quasi-judicial body of WTO. The Appellate Body is not the World Trade Court. But it is handling more disputes than any other international judicial bodies. Trade disputes have become a fact of life for international trade relations. In effect, the Appellate Body is the place where case law on international trade will be made.

After the election of Mr. Ujal Singh Bhatia (India) and Mr. Thomas Graham (United States) to the Appellate Body in 2011, there is a general concern among certain WTO members that big economies are trying to make the seat permanent the same way as in the case of the UN Security Council. There are now six nationals of the following economies serving on the Appellate Body: U.S., EU, China, Korea, Mexico and India. There is a genuine need to make the membership in the Appellate Body more broadly represented.

The nomination of candidates by Thailand and Korea then was appreciated by many WTO members. In fact many WTO members want to nominate their candidates for the election of Appellate Body member as well but they are being constrained by a lack of qualified candidates at this stage. In 2012, initially Kenya put forward a highly-regarded candidate but he later withdrew. Capacity-building in international trade law must be emphasized if members wish to nominate their nationals for the competition in the future.

Before the Selection Committee cast their votes on who should be selected as Appellate Body member, they usually hold private confessional sessions with WTO members. This process is important because WTO is a member-driven organization. Members still have control over the selection process at least indirectly. In WTO practice, decisions are usually made by consensus. If any candidate is blocked or vetoed, his chance is doomed. Candidates are therefore expected to call on WTO Ambassadors as many as possible. Some big players may even require “informal interview” with candidates in Geneva and their capitals probably to evaluate whether the candidates will bring judicial and lawyerly temperament to the position or not.

Thailand has been an active participant in the WTO dispute settlement mechanism as claimant (16 cases), respondent (3 cases) and third party (65 cases) – as of 21 February 2014. The last time Thailand appeared in WTO dispute settlement scene as a main party was in 2011 when Thailand was challenged by a fellow ASEAN member -the Philippines- on its tax and fiscal measures relating to imported cigarettes. Thailand has systemic concerns to ensure that the system is well-functioning. Therefore it is incumbent on Thailand to advance the cause of strengthening the dispute settlement mechanism. Fielding and/or supporting a qualified candidate to fill in a position in the Appellate Body is part of that effort.

3. My personal experiences attending the Appellate Body’s hearings

Ever since my arrival in Geneva on 6 October 2011, on secondment from the Foreign Ministry to the Ministry of Commerce as a Minister Counselor at the Permanent Thai Mission to the World Trade Organization (WTO), dealing with dispute settlement mechanism, I had two opportunities to attend Appellate Body hearings as a member of the Thai delegation (in the capacity of third participant) in which I gladly took. After all I used to play a bit of football, if opportunity knocks, a good player will take it – whether we can score a goal or not is another matter.

Anyway before attending the first hearing, I was reflecting on my life how I ended up in Geneva doing international trade law after a long pause. I recounted that I was away from public international law for at least 11 years and away from international trade law for over 20 years. I have to do a lot of catching up. I enjoy every minute of my diplomatic service but I understand full well that the career path in the Ministry of Foreign Affairs is not conducive to creating specialists. I consider myself a “lawyer-diplomat.” Certain diplomatic skills such as negotiation may be transferable easily among different types of job. My last posting was a Deputy Consul-General to Shanghai during 2005-2009 which I enjoyed immensely. I thought I had a major breakthrough with my consular work. But international trade law is a whole new game. So the question that I always ask myself until today is –will I rise up to the challenge by becoming a trade dispute specialist. Well, I still don’t know but I will give it a good try. In the 20 years that I was absent from international trade law field, some friends and colleagues have already established themselves as experts.

My first attendance at the Appellate Body hearing was for the Philippines- Taxes on Distilled Spirit case (DS 396 and DS 403). The dispute was related to the Philippines’ excise tax regime which has been in place since 1997 and taxes import distilled spirit a substantially higher rate than domestic products. The complainants were the EU and United States respectively. The Philippines lost the case at the panel stage and appealed on many issues of law. The Division that handled the appeal was headed by Jennifer Hillman (United States). There were three members in the Division. There was a high degree of spontaneity in the hearing. Ms. Hillman was acting in a high professional standard. She and other members of the Division would take turn to pose direct questions to parties. At times, there were light-hearted moments i.e. when a member of the Philippines’ legal team was trying to make a point that the Philippines’ spirit (sugar-based) tastes differently from the imported wheat-based spirit. According to him, the local spirit tastes sharply to the tongue and therefore consumers can easily tell the difference that they are not the “like products.”  I have to say that the gentleman’s theory is interesting but I cannot tell the difference. The only thing I can tell is that drinking too much will get one drunk. The case was a straightforward question on national-treatment in which WTO law and jurisprudence have been very clear. No discrimination is allowed under WTO law. The ruling of the Appellate Body was as expected. The Appellate Body upheld the panel’s ruling. On 20 January 2012, the Dispute Settlement Body (DSB) adopted the report of the Appellate Body without hesitation. At the next DSB meeting on 22 February 2012, the head of the Philippines delegation, sitting just a few feet from me, stated the intention to comply with the ruling but asked for a reasonable period of time to comply. The U.S. and EU welcomed Philippines’ compliance intention and pledged to work with the Philippines to find an acceptable timeframe.

The second case that I attended at the appellate stage was US-Tuna (Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products: DS 381). This was an interesting case. The U.S. lost the case at the panel’s stage. Interestingly the panel did not reach consensus on all the issues even though they ruled in favor of Mexico. The U.S., taking cue from the minority, appealed on issues of law requesting the Appellate Body to reverse the panel’s finding. The appeal process was interesting from the start. U.S. Ambassador Michael Punke wrote to the Presiding Member of the Appellate Body requesting for the scheduling of the oral hearing in the week of February 19, 2012 because fixing the date after that would prejudice U.S. participation in the hearing due to the fact that one of the U.S. lead attorneys would be unable to travel to Geneva for medical reasons relating to her pregnancy. In the end, however, the Appellate Body fixed the date of hearing on 15-16 March 2012, meaning that the U.S. had to find a substitute lawyer to handle the case.

The Division which handled the case was headed by Madam Yuejiao Zhang from China. Other members were Mr. Thomas Graham (U.S.) and Mr. Ujal Singh Bhatia (India). This case was more complex. It was a trade vs. environment issue. Although WTO law particularly the preamble of Marrakesh Agreement Establishing WTO (1995) states clearly that members maintain power to pursue their policy objectives to protect environment for sustainable development, however trying to strike a fine balance between free trade and protecting environment has never been easy.

I had a lot of experiences dealing with investigating and quasi-adjudicatory functions as I was the head of the Disciplinary Section at MFA Personnel Division for 6 years. On that basis and just for the sake of comparison, I was very eager to see how others operate in similar quasi-adjudicatory roles. Of course, I have a lot of respect for members of the Appellate Body because of their recognized authority in the field of law, trade policy and knowledge of WTO covered agreements. I even was present at the swearing-in ceremony of Mr. Graham and Mr. Bhatia, so I got the glimpse of what makes up the Appellate Body.

The Tuna case’s main argument was about whether the U.S. dolphin safe labeling provisions that govern the labeling of dolphin-safe constitute “technical regulations” or merely “standards” under WTO law. The U.S. argued that the legal provisions in question were not technical regulations because their compliance is not mandatory.  The U.S. provisions are meant to ensure that its market is not used to encourage the use of fishing techniques that harm dolphins. The U.S. argued further that even without dolphin-safe labeling; Mexico’s tuna could still be sold in the United States. Mexico countered that the U.S. measures have been unnecessary and are completely arbitrary. To support its legal argument that such U.S. provisions are technical regulations which are inconsistent with WTO law, Mexico cited earlier WTO jurisprudence: EC-Sardines; and EC-Asbestos. The Appellate Body has not issued its report yet, so it remains to be seen if they will uphold the findings of the panel.

On the whole, I think that WTO law suffers from textual ambiguity just like the language of Article 190 of the Thai Constitution 2550 which deals with treaty-making process in Thailand. For instance, the issue in Tuna case is whether the U.S. provisions are “more trade restrictive and necessary”. Defining the test for necessity is not an easy task. This type of language has a lot of built-in subjectivity. Likewise in the context of Thailand, to consider whether a treaty has provisions which “affect trade significantly” under Article 190 paragraph 3 or not is a subject of constant debate.

After seeing the Appellate Body in action twice, I have to say that I am impressed with their high standard of working. No doubt they are efficiently backed up by the Secretariat. But the spontaneity during the hearing requires breadth and depth of WTO law and high diplomatic skills on the part of Appellate Body members. To be able to perform the task of the Appellate Body efficiently, my impression is that members of the Appellate Body should be mature enough preferably over 50 years of age. May reason is that because they have to command respect among senior delegates and lawyers who take part in the hearing.

Because panels and the Appellate Body are the quasi-judicial bodies, the nature of their oral hearing is not the same as domestic court’s hearing. The atmosphere is more relaxing. The presence of third participants also gives the impression that the hearing is like a normal WTO meeting in progress. The Appellate Body members may address third participants as delegates. For instance, if Thailand raises the flag to make an intervention, the Division may just use the language -I give the floor to Thailand.

4. What is a successful formula in fielding a candidate to the Appellate Body?

In order to be successful in the membership selection of the Appellate Body, I think Thailand may have to follow a dual-track approach. The sooner we start the better. The first action is to raise Thailand’s profile in WTO dispute settlement mechanism. Reflecting on Thailand’s past role, I believe that we have done a good job so we just need to keep the momentum going such as joining in disputes as third party, as and when necessary, and participate actively in the DSU review. The second track is to groom our international trade lawyers so that they will be able to compete for important appointments at major international organizations. My feeling is that Japan is far ahead in this regard and Korea is actively following suit. Korea has been sending high-caliber delegates from the capital to DSU review negotiations on a regular basis. Some of them are in my age group and we seem to get along quite well. Korea’s main strength is that they pool resources. A few of them are drawn from the academic field with impressive track record.

At this level of competition, the best way to add value to a candidate’s profile is to publish books and articles of high quality on issues of international trade law. I think we have to encourage our Thai experts to publish their work in leading journals as often as possible. From my observation, among the present members of Appellate Body, two hold Ph.D./S.J.D. (Peter Van den Bossche and Seung Wha Chang), a few hold Master degrees (Yuejiao Zhang, Ricardo Ramirez Hernandez, and Ujal Singh Bhatia), one holds a J.D. (Thomas Graham). Education background of Appellate Body members is varied. The only pattern that I can draw a conclusion from is that most of them hold advanced degrees. But a degree by itself, even if it is a Ph.D., is only a marginal gain if it is not backed up by a large body of published work, high-level of practice or distinguished government career to reflect the recognized authority of a candidate in the field. The present composition of the Appellate Body (February 2014) reflects such statement.

Another point that I have observed is that some of the candidates for the selection of Appellate Body member may have previous experiences as panelist. I think this is a good personal qualification. If any candidate is blessed with opportunities to serve on panels, he or she may have a head start in the selection process. But it could work against the candidate as well particularly if he takes a position which is deemed harmful to trading interests of powerful WTO members. If a candidate is vetoed or rejected by those members, his chance is doomed. In my opinion, having previous experiences as WTO adjudicator or panelist is good but not necessarily giving an edge over other candidates. In fact citizens of countries that feature often in the dispute settlement process may not have opportunities to serve as panelists because of the potential conflict of interest.

I have the feeling that the Selection Committee, when selecting a person to serve on the Appellate Body, will look for someone who is mindful of the role of WTO adjudicators – that their role is first and foremost to settle the dispute. They are not expected to engage in law-making or “judicial activism” but to interpret WTO law in a balanced way taking into account members’ rights and obligations. This is because WTO is a member-driven organization. Making law is exclusively within the prerogative power of WTO members. The dispute settlement mechanism cannot add to or subtract from members’ rights and obligations. The jurisprudence is to help achieve the security and predictability of the system only. I hope that sooner or later a well-qualified Thai person will be selected and serving on the Appellate Body.

Although in theory, there are only six chairpersons of major WTO committees including the Director-General who will cast their votes in the selection process. But as WTO is a member-driven organization, the Selection Committee will have to listen to the views of members. Building a wide network of support is crucial to the success of the campaign.

These are the insights that I have gathered since I took up my posting. I have been hoping to do a multilateral work. Now I am given that opportunity. I think that it is incumbent upon me to share my experiences with those who may want to follow the same path in the future.


I have to say that my stay in Geneva, my experience with DSB and attendance at the two Appellate Body oral hearings have been very enjoyable and rewarding. It is a steep learning curve switching from handling consular affairs to settlement of trade disputes. But it is well worth doing it. Now I am quite comfortable with all WTO jargons.

Suppose if it is the other way round, assigning a trade law expert to do consular work, I think that it will be a culture shock as well. To excel in consular affairs, one needs to have a balanced temperament. Maturity is also needed. I find that the older I am, the better I am with consular affairs. Practice in the area of consular affairs is also one of the most exciting experiences.

I remember one time I was trying to make a consular representation to help a Thai national who was arrested and charged with under-declaration of the price of goods that he exported to one of the non-market economies in Asia. When I visited him at a detention centre, he complained to me that his treatment was bad. In his own words, he told me “Officer, They treat me badly. I am worse than a dog here.” I told him “You are a man. You must take it like a man. I will help you as much as I can.”
In the end, he was granted bail, paid a hefty fine and left the country.

In a way whether one is practicing consular affairs or international trade law, one is still practicing in the sphere of public international law. The difference is only in technical details.

In conclusion, as my present portfolio is dispute settlement now, my participation in DSB meetings and Appellate Body hearings has reaffirmed my understanding that the WTO dispute settlement system “has been a remarkable success”. It is one of the most used systems in the world. The Appellate Body is very efficient in its work, given the workload and the constraint under WTO law in which it has only sixty days to deliver its ruling. At any given time, it may have 2-3 cases to handle. Therefore it is natural that I look forward to having another opportunity to take part further in the Appellate Body hearing, if and when Thailand is a third participant, and will definitely share my story for the benefit of advancing knowledge in the field of international trade law to interested readers again.


Reference
1. Marrakesh Agreement Establishing the World Trade Organization (1995)
2. Understanding on Rules and Procedures Governing the Settlement of Dispute (1995)
3. Vienna Convention on Consular Relations (1963)
4. Philippines- Taxes on Distilled Spirit (DS 396 and DS 403)
5. United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (DS 381)
6. WTO (2012)



Facts on the WTO Appellate Body

        Appellate Body Members (Photo: WTO, March 2014)

Facts :
1. The Appellate Body is composed of seven Members who are appointed by the Dispute Settlement Body (DSB) to serve for four-year terms.
2. Each person may be reappointed for another four-year term. Terms are staggered, ensuring that not all Members begin and complete their terms at the same time.
3. Each Member of the Appellate Body is required to be a person of recognized authority, with demonstrated expertise in law, international trade and the subject-matter of the covered agreements generally. They are also required to be unaffiliated with any government and are to be broadly representative of the Membership of the WTO.
4. A Chairman is elected among the Members to serve a one-year term, which can be extended for an additional period of one year. The Chairman is responsible for the overall direction of Appellate Body business. The current Chairperson is Ricardo Ramírez-Hernández.
5. A Division of three Members is selected to hear each appeal; each Division elects a Presiding Member. The process for the selection of Divisions is designed to ensure randomness, unpredictability and opportunity for all Members to serve regardless of their national origin.
6. To ensure consistency and coherence in decision-making, Divisions exchange views with the other Members of the Appellate Body before finalizing Appellate Body Reports.



 






bottom banner 2
The Permanent Mission of Thailand to the World Trade Organization
Route
de Pre-Bois 20, Case postale 1848, 1215 Geneva 15, Switzerland Tel: +4122 9295200 Fax: +4122 7910166 Email: gsa@thaiwto.com