WTO's proposed reforms leave question of appeals court unanswered

Countries including India and China on Monday voiced concern that a series of proposed reforms to the World Trade Organization leaves blank a section on rebooting its top appeals court, trade sources said, with time running out before a major meeting.

WTO members are reviewing a draft proposal deemed the most serious effort to date to reform the hobbled system which has been only partially functional since December 2019 due to U.S. blockages of judges to its top court the Appellate Body.

However, the sources said the latest draft still has no plan for how to revamp the body despite most countries striving for a deal by an Abu Dhabi Ministerial Conference in February 2024.

"Several members expressed concerns that there was nothing about the Appellate Body in the revised text," said a trade source who followed Monday's private meeting in Geneva, naming India, China and South Africa as countries voicing concerns.

Countries want to fix the appeals system to allow multi-billion dollar trade disputes to be settled again. Currently, countries can still file complaints to a lower body but if they do not accept its findings, the case ends up in legal limbo where some 30 unresolved appeals now sit.

The draft proposal, which has not been published, is the third version of the proposal.

An earlier version seen by Reuters included other reforms but left the section on the appeals bench blanc.

Marc Molina, Deputy Permanent Representative of Guatemala to the WTO, who is coordinating the talks, told Reuters on Monday that negotiations continue.

"In addressing the issue of appeal, delegates are actively exploring potential resolutions that can reconcile the diverse perspectives expressed by Members," he said.

The United States, which has criticized the former Appellate Body for inefficiency and judicial overreach, said creativity would be required to make further progress.

"As we look forward, we must recognize that considerable work remains and that achieving fundamental dispute settlement reform will not be easy," said a U.S. official.