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How the WTO Appellate Body Treats Panel Reports

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How the WTO Appellate Body Treats Panel Reports To Uphold, Modify or Reverse? How the WTO Appellate Body Treats Panel Reports Tania VOON* I. INTRODUCTION The first thing that most World Trade Organization delegates do when they receive an Appellate Body Report is flick to the last page, which summarises the Appellate Body's findings and conclusions. If they represent a party in the dispute, the results of many months or even years of their labour may hang on the Appellate Body's decision whether to uphold, modify or reverse the Panel Report. In the following days and months, WTO Members, non-governmental organisations and other commentators will evaluate the outcome of the dispute and the reasoning behind the ultimate findings and conclusions. At meetings of the Dispute Settlement Body (DSB) and in press releases and journal articles, the substance of the Report will be subject to heavy scrutiny. Much of this scrutiny will be freely available to the public, along with the Report itself on the WTO Website. However, some aspects of the Appellate Body's decision-making process with respect to Panels remain hidden within each Appellate Body Report and the careful language chosen by the Division hearing the appeal. These include issues beyond merely upholding, modifying or reversing Panel findings. When should the Appellate Body make positive findings of its own? What kind of recommendation should it make, taking into account that of the Panel? How should it deal with the limitations of its role under the Understanding on Rules and Procedures Governing the Settlement of Disputes (Dsu)? With more than a decade of case-law to look back on, we can now begin to identify trends in the Appellate Body's decisions in order to gain a better understanding of its conception of the scope of its power in connection with its treatment of Panel Reports. Accordingly, this article aims to examine Appellate Body Reports not in terms of their substantive reasoning or outcomes but in terms of the conceptual process of appellate review. My goal is to reveal certain crucial questions the Appellate Body faces in examining Panel Reports that do not normally form the subject of detailed reasoning or explanation and to demonstrate how the Appellate Body has been answering those questions to date. This will contribute to increased transparency in relation to WTO * Senior Lecturer, University of Melbourne Law School; Former Legal Officer, Appellate Body Secretariat, World Trade Organization; Fellow, Tim Fischer Centre for Global Trade � Finance. PhD (Cantab), LLM (Harv), LLB (Hons) (Melb), BSc (Melb), AMusA. This article was finalised in early May 2006 and is based on material available to the public at that time. The author may be contacted at: �[email protected]�. disputes and may also assist parties in future disputes and WTO Members more generally as they continue their negotiations to improve and clarify the Dsu.' I begin Section II by considering when the Appellate Body will uphold, modify or reverse a Panel finding and then highlight the ways in which the Appellate Body does more than this. In Section oI, I investigate what the Appellate Body does not do-that is, when it will leave an issue unresolved (perhaps in the exercise of judicial economy)- and the implications for the dispute settlement system of such decisions. Finally, in Section IV, I survey the final recommendations the Appellate Body makes to the DS13 and their relationship to the recommendations of Panels in the same disputes. II. UPHOLD, MODIFY, REVERSE OR? Article 17.13 of the Dsu provides that the "Appellate Body may uphold, modify or reverse the legal findings and conclusions of the panel". Like several other WTO provisions, that little "may" raises the question whether the Appellate Body is empowered to do other things besides uphold, modify or reverse Panel findings. It seems clear from the context that the Appellate Body's power is somewhat broader than this. For example, it may draw up working procedures under Article 17.9 of the Dsu (and has done So),2 and it is to address each of the legal issues raised during the appellate proceeding.3 Moreover, the practice of the Appellate Body in the 77 Appellate Body Reports circulated to date demonstrates a willingness to do various things apart from "uphold, modify or reverse" Panels' legal findings and conclusions. It is therefore worth examining the Appellate Body's decision-making process, not only with respect to whether to uphold, modify or reverse under Article 17.13, but also with respect to whether to take other action regarding each Panel Report. In around 80 per cent of appeals, the Appellate Body modifies the Panel Report as a whole, as evidenced in the Appellate Body's own recommendations; or the DSB's decision to adopt the Panel Rcport "as modified by the Appellate Body Report".5 In only one Article 21.5 proceedings the Appellate Body reversed the Panel's findings and 1 See Ministerial Conference, Ministerial Dedaration Adopted on 14 November 2001, WT/Min(01)/Dec/1, 20 November 2001, para. 30; Ministerial Conference, Doha Work Programme: Ministerial Dedaration Adopted oil 18 December 2005, WT/MlN(05)/Df=c, 22 December 2005, para. 34. 2 Working Procedures for Appellate Preview, WT/AB/WP/5, 4 January 2005. 3 Dsu, Article 17.12: "The Appellate Body shall address each of the issues raised in accordance with paragraph 6 during the appellate proceeding" (discussed further in Section m of this article). ^ See, for example, Appellate Body Report, Mexico-Anti-Dumping Measures oil Rice, WT/DS295/AB/R, 29 November 2005, para. 351: "The Appellate Body recommends that the Dispute Settlement Body request Mexico to bring its measures, found in this Report and in the Panel Report as modified by this Report, to be inconsistent with the Anti-Dumping Agreement and the Scmt Agreement, into conformity with its obligations under those Agreements" (emphasis original). I discuss Appellate Body recommendations further in Section m of this article. 5 See, for example, Dsri, Minutes ofmeetil/g held on 20July 2005, WT/Dsb/M/194, 26 August 2005, para. 100 (upon the adoption of the Panel and Appellate Body Reports in United States-Countervailing Duty Investigation on DRAMS, WT/DS296/R, 21 February 2005, and WT/DS296/AB/R, 27 June 2005). 6 Dsu, Article 21.5: "Where there is disagreement as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings such dispute shall be decided through recourse to these dispute settlement procedures, including wherever possible resort to the original panel ...". .
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