WTO appellate body overreach and the crisis in the making: A view from the south

Abstract

The WTO Appellate Body is facing an existential crisis that threatens to impair the institutional edifice of the entire multilateral trading system. The immediate reason for the crisis is the US blocking of the appointment and reappointment of the Appellate Body members on the ground that the Appellate Body has exhibited a pattern of “judicial over-reaching” by going beyond the strict bounds of permissible interpretation thereby indulging in judicial law-making. Are these allegations founded on facts and could this be another effort by the US to dismantle legitimately established multilateral institutions/processes? This chapter views that while one may concede the US blockade as largely motivated by self-interest, an analysis of the WTO jurisprudence is replete with occasions where the panels and the Appellate Body have misused their discretion and improperly engaged in creating new WTO rules and procedures through techniques of “filling legal gaps”, “completing the analysis”, or “clarifying ambiguity”. This trend has been viewed by a large section of the WTO Members and trade scholars as detrimental to organisational legitimacy of the WTO. This chapter also argues that the current crisis, though precipitated by the US self-interest, offers an opportunity for the WTO member states and the Appellate Body members to introspect and restore democratic deficit and prevent judicial overreach. This chapter also perceives that the current crisis also owes to the inability of WTO political bodies to check and correct actions of other WTO bodies that have undermined the state-centric nature of the WTO law-making.