WTO Deputy Director-General Alejandro Jara
At the graduate institute of international and development studies in Geneva, 13 March 2012
The WTO dispute settlement mechanism has earned a reputation for high-quality results. However, this reputation did not come about automatically. The Members have been working continually to ensure that the rules they established are followed and that the system they created runs smoothly. It has also demanded the commitment of those who serve and have served as Appellate Body Members and panelists, as well as the dedication of significant resources of the WTO Secretariat.
In addition to these human costs, there is the financial side. Dispute settlement currently costs an estimated $30 million annually. Let me provide just a few examples:
- The cost of engaging experts in a single dispute has ranged from CHF 3,000 to CHF 88,800;
- The average annual cost of shipping printed documents to panelists, parties and experts is CHF 60,000;
- The cost of translation is estimated at CHF 300 per page;
- Five Appellate Body proceedings conducted in 2011 (excluding the two large civil aircraft disputes), resulted in the production of 8,244 pages. Just work out the numbers!1
Going beyond the costs, it is widely recognised by those who are regular players in WTO dispute settlement that the pace of panel and Appellate Body procedures is generally very fast, particularly when compared to other international systems. Yet for the business person who is affected by the issues, the one to two year wait for resolution seems very long indeed. We also noticed that panels are gradually taking longer to discharge their duties. This has led some to suggest that the system needs to speed up.
It was in the context of the growing costs of dispute settlement and the sentiment of some that the system was too slow that, in 2010, the Director-General requested me to initiate a process of fact-finding and consultations. The aim was to explore whether it is possible to find efficiency gains in the panel process so as to reduce the financial as well as human burden.
I consulted with delegations, practitioners, secretarial colleagues, ACWL, Appellate Body, former panellists, etc. For analytical purposes, I envisaged three phases:
(I) selection of panellists;
(II) panel work;
(III) work after delivery of the panel report.
I concentrated mainly on the second phase.
I soon concluded that panels were taking longer for different reasons, usually a combination of factors, and often because it responded to the desires of the complaining Member or the strategy the Member chose to follow. Many of those consulted came forward with ideas, which were then tested for acceptability. In a way, I served as a clearing mechanism in a market of ideas.
These ideas had to meet two basic criteria:
(I) to be consistent with existing rules, namely changes could be contemplated only if they did not involve amending the DSU;
(II) any adjustments should not undermine the excellent reputation and high quality output of the system.
In this respect, I relied primarily on the flexibility afforded under Articles 12.1 and 12.2 of the DSU which require panels to follow the working procedures found in Appendix 3 to the DSU “unless the panel decides otherwise after consulting the parties to the dispute”, and indicate that panel procedures “should provide sufficient flexibility so as to ensure high-quality panel reports, while not unduly delaying the panel process.”
It is important to bear in mind that these proposals are the brainchild (or children) of stakeholders across the spectrum of DS participants. The proposals I have received thus far can be put into three broad categories.
The first category includes those aimed at making the first substantive meeting more effective. I will give you two examples of proposals in this category:
(II) early questions.
Double-briefing refers to a process whereby parties’ written submissions (first written submission and rebuttals and submissions of third parties) are submitted to a panel before the first hearing the panel holds with the parties. This approach is used in and drawn from the experience of Article 21.5 compliance panels.
I acknowledge that this approach would probably delay the first hearing with the parties. However, double‑briefing could speed up the panel process by moving forward the maturity of the parties’ discussions on the relevant issues, thus probably eliminating some exchanges at the written question and answer phase. It may also possibly eliminate the need for a second hearing.
(II) Early (indicative) questions for the panel meeting
Generally, panels have utilised the first substantive meeting to determine basic factual and legal questions. The parties sometimes are not prepared to answer orally, due in part to lack of prior knowledge of the panel’s particular preoccupations. In addition, many of the parties’ oral statements simply reiterate the contents of their first written submissions. Some have expressed the view that this leads to first substantive meetings being longer than necessary, and also that they do not optimize the time the panel spends with the parties.
It was suggested, therefore, that panels should provide parties in advance with a list of questions that might be posed. This practice is drawn from the Article 22.6 proceedings and indeed has already been applied, with positive reactions from participants, in recent panel proceedings.2
In a second category, I received proposals aimed at improving the efficiency, in terms of length and cost, of the process. I will give you two examples of proposals in this category:
(I) time limits on oral statements; and
(II) agenda for the panel meeting.
(I) Time limits on oral statements
It has been suggested that panels should emulate the Appellate Body practice of setting time-limits for oral statements by parties and third participants. A number of panels have set time-limits on oral statements.3 There is little point in having oral statements that repeat the written submissions.
(II) Agenda for the panel meeting
In addition, panels should provide parties in advance with a proposed agenda or structure for the meeting and inform the parties how it intends to allocate the time set aside with respect to each agenda item.
The third category of proposals includes suggestions to improve the presentation of panel reports and the reduction of the costs in their production. Panel reports have become increasingly voluminous. This is due to an increase in the complexity of the issues, as well as to the ever-expanding jurisprudence, the growing number of annexes attached to reports, not to mention lengthier descriptive sections.
I will also give two examples of proposals in this third category:
(I) page limits for executive summaries;
(II) reduction of annexes.
(I) Page limits for executive summaries
It has been proposed that panels establish, in their Working Procedures, page limits for executive summaries. Many of the recent panels have adopted this approach.
Still with respect to the executive summaries is the proposal that that panel reports should contain only a brief description of the facts and issues, while the executive summaries would be attached as annexes. Some of you will have noticed that several reports circulated to Members in 2011 have already done so.4
An additional proposal is that parties should submit only one integrated executive summary that would cover the arguments contained in all written submissions to the panel, as opposed to submitting a separate executive summary for each submission.
(II) Reduction of annexes
The next proposal relates to the reduction in the number of annexes appended to panel reports, such as requests for consultations and requests for the establishment of panels; preliminary rulings. To the extent that these documents are in the public domain long before the panel report is issued, it has been proposed that they should not be annexed to reports.
The transcript of a panel’s meeting with experts is usually attached as an annex to the panel report. Indeed, it forms part of the panel record. However, it has been proposed that the transcript need not be annexed, but that it be part of the electronic version available on the WTO website to preserve transparency.
One development in this area witnessed in recent disputes is that parties’ replies to a panel’s questions generally are no longer attached to panel reports as annexes. Neither are experts’ replies to a panel’s questions.
Implementing these steps would eliminate the time it takes the Secretariat to prepare these annexes, including inserting proper DS numbers and reformatting them as necessary to convert programs used and page sizes to WTO standards. Reducing the length of panel reports would of course reduce the costs of printing and publication. It would also significantly reduce the costs of translation.
DS Registry electronic filing
Speaking of innovative ideas, I will take this opportunity to highlight a different initiative. In 2010, in consultation with Members, the WTO began the process of bringing the DS system into the 21st century with the development of a digital database of information regarding all prior panel and appellate cases. It is intended to facilitate Members’ and the public’s ability to research and access DS reports and other public documents related to dispute settlement. Additionally, we hope to provide a facility for Members to file their submissions electronically via a secure, web-based e-filing system. As you know, most submissions are currently filed electronically through e-mail. The new system will operate in a similar way, but is expected to increase efficiency for Members and the Secretariat, as well as reduce costs for shipping, storage and photocopying. Moreover, it will provide a more secure method of filing submissions than we currently use now, and there is no need for Members to have any specialized equipment. If you can send an e-mail, you can e-file a submission. So far, we have been scanning panel and Appellate Body records that are not currently in electronic form or that are in a form that is no longer readable, with a view to uploading all such documents into the readily-searchable electronic archive. Documents to be eventually filed electronically via the web-based system will be automatically included in the archive, and will be accessible by those authorized to view them (such as parties to a dispute in question). We debuted a prototype of the proposed system at the 8th Ministerial Conference in December 2011. Members enjoyed the opportunity to practise searching and uploading documents. We are currently working with Members to finalize the design of the system so that it will have the features most useful to disputing parties.
You may be wondering when this consultation process will end and bear fruit. (Or maybe you are just wondering when my presentation will end!) Well, in some ways, the fruit is already on the vine, as some of the innovations have been put into place by some panels. Broader implementation will be determined by Members working together with panelists. I am still open to receiving more views and ideas and will be happy to try to help Members achieve efficiencies to improve a dispute settlement mechanism that is very good, but that can no doubt be made better. In more than one way this should be viewed as an on-going permanent exercise: to constantly draw from experience and be open to changes, however small, that will improve the system.
1. In his speech to the WTO Budget Committee in 2011, the Director-General noted that the WTO currently spends, excluding staff costs, 3 million Swiss francs per year on the printing and distribution of documents by post across the globe. We also print more than 70 million pages per year! (Director-General’s statement at the Budget Proposal Budget Committee Meeting of 11 October 2011). Back to text
2. Advance questions were provided to the parties by the panels in China — Raw Materials and Philippines — Distilled Spirits. Back to text
3. Long before the initiation of this consultation’s process, the Panel in US — Lamb set the time-limit for the parties’ oral statements at 30 minutes each. Similarly, the Panel in EC — Export Subsidies on Sugar set time limits with respect to the third parties’ oral statements. At the second substantive meeting, which the third parties were allowed to attend due to enhanced third party rights, they were only permitted to attend as observers. See Panel Report, EC — Export Subsidies on Sugar, paras. 2.8-2.9. Most recently, following the start of the consultations process, the panel in US — Tuna II (Mexico) set time-limits for the third parties’ oral statements. Time limits were also set for statements delivered during panel meetings last fall in China — Electronic Payment Services. Back to text
4. Examples of these panel reports are: China — Raw Materials; Dominican Republic — Safeguards; EU — Footwear (China); Philippines — Distilled Spirits; US — Clove Cigarettes; and US — COOL. Back to text