órgano de apelación

Discurso de despedida de la Prof. Dra. Hong Zhao, Miembro del Órgano de Apelación

El 30 de noviembre de 2020, la Prof. Dra. Hong Zhao, Miembro saliente del Órgano de Apelación, pronunció su discurso de despedida en el Instituto Universitario de Altos Estudios de Ginebra. Estas fueron sus palabras:

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Equal Justice under the Treaty — A Farewell Speech

Excellencies, ambassadors, head of delegations, colleagues and friends, Prof. Pauwelyn, friends of the Graduate Institute, those who are online or present, ladies and gentlemen,

Good afternoon,

Today marks the end of my term as an Appellate Body Member. From tomorrow on, the Appellate Body will be an entity that exists only in the Treaty of DSU.

As required by a tradition as well as by the duty of a last sitting Member, I shall present the farewell remarks today and share with you my reflections on the dispute settlement of the WTO. It may take a bit longer time than usual, for which I beg your pardon.

Farewell Remarks

I have to confess that I didn't join Appellate Body in its heyday. The selection process of new Appellate Body Members was suspended ever since mid-2017, merely half a year after my term of office had started. Witnessing the attrition of Appellate Body Members until the AB was unable to work was painful. On one hand, there were mounting pressures on the AB from the outside, on the other, the caseloads never stopped rising, even during 2020. It has provided a unique opportunity for me to reflect on the fundamental issues underlying what had happened. The divide of Members' positions on AB matters at the monthly DSB meeting during the past three and half years was deep and unprecedented in the history of the multilateral trading system. Being fully aware of it, I am constantly reminded of my duty as an Appellate Body Member to settle disputes for WTO Members independently and impartially, I spent an enormous amount of time scrutinizing all the criticisms and comments that I could collect and all relevant documents on negotiating history before I drafted these farewell remarks for today. I know the WTO Members expect a neutral and objective view on these thorny issues from an AB Member.

I hope that the views presented will function as a stepping-stone that will help bridge the divide, provide a rational basis in enhancing the understanding on AB matters, and help Members find a solution for going forward. The world needs healing, and the trade family should be together. This is a biggest ever challenge in my entire professional life. However, it is a task that I can’t shun from, as I believe it is my duty as the last sitting adjudicator to the 164 WTO Members. I will present it independently and impartially as the duty of an AB Member so defines.

First, let me be frank. Though cases are still being brought to the panel stage, which manifests WTO Members' continued confidence in the dispute settlement system for the time being, the docket of the AB continues to grow even after 10 December 2019, when the AB announced it would suspend all the cases at hand and was unable to hear any new appeals. It was really worrisome. While the WTO Members constantly resolve to appeal into the void, up to now, there are 14 pending cases before the AB, four of which were appealed after 10 December 2019(1). If the situation continues, it will signify that the WTO dispute settlement system has been brought back to the GATT era when panel reports could be easily blocked by any defendant. It makes the WTO dispute settlement system effectively non-binding. This has been a dramatic derogation and regression from the WTO dispute settlement system since the Uruguay Round. To avoid a complete paralysis, actions must be taken to fix the current situation. The stalemate in one key pillar, i.e. dispute settlement, and the lack of progress in another pillar, i.e. negotiation, are not good signs for the future of the multilateral trading system. The WTO's existential crisis is looming large. This should be highly alerted and clearly sensed by all Members. Save the dispute settlement system, save the WTO. There is no time to waste. This is the first message I would take this chance to convey to the WTO Members and the trade world.

In the following remarks, I will address four issues: 1) the reflections over the debate on the AB; 2) the contributions of the AB to dispute settlement and the international rule of law; 3) underlying reasons and lessons learned; and, lastly, 4) the way forward: suggestions for the future.

Reflections over the debate on the AB

A disclaimer and an introduction

Disclaimer: The views expressed are purely mine and do not represent the AB or any agency. My intention is to facilitate WTO Members and the WTO legal community to better understand the debate before they make their decisions. I will provide a framework of analysis rather than give an answer.

Introduction: the conflict of ideas

After an overall review of all the debates about the AB among WTO Members, which the criticism could be traced back as early as 2002 and 2003(2), I feel somehow the whole debate reflects a strife of two contrasting views/norms and different preferred styles of adjudication of WTO dispute settlement among Members on dispute settlement, including that of the operation of the AB. It also implies very different expectations of WTO Members from the Uruguay Round negotiating outcome. To some extent, the debate is actually a carryover of differences of negotiation that were smartly embedded into the treaty with constructive ambiguities 25 years ago. Inevitably and sadly, the beliefs in different ideal international adjudication in Members' minds clash with the WTO dispute settlement in the treaty.

I would like to review at least two sets of conceptual issues with respect to international adjudication before looking at those debates in real life.

1. The conflict of ideas — ad hoc approach vs. consistent approach

International adjudication has come a long way from war to peace, from bilateral settlement to third-party adjudication, from diplomatic conciliation to legal settlement, from ad hoc adjudication to institutional adjudication, from bilateral to plurilateral and multilateral adjudication, from one stage to two stages of adjudication. It moves in a seemingly spiral trajectory in the evolution of adjudicatory form, aiming at achieving justice among stakeholders in relevant international fields.

Some believe, unlike domestic judication process, international adjudication should follow an ad hoc approach and should desirably be conducted on a case-by-case basis as far as participating Members so agree. Investor-State Dispute Settlement at the International Centre for Settlement of Investment Disputes (ICSID) could be such an example. Some insist that international adjudication should maintain consistency in its decisions. Both the International Court of Justice (ICJ)(3) and the European Court of Justice (ECJ), though not recognizing any binding effect to their own decisions, do take previous decisions into great account.(4) The ad hoc approach and the consistent approach treat previous decisions, precedents, and jurisprudence quite differently in international adjudication. Obviously, critiques of the AB's practice prefer the idea of ad hoc approach to the consistent approach. The majority of Members of the DSB prefer the consistent approach, by emphasizing the importance of maintaining “consistency and predictability” in the interpretation of rights and obligations under the covered agreement.(5) In my view, the different preferences and emphases of two approaches represent the hard core of divisiveness of Members' views on the AB's practice of adjudication.

2. The different styles of international adjudication: judicial activism vis-a-vis judicial restraint

“Judicial activism” and “judicial restraint” definitely belong to those most difficult legal vocabularies to be defined in terms of their nature and scope. Here they are used just for the convenience of illustrating two different styles of adjudication.

“Judicial activism” hereafter refers to an adjudicating style whereby the adjudicators are active in making decisions or providing interpretations, while “judicial restraint” refers to an adjudicating style whereby adjudicators are restrained and cautious of making sweeping decisions or providing comprehensive treaty interpretation.

There is no universal views on the adjudication style of the AB by WTO Members or academics in the international trade area. The current criticisms of the AB's practice are seemingly referring to a sort of “active adjudication” style of the AB in making decisions and providing treaty interpretations, while a “restrained adjudication” style of the AB is much preferred or expected by the opponents.

After a brief overview of the two conceptual legal issues pertaining to adjudication as an introduction, let's look at the essential allegations against the AB on which Members hold divergent views. To me, the benchmark of measurement of whether the AB did or did not operate as it was designed should be the treaty of the WTO and not the expectations or beliefs in the minds of people who so claim. So, let's review what is in the treaty and assess those challenges by comparing the treaty itself with its application in the reality.

First, did the AB overreach?

1. The issue of “overreaching”

If “overreaching” is defined as a situation where adjudicators make decisions outside the scope of issues appealed or make decisions on issues not necessary for settling the dispute, I would agree with this definition and actually did not do so in my term as an AB Member.(6) Yet some criticisms of the AB seemed to point to the AB's creation of jurisprudence, establishing binding precedent, and making rules rather than settling individual disputes. These claims are mostly premised on the third sentence of Article 3.2 of the DSU.

Yet here I would draw your attention to the first sentence of Article 3.2, which provides an essential function of dispute settlement that shouldn’t be lightly ignored. It provides that the dispute settlement system is a central element in providing security and predictability to the multilateral trading system. Thus whether “providing security and predictability to the multilateral trading system” is the ultimate objective and purpose of dispute settlement or whether it is an integral part of that objective of dispute settlement becomes a vital issue. If the first sentence of Article 3.2 should be given weight in interpreting the purpose and objective of the DSU, then panels and the AB are both required to perform their duties to provide “security and predictability” to the multilateral trading system. In that context, panels and the AB are just working towards achieving the purpose and objective of the DSU by maintaining like decisions in like cases and following jurisprudence in the interpretation of the same provision under the covered agreement. If so, the panels and the AB did not overreach, but performed their duties under the mandate of the treaty.

Therefore, a careful reading of Article 3.2 and other provisions of Article 3 of the DSU objectively and holistically, it could be well noted that WTO dispute settlement functions in two perspectives: 1) first and foremost, to settle disputes specifically, and 2) to provide security and predictability to the multilateral trading system generally. These two perspectives should work effectively and complementary with each other.(7)

Second, did the AB interpret rules or make rules?

This critique seems to be referring to the alleged “overreaching” of the AB in individual cases or on specific situations.

The DSU makes it clear that WTO dispute settlement is to “preserve rights and obligations” of Members rather than to create the rights and obligations. It is obvious that the dispute settlement system is not set up for making rules. Yet panels and the AB are instructed to “clarify the existing provisions” of the covered agreement in accordance with “customary rules of interpretation of public international law”. Thus, it is obvious that treaty interpretation is a key method to clarify the existing provisions in order to settle disputes for Members. In other words, the WTO dispute settlement system is centred on treaty interpretations.

Then the issue arises when the treaty itself is drafted with constructive ambiguities and that ambiguity has been raised by a WTO Member under a dispute settlement proceeding, could clarifying the existing provision through treaty interpretation for the sake of resolving that dispute constitute so-called “rule making” or “gap filling”?

To me, that is the real, hard issue and a very close call.

It leaves the adjudicating body two options: it either becomes unable to deliver its decision, or it runs a risk of stepping over the red line, if taking an extremely strict view of interpreting “adding or diminishing rights and obligations”. Let us try to look at it more closely.

First, on specific dispute settlement, for any matter that is raised properly before the adjudicating body, it is by definition within the autonomy or discretion of the adjudicating body to render a decision within its scope of adjudicatory review as required by the DSU. It is, at least, not overreaching.

Second, if the adjudicating body conducted treaty interpretation in accordance with the “customary rule of interpretation of public international law” as mandated by the DSU, it shall not be regarded as rule making per se.

Third, if that ambiguity issue is properly raised before the adjudicating body, it means that the Member is ready to subject itself to the jurisdiction and is prepared to accept the adjudicating outcome. A post hoc result-oriented criticism would spark concerns as to whether these critics are in line with the good faith principle in treaty implementation under the Vienna Convention on the Law of Treaties.

Fourth, should the adjudicating body decline to render a decision pertaining to interpreting any provision with ambiguity, is it in conflict with the requirement of addressing each of the issues appealed before it under Article 17.12 of the DSU?

Following the above discussion, if a term or concept that is not perceived to be drafted with ambiguity in the negotiation, which implies an ordinary meaning to be given to it should there arise a need to define it for a dispute settlement purpose. If so, could the adjudicating body's provision of a definition to such a term constitute “adding or diminishing rights or obligations” under Article 3.2 of the DSU? Is the adjudicating body interpreting rules or making rules by providing such a definition of ordinary meaning for the purpose of settling the dispute before it? I just pose this issue to all of you.

These could be crucial issues that WTO Members may wish to determine so that they could provide clear guidance to the adjudicating body.

The other issue that could affect whether an interpretation by an adjudicating body would constitute “rule making” is what effect will be given to that interpretation by the adjudicating body. Does the specific interpretation bear any binding or persuasive effect?

Third, an issue of adjudication style

To me, the major criticisms of or concerns about the AB, such as “overreaching”, “rule making”, “advisory opinion”, or “obiter dicta”, can actually be ascribed to an issue of adjudication style of an adjudicating body.

As indicated in the beginning, international adjudication could be categorized into two styles, i.e. “adjudicatory activism” and “adjudicatory restraint”.

To my knowledge, there is a general inclination of WTO Members to prefer slim reports with sound reasoning to lengthy and complicated reports. This has become a gross concern for Members for quite a while. I believe both panels and the AB have put forth an effort to address this concern of Members, but perhaps they have not yet met the varied expectations of WTO Members. I think this is an issue that the AB should seriously consider to further improve. Though the scope and size of appeal sometimes play paramount roles in the size of the report rendered, to me, rigidity in format of producing the report sometimes could make reports unnecessarily repetitive, and there is room to improve the drafting.

With respect to the reasoning and interpretations offered in the report, my view is the legitimacy of the report may be undermined if the legal reasoning will be sacrificed in the report for the sake of slimness. An adjudicating body achieves its reputation by producing credible and rational analysis, which I believe is much appreciated by Members and the WTO legal community alike.

After a cursory overview of the statements of WTO Members at the DSB and the academic work and comments published by international trade circles, my impression is that there are wide-ranging and even contrasting views on the outcome and style of AB reports. Some commended it, most Members welcomed it, and almost every Member pledged to implement it contingent only on a need of an RPT (a reasonable period of time for implementation). Some scholars believed the AB is doing less than it should in interpretation, noticing that the AB avoided sweeping statements and took a cautious attitude that might be regretted. Of course, some complained the opposite.

To me, the concerns Members expressed about the AB are mostly caused by different understandings of the AB's nature and function; however, they are also caused largely by the different ideas and styles of international adjudication.

In my view, every adjudicator has his or her own trait and style of adjudication. As long as the adjudication is within the mandate and compatible with the applicable rules, each adjudicator may exercise his or her adjudicatory autonomy and discretion. At the same time, I also recognize that there exists room to reconsider or to improve the AB's adjudication style. Perhaps a more cautious and restrained attitude in adjudication would be much safer and desirable, in particular because the participants are mostly sovereign states, and most issues involved are highly sensitive. Personally, I always hold a strict line in sticking to the treaty and interpret each issue objectively, faithfully, and in good faith, as the treaty provides.

Fourth, the issue of precedent

“Precedent” is another highly controversial and complex issue. It holds a central place in the whole debate.

To me, the rule of precedent is the typical phenomena of how deeply a common law tradition could impact the state practices in international adjudication and the adjudication practice of international adjudication bodies. From the eyes of lawyers of continental law countries, it's a bit bizarre why there is a need to rely on past decisions to litigate the case while the law itself is self-evident? Why do judges, whose job is clearly defined to apply the law to facts, and who are not allowed to make law, have the need to look at and rely upon previous cases to make their judgement? Yet surprisingly, the rule of precedent, a heritage from Anglo-Saxon law not only influenced the major continental law countries' judicial practices but also penetrated widely into many fields of the international adjudication in an amazing manner. It will take another lecture to review this matter thoroughly. For now, let me focus on its impact on WTO litigation.(8) Interestingly and ironically, it is mostly the common law countries that carry on this heritage that now criticize the AB for its adjudication practice based on case law.

“Precedent” is defined as a decided case that provides a basis for determining later cases involving similar facts or issues.(9) It is a concept, rule, and practice rooted in the history of the Anglo-American common law system where judges are bound to the court's past decisions — also known as the principle of “stare decisis”.(10) Whereas in a number of civil law countries, courts rely on the doctrine of “ jurisprudence constante”, where judges find that the sound reasoning of previous decisions is highly persuasive but not binding or controlling on issues of law in later adjudication. Therefore, though the legal theories or concepts of the two major legal families differ significantly, their practices actually have achieved similar effects in maintaining the consistency of decisions by judiciary bodies.(11)

Though international law doesn’t contain the rule of precedent per se in any treaty(12), at least to my knowledge, it has become a prevalent practice by major international adjudicating bodies.(13) Even in the context of investor-state dispute settlement (ISDS), which is an area where fragmentation and lack of coherence of the ISDS jurisprudence has been widely complained of, the arbitral tribunal often referred to the award rendered by previous tribunals on issues such as the definition of “investment”.(14)

My AB colleague, Mr. Ricardo Ramírez-Hernández claimed in his farewell speech that “I've never seen a Member who has not argued its case based on previous case law.”(15) Indeed, citing and reliance on past decisions have become normal practices in dispute settlement at both the panel and AB stages at the WTO.

From the perspective of those who criticized the AB's practice, the AB at least maintained a certain form of “de facto precedent”, which allegedly exceeds its mandate of adjudicating each dispute individually on a case-by-case basis.

From the perspective of a large number of WTO Members, “though recognizing precedent is not created through WTO dispute settlement proceedings, Members of the WTO emphasize ‘consistency and predictability’ in the interpretation of rights and obligations under the covered agreement is of significant value to Members.”(16)

From the perspective of the daily practice of dispute settlement at the WTO, it is no wonder that the driving force to run the cases is the WTO Members that are represented by their super-competent international lawyers. As adjudicators, panels and the AB are merely recipients of the legal complaints presented. Therefore, if there is an ecosystem of WTO dispute settlement, panels and the AB are only part of it. If Members and their lawyers continue to present their submissions and oral statements with dozens of pieces of case law as arguments or reasoning, it is very difficult for panels or the AB to refrain from responding to or giving a value to past decisions.

From the perspective of the principle of “equality before Treaty” and “equal justice under Treaty”, the issue becomes that all 164 WTO Members have an equal opportunity to access and enjoy equal adjudication under the WTO dispute settlement system, in terms of both their procedural and substantial rights under the covered agreements. I do not see that any Member would like to accept a different adjudication outcome on the same issue in similar situations. If dispute settlement cannot render fair outcomes, what is the use of going through it? This raises the ultimate purpose and meaning of international adjudication. How could a dispute settlement system be sustainable if it constantly renders frivolous or conflicting outcomes? This is the fundamental issue that WTO Members should reflect on before they make their decisions. This will also determine the future direction of the WTO dispute settlement system.

To me, “precedent” is just a legal methodology to achieve “the rule of law”. This is actually an issue on how to achieve proper balance between “certainty” and “flexibility” in an adjudication system. A typical conundrum entertains by any legal system of the rule of law. In other words, it is an issue of whether an adjudication system could accommodate changes over time and correct its own mistakes, if any. Even in the legal regimes where the rule of precedent plays a dominant role, there exist situations where the adjudicators could distinguish from, escape from, or even overrule (i.e. in exceptional circumstances) the previous case law as far as they can provide “sound reasons”.

Therefore, what I would suggest for Members is to consider bringing into the WTO dispute settlement the doctrine of “jurisprudence constante”, as a way to resolve this conundrum. It is a principle and practice from the continental law system. It will help resolve the sensitive issue of how to treat previous decisions (precedent) by adjudicators within the WTO dispute settlement system, as well as take into account the need to maintain the “consistency and predictability” of the system by giving no binding effect to any previous report while recognizing its persuasive effect on later cases, wherever appropriate.

I hope the switching from common law tradition to civil law methodology could be a pragmatic, balanced middle way(17 to resolve this conundrum of dispute settlement practice at the WTO.

Fifth, why a second stage of adjudication?

A second stage of adjudication is not only a quid pro quo for parties' concessions to give up their political right to block the adoption of a panel report(18), but also a chance to correct mistakes. To WTO Members, it also means a second chance to be heard by the adjudicators on the legal matters and thus a fairer outcome might be obtained. It matters with a procedural right of WTO Members to have fair access to adjudication of a second stage where they see a legal error in a panel report. If the multilateral trading system established two stages of adjudication within the treaty, it is a fundamental right of Members to keep it and ensure that such a right is readily accessible.

Could a second stage evolve and accommodate the changes of time and correct its own mistakes, if any? First and foremost, it is through legislative action, i.e. the Ministerial Conference or General Council, to make and amend the treaty, and issue authoritative interpretations to update the rule book so that the adjudication body could follow. Second, the adjudicating body itself, i.e. the AB, could accommodate the change of circumstances and update its jurisprudence based on “sound reasons” wherever it is appropriate. My understanding is that the AB did evolve its jurisprudence as time went by, although this is maybe not recognized by many.(19)

Why were more cases brought to the second stage than the negotiators expected?20)

As illustrated above, dispute settlement cases are not driven by the adjudicating body; they are in the hands of WTO Members. In the past, it was the major Members that were the most frequent users of the system. Most recently, more and more developing countries, even smaller economies, have come to the playground.

My perception is that it is more likely that there will be more cases rather than fewer in the future of WTO dispute settlement. Therefore, my advice to the Membership is that the WTO should be better prepared for a booming season of disputes in the days ahead. Perhaps this could not be easily restrained through quantitative restrictions or quotas. Or it may not feasible to define what constitutes an “egregious mistake” as a benchmark for an appeal. The rise of cases was not anticipated by anyone 25 years ago, and it was nobody's fault. Maybe it is a positive sign that access to international adjudication is no longer a luxury or a privilege for a small group of Members only. It represents more egalitarian status before the Treaty, which is commendable for the Membership.

Second, the contribution of the AB to dispute settlement and international rule of law — a fair judgement

It is challenging for any of us to provide a comprehensive and objective assessment of the institution we work for. However, as the last sitting Member of the AB before its return, I am obliged to say a few words about the work of the AB as an institution, about my fellow AB Members, and about the supporting staff. I will try to establish my observations with facts.

Fact 1: Despite harsh criticism, the Appellate Body is unparalleled in its effectiveness and efficiency in the history of international adjudication, compared to other major international adjudicating bodies. In its 25 years of operation, the seven-member AB has resolved 195 disputes(21), compared to around 160 cases completed in 74 years by the ICJ, with 15 standing judges.(22) In terms of efficiency, the AB spends on average a few months(23) on each case, while other major international adjudicating bodies usually need a few years to complete a decision.

The AB also established and maintained a standard and consistent practice of implementing its working procedures, in particular in areas of due process, procedural fairness, and keeping a good reputation for its adjudication.

The AB has significantly contributed to the security and predictability of the multilateral trading system. Though there was room to improve, the AB distinguishes itself for its outstanding performance among all international adjudicating bodies, and its accomplishment cannot be ignored by history. No matter how many setbacks it encounters today, the establishment of the AB was a major achievement in the international rule of law, as well as a significant development in human civilization.

Fact 2: AB Members are a group of fully committed devotees of the international rule of law. As required by the DSU, my fellow ABMs are “persons of recognized authority, with demonstrated expertise in law, international trade and subject matter of the covered agreements generally”.(24 The ABMs do not enjoy either the lifetime pensions of their peers in the ICJ and the International Criminal Court (ICC) have(25) or the high daily fees comparable to their part-time ICSID peers.(26) I can think of no better words than “willing ox” to pay tribute to my fellow colleagues.

Fact 3: The AB Secretariat is also the most supportive team I have ever worked with. Composed of only 25 staff at its peak, the ABS is substantially smaller, both in absolute and relative terms, than its international peers, such as the Registry of the ICJ, which had 116 staff in 2019.(27 Yet their diligence and professionalism have never been compromised under the swelling workload.

I understand that the WTO Members and their constituents have high expectations for the AB. And the AB is inclined to improve once proper guidance is provided. However, given the lean structure of the AB, the limited support staff, the high appeal rate, and the increasingly complex matters appealed, it is fair to say that we have delivered what we can deliver and are supposed to deliver.

We have undertaken this work, knowing that we have nothing to complain about, and we can only work hard to the end as we promised. I will continue to talk about the perseverance, enterprising nature, courage, and cooperation of the AB in the future, which will inspire the future generations of ABMs. I believe WTO Members will make a proper decision for the AB's restoration.

As the Chinese saying goes, “Please don't dismantle the bridge after crossing the river.” From an historical point of view, the judgement on an international adjudicating body and its adjudicators should be, at least, fair.

Third, the way forward — suggestions for the future

The multilateral trading system has never been in such a difficult time in history, with two pillars at risk, no Director-General, and being side-lined by regional trade blocs for over a decade. It is not the multilateral trading system we were familiar with before. The pains of failure of the Doha Round negotiation did not recede, while new pains of divide on dispute settlement are rising. WTO Members should reflect on the deep crisis. It is a moment to heal and unite.

In my view, having a mentality of collaboration is essential for WTO reform and the rejuvenation of the dispute settlement system. Obviously, dispute settlement should be the first item to be fixed. I suggest WTO Members put all their issues and demands on the table simultaneously. There needs to be a grand bargain, where issues old or new, trade-related or not, shall be put on the table. Then let the Members draw a blueprint with a vision, and make it happen, either all at once or step by step. Next, I will focus on the to-do list for the dispute settlement system.

1) Resume the selection process of AB Members and restore the functioning of the WTO dispute settlement system, bearing the following in mind:

  • Acknowledge that “not adding or diminishing Members' rights and obligations” shall have a central place in dispute settlement, reinforcing a case-by-case dispute settlement mentality;
  • Recognize the importance of the dispute settlement system's central place in providing security and predictability to the multilateral trading system;
  • Reassure WTO Members that dispute settlement serves to preserve their rights and obligations, and clarify the existing provisions in accordance with customary rules of interpretation of public international law rather than making rules;
  • Emphasize a restrained style of adjudication at the AB, focusing on issues raised and necessary for settling disputes, and refrain from advisory opinions or obiter dicta;
  • Clarify the issue of the 90-day limit, and communicate with participants to seek their views on extensions beyond 90 days;
  • Clarify Rule 15 so that the confirmation of extending an AB Member who needs to work more than two months beyond their term must be submitted to the DSB;
  • Consider an AB with seven to nine full-time Members, each serving one longer fixed term of seven to nine years;
  • Consider establishing fixed-term and rotating AB Secretariat staff; and
  • Encourage like-minded Members to join the Multi-Party Interim Appeal Arrangement (MPIA) under Article 25 of the DSU until the full functioning of the AB.

2) Improve the implementation of dispute settlement.

There are many cases that go through the second compliance panel, which could last four or five years or even longer. But implementation is an essential issue that Members should take care of and try to enhance the quality of compliance by defendants.

3) Strengthen the panel proceedings.

  • Consider establishing a standing pool of panellists (between 21 and 30 people, enabling 7 to 10 panels to work at the same time);
  • Introduce fixed terms of five or six years and full-time panellists; and
  • Compose panels on a random rotation.

4) Clarify optional transparency rules in oral hearings at both panel and AB proceedings, as far as both participants agree, to avoid an inevitable breaching of the DSU by panel or the AB in their daily practices.

  • Consider live-stream oral hearings of the AB and the two substantive meetings at the panel stage.

5) Consider not allowing amici curiae submissions.

6) Establish a two-tier World Trade Court: an ideal long-term goal, as designed in the original ITO Treaty.

7) Enhance capacity building to narrow legal gaps among WTO Members.

8) Consider allowing Members to litigate in their mother languages.

Concluding remarks

The WTO is standing at an historical point. Wither the next step? Will the rules-based multilateral trade system be strengthened and revitalized, or will it continue to be side-lined by regionalism or even threatened by unilateralism? Will inclusiveness, equal justice under the treaty, rule of law, and a consistent jurisprudence tradition continue to be valued in dispute settlement and in the implementation of treaty rules? Or will a frivolous, one-tier, ad hoc commercial-arbitration-like approach be the main theme of the WTO dispute settlement system? It is high time for Members to make the decision. The future of the WTO is in the Members' hands.

I will conclude by sharing with you a famous legend that appears in several ancient cultures, including Egypt, Saudi Arabia, India, and China — the nirvana of the phoenix and its rebirth.

Although the details differ, the central theme of the legend is the singing of a phoenix and its dying in a fire, followed by its rebirth and another even more glorious life afterwards.

I cite this painfully beautiful story with multicultural origins to sew a wish that there will be a vigorous revival of the AB in the future.

Last but not least, let me thank WTO Members for selecting me and for their unabated confidence and support during the past four years. I also thank the Secretariat of all divisions for their indispensable logistical support of various types. I thank the academics and practitioners from the legal family I come from; I hope I have represented you well, at least I tried my best. I also thank my family, my husband, and our son, for their lasting tolerance of lack of my companionship, and I am grateful for my mother's raising me up and still missing me and her grandson. I also thank every friend and colleague who helped in this way or that during the past four years. What can't be forgotten is to thank the Graduate Institute, Prof. Pauwelyn, his team, and the Global Trade Platform for organizing this event.

Before fully discharging my current duty, there is one matter I can't put aside. That is our talented, behind-the-scenes professional lawyers who wholeheartedly devoted themselves to the dispute settlement system at the second stage. I sincerely call upon each Director to treasure them, to encourage them to carry on the institutional memory of the second stage, and to foster their future professional development. They are the most invaluable assets that our multilateral trading institution could ever possess. Our institution should be able to guarantee that anyone who works for its adjudicating body be protected, and to work with no fear but with a sense of honour and security. Let our institution be strong and long-lasting, so those who are young can hold their beliefs that independence and impartiality, collaboration and equality, are valued all the time.

I always say to my AB colleagues and the team when each hard decision is made in our case, the measurement is that at the last minute of life, one doesn’t regret that decision. That is the so-called final measurement. It is my belief that everyone who works for this multilateral institution should bear the 164 Members' interests in their hearts, as that is the final measurement of everything we do here. For the 164 Members, by the 164 Members, making sure the multilateral trading system benefits all 164, and making sure all 164 enjoy equal rights of development and equal justice under the Treaty. These are the long-lasting objectives that all of us pursue.

For that purpose, I count on all of you, the promising young generations, to carry on this goal and make our world better, fairer, and more prosperous.

All farewells are meant to be reunions. The Chinese saying for that is “Mountain stands, but river flows.”

My best wishes for all of you.

Thank you for your attention.


  1. The four cases are:  “Saudi Arabia — Measures Concerning the Protection of Intellectual Property Rights” (DS567), appeal notified on 28 July 2020; “European Union — Cost Adjustment Methodologies and Certain Anti-Dumping Measures on Imports from Russia (Second Complaint),” (DS494), appeal notified on 28 August 2020;  “United States — Countervailing Measures on Softwood Lumber from Canada” (DS533), appeal notified on 28 September 2020; and “United States — Tariff Measures on Certain Goods from China” (DS543), appeal notified on 26 October 2020. Back to text
  2. USTR, Report on the Appellate Body of the World Trade Organization, February 2020, Annex A-17. Back to text
  3. All ICJ decisions flow from and are built upon past decisions, although the ICJ has been careful to refrain from indicating that reliance on precedent was mandatory [66]. The Court gives great weight to finding and applying international law consistent with its prior decisions. Back to text
  4. Gilbert Guillaume, “The Use of Precedent by International Judges and Arbitrators”, Journal of International Dispute Settlement, Vol. 2, No. 1 (2011), pp. 5-23. Back to text
  5. Though recognizing “precedent is not created through WTO dispute settlement proceedings”, WTO Members emphasize that “consistency and predictability in the interpretation of rights and obligations under the covered agreement is of significant value to Members”. See WTO document: The Informal Process on Matters Related to the Functioning of the Appellate Body, Report by the Facilitator, H.E. Dr. David Walker (New Zealand), 15 October 2019, Job/GC/222. Back to text
  6. For example, I recall the first case I adjudicated as a Division Member was on an anti-dumping measures. One participant requested the AB to decide on systematic issues concerning the general principles of WTO dispute settlement under Article 3 of the DSU. After reviewing and making decisions on provisions under the Anti-Dumping Agreement, which the Division believed to be sufficient to settle that dispute, the Division exercised judicial economy and declined to render interpretations under general matters of Article 3 of the DSU. Back to text
  7. Prof. John Jackson indicated that “we could appraise the dispute settlement system by asking how effective it is in promoting the settlement of cases or how it develops the jurisprudence in the sense of providing greater certainty and stability while resolving ambiguities in the rule structure.” See John Jackson: The Role and Effectiveness of the WTO Dispute Settlement Mechanism, Brooking Trade Forum 2000, Brookings Institution Press, DOI: http://doi.org/10.1353/btf.2000.0007, p. 208. Back to text
  8. Raj Bhala, “The Myth About Stare Decisis and International Trade Law: A Trilogy”, American University International Law Review, Volume 14, Issue 4, 1999. Back to text
  9. Bryan A Garner, Black's Law Dictionary, Third Pocket Edition, p. 553. Back to text
  10. The merits of following precedent are multiple: 1) it helps ensure the attainment of principle of equality before justice; 2) it restricts the scope of arbitrariness and bias of adjudicators or tribunals; 3) through building a reasonable and predictable legal framework, it helps enhance participants' confidence and trust; 4) it helps losing parties abide by the law, as judgement is not particular to them but rather it applies to all similar situations; 5) it is cost effective and efficient, as it may prevent unnecessary potential appeals; and 6) it enhances the sense of responsibility of adjudicators when facing new cases to reflect upon multiple alternative approaches. See P. S. Atizah and R. S. Summers, Form and Substance in Anglo-American Law: A Comparative Study in Legal Reasoning, Legal Theory and Legal Institutions, Oxford University Press, 1987; Chinese version translated by Jin Min, Chen Linlin, and Wang Xiaohong, China University of Politics and Law, 2005, p. 97. Back to text
  11. Interpreting Precedents: A Comparative Study, D. Neil MacMormick and Robert S. Summers (eds.), Dartmouth Publishing Company Limited, 1997, pp. 1-11. Back to text
  12. Scholars of international law may refer to Article 59 of the International Court of Justice Statute in this regard, according to which international court rulings are binding only on the parties in the dispute at hand and have no bearing on matters outside of the case. It is true also with the ECJ and many other international judicatory institutions. Back to text
  13. Gilbert Guillaume, “The Use of Precedent by International Judges and Arbitrators”, Journal of International Dispute Settlement, Vol. 2, No. 1 (2011), pp. 5-23. See also Krzysztof J. Pelc, The Politics of Precedent in International Law: A Social Network Application, American Political Science Association, http://www.jstor.org/stable/43654392. Back to text
  14. The definition of “investment” in the awards of Salini Construttori S.p.A. and Italstrade S.p.A. v. Kingdom of Morocco, ICSID Case No. ARB/00/4 (July 2001) has been cited by several ISDS arbitral tribunals. Back to text
  15. Ricardo Ramírez-Hernández farewell lecture, 2017, WTO website. Back to text
  16. See WTO documents: The Informal Process on Matters Related to the Functioning of the Appellate Body, Report by the Facilitator, H.E. Dr. David Walker (New Zealand), 15 October 2019, Job/GC/222, p. 6; and The Informal Process on Matters Related to the Functioning of the Appellate Body, Communication from Japan and Australia, WT/GC/W/768, p. 2. Back to text
  17. Among the 20 or so papers on AB reform by WTO Members in the past three years, Honduras submitted its working document, Addressing the Issue of Precedent, on 1 February, 2019, proposing a possible middle path by suggesting: “1) the report will be adopted by negative consensus solely with respect to the outcome for the disputing parties, while adopting legal interpretation in the report through positive consensus, whether it can form precedent forming a part of the WTO law; or 2) legal interpretations of the Appellate Body take the form of precedent only once they have been repeated a given number of times in similar context; or 3) all the 7 AB Members endorse an interpretation in a specific report or on a thematic issues.” Back to text
  18. Debra P. Steger, “The Founding of the Appellate Body”, A History of Law and Lawyers in the GATT/WTO-the Development of the Rules of Law in the Multilateral Trading System, Gabrielle Marceau (ed.), Cambridge University Press, 2018, p. 447. Back to text
  19. This has not made much difference with what a court did at a national level. See Charles Rothfeld, “Should the Supreme Court Correct its mistakes?” Harvard Law Review Forum, 10 December 2014, 128 Harv. L. Rev. F 56. Back to text
  20. USTR, Report on the Appellate Body of the World Trade Organization, February 2020, p. 1. “WTO Members agreed to a standing ‘Appellate Body’ … as a means to correct egregious mistakes by dispute settlement panels.” Back to text
  21. Based on the number of notice of appeals included in the Appellate Body Annual Report, 2019-2020, Annex 9, pp. 202-241. Back to text
  22. Though not exactly comparable, there were 6 cases by the International Criminal Court (ICC) with 18 judges in 17 years. Back to text
  23. According to WorldTradeLaw.net: 140 days on average of each case by the AB. Back to text
  24. DSU Article 17.3. Back to text
  25. Report of the Secretary General of the United Nations, Conditions of service and compensation for officials other than Secretariat officials: members of the International Court of Justice and President and judges of the International Residual Mechanism for Criminal Tribunals, 18 September 2019, https://undocs.org/pdf?symbol=en/A/74/354. Back to text
  26. https://icsid.worldbank.org/en/Pages/icsiddocs/Schedule-of-Fees.aspx. Back to text
  27. Report of the International Court of Justice, 1 August 2019–31 July 2020, https://www.icj-cij.org/public/files/annual-reports/2019-2020-en.pdf. Back to text


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