Hi Simon, Interesting post. A couple thoughts: 1. The language in Article 12.5, paragraph 2 is not new. It copies verbatim the EU’s draft provisions for data flows and data protection in EU trade agreements adopted in Jan 2018 when DG-Trade and DG-Justice finally settled their long-standing battle between free trade or privacy, something I discussed in my paper below esp p. 235. Gao, Henry, 'Data Sovereignty and Trade Agreements: Three Digital Kingdoms', in Anupam Chander, and Haochen Sun (eds), Data Sovereignty: From the Digital Silk Road to the Return of the State (New York, 2023; online edn, Oxford Academic, 14 Dec. 2023), https://doi.org/10.1093/oso/9780197582794.003.0010, accessed 28 Mar. 2024. 2. Why the strange language like “Nothing in this Agreement shall affect” and starting with “Each Party may”? My guess is that it came from DG justice as the usage of “affect” rather than “prevent” is more common in non-trade areas such as competition etc. Starting with “Each Party may” is also prob their idea as it affirms positively the right to regulate on privacy rather than relegating it to an exception. Of course as I was not privy to the internal EU discussion, I stand corrected by anyone who’s better informed. 3. This has been adopted as the common language in most EU FTAs which address the issue since 2018, except the one in Article DIGIT.7 para 2 of the EU-UK Trade and Cooperation Agreement, which does use “prevent” instead of “affect”: Nothing in this Agreement shall prevent a Party from adopting or maintaining measures on the protection of personal data and privacy, including with respect to cross-border data transfers, provided that the law of the Party provides for instruments enabling transfers under conditions of general application for the protection of the data transferred. I guess this means that if you have a good lawyer on the other side, the EU can change the wording!

Dear Geraldo, Thanks for the post summarizing our debate. I fully agree with Prof. Petersmann's view that when GC takes over the issue and makes the decision, it is making the decision as the GC not the DSB. Therefore, as I mentioned during our tweeter debate yesterday, it is not bound by the consensus rule (https://twitter.com/henrysgao/status/1289195324683124736) Also, as per Art. IV.1 of the WTO Agreement: "The Ministerial Conference shall have the authority to take decisions on all matters under any of the Multilateral Trade Agreements, if so requested by a Member, in accordance with the specific requirements for decision-making in this Agreement and in the relevant Multilateral Trade Agreement." Note here that it refers to "in accordance with the specific requirements for decision-making in this Agreement and in the relevant Multilateral Trade Agreement", which means that, in addition to the decision-making rules under the Multilateral Trade Agreements (such as the DSU), the rules under the WTO Agreement shall also be taken into account. Moreover, to the extent that there’s a conflict between the decision-making in the WTO Agreement and in the relevant Multilateral Trade Agreement, we’d refer to Article XVI.3 of the WTO Agreement, which provides that “[i]n the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict.” Applying this conflict rule to the current situation, the voting rules under Art. IX.1 of the WTO Agreement would apply. I discussed the issue more fully in my paper at https://ssrn.com/abstract=3422025. Feel free to check it out!

This is the link (Chinese only): http://images.mofcom.gov.cn/trb/202007/20200717145528534.pdf

Thanks Steve for the interesting essay, esp the point concerning HK. If HK indeed has full autonomy, wouldn't it, paradoxically, be an infringement of its autonomy to include provisions on its autonomy in the Accession Protocol of China, or any other WTO Member for that matter?

Interesting post Jesse. I do not presume to speak for these countries, but I guess a principled objection would be that the MPIA sets a dangerous precedent for moving on other issues developing countries oppose?

It could be argued that the AB ruling in EC — Sardines is just obiter dicta. Interesting to see how this plays out in practice.

You did not miss anything Jesse. I think it is just a matter of different perspectives. On your first point, not appealing doesn't necessarily mean that the party is happy. It could be simply a decision made after weighing the pros of getting a better decision versus the hassle of having to go through another round of legal battle. There could be cases where the MPIA panel findings are better than the panel findings. Let's say that A complains that B's measure violates both GATT Art XI & XIII, but the panel only finds violation of Art XI. B files for arbitration on this point, and the MPIA panel concludes that it violates both GATT Art XI & XIII, but then B withdraws the appeal. This would be a decision that A wants to keep but can't under MPIA rules. I understand and agrees with your point that a ruling by the MPIA should not be "somehow more valuable than an adopted panel report." Indeed, I myself also have has doubts on the legitimacy of the arrangement since day 1 given that the MPIA award will never be adopted by DSB. However, the intentions of the MPIA parties are quite clear in that they wish to use the MPIA as an "ersatz Appellate Body" (in the words of US WTO Ambassador Shea), which is also affirmed by the MPIA's repeated use of such words as consistency, coherence, etc.

Thanks Simon for reminding us the similarity to the AB working procedure, which I did not put in the original post to avoid diluting the main message. According to the AB report in EC — Sardines, "the right to withdraw an appeal must be exercised subject to these limitations" such as "fair, prompt and effective resolution of trade disputes" or "good faith". Thus, the right to withdraw under Rule 30 could be denied by the AB, but the MPIA states differently, by saying that "If no other appeal or appeal remains, the notification shall be deemed to constitute a joint request by the parties to resume panel proceedings under Article 12.12 of the DSU". Thus, there seems to be no way to stop the withdrawal.

I would not call the exercise of one's rights duly provided for in the legal text bad faith. I do not think that the MPIA provides for an interim report, but for WTO dispute settlement insiders (both within and outside of WTO Secretariat), there should be no shortage of ways to learn the outcome, including some which are entirely legitimate.

According to the data from WorldTradeLaw.net, of the 148 AB reports circulated, only 60%, or 90 reports involve cross-appeals. Now is the time to make this 100%.

I'm not so sure. The WSJ article kept referring to it as "tax incentives" but it also stated that they are referring to VAT rebates. Typical journalism gimmick?

Dear Steve, Interesting post but I don't think it violates SCM rules as these are indeed VAT rebates. Moreover it's not entirely correct to say that these products are banned in China. China has banned mainly wild animals and many on the list are not, including edible turtles, terrapins and tortoises. If the other countries are worried about zoonosis, they could adopt the appropriate SPS measures. But frankly after the COVID-19 outbreak I don't see why anyone eager to try these animals.

Fully agree Jesse. I had to be brief as the comment was written at bedtime. But I'm not comfortable even with the rejection of Art. 11 claims subject to a Party's agreement, esp if you believe that raising such claim is a right for WTO Members. I could imagine this creating a lot of pressure for the Party raising the claim, as foonote 9 seems to indicate that it's up to such Party (not the Parties). To be frank I never understand the obsession with the 90-day limit under the new MPIA. Art. 25 does not have any time limit, while the time limit under Art 12.12 is 12 months, not 90 days. The only explanation is that the MPIA Parties wanted to show that they can address the US concerns with 90-day rule.

It seems that the Parties have tacitly adopted many of the US proposals, including: 1. no obiter dicta/advisory opinion; 2. no Art. 11 claim; 3. no exceeding 90-day limit without agreement by the Parties; 4. no adoption of report by DSB thus no presidential value. Any more?

In the same article, Bacchus noted that it was Andy Stoler who first used the word “Appellator”, albeit in jest. But he also noted that such joke concocted by two Americans did not go well with Canadians, who as loyal subjects of Her Majesty must defend the Queen (and the purity of the Queen's English). That said, I hope to settle the debate on the appealing question of the appellation of the Appellate Body once and for all by pointing out that, "Member" is no longer a suitable word as the Appellate Body has been "disMembered". Instead, as the Appellate Body is called a "Body", it can only be composed of "Body Parts" or "Organs" of the Body. Given the "disMembered" state the Body is in at the moment, I'd prefer the former.

The following is a comment by Prof. Dr. Ernst-Ulrich Petersmann, which I reproduce here at his request: Thank you, Henry, for reminding us of the contradictions between the 2013 speech by T.Graham interpreting the WTO Dispute Settlement Understanding as an Appellate Body member and his speech on 5 March 2020 in Washington defending the very different DSU interpretations of Washington trade remedy lawyers and of the USTR. Having served myself as secretary of the Uruguay Round Negotiating Group 13 that elaborated the DSU, I find no less contradictory Graham’s invocation of ‘the negotiating history’ for justifying USTR interpretations (e.g. that the Appellate Body was ‘intended .. as a check on occasional egregious mistakes by panels’) that are plainly inconsistent with the finally agreed legal texts and with their interpretations by WTO litigants and WTO appellate reports as adopted by the DSB over 25 years. Why is it that former American WTO Appellate Body members coming from the US Congress or from US Universities interpreted the same DSU texts so differently from what Graham and protectionist US trade politicians now propose? Is it consistent with the legal duties of Graham as a former WTO Appellate Body member - at a time when, according to his own speech, he is still working (under ‘Rule 15’) on a WTO Appellate Body division finalizing the Appellate Body Report in the pending WTO dispute against Australia’s restrictions on the packaging of tobacco products – to publicly support arbitrary interpretations and illegal blocking of the WTO Appellate Body by the USTR? The contradictory reasoning of Graham offers a taste of how contradictory WTO dispute settlement practices risk becoming if WTO members follow the recommendations of Graham and of the USTR to abandon the Appellate Body jurisprudence on ‘providing security and predictability to the multilateral trading system’ in the ‘prompt settlement’ of WTO disputes through, inter alia, clarifications of ‘the existing provisions of those agreements in accordance with customary rules of interpretation of public international law’ (Article 3 DSU). Fortunately, among the 27 Appellate Body members since 1995, Graham remains the only one who seems to be proud of transforming himself ‘from a Paulus into a Saulus’, i.e. pleading now – back in Washington as one the best-known trade remedy lawyers - for the destruction of what he himself praised in 2013 ‘as the most successful international dispute settlement system in the history of the world’. History confirms that legal civilization evolves dialectically and, unfortunately, remains never guaranteed – unless it is defended more strongly than through intergovernmental power politics. Once the USTR succeeds in destroying the Appellate Body, it seems more than unlikely that this ‘most successful international dispute settlement system in the history of the world’ (Graham) can ever be reconstructed. If my former friend, the late Professor John H. Jackson from Georgetown University could have listened to the speech of Graham, he would have found it difficult to rest in peace, as the destruction of the WTO dispute settlement system will provoke trade wars and other adverse repercussions (e.g. for climate change mitigation) all over the globe, also for many people inside the USA (with the possible exception of trade remedy lawyers in Washington).

You just made my day Anon! "Obiter Dictator" it is! But wait, this term is actually "dictum on dicta" because in my paper with the same title ( https://doi.org/10.1017/S1474745618000162 ), I've proven that, following the US argument that there's no such thing as precedents in WTO, there must also be no dicta because the distinction between obiter dicta and ratio decidendi can only be found in a legal system based on the doctrine of precedent. Thus the search for the perfect title continues.

Dear Debra, I think the biggest mistake was your insistence, at the time of creation, that all Members are assigned big sunny offices "with the type of furniture allocated to directors". Instead, you should have just gone with the proposal to slot them into the tiny cubicles in the dungeon at Centre William Rappard. That would constantly remind them who they really are and nobody would dare to use such self-aggrandizing word as "judge". Problem solved!

Indeed Steve. I guess Graham 13' would agree with you too, as he stated the following in his speech: "But without that respect, there may be a risk of the emperor’s having no clothes: of insufficient disincentives to prevent first one sovereign government, and then perhaps another, and another, from deciding not to comply with dispute settlement decisions. How bad would that be? It’s hard to say. But it’s probably better not to find out." And now we have found out.

Thanks Jesse. Many of the quotes were taken from the very end of the speech too, such as: "in conclusion, I would like to say, on the completion of my first year as a Member of the Appellate Body, that the sense of responsibility and dedication to the institution of my fellow Members have been enormously impressive, as has been the extraordinary ability and dedication of our truly great multinational staff." "For we are not policymakers, and we are not negotiators. We are judges, applying a legal craft. It is as craftsmen—not statesmen -- that we work together to try to get it right."

Thanks Graham for the comments. I did cite some of his concerns which was mentioned back in 2013 and cited in your reply as well. As I said he seems to be consistent on these issues but not on the other issues. To use your words these are the individual trees which seem to have grown into totally different shapes in 7 years. Moreover, even the whole forest looks different, as the tone of the 2013 speech was full of enthusiasm while in 2020 it changed into total condemnation. That is what puzzles me.

Thanks for your kind support Prof. Petersmann! I shall try my best!

Hi Marc, Thanks for the comments, but I beg to differ with your point that the sole AB member (or any other member for that matter) "does not have the expertise to deal by herself alone with diverse complex issues arising in various appeals". As per Art 17.3 of the DSU, The Appellate Body shall comprise "persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally". Apparently, when she, and all past, current, and future other AB members were/are appointed, the whole WTO Membership must have regarded them as being "persons of recognized authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally". If what you said is true, then the WTO Members as a whole must have made big mistakes in appointing them. Indeed, there have been many cases where an AB member acting alone deciding cases, of course not as the AB division, but as arbitrators under the arbitration proceedings under Arts 21 & 22 of DSU. You could argue that the subjects of arbitration are much more limited, but to deal with these arbitrations, they still need to grapple with the "diverse complex issues arising in various appeals". Moreover, let's not forget, as per Art 17.7 of DSU, the Appellate Body shall be provided with "appropriate administrative and legal support as it requires". Unless the AB Secretariat is disbanded as some Member would have wished, the sole AB member will get such support, which should be more than sufficient to help her fulfill her duties. As to your point on the impending collision, I'd have to say that most if not all WTO Members would agree that it was the US who kicked away the driver in the first place in its crazy attempt to derail the train of multilateralism (hence my op-ed "Murder on the Multilateral Express" https://www.lowyinstitute.org/the-interpreter/murder-multilateral-express). Thus my suggestions are designed to avoid the collision and save the AB, and would be exempted from any collateral damages as per the doctrine of necessity.

Brett, I fully agree with you that is wrong to say that "the country itself or its citizens are morally bankrupt", which is why I didn't make the statement. Instead, I was just saying that the current US administration is morally bankrupt, as they have betrayed the letter and spirit of multilateralism with the unilateral measures. Putting aside the difficult issue of morality aside, I also agree with you that there are different ways of interpreting the US memo. The following hints, however, would push me to the more skeptical side: 1. Timing: Note that the memo was issued on July 26, and the USTR was given 60 days to "secure changes at the WTO". As July and August both have 31 days, this would give USTR until Sept 24. As Sept 24 is a Tuesday, realistically the USTR only has until Sept 20 (Friday) to do anything. As you are well aware of, August is the holiday season for the WTO, and the first week of Sept only has 3 working days as both Sept 5 & 6 are WTO non-working days. Thus, this would only give USTR 13 working days to solve a long-standing practice that has existed for 54 years, if we use 1965, the year when GATT Part IV was added, as the starting year. Can this really happen? My guess is that it probably won't even make it to the official agenda to the WTO. As this is a systemic issue, the best forum would be the General Council, and it held its last meeting on July 24, which, rather conveniently, is two days BEFORE the memo was released. And you need advance notice to put things on its agenda. My bet is that the US has not tabled the matter on the agenda at the last GC meeting, and does not have the intention of tabling this on its agenda, until at least after the August holidays. If they were really keen to address the issue, why choose such an inconvenient timing? 2. Substance: The US memo doesn't provide any specific benchmark on how developing country status should be determined (granted, they have submitted other proposals earlier with more details). More importantly, they have not provided any proposal on what should happen after a Member is disqualified. Having seen the high-quality works the US government, including the USTR, has produced, especially on topics that they are genuinely interested in, I don't believe that this can be explained by sloppy drafting of the bureaucrats. As it often happens in negotiations, lack of substance simply reflects lack of interest, which again confirms my suspicion that the issue was only thrown out as a red herring to derail rather than to facilitate the negotiations.