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US Suddenly Discovers Why Supranational Tribunals Are A Problem, Just As It Starts Losing In Them

from the probably-just-a-coincidence dept

Tue, Jun 28th 2016 11:23pm — Glyn Moody

There's a bit of a battle going on in an obscure part of the World Trade Organization (WTO) called the Appellate Body, which has extremely wide-ranging powers within the WTO:

It is a standing body of seven persons that hears appeals from reports issued by panels in disputes brought by WTO Members. The Appellate Body can uphold, modify or reverse the legal findings and conclusions of a panel, and Appellate Body Reports, once adopted by the Dispute Settlement Body (DSB), must be accepted by the parties to the dispute.

Here's what's been happening, as reported by Bloomberg: The U.S. won't support the reappointment of Seung Wha Chang of South Korea to the World Trade Organization (WTO) appellate body, a U.S. official said at a meeting in Geneva.

"We do not consider that his service reflects the role assigned to the appellate body by WTO members in the WTO agreements," Deputy U.S. Permanent Representative Chris Wilson told members of the WTO dispute settlement body (DSB) May 23. "Any failure to follow scrupulously the role we members have assigned through these agreements undermines the integrity of, and support for, the WTO dispute settlement system."
As the article explains, that's not going down too well with other WTO members, including Brazil, the European Union, Japan, and South Korea, who are traditionally allies of the US in trade matters. So what exactly has Chang done to incur the wrath of the US? The U.S. said it was troubled by four recent panel decisions that Chang was involved in because they "raised systemic concerns about the disregard for the proper role of the appellate body and the WTO dispute settlement system."
Which seems to be a polite way of saying that Chang hasn't been toeing the US line. That's confirmed by the following section from a WTO news item about the DSB meeting where this argument took place: Canada, the European Union, India and Viet Nam added that the United States' statement of opposition [to Chang] based on previous Appellate Body decisions could create a dangerous precedent for other reappointment proceedings and affect an Appellate Body member's decision-making during their first term.
Here's one of those panel decisions that the US doesn't like: In the fourth ruling -- which upheld China's allegations about U.S. duties on non-market economies -- the appellate panel "took a very problematic and erroneous approach" that risks turning the DSB into "one that would substitute the judgment of WTO adjudicators for that of a member's domestic legal system as to what is lawful under that member's domestic law," Wilson said.
The interesting part is the bit at the end there, where the US complains that the WTO's dispute settlement system is effectively overruling national law. Techdirt readers will recognize that as a common complaint about the tribunals that adjudicate on disputes between investors and governments -- the so-called "investor-state dispute settlement" (ISDS) system, aka corporate sovereignty. Until now, the US has been a solid supporter of these tribunals, so it's rather significant to see it moaning about the problem of uppity adjudicators here. It raises the question why the US is unhappy with the DSB tribunal, but doesn't seem to have a problem with those used in ISDS.

It might have something to do with the fact that the US has never lost a corporate sovereignty case -- something it uses to justify the inclusion of ISDS in TPP and TAFTA/TTIP -- but is increasingly on the wrong end of decisions at the WTO. As to why the US never loses ISDS cases, Ante Wessels, writing on the FFII.org blog, has a provocative theory: he says the "Investor-to-state dispute settlement is a rigged system" that is tilted in favor of the US. Whether or not you agree with his analysis, it's certainly interesting to see how the US seems to be changing its mind on the value of supranational tribunals that can ride roughshod over domestic legal systems now that it finds itself on the losing side.

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Filed Under: corporate sovereignty, isds, seung wha chang, trade agreements, tribunals, us, wto

24 Comments

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Anon E. Mous (profile), 29 Jun 2016 @ 1:04am

I doubt anyone is shocked at this revelation. The U.S. and various special interest groups and their lobbyists have instituted protectionist tariffs, duties and bills to thwart their trading partners and when the decision come down from the WTO panel usually against the U.S. only then do they back down, this is more than a common theme it has been happening for years and years.

I find it rather amusing that the U.S. is bitching about the WTO Panels rulings when they were part of the process that brought in NAFTA AND other trade agreements.

The U.S. agreed as did the other countries who signed the agreement to the dispute mechanism way back when, but when the U.S is found to be in violation of the trade agreement they dont like the rules all of a sudden and the way the disputes are adjudicated.

Maybe if the U.S. didn't let lobbyists and special interest groups throw gobs of money at the members of senators and congress as a means to protectionism of those groups profits to stifle the competition the U.S. wouldnt be crying about how many times they have violated those trade agreements rules and got smacked on the hand by the WTO panel.

I can only wait to see how TPP is going to go, it is going to be some of the same B.S. and we are alll going to get screwed because of it being forced down are throats
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Anonymous Coward, 29 Jun 2016 @ 2:10am

tl;dr version of the US's complaint:

"We think it is problematic that US national law is treated the same as the national law of other countries. We are special, after all."
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Anonymous Coward, 29 Jun 2016 @ 2:16am

typical USA! everything is good as long as it is winning and/or getting the advantage! as soon as it's on the receiving end, it takes the ball the home!! and it doesn't give a flyin' fuck about the nations/companies that lose!! pathetic!!
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Anonymous Coward, 29 Jun 2016 @ 2:56am

Re:
"We think it is problematic that US national law is treated the same way we treat the national law of other countries. We are special, after all."

There, fixed that for you.
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David, 29 Jun 2016 @ 3:48am

Re: Re:
I think you are not being fair here. The U.S. has a similarly dim view towards its own laws and particularly its constitution where it does not match the interests of the military-industrial and megacorporate complex.

They aren't just wiping their ass with foreigners' laws.
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Anonymous Coward, 29 Jun 2016 @ 4:06am

USEXIT anyone?
Now we see why international governing bodies may not be the boon they were thought to be. Maybe Britain got it right?
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Anonymous Coward, 29 Jun 2016 @ 4:12am

The emperor doesn't like...
their own decrees.

Must reboot roman empire.
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Daydream, 29 Jun 2016 @ 5:17am

Clarify something for me?
These tribunals that make decisions in investor-state disputes, who are they responsible to?
That is to say, who appoints them? And who dismisses them if they aren't doing a good job?
Is there a Supranational Judicial Appointments Commission that makes the decision? If so, who appoints THEM?
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DannyB (profile), 29 Jun 2016 @ 5:54am

Trump can save us!
Trump can start a movement for America to exit from and no longer be part of the EU!

/s :-)
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Roger Strong (profile), 29 Jun 2016 @ 7:41am

Re: The emperor doesn't like...
...as it was in the year 14 A.D.
[...]
This new Empire will be at peace(no border = no wars)

So, just before the Empire invaded (de-Brexited?) Britain.
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Ninja (profile), 29 Jun 2016 @ 8:31am

Live by the sword, die by the sword, eh? The same is happening in the intellectual property field. The US has been increasingly in the receiving end of a good IP beating, specially from China these days. Maybe it's the tipping point where things are brought to saner approaches?
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Anonymous Coward (profile), 29 Jun 2016 @ 8:52am

techdirt rules
The US should have been paying attention to what we have been telling them all along here at techdirt.. that they should listen to our collective comments so they get it right the first time.
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1/4 Crow, 29 Jun 2016 @ 9:14am

For Little Big Horn
Maybe the Native Americans and ghost ancestors will finally see the day of retribution against the legacy Washington, DC forked tongued! That is in and of itself exciting if for nothing more than dancing, pipe smoking, and whiskey drinking around the fires again, prohibition on Indian lands repealed and all our women laughing and laughing and laughing again..
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Citizen X, 29 Jun 2016 @ 11:05am

Re:
Who specifically is it when they talk of the US blaiming this and doing that? Maybe we should take a look at WHO is doing the talking and trading for the US specifically.
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Friendly Persuasion (profile), 29 Jun 2016 @ 11:08am

Re: Re:
That seems more than a logical requisition, before we start determining what is the problem the US is claiming with this guy and previous rulings. What is at risk in the (US) denouncement?
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Anonymous Coward, 29 Jun 2016 @ 11:21am

Kangaroo Courts
It seems that the US likes to have "kangaroos" on all of their "courts". For example the FISA and seemingly, more and more, the SCOTUS.
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Aye Up Me Duck!, 29 Jun 2016 @ 11:37am

Re: Trump can save us!
No that wouldn't be good for his golf course that no locals wanted in the first place. Now they have a new Blarney stone to pee on every night on their way home from the pubs.. the Trump golf course sign. Its what they tell the foreigners is good luck to kiss now!
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Get that straight, 29 Jun 2016 @ 11:44am

Re:
Don't confuse what the US government is doing anywhere with the GOOD people of America. Thank You.
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Anonymous Coward, 29 Jun 2016 @ 12:34pm

Re:
I guess those lobbyist will have to dig deeper and include the members of this board when they dish out their bribes.
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Coyne Tibbets (profile), 29 Jun 2016 @ 3:20pm

Arrogance
Only U.S. corporations would have the arrogance to create an international tribunal in the belief it would be their personal brown-nosed butt-boy.
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That One Guy (profile), 29 Jun 2016 @ 4:05pm

Re:
You'd like to think so, but the USG and numerous companies have been IP-junkies for so many years at this point even suffering from increasing 'crashes' isn't likely to wake them up from from their 'drug' of choice.

Nope, as before the response will undoubtedly be 'If there are problems resulting from the law that can only be because it's not strong enough, so ratchet up the laws some more!'
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got_runs? (profile), 29 Jun 2016 @ 4:24pm

This American citizens fault for not paying attention.
Giving up national sovereignty for a buck.
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Anonymous Coward, 30 Jun 2016 @ 11:13pm

Re: Re: The emperor doesn't like...
When London was Londinium and the sestertium was worth far more than Euro :)
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Anonymous Coward, 1 Jul 2016 @ 4:38am

Hey, history books, hey , history books, over here.......psssshhhh......over here

A governments admition to "influence" their representatives
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