4:31 PM Jul 31, 1995

APPELLATE BODY STILL BLOCKED BY US

Geneva 31 July (Chakravarthi Raghavan) -- The establishment of the World Trade Organization's appellate body for the Dispute Settlement system appears to be still stalled -- over the US insistence on two representatives from the US to serve on the 7-member body.

With the United States seeking two seats, and the European Union making a similar claim for Europe (one from the EU, and another from non-EU Europe, most of whom have free trade or preferential trade accords with the EU), the deadlock has not been resolved.

A meeting of the Dispute Settlement Body (DSB) -- where the Chair had hoped to announce the names of the personalities chosen -- set for Monday was cancelled.

With the WTO 'shutting down' for all practical purposes for the summer recess in Europe, and due to resume only on 11 September, no solution can be found till after, trade diplomats said Monday.

But the Americans have been holding firm to their demand for two seats, and so far have shown no signs of compromising. But the others too have not so far yielded.

The Standing Appellate Body, under Art 17 of the DSU, is to be established by the DSB - and a six member panel (the Chairmen of the WTO General Council, the DSB, the Councils on Goods, Services and TRIPs, and the WTO Director-General) have gone through the over 30 applications/nominations, and interviewed the persons.

The Standing Appellate Body is to consist of seven members, three of whom are to serve on any one case, and to be chosen in rotation, according to rules and working procedures to be determined by the Appellate Body.

In stalling the establishment of the appellate body, the US is presumably hoping that if a decision has to be reached just before the Appellate Body is needed to hear appeals, it could get its way.

However, the DSB has been told both by its Chair and delegations that the process should be completed well ahead of appeals being lodged.

For while there are no appeals against panel rulings that the appellate body will have to hear and dispose off (within a 60-day period of notification of a party to a dispute appealing a panel ruling), and it might appear that there is no hurry, the appellate body before getting to that stage has to meet and agree on its own rules of procedure and how the appeals would be handled.

This process of settling the rules would not be easy, and time would be needed, trade diplomats say -- a view already reiterated at the DSB by its chairman.

Also put off are decisions relating to the WTO's "derestriction" of documents, mainly reports and rulings of dispute settlement panels, and their availability to NGOs - an issue pushed by the United States originally, but again being held up by the United States and hiding behind it the European Union.

While there has been a consensus of sorts in favour of the panel rulings and reports being available, the US and EU are trying to "bottle up" the recommendations and reports of the Textiles Monitoring Body which hears appeals arising out of the implementation of the Agreement on Textiles and Clothing, including the transitional safeguard measures that importing countries might put in place.

As one trade diplomat put it, there is an attempt to create "islands of transparency" (such as over panel rulings where the vocal Northern NGOs are involved) and "islands of non-transparency and secrecy" where the majors don't want their protectionist activities to be brought to public attention and notice through publication of TMB rulings and reports.