JOB/GC/222  
 
15 October 2019  
(19-6676) Page: 1/6 
General Council    
 
 
 AGENDA  ITEM 4 
 
INFORMAL PROCESS ON MATTERS RELATED TO T HE FUNCTIONING OF TH E APPELLATE 
BODY  – REPORT BY THE FACILI TATOR, H.E. DR. DAVI D WALKER (NEW ZEALAN D) 
TUESDAY, 15 OCTOBER 2019 
Introductory Remarks  
1.1.  Thank you, Chair.  I am pleased to have this opportunity to report to you, for the fourth time, 
and in so doing, take stock of where we stand in the Informal Process and my own consultations at 
this moment in time.  
1.2.  My previous report to the General Council was in July.  At and since the Jul y meeting, I have 
received useful feedback from Members and work has continued in the Informal Process.  
1.3.  As requested by the Chair of the General Council, I will therefore provide you today with an 
update on developments in the process since we have last m et. 
1.4.  It should be read in conjunction with my reports to the General Council on 28  February, 7 May 
and 23 July, which were issued as JOB/GC/215, JOB/GC/217 and JOB/GC/220 respectively.  
Fourth Report on Informal Process  
Process  
1.5.  As mentioned by the Chair, I  have continued my consultations and meetings in a range of 
formats, keeping in mind the solution -focused spirit of this Informal Process.  
1.6.  This included a further small group session - the 10th in that format - on 26  September, as 
well as a 5th  open-ended I nformal Meeting on 4 October to ensure transparency and inclusiveness 
in the Informal Process.  
1.7.  As before, the informal small group meeting comprised delegations and coordinators that had: 
(i) tabled written proposals; (ii)  raised concerns about the functio ning of, and the adherence to 
WTO rules by, the Appellate Body; and (iii)  made alternative proposals and/or raised follow -up 
questions on the proposals, issues and convergence elements.  
Substance  
1.8.  As you will recall, I presented to the General Council in Ju ly a progress report focusing on the 
points of convergence that I considered could be drawn from the Informal Process.  
1.9.  I put forward these points of convergence on my own responsibility in line with the purpose of 
this Informal Process, as initiated by the General Council Chair: namely, to undertake a discussion 
aimed at seeking workable and agreeable solutions to improve the functioning of the Appellate Body 
and avoid deadlock come December.  
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  1.10.   These points of convergence were and are of course without prejudice to differences that may 
remain on some issues that we have been discussing.   
1.11.   Responding to the feedback that I r eceived from Members at and since the July General 
Council meeting, the process has focussed on developing a concrete instrument for consideration by 
Members.  
1.12.   Based on the discussion to date and the proposals that Members have put forward in this 
Informal Process, my view is that an appropriate form for such an instrument would be a General 
Council Decision.  
1.13.   Following my discussions with the Chair, and drawing on Members' feedback, we therefore 
started looking to frame up such draft instrument based on the  points of convergence from 
JOB/GC/220.   
1.14.   The draft as presented today  - and I understand that copies have been made available to 
delegations in the room, as a non -paper for reference  - contains some adjustments to the 
JOB/GC/220 'points of convergence' text, resulting from the feedback that I received – both at and 
since the General Council meeting, including of a linguistic  nature.  As you may recall, I highlighted 
these adjustments at the 4  October open -ended Informal Meeting.  
1.15.   Rather than  reading the entire text of the draft instrument to you, I thought I would highlight 
for you, as I did on 4  October, just the points of adjustment that have been made (i.e. compared 
with paragraphs 1.13 through to 1.32 from JOB/GC/220):  
• First, in the secti on on 'Transitional rules for outgoing Appellate Body members', ahead 
of what corresponds to paragraph 1.13, there is a new point, which reads: "Only WTO 
Members may appoint members of the Appellate Body."  
• In what corresponds to paragraph 1.13, at the end of that sentence, the following has 
been added: "obligated to fill vacancies as they arise."  
• In the section on '90 days', in what corresponds to paragraph 1.18, instead of the phrase 
that "an Appellate Body report  needs to be issued no later than […]", it now reads: "the 
Appellate Body is obligated to issue its report no later than […]".  
• Then, in what corresponds to paragraph 1.19, a footnote has been added at the end of 
where it says that "the parties may agree with the Appellate Body to extend the 
time-frame for issuance of the Appellate Body report beyond 90 days", and the footnote 
reads: "Such agreement may also be made in instances of force majeure." – and that is 
to pick up a point that a number of Members raised in a recent proposal.  
• Then, on 'Advisor y Opinions' , in what corresponds to paragraph  1.23, instead of saying , 
as it previously did , "should not be ruled or decided upon", it now says "may not be ruled 
or decided upon".  
• And then, in what corresponds to paragraph 1.24, after the word "necessary" and before 
the words "to resolve the dispute", an additional phrase has been included, which reads: 
"necessary to assist the DSB in making the recommendations or in giving the ruling 
provided for in the covered agreements in order to resolve the dispute".  
• And finally, on "Regular dialogue between the DSB and the Appellate Body", in what 
corresponds to paragraph 1.30, an additional phrase has been added after the word 
"issues" and before "in a manner unrelated to the adoption of particular reports ", it now 
reads: "on issues, including in relation to implementation of this Decision, in a manner 
unrelated to the adoption of particular reports".  
1.16.   Taking account of Members' feedback, these are the changes that I have applied to the 
substantive part of the draft, a t this point.  JOB/GC/222  
 
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  1.17.   As a draft General Council Decision, there is of course also some Preambular language.  In 
that Preambular language:  
• There is a reference to what the General Council does, i.e. conducting the function of the 
Ministerial Conference in the int erval between its meetings pursuant to paragraph 2 of 
Article IV of the WTO Agreement.  
• As is common in such decisions, the General Council is having regard to paragraph 1 of 
Article  IX of the WTO Agreement.  
• And, because of the context of our work in this  Informal Process, the General Council is 
mindful of the work, which has been undertaken in the Informal Process of Solution -
Focused Discussion on Matters Related to the Functioning of the Appellate Body, under 
the auspices of the General Council.  
• The Gen eral Council also recognizes the central importance of a properly functioning 
dispute settlement system in the rules -based multilateral trading system, which serves 
to preserve the rights and obligations of Members under the WTO  Agreement and ensures 
that rules are enforceable.  
• And finally, it states that the General Council desires to enhance the functioning of that 
system consistent with the Understanding on Rules and Procedures Governing the 
Settlement of Disputes (the DSU).  
 
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1.18.   So, Chair, this is how I see the draft instrument at this point.  
1.19.   I am putting it forward for Members' consideration, on my own responsibility as Facilitator, 
based on the proposals submitted by Members and the extensive discussion in the Informal Process, 
as well as the feedback on the points of convergence that I have received  since July.  
1.20.   It is now up to Members to see how they wish to take this matter forward.  
1.21.   In considering the draft General Council Decision there are a few observations that, in my 
view, may  be relevant.  
1.22.   As I noted above, the purpose you set for this Informal Process Chair is to undertake a 
discussion aimed at seeking workable and agreeable solutions to improve the functioning of the 
Appellate Body and to avoid deadlock come December.  
1.23.   It may seem tautological, but a solution to improve the functioning of the Appellate Body can 
only have effect if there is a functioning Appellate Body for it to apply to.  So logically, the adoption 
of such a General Council Decision should be accompanied by an instruction from the General Council 
to the DSB to launch the selection process to fill vacant positions.  
1.24.   As was observed in July, the adoption of a Decision such as that attached – based as it is on 
the points of convergence from JOB/GC/220 – would consti tute a shared assessment by Members 
that the Appellate Body has, in some respects, not been functioning as intended under the DSU.  
1.25.   Such a Decision would have implications for the actions of the Appellate Body, but it also 
carries implications for how Membe rs look to use the Appellate Body.  
1.26.   To take such 'reset ' action, Members will need to have sufficient trust and confidence in each 
other that they will work together to implement any such Decision in the coming years.   
1.27.   Building that trust and confidence is an urgent task.  JOB/GC/222  
 
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  1.28.   Even if action was taken today, the time required to conduct a selection process is such that 
the Appellate Body will inevitably experience a 'technical dip' (i.e . it will fall below the number of 
members needed to hear a new appeal) as of 11  December.  The urgency  now is to take action to 
avoid that situation becoming material for Members in resolving a dispute.  
Concluding Remarks  
1.29.   As with my previous reports, this report will be issued in the JOB/GC -series, with the draft 
General Council Decision annexed to it.  
1.30.   I continue to stand ready to assist the Chair of the General Council and Members, in my 
capacity as Facilitator, as may be required.  
1.31.   Thank you.  
 
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  ANNEX  
DRAFT GENERAL COUNCI L DECISION ON FUNCTI ONING OF THE APPELLATE BODY  
The General Council,  
Conducting  the function of the Ministerial Conference in the interval between meetings pursuant to 
paragraph 2 of Article IV of the Marrakesh Agreement Establishing the World Trade Organization 
(the "WTO Agreement "); 
Having regard to  paragraph 1 of Article IX of the WTO Agreement;  
Mindful  of the work undertaken in the Informal Process of Solution -Focused Discussion on Matters 
Related to the Functioning of the Appellate Body, under the auspices of the General Council;  
Recognizing  the central importance of a properly functioning dispute settlement system in the 
rules-based multilateral trading system, which serves to preserve the rights and obligations of 
Members under the WTO Agreement and ensures that rules are enforceabl e; 
Desiring  to enhance the functioning of that system consistent with the Understanding on Rules and 
Procedures Governing the Settlement of Disputes (the "DSU");  
Decides  as follows:  
Transitional rules for outgoing Appellate Body members  
Only WTO Members ma y appoint members of the Appellate Body.  
The Dispute Settlement Body (the "DSB") has the explicit authority, and responsibility, to determine 
membership of the Appellate Body and is obligated to fill vacancies as they arise.  
To assist Members in discharging this responsibility, the selection process to replace outgoing 
Appellate Body members shall be automatically launched 180 days before the expiry of their term 
in office.  Such selection process shall follow past practice.  
If a vacancy arises be fore the regular expiry of an Appellate Body member's mandate, or as a result 
of any other situation, the Chair of the DSB shall immediately launch the selection process with a 
view to filling that vacancy as soon as possible.  
Appellate Body members nearin g the end of their terms may be assigned to a new division up until 
60 days before the expiry of their term.  
An Appellate Body member so assigned may complete an appeal process in which the oral hearing 
has been held prior to the normal expiry of their ter m. 
90 Days  
Consistent with Article 17.5 of the DSU, the Appellate Body is obligated to issue  its report no later 
than 90 days from the date a party to the dispute notifies its intention to appeal.  
In cases of unusual complexity or periods of numerous appea ls, the parties may agree with the 
Appellate Body to extend the time -frame for issuance of the Appellate Body report beyond 90  days.1 
Any such agreement will be notified to the DSB by the parties and the Chair of the Appellate  Body.  
 
1 Such agreement may also be made in instances of force majeure . JOB/GC/222  
 
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  Municipal Law  
The 'meaning of municipal law' is to be treated as a matter of fact and therefore is not subject to 
appeal.  
The DSU does not permit the Appell ate Body to engage in a 'de novo'  review or to 'complete the 
analysis' of the facts of a dispute.  
Consistent with Article 17.6 of the DSU, it is incumbent upon Members engaged in appellate 
proceedings to refrain from advancing extensive and unnecessary arg uments in an attempt to have 
factual findings overturned on appeal, under DSU Article 11, in a de facto  'de novo  review'.  
Advisory Opinions  
Issues that have not been raised by either party may not be ruled or decided upon by the Appellate 
Body.  
Consistent with Article 3.4 of the DSU, the Appellate Body shall address issues raised by parties in 
accordance with DSU Article 17.6 only to the extent necessary to assist the DSB in making the 
recommendations or in giving the ruling provided for in the covered agre ements in order to resolve 
the dispute.  
Precedent  
Precedent is not created through WTO dispute settlement proceedings.  
Consistency and predictability in the interpretation of rights and obligations under the covered 
agreements is of significant value to Me mbers.  
Panels and the Appellate Body should take previous Panel/Appellate Body reports into account to 
the extent they find them relevant in the dispute they have before them.  
'Overreach'  
As provided in Articles 3.2 and 19.2 of the DSU, findings and recomm endations of Panels and the 
Appellate Body and recommendations and rulings of the DSB cannot add to or diminish the rights 
and obligations provided in the covered agreements.  
Panels and the Appellate Body shall interpret provisions of the Agreement on Impl ementation of 
Article VI of the General Agreement on Tariffs and Trade 1994 in accordance with Article 17.6(ii) of 
that Agreement.  
Regular dialogue between the DSB and the Appellate Body  
The DSB, in consultation with the Appellate Body, will establish a me chanism for regular dialogue 
between WTO  Members and the Appellate Body where Members can express their views on issues, 
including in relation to implementation of this Decision, in a manner unrelated to the adoption of 
particular reports.  
Such mechanism w ill be in the form of an informal meeting, at least once a year, hosted by the Chair 
of the DSB.  
To safeguard the independence and impartiality of the Appellate Bo dy, clear ground rules will be 
provided to ensure that at no point should there be any discus sion of ongoing disputes or any 
member of the Appellate Body.  
 
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