WT/GC/W/752  
 
26 November 2018  
(18-7417) Page: 1/4 
General Council  
12-13 December 2018  Original: English  
 
COMMUNICATION FROM THE EUROPE AN UNION, CHINA, CAN ADA,  
INDIA, NORWAY, NEW Z EALAND, SWITZERLAND,  AUSTRALIA,  
REPUBLIC OF KOREA, ICELAND, SINGAPORE AND  MEXICO  
TO THE GENERAL COUNC IL 
The following communication, dated 2 3 November 2018, is being circulated at the request of the 
delegations of the European Union, China, Canada, India, Norway, New Zealand, Switzerland, 
Australia, Republic of Korea, Iceland, Singapore and  Mexico. 
 
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INTRODUCTION  
We are deeply concerned that the enduring absence of consensus in the Dispute Settlement Body 
("DSB") to fill the vacancies on the Appellate Body risks undermining the viability of the WTO dispute 
settlement system . 
 
We acknowledge the successful contribution of the dis pute settlement system to the security and 
predictability of the multilateral trading system. We recognise the essential role of the Appellate 
Body within the system that serves to preserve the rights and obligations of Members under the 
covered agreements , and to clarify the existing provisions of those agreements without adding to or 
diminishing the rights and obligations provided therein.  
 
At the same time, we acknowledge that concerns have been raised about the functioning of the 
dispute settlement syst em and are ready to work on solutions, while preserving the essential 
features of the system and of its Appellate Body.  
 
To this end, we call on all Members to fill the vacancies on the Appellate Body and to amend certain 
provisions of the Understanding on  Rules and Procedures Governing the Settlement of Disputes 
("DSU").1 The proposed amendments aim at improving the DSU while addressing the concerns that 
have been raised on these issues.  
 
PROPOSED AMENDMENTS  
Transitional rules for outgoing Appellate Body members  
 
Concerns have been expressed that the Appellate Body does not have the authority to deem 
someone who is not an Appellate Body member to be a member.  
 
It is proposed that a transitional rule for outgoing Appellate Body members is adopted by the WTO  
Membership itself through an amendment of the DSU. The DSU would provide that an outgoing 
Appellate Body member shall complete the disposition of a pending appeal in which a hearing has 
already taken place during that member's term.  
 
                                                
1 If the amendment of the DSU prove s to be impracticable to achieve this objective swiftly, we will consider 
other legal instruments appropriate for that purpose.  WT/GC/ W/752  
 
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  The issue of 90 days  
 
Concerns have been expressed with the timelines for appellate proceedings and with the absence of 
consultation of the parties when the 90 -day timeframe provided for in Article 17.5 of the DSU is 
exceeded and with the alleged lack of transparency.  
 
It is proposed to amend the 90 -days rule in Article 17.5 of the DSU by providing an enhanced 
consultation and transparency obligation for the Appellate Body. Article 17.5 would provide for the 
possibility for the parties to agree to the exceeding of the 90 -day timeframe. In practice, the 
Appellate Body would need to consult with the parties early in appellate proceedings – or before the 
appeal is filed – if it estimates that the report will be circulated outside 90 days. If there is no 
agreement of the part ies on the exceeding of this timeframe there could be a mechanism pursuant 
to which the procedure or working arrangements for the particular appeal could be adapted to ensure 
the meeting of the 90 -day timeframe. For example, the Appellate Body could propos e to the parties 
to voluntarily focus the scope of the appeal, set an indicative page limit on the parties' submissions 
or it could take appropriate measures to reduce the length of its report. This could also include the 
publication of the report in the l anguage of the appeal only, for the purposes of meeting the 90 -day 
timeframe (the translation to the other WTO languages and formal circulation and adoption would 
come later).  
 
It should however be clear that those changes do not affect the existing rules on the validity or the 
adoption of late reports.  
 
The meaning of municipal law as an issue of fact  
 
Concerns have been expressed with the Appellate Body review of panel findings as to the meaning 
of domestic legislation . 
 
It is proposed to clarify, for gre ater certainty, that issues of law covered in the panel report and legal 
interpretations developed by the panel, in the meaning of Article 17.6 of the DSU, while they include 
the legal characterisation of the measures at issue under the WTO rules, and the panel's objective 
assessment according to Article 11 of the DSU, they do not include the meaning itself of the 
municipal measures.  
 
Findings unnecessary for the resolution of the dispute  
 
Concerns have been expressed that the Appellate Body has a tendency to make findings on issues 
not necessary to resolve a dispute . 
 
It is proposed to amend Article 17.12 of the DSU to provide that the Appellate Body shall address 
each of the issues raised on appeal by the parties to the dispute to the extent this is necess ary for 
the resolution of the dispute.  
 
Indirectly, this amendment would also address the concern related to the timelines of appellate 
proceedings (cf the issue of 90 days).  
 
The issue of precedent  
 
Concerns have been expressed with the Appellate Body's a pproach to treat its own reports effectively 
as precedent that panels are to follow absent "cogent reasons".  
 
It is proposed that annual meetings are held between the Appellate Body and WTO Members (in the 
DSB) where Members could express their views in a manner unrelated to the adoption of particular 
reports (as laid down currently in Article 17.14 of the DSU). This would provide an additional "channel 
of communication" where concerns with regard to some Appellate Body approaches, systemic issues 
or trends  in the jurisprudence could be voiced. Adequate transparency and ground rules for such 
meetings would need to be put in place, in order to avoid undue pressure on Appellate Body 
members.  
 
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 WT/GC/W/752  
 
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  These proposed amendments are contained in the Annex. In view of the urgency of the matter, and 
in order to allow for the appointments to take place swiftly, we are hereby proposing that these 
amendments be adopted by the General Council as soon as possibl e, pursuant to Articles IV:2 and 
X:8 of the Marrakesh Agreement Establishing the World Trade Organization.  
 
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  WT/GC/ W/752  
 
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  ANNEX  
AMENDMENT OF CERTAIN  PROVISIONS OF  
THE UNDERSTANDING ON  RULES AND PROCEDURE S 
GOVERNING THE SETTLE MENT OF DISPUTES  
Article 17  of the Understanding on Rules and Procedures Governing the Settlement of Disputes 
("DSU") shall be amended as follows:  
 
1. In paragraph 2 the following sentence shall be added:  
 
"The outgoing  person shall complete the disposition of an appeal in which the or al hearing has been 
held." 
 
2. Paragraph 5 shall be amended to read as follows:  
 
"As a general rule, the proceedings shall not exceed 60 days from the date a party to the dispute 
formally notifies its decision to appeal to the date the Appellate Body circulat es its report. In fixing 
its timetable the Appellate Body shall take into account the provisions of paragraph 9 of Article 4, if 
relevant. When the Appellate Body considers that it cannot provide its report within 60 days, it shall 
inform the DSB in writin g of the reasons for the delay together with an estimate of the period within 
which it will submit its report. In no case shall the proceedings exceed 90 days , unless the parties 
agree otherwise on a proposal from the Appellate Body. The parties shall give  sympathetic 
consideration to such proposals. In the absence of such agreement of the parties, if the Appellate 
Body considers that it cannot submit its report within 90 days it shall, after consulting with the 
parties, propose them specific procedures or working arrangements and take appropriate 
organizational measures, without prejudice to the procedural rights and obligations of the parties 
under this agreement, with a view to enabling the Appellate Body to submit its report within that 
period. The parti es shall cooperate to enable the Appellate Body to circulate its report within 90 
days. " 
 
3. A footnote 7 bis shall be inserted to paragraph 6 that shall read as follows:  
 
"For greater certainty, the "issues of law covered in the panel report and legal interp retations 
developed by the panel" do not include the panel findings with regard to the meaning of the municipal 
measures of a party but do include the panel findings with regard to their legal characterisation 
under the covered agreements".  
 
4. Paragraph 12 s hall be amended to read as follows:  
 
"The Appellate Body shall address each of the issues raised in accordance with paragraph 6 during 
the appellate proceeding , to the extent necessary for the resolution of the dispute. " 
 
5. Paragraph 15 shall be inserted. It  shall be preceded by a sub -heading "Meetings with the 
Appellate Body" and it shall read as follows:  
 
"Meetings with the Appellate Body  
 
Once a year, the DSB  shall meet in the presence of the Appellate Body. At such meetings, any 
Member may express its views on adopted Appellate Body reports. The meetings shall be open to 
all Members and their conduct shall be respectful of the independence and impartiality of  the 
Appellate Body. The DSB shall adopt the rules applicable to such meetings on a proposal from the 
Chairman of the DSB and in consultation with the Appellate Body."  
 
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