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WTO failing to cope with trade disputes burden as staff exits mount

In its latest annual report, the World Trade Organization (WTO) has reported that its disputes unit has ‘faced difficulties in retaining staff’, causing delays to panels being established amid a surging caseload.

The annual report revealed the WTO’s dispute settlement body had one of its most active years in 2014 since its inception nearly two decades ago, with 34 active panel, compliance and arbitration proceedings and six appeals.

Significant cases before the body included the European Union’s renewed trade row with the US in its proxy dispute over aircraft makers Airbus and Boeing, this time over alleged US tax incentives for Boeing, while a plain packaging disputes brought against Australia, with five WTO members challenging the policy and 41 members registering as third parties, is the largest dispute ever brought before the dispute settlement system.

The WTO’s director-general Roberto Azevêdo said in September last year that the disputes arm faced difficulties in retaining staff and acknowledged that the private sector can offer lawyers more stable and lucrative working conditions and better career advancement opportunities. The latest annual report from the WTO said that ‘inevitably, this has led to the loss of a number of trained and experienced lawyers and consequently their institutional and case law memory’.

The exit of experienced lawyers has led to delays in getting disputes panels up and running and long waits for slots to appeal an outcome.

Both the increasing dispute settlement workload, coupled with the recent loss of a number of trained and experienced dispute settlement lawyers, led Azevêdo to reallocate resources at the end of 2014 so that the three dispute settlement divisions could recruit junior lawyers through temporary contracts for a period of up to two years. The WTO has also had to reassign staff working in other divisions to work on pending disputes.

But, the annual report stated: ‘These solutions only provide temporary relief for what is a recurrent problem. The need for specialised skills, at both professional and support staff levels, means that the WTO needs to hire new staff at both the senior and junior levels.’

The disputes body received 14 requests for consultations in 2014, nearly half what it received in 2013 when 27 requests were filed. Nonetheless, this did not reduce the workload, as 40 active disputes were already proceeding through adjudication, whether before the appellate body, panels or in arbitration.

Brussels-based Lode Van Den Hende, a European Union and WTO law specialist at Herbert Smith Freehills, told Legal Business: ‘There is an anomalous situation where the support staff, not the panelists who come and go, are writing the reports. That’s not very healthy; the WTO needs to ensure the balance does not shift any further onto the support staff.’

He added: ‘Panelists are appointed on an ad hoc basis so you can have an ex-trade ambassador who hasn’t decided a case for five years in charge. The WTO is a small organization, considering it’s meant to be running global trade, so while I haven’t seen a reduction in quality it would make sense to make panel members and the appellate body members full-time. However, the problem with this is that fewer judges would be needed if the jobs became full-time and it would be hard for all the different members to agree on which judges would win these spots. At present the WTO attempts to be representative but that would get harder if there were fewer roles.’