Reforming the appellate body

Abstract

The Appellate Body (hereinafter AB) has been criticized for exercising “judicial activism” on the one hand, and, on the other hand, for being too literalistic in its interpretation of the WTO agreements. This reflects the question of whether the Appellate Body is an international court of trade. After reviewing the judicial features of the AB, i.e., automaticity of decision-making and compulsory jurisdiction, this chapter considers the U.S. concern for AB’s judicial activism and for the AB’s practice that may adversely affect the sovereignty of WTO Members. The problem is that there is no mechanism for checks and balances in regard to the AB in the WTO. Accordingly, this chapter considers several potential institutional reforms that may put some discipline on the AB, including optional DSB jurisdiction, reduction of the threshold of the exclusive authority of the Ministerial Conference and the General Council to adopt interpretations, and establishment of an informal peer group to review AB reports.