The Washington Post editorial board had a recent op‐ed that focused on defending globalization and free trade from critics. As part of the piece, however, they included the following statement about the WTO’s Appellate Body, which, loosely speaking, is the highest “court”:
If the administration’s call for “reform” of global institutions means it intends to fix the World Trade Organization’s often biased forum for appealing trade rulings — without trashing or withdrawing from the WTO, as former president Donald Trump would have — well and good.
In response, I sent the following letter to the Post to clarify some points about the Appellate Body:
I agree with the general thrust of your editorial entitled “Biden must learn the right lesson from globalization.” However, I take issue with your reference to the WTO’s “often biased forum for appealing trade rulings.”
A fair accounting of the decisions of the WTO’s Appellate Body shows that the U.S. won some and lost some; and that the Appellate Body sometimes found domestic laws to violate WTO rules, while other times offered up more deference to these laws than the WTO’s “lower court” (called “panels”) did. If there is a bias, it is not obvious what it is. I worked as a staffer supporting the Appellate Body’s “judges” from 1999–2001, and I can say with certainty that every decision was based on a good faith effort to interpret and apply the rules.
That doesn’t mean the Appellate Body got every decision right, of course. All courts make mistakes. And it’s fine to revisit the Appellate Body’s role. It is certainly the right of the governments who make up the WTO to reconsider the scope of appeals.
But “often biased” is a strong charge that should not be tossed around lightly, and in this situation overstates the case.
I’m going to elaborate on some of these points here. When people talk about bias, the bias is usually against someone or something. Here, I think the most likely claims of bias would be that the Appellate Body was biased against (1) the United States or (2) certain types of trade measures.
With regard to bias against the United States, about a year ago I did a blog post that provided data on wins and losses in WTO disputes. WTO disputes are often complex, and it can be hard to judge wins and losses, but with various caveats, my conclusion was that “[the] figures indicate that the U.S. does a little better than average as a complainant and also as a respondent, although the variance from the average is pretty small.” If there’s a bias against the United States, I didn’t see it in the data.
As to bias against specific types of trade measures, I think that even many of the anti‐globalization critics of the WTO would say that the Appellate Body provided a correction to some of the earlier panel decisions that dealt with environmental and other public policy laws and regulations. The Appellate Body showed more deference to these laws and regulations than many panels had, and the U.S. government was generally supportive of that change in approach.
On the other hand, the Appellate Body showed less deference than did some panels in the area of “trade remedies” (anti‐dumping, countervailing duties, and safeguards). If the United States has concerns about this, its most productive option, in my view, is to propose specific changes to the WTO provisions in this area. This could involve changes to the substantive law or to the standard of review.
To be clear, I don’t think the approaches of WTO panels and the Appellate Body in either of these areas should be considered “bias” in the negative sense of the term. The governments who are Members of the WTO create a set of rules, and then those governments bring cases that panels and the Appellate Body hear. It may be that the “judges” who serve as panelists or on the Appellate Body at a given time have certain instincts on particular issues, but that doesn’t mean they are taking an unthinking approach based on preconceived notions. Rather, like domestic judges, panels and the Appellate Body make a good faith effort to interpret and apply the rules in specific cases. Nevertheless, there will always be disagreement on the interpretive approach and on outcomes.
The Trump administration used allegations of “overreach” in appellate rulings to block appointments to the Appellate Body, leaving WTO dispute settlement in crisis. Finding a compromise is going to be one of the most difficult challenges faced by Biden’s trade policy team. The misconceptions about the Appellate Body that have seeped into the discussion here in Washington will make the task much harder.