Conventional wisdom has it that, in recent years, the legalized mechanism of dispute settlement before the World Trade Organization (WTO) has been “busier than ever”, “a victim of its own success”. This paper uses hard data to assess the WTO’s current caseload and examines how it has evolved since the WTO’s creation in 1995. We also forecast panel and Appellate Body (AB) caseload ten years from now using different scenarios.
WTO dispute settlement does, indeed, currently experience a peak in terms of the total number of cases pending before panels and the AB (as of 30 April 2018, respectively, 18 and 8). However, this is not due to an increase in new cases filed (new consultation requests markedly reduced, from a high of 50 in 1997 to “only” 17 in 2017), but rather because pending cases take much longer to conclude as they have become more complex and are often delayed for lack of human resources. In addition, fewer cases filed get formally settled (from 20% in the first five years of the WTO to almost zero after 2014), appeal rates remain very high (on average 68%), and the share of follow-up disputes over compliance (DSU Art. 21.5) has markedly increased, all three factors leading to more (pending) caseload without actually more (new) cases filed, or more panel or AB reports issued (the number of reports produced per year has actually gone down, dropping from a peak of 26 panel reports and 13 AB reports in 2000, to “only” 13 panel reports and 6 Appellate Body reports in 2017).
WTO dispute settlement is also predominantly used (i) for certain types of disputes (45% of cases filed between 2012-2016 are trade remedy disputes, compared to only 23% between 1995-1999) and (ii) for disputes between a small subset of WTO members (20 WTO Members represent 85% of DSU participation as main party).
Looking forward, we forecast that the current glut in WTO caseload will not last. More specifically, after a temporary drop in 2019, we forecast a record-breaking spike in 2020-2022, after which WTO caseload will fall back and stabilize at numbers we have seen before. In none of the three scenarios we set out (“business as usual”, “back to normal”, “more settlements, less appeals”) is there reason to panic today (e.g. to massively hire additional, long-term WTO Secretariat staff; temporary hires to address the 2020-2022 spike would suffice). Moreover, relatively small improvements -- panels and the AB renewing compliance with timeframes set out in the DSU; the system improving on its “clearly preferred” solution of settlement, and parties exercising restraint when it comes to appealing panel reports (the assumptions under our “more settlements, less appeals scenario”) -- would bring WTO caseload down to surprisingly low levels (post-2021: 6-7 concurrent panels, and 1-2 concurrent AB proceedings). But there is also a “worst case scenario”: if WTO Members continue to fail to fill vacancies on the Appellate Body, WTO dispute settlement will grind to a halt in December 2019, at which time only 1 individual would remain on the AB, making it impossible for the AB to function.
Monday, June 4, 2018
Pauwelyn & Zhang: Busier than Ever? A Data-Driven Assessment and Forecast of WTO Caseload
Joost Pauwelyn (Graduate Institute of International and Development Studies) & Weiwei Zhang (Graduate Institute of International and Development Studies) have posted Busier than Ever? A Data-Driven Assessment and Forecast of WTO Caseload. Here's the abstract: