1 This risk of non-adoption follows from Article 16.4 WTO Dispute Settlement Understanding (DSU): ‘Within 60 days after the date of circulation of a panel report to the Members, the report shall be adopted at a DSB meeting unless a party to the dispute formally notifies the DSB of its decision to appeal … If a party has notified its decision to appeal, the report by the panel shall not be considered for adoption by the DSB until after completion of the appeal.’

2 Cf. E. U. Petersmann, ‘The 2018 American and Chinese Trade Wars Risk Undermining the World Trading System and Constitutional Democracies’, EUI Working Paper Law 2018/17.

3 Cf. Bacchus, J., The Willing World: Shaping and Sharing a Sustainable Global Properity (Oxford University Press, 2018)CrossRefGoogle Scholar; Petersmann, E. U., Multilevel Constitutionalism for Multilevel Governance of Public Goods – Methodology Problems in International Law (Hart, 2017)Google Scholar.

4 Cf. G. Shaffer, M. Elsig, and M. Pollack, The Slow Killing of the WTO, www.huffingtonpost.com (6 December 2017), refuting television statements by US President Trump (‘The WTO … was set up for the benefit of everybody but us. They have taken advantage of this country like you wouldn't believe … As an example, we lose the lawsuits, almost all of the lawsuits in the WTO … Because we have fewer judges than other countries. It's set up as you can't win. In other words, the panels are set up so that we don't have majorities. It was set up for the benefit of taking advantage of the United States’) as ‘fake news’.

5 Cf. the references to various speeches by USTR Lighthizer in: Q. Slobodian, ‘You Live in Robert Lighthizer's World Now’, Foreign Policy (6 August 2018); J. Bacchus, ‘Might Unmakes Right: The American Assault on the Rule of Law in World Trade’, Centre for International Governance Innovation CIGI Papers No. 173 (May 2018); Petersmann, E. U., ‘The Crown Jewel of the WTO has been stolen by US Trade Diplomats – and they have no Intention of Giving it Back’, Prévost, D. et al. (eds.), Restoring Trust in Trade – Liber Amicorum for Peter Van den Bossche (Hart, 2018), pp. 105–118Google Scholar.

6 Cf. Dunoff, J. L. and Pollack, M. A., ‘The Judicial Trilemma’, American Journal of International Law, 111 (2017), 225CrossRefGoogle Scholar, 267f.

7 Cf. Kuijper, P. J., ‘The US Attack on the WTO Appellate Body’, Legal Issues of Economic Integration, 45 (2018), 1–11Google Scholar. Rule 15 authorizes the AB to permit its outgoing members to complete the disposition of pending appeals similar to the working procedures for many other international courts.

8 Notwithstanding the text of Article 17.2 (‘The DSB shall …’), numerous DSU provisions make clear that obligations addressed to the DSB entail legal good faith obligations also for each DSB member.

9 Cf. J. Hillman, ‘Three Approaches to Fixing the WTO's Appellate Body: The Good, the Bad and the Ugly?’, Institute of International Economic Law, Georgetown University Law Center, December 2018, Annex (listing the concerns expressed by the US in DSB meetings since 2017).

10 On the legal inconsistency of this US criticism see Gao, H., ‘Dictum on Dicta: Obiter Dicta in WTO Disputes’, World Trade Review, 17 (2018): 509–533CrossRefGoogle Scholar, and Sacerdoti, G., ‘A Comment on Henry Gao ‘Dictum on Dicta: Obiter Dicta in WTO Disputes’, World Trade Review, 17 (2018): 535–540CrossRefGoogle Scholar.

11 https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20I.pdf, at pp. 22–28.

12 E.g. of Article 3:2 DSU regarding treatment of AB case-law as precedent absent ‘cogent reasons’; Article 17:5 DSU regarding the 90 days deadline; Article 17:6 regarding ‘issues of law’ and legal qualifications of facts; Article 17:12 DSU regarding obiter dicta.

13 E.g. elaboration of AB Working Procedures as prescribed in Article 17:9 DSU; judicial ‘administration of justice’ in applying the incomplete DSU rules to disputes over political disagreements on WTO rules.

14 DSB meeting of 21 November 2018 (summary reported on the WTO website). US Ambassador Shea's claim (e.g. during the WTO Public Forum session 111 on 4 October 2018) that the US does not recognize a ‘judicial function’ of the AB, illustrates that the US claim of ‘AB over-reach’ rests on very subjective DSU interpretations which are not shared by most AB and DSB members, just as the related US claim that one WTO member's rights or obligations may be clarified by a Panel without regard to the AB's clarification (‘precedent’) of the same rights or obligations in previous WTO disputes. The different ‘institutional choice’ perspectives (e.g. political vs judicial choices) affect the ‘cognitive dimension’ of legal interpretations – a fact which is often overlooked in the criticism of WTO dispute settlement findings by diplomats and economists.

15 Cf. Kuijper, supra n. 7, at 6–7. .

16 On the longstanding reluctance of the US to limit US foreign policy powers by submitting to international courts, see: Romano, C. P. R. (ed.), The Sword and the Scales: The United States and International Courts and Tribunals (Cambridge University Press, 2009)CrossRefGoogle Scholar.

17 Cf. Article 31.3(c) of the Vienna Convention on the Law of Treaties (VCLT), which is widely recognized as codifying customary rules of international treaty interpretation, and the specification of applicable, universally recognized ‘principles of justice’ in the Preamble of the VCLT; cf. Cook, G., A Digest of WTO Jurisprudence on Public International Law Concepts and Principles (Cambridge University Press, 2015)CrossRefGoogle Scholar.

18 WTO AB members have persistently characterized the AB as a judicial institution, for instance in their contributions (e.g. by WTO AB members J. Bacchus, C. D. Ehlermann, J. Hillman, M. Matsushita, and D. Unterhalter) to: Marceau, G. (ed.), A History of Law and Lawyers in the GATT/WTO: The Development of the Rule of Law in the Multilateral Trading System (Cambridge University Press, 2015)Google Scholar. See also van den Bossche, P., ‘The Appellate Body of the WTO’, De Beere, G. and Wouters, J. (eds.), The Contribution of International and Supranational Courts to the Rule of Law (Elgar, 2015), 176–202CrossRefGoogle Scholar. The Handbook on the WTO Dispute Settlement System, prepared by the WTO legal services (Cambridge University Press, 2004) likewise describes WTO panels and the AB as ‘quasi-judicial bodies, in a way tribunals, in charge of adjudicating disputes’ (e.g. p. 21).

19 See Bacchus, supra 5.

20 Cited from: Financial Times Free Trade, FT@newsletters.ft.com of 10 September 2018: ‘For Mr Lighthizer, as well as Peter Navarro, the chief trade hawk in the White House, the goal is not only to disentangle the US from its Chinese supply chains, and to shift production back home, but to do the same with the rest of America's traditional trading partners as well.’

21 Cf. WT/DS 544 (5 April), 547 (18 May), 548 (1 June), 550 (1 June), 551 (5 June), 552 (12 June), 554 (29 June), and 556 (9 July 2018). All these complaints convincingly challenge the US claim that ‘economic security’ is part of ‘national security’ and justifies violating all WTO rules without WTO jurisdiction for reviewing such unilateral invocations of Article XXI GATT in WTO dispute settlement proceedings aimed at protecting the non-discrimination and reciprocity obligations of WTO law without constraining national security policies. Contrary to the US concerns, Article XXI GATT only protects the reciprocity principles underlying GATT (e.g. Articles XIX, XXVIII) without limiting national security policies.

22 E.g. in view of the very small amount of US production of steel and aluminium ‘for the purpose of supplying a military establishment’ in terms of GATT Article XXI(b).

23 Cf. E. Luce, ‘Donald Trump's Circus Act Is a Sinister Distraction’, Financial Times (26 August 2018).

24 See document WT/GC/W/752 of 26 November 2018.

25 Cf. WT/GC/W/753 of 26 November 2018.

26 Note 3 to Article IX:1 WTO ('Decisions by the General Council when convened as the Dispute Settlement Body shall be taken only in accordance with the provisions of paragraph 4 of the Dispute Settlement Understanding') is no legal obstacle to majority decisions by the WTO Ministerial Conference or by the General Council deliberately not convening as DSB in order to meet the collective duties of WTO members to comply with Article 17 DSU. Such convening of the WTO General Council in order to overcome disagreements in the DSB has been practiced already in the past, for instance when WTO Members wanted to censure the AB for its handling of amicus curiae briefs (cf. WTO doc. WT/GC/M/60 and Kuijper, supra n. 7, at 10.

27 ‘The WTO shall continue the practice of decision-making by consensus followed under GATT 1947. Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting … Decisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the Multilateral Trade Agreements.’ The ‘exceptions’ for consensus-based decision-making by the DSB (e.g. pursuant to Articles 2.4, 16.4, 17.14 DSU) do not prevent the Ministerial Conference or General Council from meeting collective WTO legal obligations by voting if ‘a decision cannot be arrived at by consensus’ in the DSB due to illegal blocking of consensus in the DSB.

28 Cf. the WTO General Council Decision adopted 10 December 2002 on ‘Procedures for the Appointment of Directors-General’ (WT/L/509 dated 20 January 2003), which provides in para. 20: ‘Recourse to a vote for the appointment of a Director-General shall be understood to be an exceptional departure from the customary practice of decision-making by consensus, and shall not establish any precedent for such recourse in respect of any future decisions in the WTO.’ The text of Article IX:1 confirms that the same ‘exception’ must be applied to illegal blocking of the appointment of AB members.

29 Article XVI.3 provides: ‘In the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreements, the provisions of this Agreement shall prevail to the extent of the conflict.’ If the US should claim that Article 2.4 DSU (‘Where the rules and procedures of this Understanding provide for the DSB to take a decision, it shall do so by consensus’) protects a veto-power of the US for indefinitely blocking the filling of AB vacancies and, thereby, de facto amending the DSU, the ‘authoritative interpretation’ could clarify that – according to its Article XVI.3 – the legal duties under Article IX.1 of the WTO Agreement must prevail and require overcoming any ‘conflicting interpretations’ of WTO rules so as to prevent illegal abuses of veto-powers and protect the collective WTO obligations of maintaining the AB as legally prescribed in Article 17 DSU. WTO members have no legal and democratic mandate to amend the DSU de facto by rendering the exercise of AB jurisdiction impossible.

30 On the problems of using Article 25 DSU as a bilaterally agreed substitute for AB review of WTO panel reports (such as non-adoption of the panel and arbitration reports by the DSB) see the analysis by former US congressman and former AB chairman J. Bacchus, How to Solve the WTO Judicial Crisis, in: CATO Institute 6 August 2018; S. Anderson et al., ‘Using Arbitration under Article 25 of the DSU to Ensure the Availability of Appeals’, CTEI Working Paper, Graduate Institute Geneva (2017–17).

31 For a discussion of the, by now, about 20 WTO dispute settlement reports on ‘zeroing’ in US anti-dumping practices, see, e.g., Ahn, D. and Messerlin, P., ‘US–Anti-Dumping Measures on Certain Shrimp and Diamond Sawblades from China: Never Ending Zeroing in the WTO?’, 13 World Trade Review (2014), 267–279CrossRefGoogle Scholar.

32 Cf. A. M. Wolff, ‘Stressed in an Age of Populism: Recommendations for Changes in US Trade Law and Policy’, Institute of International Economic Law IIEL Issue Brief 04/2017; Petersmann, supra n. 2; Levitsky, S. and Ziblatt, D., How Democracies Die (New York: Crown, 2018)Google Scholar, at 206: ‘America is no longer a democratic model. A country whose president attacks the press, threatens to lock up his rival, and declares that he might not accept election results cannot credibly defend democracy … The Trump presidency – together with the crisis of the EU, the rise of China, and the growing aggressiveness of Russia – could make (the idea of a global democratic recession) a reality’.

33 See note 16 above and related text.

34 The 2018 US President's Trade Policy Agenda insists: ‘The United States will not allow the WTO – or any other multilateral organization – to prevent us from taking actions that are essential to the economic well-being of the American people’; cf. note 11, at p. 2.

35 Examples include (1) protectionist abuses of trade remedy rules; (2) excessive, unilateral interpretations of ‘national security’ in US trade laws (e.g. Section 232); (3) hegemonic recourse to ‘aggressive unilateralism’ (e.g. Section 301); (4) disregard for the customary rules of treaty interpretation in favour of alleged historical intentions of US negotiators; (5) politicization of appointments of judges; (6) political interferences into third party adjudication disregarding the democratically defined separation of executive and judicial powers (e.g. of the AB); (7) abusive ‘blocking’ of the nomination of judges or (8) of the adoption of impartial dispute settlement rulings; and (9) non-implementation of legally binding dispute settlement rulings. The less US governments succeed in limiting such ‘domestic governance failures’, the more ‘populist protectionists’ inside the US (e.g. US steel lobbies and their former advocates like R.Lighthizer) call for adjusting WTO rules to US protectionism, for instance in the US Trade Policy Agenda of March 2018 signed by USTR Lighthizer (see supra note 11) and in the long-standing US calls for using Article 17.6 Antidumping Agreement as a legal restraint on WTO review of trade remedy measures (Article 17.6(ii) was inserted into the Antidumping Agreement at the request of the US in late 1993 in the US hope of incorporating the ‘Chevron doctrine’ in US constitutional law – prescribing judicial deference vis-à-vis regulatory agencies controlled by the US Congress – into WTO law).

36 Cf. note 11, at p.4.

37 For a discussion of the ‘Geneva school of law and economics’, and its comparison with other schools of ‘law and economics’, see Slobodian, Q., Globalists: The End of Empire and the Birth of Neoliberalism (Harvard University Press, 2018)CrossRefGoogle Scholar, at pp. 7ff, 183ff, 208ff, 260ff. My – very critical –review of this innovative book has been published in the Journal of International Economic Law, 19 (2018) in December 2018.

38 On ‘Geneva ordo-liberalism’, its ‘thinking in terms of interdependent orders’ (as pioneered by W. Eucken, F. A. Hayek, and J. Tumlir), its emphasis on multilevel market regulations aimed at protecting transnational rule of law and non-discriminatory conditions of competition, and on the influence of ordo-liberalism on the design of many WTO rules, see Slobodian, supra 37, who describes the WTO as ‘the paradigmatic product of Geneva School neoliberalism’ (p. 25), and the ‘creation of the WTO (as) a crowning victory of the neoliberal project of finding an extra-economic enforcer for the world economy in the twentieth century’ (p. 23).

39 On the clarification of the TRIPS rules on ‘unfair competition’ in the recent WTO panel reports on Australia–Plain-Packaging of Tobacco Products, WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R, 28 June 2018, see E. U. Petersmann, ‘How to Reconcile Human Rights, Trade Law, Intellectual Property, Investment and Health Law? WTO Dispute Settlement Panel Upholds Australia's Plain Packaging Regulations of Tobacco Products’, EUI Working Paper Law 2018/20, at 22ff.

40 Cf. R. D. Anderson et al., ‘Competition Policy, Trade and the Global Economy: Existing WTO Elements, Commitments in Regional Trade Agreements, Current Challenges and Issues for Reflection’, WTO Staff Working Paper 2018–12, at 20ff.

41 Cf. T. Wu, ‘The Curse of Bigness: Antitrust in the New Gilded Age’, Colombia Global Reports (2018); Tepper, J. and Hearn, D., The Myth of Capitalism: Monopolies and the Death of Competition (Wiley, 2018)Google Scholar.

42 Cf. Bacchus, J., Lester, S., and Zhu, H., ‘Disciplining China's Trade Practices at the WTO: How WTO Complaints Can Help to Make China More Market-Oriented’, Policy Analysis Cato Institute, 856 (15 November 2018)Google Scholar.

43 Cf. Rodrik, D., ‘Populism and the Economics of Globalization’, Journal of International Business Policy, 1 (2018)CrossRefGoogle Scholar (criticizing the existing, yet under-financed and often ineffective ‘trade adjustment assistance’ in the USA).

44 Cf. Rodrik, supra n. 43 and the commentary by Hoekman, B. and Nelson, D. R., ‘Reflecting on Populism and the Economics of Globalization’, Journal of International Business Policy (2018)CrossRefGoogle Scholar.

45 Cf. Transforming our World: The 2030 Sustainable Development Agenda, UN General Assembly Resolution A/RES/70/1 of 25 September 2015 (focusing on 17 global goals like overcoming poverty, hunger and global warming, and protecting health, education, gender equality, access to water, sanitation and clean energy, urbanization, the environment, human rights and social justice). Implementation of these ‘sustainable development goals’ is described as ‘localizing the SDGs’ so as to empower local institutions, actors and civil society support.

46 Justice tends to be defined in terms of ‘justification’ by agreed procedural, constitutional, distributive, corrective and commutative principles of justice and equity, as they underly many GATT/WTO provisions like GATT Article XXIII.1 on ‘violation complaints’, ‘non-violation complaints’, and ‘situation complaints’.

47 Cf. Hillman, supra n. 9, at 7f.

48 Hillman, supra n. 9, at 6. The US insistence, during the Uruguay Round negotiations, on creating a new ‘Rules Division’ in the GATT/WTO Secretariats with exclusive competence for serving GATT dispute settlement panels reviewing trade remedy measures, on staffing this Division with US trade remedy experts, and on preventing the GATT/WTO Legal Divisions from advising such trade remedy panels is often criticized by WTO lawyers as weakening the coherence of the WTO dispute settlement system; cf. G. Sacerdoti, ‘The WTO Dispute Settlement System and the Challenges to Multilateralism : Consolidating a “Common Global Good”’, Prévost, supra n. 5, 87ff, at 92.

49 US steel companies and their powerful lobbies remain the main users of US trade remedy laws. Already prior and during the Uruguay Round of GATT negotiations, they successfully lobbied the US government to negotiate ‘voluntary export restraints’, veto the adoption of GATT panel reports limiting abuses of antidumping laws, and politically interfere in GATT dispute settlement practices (e.g. by forcing GATT Director-General A.Dunkel to assign jurisdiction inside the GATT Secretariat for servicing GATT dispute settlement procedures involving trade remedy laws to a newly created ‘Rules Division’ staffed with US experts specialized in the administration of US antidumping laws). President Trump's ‘aggressive unilateralism’ is carried out by the same lawyers (like USTR R.Lighthizer) who worked for the US steel industries during the 1980s advocating similar, protectionist trade policies and power-oriented dispute settlement methods.

50 One well-intentioned, yet impractical proposal has been to request the DSB Chair to ‘declare consensus’ – in spite of the US objections – on the ground that persistent abuse of such veto-powers in violation of DSU rules (e.g. Article 3.10, 17, 23) also violates general principles of international law like good faith and equity principles (e.g. that one cannot derive a legal claim from one's own breach of law). The ‘neo-liberalism’ driving US trade policies has often prompted US trade diplomats to oppose claims by other GATT/WTO members that alleged ‘gaps’ in GATT/WTO rules (e.g. in case of claims for dispute settlement findings for ‘reparation of injury’ and reimbursement of illegal antidumping or countervailing duties) should be filled by interpreting indeterminate, or ‘incomplete’ GATT/WTO rules in conformity with general international law principles (e.g. on state responsibility and reparation of injury caused by illegal measures). This is illustrated also by the examples mentioned in footnotes 35 and 48.

51 Like some of the proposals of R. McDougall, ‘Crisis in the WTO: Restoring the WTO Dispute Settlement Function’, CIGI Papers No. 194 of October 2018.

52 Cf. Kahneman, D., Thinking, Fast and Slow (Penguin, 2012)Google Scholar.

53 Even though the ordo-liberal need for complementing welfare-increasing, voluntary agreements in economic markets, by ‘social contracts’ and ‘constitutional contracts’ among citizens in political markets, is also emphasized by US ‘constitutional economists’ (like Nobel Prize laureate J. Buchanan and his ‘Virginia School’ of public choice and constitutional economics), US trade and economic policies remain dominated by interest group politics resisting constitutional restraints (e.g. on the congressional delegation of almost unlimited trade policy powers to the US President and their protectionist abuses for the benefit of rent-seeking steel lobbies and other interest groups). Ordo-liberal constitutionalism could help China and market-driven WTO member states to limit their ‘strategic dilemma’ (as illustrated by US trade restrictions on Chinese IT companies and other Chinese suppliers of strategic US industries) that the unlimited powers of Chinese state-owned (or state-influenced) enterprises risk distorting not only economic competition, but also the ‘balance of power’ in international relations. Obviously, neither China nor the US nor most other WTO members are willing to respond to this ‘constitutional challenge’ by amending their national Constitutions. Yet, European ordo-liberalism demonstrates that multilateral trade agreements and third-party adjudication can serve ‘constitutional functions’ if agreed trade, competition, and legal disciplines are enforceable through multilevel judicial remedies like those characterizing the European and also the WTO dispute settlement systems. Unfortunately, notwithstanding their criticism of anti-competitive trade distortions in China and other WTO member countries, US advocates of using ‘trade wars’ as a means for imposing ‘optimal tariffs’ exploiting US market power, like protectionist US interest groups benefiting from redistributing domestic income through discriminatory import restrictions, oppose limiting trade policy powers and distortions of competition through stronger WTO legal and dispute settlement rules.