On July 9, 2021, the World Trade Organization (WTO) published its 2021 Annual Report, which highlights the increase in trade-restricting measures and trade-facilitation measures put in place by its members in response to the COVID-19 pandemic.
However, the report notes that 2020 saw the lowest number of disputes initiated among WTO members since the inception of the WTO in 1995. While an average of 37 panel or arbitral proceedings were ongoing each month in 2020, WTO members filed only five requests for consultations concerning allegedly WTO-inconsistent measures in 2020, as compared with 20 in 2019. This decrease in the number of initiated disputes stands in stark contrast to the persistent trade tensions among WTO members, including the United States, the European Union, and China.
Furthermore, the organization’s appeals function, the Appellate Body, remains blocked—and thus, no appeals were heard in 2020. As of December 2020, 16 appeals were pending before the Appellate Body due to the impasse in selecting new members.
Despite the impasse, three Appellate Body reports (relating to four disputes) were circulated in 2020, including one on the long-running Tobacco Plain Packaging disputes (WT/DS435/AB/R and WT/DS441/AB/R), which began in 2012. At issue in the Tobacco Plain Packaging disputes were article 2.2 of the Agreement on Technical Barriers to Trade (TBT Agreement) and article 16.1 and article 20 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement). The Appellate Body found that Australia’s tobacco plain packaging measures were not inconsistent with the provisions of the TBT Agreement or the TRIPS Agreement.
Beyond bringing an end to the suspension of the Appellate Body’s operations, some argue that the entire WTO dispute settlement system needs to be reformed, which begins with the WTO’s negotiation function. Negotiation challenges include rules for dealing with digital trade and e-commerce; state-owned enterprises and industrial subsidies; environmental sustainability; and the contentious issue regarding the developed- or developing-country status of WTO members—which can trigger “special and differential treatment.”