On the eve of the G20 summit in Osaka, the Global Business Coalition calls for urgent action on the reform of the WTO. In order to maintain the continuity and sustainability of the WTO dispute settlement system, the efforts and collaboration of the G20 to unlock the appointment of members in the Appellate Body are vital, in order to avoid a crisis in the multilateral trading system.

Entrepreneurs are deeply concerned about the future of the multilateral community. For more than two decades, the World Trade Organization (WTO) has been the basis of our global economic success. The multilateral trading system has proven to be essential for our business and for the functioning of its global value chains. The latter have provided greater prosperity, better choice of products and improvements in the purchasing power of consumers. Currently, these advances have been put at risk. The current WTO crisis and ongoing trade conflicts threaten predictability, stability and openness in world markets. This situation of trade, therefore, also endangers global cooperation, development and peace.

It is a widely accepted fact that the WTO needs urgent modernization, leading to a better balance of all Member States and being able to address the reality of 21st century trade patterns. The international business community has repeatedly called for immediate action to reform the three pillars of the WTO: standard setting and liberalization, monitoring and dispute settlement. While several proposals on the reform of the WTO were presented, the members of the WTO have been unable to make decisions. We're running out of time.

It is especially urgent that we address the conflict between WTO members about the functioning of the dispute settlement system. A balanced and effective dispute settlement system is essential for the application of the WTO rule and the orderly resolution of commercial disputes. However, the system will collapse if the nomination process for members of the Appellate Body is not unblocked soon. As of December 2019, the terms of two of the remaining three members of the Appellate Body will expire, leaving the mechanism unable to complete any appeal. If the stalemate continues, the credibility of the WTO agreements will be affected. In addition, each individual commercial dispute may turn into a small commercial war without an adequate rule-based liquidation process.

We call on the G20 leaders to:

  1. Make the resolution of the dispute over the WTO dispute settlement system and its Appellate Body an absolute priority.
  2. Participate in urgent negotiations in Geneva to unblock the process of nominating members for the Appellate Body.
  3. Mandate the G20 trade ministers to inform their leaders and the public about the progress made on a monthly basis.
  4. Find solutions within the existing framework, guarantee an impartial and binding process, as well as establish opinions on all matters of the WTO.
  5. Take into account the concerns already mentioned, as well as the existing proposals for solutions for the G20 and other WTO members, for example, regarding the transitional rules for outgoing members of the Appellate Body, the duration of the proceedings (including the question of the 90-day term), and the focus of the results, as well as the issue of precedents.
  6. Consider contingency work on potential alternatives as a last resort, in case the stalemate continues. This could include arbitration based on Article 25 of the WTO Dispute Settlement Agreement (ESD) and appointment of new members of the Appellate Body by vote.
  7. Apply good practices, conciliation and mediation based on Article 5 of the DSU, in order to facilitate the prompt resolution of disputes and avoid further burdens in the system.
  8. Ensure the sufficient capacity of the WTO dispute settlement system to decide in a timely manner on the growing number of cases.

Miguel Acevedo

President of the Global Business Coalition

This statement is issued by members of the Global Business Coalition, in Berlin, Brasilia, Brussels, Buenos Aires, Istanbul, London, Madrid, New Delhi, Ottawa, Paris, Rome, Seoul, Sydney and Washington, D.C.

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