Airbus’s appeal over the latest World Trade Organization ruling may not necessarily be held up by the impasse which is forcing suspension of the WTO’s Appellate Body.
The airframer remains locked in a transatlantic dispute with Boeing over government subsidies to large civil aircraft programmes.
But the WTO mechanism is facing crisis after US representatives repeatedly blocked replacement of any of the seven members of the Appellate Body, and rejected proposals to proceed with selection processes to fill vacancies.
Newly-instated European trade commissioner Phil Hogan says the Appellate Body will “essentially stop functioning” from 11 December, because it will be unable to take on any new appeals.
Describing the situation as a ”regrettable and very serious blow” to the international trade system, he says: “With the Appellate Body removed from the equation, we have lost an enforceable dispute settlement system that has been an independent guarantor – for large and small economies alike – that the WTO’s rules are applied impartially.”
European Union representatives filed an appeal over the latest WTO findings on the Airbus-Boeing dispute – centred on A350 and A380 subsidies – on 6 December.
FlightGlobal understands from a source with knowledge of the situation that the applicable WTO rules on disputes foresee the possibility for outgoing Appellate Body members to complete pending appeals.
Even if appointments to the Body remain blocked for the time being, an appeal can still be dealt with on that basis, FlightGlobal has been told.
WTO director general Roberto Azevedo stated on 9 December that he intended to embark on intensive consultations to resolve the Appellate Body situation, after WTO members were unable to reach consensus on a proposal to address concerns over the Appellate Body’s functioning.
“Obviously the paralysis of the Appellate Body does not mean that rules-based dispute settlement has stopped at the WTO,” he says.
“Members will continue to resolve WTO disputes through consultations, panels, and other means envisaged in the WTO agreements such as arbitration.”
But he stresses that the organisation’s members “cannot abandon” the “priority” of finding a permanent solution for the Appellate Body.
European commissioner Hogan says the EU has put forward proposals on interim appeal arrangements for partners who are willing to continue to resolve disputes in a binding way.
Hogan says the European Commission will also unveil further proposals to ensure that the EU can “continue to enforce its rights” in international trade matters “should others block the system”.
