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How Should the EU and Other WTO Members React to Their WTO Governance and WTO Appellate Body Crises?

Ernst-Ulrich Petersmann, Abstract Since 2017, the United States (US) and other World Trade Organization (WTO) members violate their legal duties and democratic mandates given by national parliaments to maintain the WTO Appellate Body (AB) as legally prescribed in Article 17 of the WTO Dispute Understanding (DSU), i.e. as being ‘composed of seven persons’, with vacancies being ‘filled as they arise’. This contribution argues that none of the reasons offered by the US for its blocking of the (re)appointment of AB candidates - on grounds unrelated to the personal qualifications of the candidates - can legally justify its disruptions of the WTO legal and dispute settlement system. Also the European Union (EU) has offered no convincing justification of its failure to protect ‘strict observance of international law’ in it external relations, as required by Article 3 of the Lisbon Treaty on European Union (TEU) and by Article IX:1 WTO Agreement (‘where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting’). The 2018 ‘Concept Paper’ prepared by the EU Commission on ‘WTO modernization’ indicates no strategy for the obvious problem that the EU objective of ‘preserving and deepening the rules-based multilateral system’, including ‘more effective and transparent dispute settlement including the Appellate Body’, is inconsistent with the US strategies underlying US blocking of the AB jurisdiction by preventing the appointment of AB judges, a strategy which was previously applied by the US for blocking third-party adjudication under Chapter 20 of the North American Free Trade Agreement (NAFTA). Trade diplomats have no democratic mandate for disrupting the AB jurisdiction by illegally reducing the number of AB members to one single judge by December 2019 and, thereby, undermining the WTO legal and dispute settlement system. EU trade diplomats must exercise leadership for using the existing legal powers and duties of the WTO Ministerial Conference and General Council under Article IX:1 WTO – if necessary, based on ‘a majority of the votes cast’ - to initiate and complete the WTO selection procedures for filling AB vacancies and protect the AB as legally defined in Article 17 DSU. Article IX.2 could be used for authoritative interpretations ‘taken by a three-fourths majority of the Members’ confirming the collective duties of WTO members to fill AB vacancies in case of illegal blocking of AB nominations. WTO law foresees similar majority decisions for the appointment of the WTO Director-General; such majority decisions are necessary for preventing illegal de facto amendments of the WTO legal system, and do not set a precedent for future WTO majority voting on discretionary, political issues, which most WTO diplomats reject as a ‘nuclear option’. As suggested by European ordo-liberalism, citizens and democratic institutions must hold trade politicians democratically and legally more accountable for complying with their legislative mandates to implement and modernize, but not to destroy WTO law and dispute settlement. Keywords: Appellate Body; competition rules; governance crisis; ordo-liberalism; WTO

(Forbes) Court Case Against Trump "Immigration" (non-immigrant) Visa Ban Moves Forward

According to Forbes, even in the midst of the coronavirus epidemic, there is no reason not to outsource, and continue to outsourcing an ever growing, potentially unlimited number of good US jobs. (See also several articles on India's WTO suit DS503 in Inside US Trade, from March 2016, and others.) This is just nuts. Money isn't everything.

"If H-1B visa reform goes ahead, here are the GATS violations US would be committing" - Firstpost - India (2017)

"Few know that India has already filed an objection (referred to as ‘request for consultation’ which is the first step for trade dispute settlement) with the World Trade Organisation (WTO) in March last year on the current H-1B visa rules. If Trump has his way upending work-visa programs than the present Indian concerns may just look finicky. India requested for consultations with the US, regarding certain American measures for imposing increased fees (objections to “pay higher filing fees and fraud prevention and detection fees under certain specified circumstances”) on certain applicants for L-1 (a non-immigrant visa which allows companies to relocate foreign qualified employees to its US subsidiary or parent company) and H-1B (a non-immigrant visa that allows American employers to temporarily employ foreign workers in speciality occupations), and concerns relating to a numerical commitment for H-1B visas. India has said that these measures are in violation of several articles of the General Agreement on Trade in Services (GATS) — the set of multilateral rules that govern international trade in services. New Delhi requested for consultations with Washington that were held last year. India has not yet requested the WTO for establishing a Dispute Settlement Board (DSB). Specifically, India has said that some Washington measures on these categories of visa holders violate clauses related to Most-Favoured-Nation (MFN) treatment, rules on transparency, clauses on domestic regulation, measures to increase the participation of developing countries in world trade and commitments to market access and national treatment. Consider some of these stipulations under GATS. The national treatment clause says that a government shall accord services and service suppliers of other countries “in respect of all measures affecting the supply of services, treatment no less favourable than that it accords to its own like services and service suppliers”. The MFN treatment clause requires that governments should accord “immediately and unconditionally” treatment “no less favourable” to a country what it accords to other countries for like services and service suppliers. In sectors where a country has undertaken market commitments, the measures that a country cannot “adopt or maintain” in its sub-regions or its territory extend to limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test, limitations on the total number of service operations or on the total quantity of service output expressed in numerical units in quotas, among other such stipulations. The clause on movement of Natural Persons Supplying Services in the GATS Annex says that though GATS does not prevent a country from applying measures to regulate the entry of natural persons into, or their temporary stay in its territory, “provided that such measures are not applied in such a manner as to nullify or impair the benefits accruing to any Member under the terms of a specific commitment”. All of these possible violations would be important to cite if India chooses to request WTO to set up a DSB. After the panel judgment, either of the countries can appeal against the judgment. If the highest international trade court even then rules in favour of India then US would be bound to comply. However, it is unclear how much the Trump administration would feel bound by its WTO commitments, including dispute judges’ verdicts against it. The growing rhetoric of “unfair” trade agreements used in the current US political discourse might even see Washington pulling out of the WTO. India and most other WTO members are in for rough weather in the present climate as far as trade negotiations with the US are concerned. In a hypothetical situation of India winning a case against the US regulations on work visas at the highest trade court and US ignoring the verdict against it, India can seek WTO’s authorisation to retaliate (to “suspend concessions or other obligations”) against the US — normally such an authorisation is not refused, trade experts opine. India could then consider imposing punitive tariffs on US imports. Another option for retaliation, experts say, could be the refusal to recognise some of the intellectual property (IP) rights of US right holders. But this option of retaliation could involve a much more complicated procedure. An across-the-board or discriminatory higher tariffs, on the face of it, would also be violative of international trade rules, particularly the MFN clause, though much depends on the nitty-gritties of the American legal changes in trade policy. Even Trump’s ‘Buy American, Hire American’ would not be so easy to implement if US does choose to abide by its international trade commitments. There could be two scenarios: one, when the US government procures only from domestic sources, and linked with that the government mandates that even a private entity must source from within the US. In both these possible realities, there is no talk of subsidies yet (which could violate other WTO rules). “In the first situation, the US has some flexibility — it is government procurement to mandate procurement from domestic sources provided this is for non-commercial use and for government’s own use. Then the US would be within its rights to mandate such a local procurement for government purposes. But if the US government mandatorily requires even the private sector to source domestically then that would be violative of WTO rules,” Abhijit Das, Head of the Centre for WTO Studies at the Indian Institute of Foreign Trade says. “Then the second situation where US government gives incentives to procure domestically, such an incentive would be violative of WTO subsidies agreement. This is commonly called the local content subsidy, which is prohibited,” he adds." Updated Date: February 06, 2017 08:39:31 IST

Graphic illustrates why the oligarchy wants to capture migration for corporations..

Globally. Thats a hidden gotcha they embedded in the WTO when it was set up. Which could easily turn out to be one of the epic mistakes of all time. This graphic which is repeated in a great many of the dozens of papers hyping TMNP is also fairly misleading, given that the ratio between wages in expensive countries like the US and poor countries like India can be 20 times or more, not the small amount pictured here. Also, they consistently try to confuse temporary movement of natural persons with actual immigration for the purpose of permanent migration (traditional immigration) which most Americans have a favorable opinion of. But the two are totally different. One is freedom, the other is often compared to modern slavery.

Edward Alden: India's landmark WTO challenge to US

In the midst of a xenophobic U.S. presidential campaign in which candidates in both parties have harangued China and Japan over their trade policies, and leading Republicans have called for a "great wall" to keep out immigrants from Mexico and Central America, one country has quietly refused to take it any longer. The government of India filed suit on March 3 in the World Trade Organization (WTO) seeking to overturn a new U.S. tax on high-skilled migrants that India says discriminates against its citizens and would damage some of its most successful companies. The case marks the first time that a country's immigration laws have been challenged using the rules of a trade agreement. And despite the logic of India's action, it may well be the last such case. With tariffs on imports already very low in most countries, economists have argued that easing restrictive immigration laws in advanced countries would now do far more than additional trade liberalization to boost global growth. Michael Clemens of the Center for Global Development has written that immigration restrictions are the "greatest single class of distortions in the global economy," amounting to "trillion dollar bills on the sidewalk" if such distortions could be eliminated.......

India Takes First Step Toward Challenging U.S. Visa Policy At WTO (March 10, 2016)

"India is also claiming that commitments made by the U.S. in its free trade agreements with Singapore and Chile to provide a certain number of H-1B visas to those countries violates the United States' commitment under GATS to annually provide 65,000 H-1Bs worldwide. However, the U.S. GATS schedule specifically states that it will offer "up to" 65,000 H-1B visas for persons annually on a worldwide basis. It also committed in its GATS schedule to allow entry for an unlimited number of qualifying L-1 visa holders."

US—India Visa Fee Controversy before the WTO: A Migration-Mobility Nexus for the WTO?

This is more about the outrageous DS-503 WTO dispute case that would allow unlimited guest workers to be imported into the US and other countries by foreign corporations, allowing them to do an end run around wage and labor laws and possibly ending the middle class most of us grew up with, and decent work for decent wages forever, possibly as soon as next year.

Certain U.S. Laws for Foreign Workers Draw Fire from India in the WTO (US Congress research "CRS" report)

This is an arguably incomplete, dismissive Congressional Research Reports report (PDF) on the DS503 case, but it fails to portray the situation with the needed urgency. . Note that they say that there is a possibility of the US losing the case, and having to modify behavior on the contested parts of our work visa system, which includes the visa quotas that limit the numbers of work visas granted per year. The effect of massive job outsourcing on workers is that many job ads turn out to be fake, using up jobseekers energy. It's only because of the quotas that far more jobs that can be, are not currently offshored. But the amount might rise very substantially. A very bad idea in this time of falling employment. GATS Mode Four and Three should be reduced or eliminated, not expanded. Professor Alan Blinder of Princeton found that 26% of all US jobs could be outsourced and offshored. A replication study of his study, attempting to verify his work found that actually 46% of our jobs are in immediate danger of outsourcing, But they left public services, the main target of GATS, out. So the actual number likely to be outsourced is potentially significantly higher.

Is media spinning that U.S." is about to cripple the World Trade Organization’s dispute-settling system" true? Not in the way they want us to think it.

Example of the spin: "Dec 9, 2019 "The governance of international trade is on track to suffer serious damage this week as the United States carries out a long-standing threat to cripple the World Trade Organization’s system for settling disputes. The WTO’s Appellate Body, which adjudicates on contested rulings over disputes between member countries, will become unable to function when Washington exercises a veto and blocks new judges from being appointed to replace two whose terms of office are expiring......"

The WTO Dispute Settlement System: An Analysis of India’s Experience and Current Reform Proposals

ORF Occasional Paper_209 - An analysis from India's perspective of the US's not allowing the operation of the Dispute Settlement Body, of course, preventing the settlement of the DS503 case, and possible loss of millions of US jobs to outsourcing "body shop" companies. Most of the US, EU, Australian, etc. workers who could be impacted have no idea that the WTO even has jurisdiction over services.

"Breaking the rules to prevent rule-breaking? The GATS and service mobility: drawing lines between genuine immigration control and protectionism"

Essential article on DS-503 WTO dispute that could drastically impact the size of the middle class in the US and in many other countries all around the world. (by reducing its size due to large scale job outsourcing) Would also lower the wages across the board for workers. Would heavily impact public services. GATS 'movement of natural persons' (Mode Four) and its Mode Three are the most controversial parts of the longstanding trade deal because they attempt to create new rights to which seem to allow companies bypassing national labor laws. This case could take intra-company cross border labor for work- "non-immigrant" temporary migration to work out of hands of governments and put it in the hands of the WTO. The US is a test case and the decision might be binding on many other countries as well. Could dramatically lower wages for many professions at all skill levels, from professional to fairly basic. Any job that has been the subject of GATS commitments in a country, which are very broad. In the US could easily impact tens of millions of jobs cutting many careers short. Even with visa quotas IT has already been greatly impacted, leaving many workers struggling to find work. Situation is likely to get much much worse if the WTO panel decides in India's favor. Indian-affiliated "US" IT firms are notorious for not hiring US workers, even US workers with Indian backgrounds. They want dis-empowered workers whose status in the US depends on their job. This is a very bad situation that could become the norm in dozens of high employment fields. Might cause extreme loss of trust in government, a shift we might not recover from.

A long discussion on the captured state (of affairs) for working people in the US, UK and a case in the WTO, DS503 that could pull the rug out from underneath developed country workers worldwide.

A few days ago I was reading British news where they were reporting on the expectations of Leave voters for what would be done with Brexit. It seemed so very far off the mark from what I knew was happening I almost wanted to scream. The same woeful situation exists in the US, where people who have everything to lose are gleefully voting for Biden and Trump clearly unaware of the agendas they represent. When my primary rolls around, I'm voting for Sanders, fully aware, however, unlike many people, I've been fully aware that Sanders signature issue(s) - 8single payer* *was officially "decided" by the WTO >20 years ago*. However, single pater, pure single payer is exempt from GATS so it could conceivably work, except for the little problem of it being 2020, not before the WTO existed, or perhaps the standstill may have even begun as early as the early 80s or formally, September 20, 1986. So frankly, the entire situation is bizarre and doesn't add up. That is unless you realize that the system is very close to 100% captured, Only then - it all makes perfect sense. What a major mess.