WTO faces crisis over disputes settlement

The appellate branch of the WTO’s Dispute Settlement Body had been a target of US criticism before President Donald Trump took office. (Reuters/File)
Updated 08 December 2019

WTO faces crisis over disputes settlement

  • Trump’s trade team has both extended that policy and escalated the fight

GENEVA: The World Trade Organization’s capacity to settle international disputes, a core function throughout the body’s 25-year history, is on the brink of collapse following relentless US opposition.

The appellate branch of the WTO’s Dispute Settlement Body (DSB), sometimes dubbed the supreme court of world trade, was a target of US criticism before President Donald Trump took office.

His predecessor Barack Obama’s administration began a policy of blocking the appointment of appeals judges over concerns that their rulings violated American interests.

Trump’s trade team has both extended that policy and escalated the fight.

Barring a shock breakthrough in the coming days, the court will cease functioning on Wednesday.

The WTO appellate branch normally counts seven judges but has just three left — the minimum required to hear an appeal. Two more judges are due to retire on Tuesday.

WTO Director General Roberto Azevedo warned on Friday that the organization was facing a stark choice.

“You could restore the impartial, effective, efficient two-step review that most members say they want,” he said.

“Alternatively, your choices could open the door to more uncertainty, unconstrained unilateral retaliation — and less investment, less growth, and less job creation.” Various reform proposals have secured broad support.

But according to EU trade commissioner Cecilia Malmstrom, there can no solution without US buy-in because the WTO works on consensus.

“This is a dispute between the 163 members of the WTO and the US,” she told the European Parliament last month.

US WTO envoy Dennis Shea argued on Friday that Washington had “engaged constructively over the past year” to resolve the crisis, but would not relent until its concerns were fixed.

“This is not an academic question; we will not be able to move forward until we are confident we have addressed the underlying problems and have found real solutions to prevent their recurrence,” he told a WTO meeting.

US concerns regarding the WTO appeals court include allegations of judicial overreach, delays in rendering decisions and bloated judges’ salaries.

But top American trade officials have also insisted that the US Constitution does not permit a foreign court to supersede an American one — and that WTO appellate judges assert such superiority in international trade law.

Washington reportedly threatened to block the WTO’s 2020 budget over the dispute, raising the prospect of a Jan. 1 shutdown.

The US ultimately backed a provisional budget compromise on Thursday but it included substantial appellate body cuts.

“There is no question the Trump administration has killed the appellate body,” said Edward Alden, a trade expert at the Council of Foreign Relations think tank. “That was its intention, and it has succeeded.”

The appellate body’s demise will place international trade disputes in legal limbo.

Countries will still be able to file grievances and dispute panels can issue rulings, but nations unhappy with those rulings can simply delay enforcement by filing an appeal to a non-functioning court.

The EU, Canada and others have reaffirmed their commitment to a two-step dispute process, arguing that the right of appeal is essential in any legal system.

Brussels and Ottawa have agreed to set up a temporary appellate process, which mirrors the WTO court, and would handle any bilateral disputes that arise during the impasse. Norway has joined that accord.

Leading WTO members also say they are open to wider reform.

“We have made clear that we are fully committed to tackling the root causes of the discontent around the existing system,” the EU ambassador to the WTO Aguiar Machado told AFP.

Another Western diplomat who requested anonymity told AFP the EU was willing to tackle concerns about the court’s “excesses” but said the US must first agree to begin recruiting new judges — a non-starter for Washington.

Some have suggested that a solution might have to wait until after next year’s presidential election in the US.

In the meantime, the WTO has been left diminished.

Since its founding in 1995, the organization has been tasked with promoting liberal international trade through a rules-based system backed by a dispute settlement process.

Trade promotion has faltered as the body has struggled to agree any major new deals and Alden of the Council on Foreign Relations predicted: “There will never be another big, liberalising trade round.”

Certainly, court-backed rule enforcement appears certain to suffer a heavy blow next week.


INTERVIEW: ‘Women’s empowerment is happening and heartfelt,’ says Saudi university head Einas Al-Eisa

Updated 26 January 2020

INTERVIEW: ‘Women’s empowerment is happening and heartfelt,’ says Saudi university head Einas Al-Eisa

  • “I’m leaving Davos convinced that we’re heading in the right direction.”: Al-Eisa
  • Recently the World Bank rated Saudi Arabia as the leading country in the world in terms of fostering female equality

If any of the aspirational young women of Saudi Arabia need a role model, they should look no further than Einas Al-Eisa, the rector of the Princess Nourah Bint Abdulrahman University in Riyadh.

I caught up with her at Davos last week, at the annual meeting of the World Economic Forum (WEF), where she told me one of the most inspiring and heartwarming stories I have ever heard. She was reluctant at first to go “on the record” about her family history, but finally agreed, not least because I insisted. It was too good a story to leave untold.

“Let me tell you something personal. I’m a second-generation female doctor of philosophy. My mum went to the first school ever to open for girls in Saudi Arabia, and she continued to go all the way to be a university professor. She was able to pursue her dream in Saudi Arabia, and became a history scholar. I’m 15 years on from my PhD, in anatomy and neurobiology, in Canada,” she said.

“Now my daughter is doing engineering. That just tells you all the evidence of the amount of empowerment and accelerating change in the Kingdom. Change is real, happening and heartfelt. We really have a good story to tell the world,” she said while in Saudi Arabia’s headquarters overlooking the snowy Congress Hall of the WEF.

Princess Nourah University — or PNU as Al-Eisa calls it — is the biggest female academic institution in the world, with 35,000 students spread across
8 million square meters in the Saudi capital in 600 buildings. It grew out of the College of Education opened in 1970, and is named after the sister of King Abdul Aziz Ibn Saud, the founder of the Kingdom.

Her job carries a huge responsibility. “It’s a big challenge, not just for me, but globally. Empowering women is a challenge worldwide,” she said.

She, and the Kingdom, are rising to that challenge. Recently the World Bank rated Saudi Arabia as the leading country in the world in terms of fostering female equality, after a raft of measures to give women essential rights to education, employment and mobility. A new generation of women — like her daughter — is growing up in the Kingdom, increasingly self-confident of their place in Saudi Arabia and in the world, under the Vision 2030 strategy to transform the country.

Al-Eisa is an enthusiastic supporter of the changes, and dismisses suggestions that some of the more conservative parts of the Saudi demographic oppose them.

“Let me take a step back, and talk about the transformation. It’s about opening new sectors that will build the capacity of society as a whole — the quality of life, health, education, job opportunity, economic development — so that we can develop sectors like entertainment, culture, and technology.

BIO

BORN:

Riyadh, Saudi Arabia

EDUCATION:

Doctorate in anatomy and neuroscience, Dalhousie University, Canada

Harvard University Professional Development Programs, US

CAREER:

Dean, Department of Science and Medical Studies, King Saud University

Vice-dean, College of Nursing, Saudi Arabia

Rector, Princess Nourah Bint Abdulrahman University

“These are all perfect opportunities for the whole of society to engage in, and now with the rate of enrolment of women in the private sector increasing from 19 percent to 23 percent in just one year, that reflects the engagement of the whole of society. As a university, we study this progress, the implementation of the policies, and the impact of the reforms,” she said.

Perhaps the most encouraging aspect of the big changes underway in the Kingdom is the trend for women to study what have traditionally been regarded as exclusively male domains — science, technology, engineering and mathematics, the STEM disciplines. Of the 5,200 who graduated from PNU last year, 1,400 came from STEM faculties.

“I predict a huge contribution from women in that sector in the very near future. One good story that comes from Saudi Arabia is the increased number of women engaging in the technology sectors, for example, versus the drop we see worldwide. Elsewhere women are moving away from these fields, whereas in the Kingdom, the number is going up constantly,” she said.

Education in the Kingdom remains segregated in terms of gender, but she does not think that is a significant or fundamental issue. In the West and in other parts of the world, co-education is the norm, but there have been many serious academic studies that have questioned the benefits of mixed-sex education. She is in no hurry to push for co-education in Saudi Arabia, on grounds of academic pragmatism, rather than any moral or ethical issues.

“If you go back to the literature and look at the assessment of the value of women studying in a campus of only women, there is enough global evidence to support the value of women-only education, in a women’s environment. There is enough evidence out there, but still it is a source of debate,” she said.

“Women are less intimidated in the fields of technology and engineering when they are taught in a safe environment. The way we are tackling that is to ensure that women have the best educators, the best learning opportunities, the best curricula, irrespective of gender,” she said.

Many of the faculty staff are male, she pointed out, so the young women studying at the university are not completely segregated. “We have male and female teachers in PNU, and we will continue to support more women in academia, in engineering especially, as faculty staff, and as engineers in the field. We will continue to empower women and I guarantee they are not isolated,” she said.

The crucial issue is what young women do after graduation. The Vision 2030 reform strategy envisages a big increase in the female workforce, rising to as much as 30 percent over the next decade. Recent statistics show that the Kingdom is well on the way to reaching that target, with 23.5 percent of the private sector workforce being female, according to official figures.

But for Al-Eisa, it is not just a simple matter of meeting official quotas. Again, she takes an academically pragmatic view.

“Just like it should be everywhere else in the world, it’s the competency of the graduates that dictates where they go. We have a very good story in the health sector — nearly 40 percent of people working in health are female, reflecting the parity and the power we have achieved after investing so much in health and education,” she said.

PNU works closely with INSEAD, the French management institute, to ensure that young women graduating from the university are equipped with the skills to get them jobs in increasingly competitive managerial professions.

She also works with the Ministry of Education in its “Women Leaders 2030” program that nurtures young women to become business leaders in the private sector. The ministry’s work is closely coordinated with the UN’s sustainable development goals which also align with Vision 2030.

“It’s very important to produce holistic leaders, women who understand the challenges and bigger issues in the wider world,” she said.

Her visit to the WEF has certainly opened her eyes to the bigger picture. All the issues that concerned her back in Saudi Arabia were also on the WEF agenda, she said, and she was “pleasantly surprised” that Davos was not all about money and economics.

“I come from the education sector, and I thought there will not be much for me in Davos, but there is so much going on, in investment, in education, in new opportunities, in skills development, science, science breakthroughs. I was impressed by the wide array of topics discussed and the caliber of discussions,” she said.

She will leave Switzerland with a new set of ideas to further promote the role of women in Saudi Arabia.

“The session on Education 4.0 was a very good exchange of ideas, and made me think how Saudi Arabia must invest even more in the infrastructure of education, curriculum development, teachers’ preparation programs and the rest.

“It’s time now to experiment with more disruptions in education. I’ve learned new ideas about education and I’m going home with the conviction that we’re heading in the right direction. Now when we talk about concepts like artificial intelligence, cybersecurity and data science, these are new programs that are opening up for all women. This is the language of the world, not just for Saudi Arabia,” she said.

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