President of the European Commission, Ursula von der Leyen, stated that “a stronger Europe in the world implies efficient EU leadership on global trade and appropriate powers to ensure that international trade rules are respected,” adding that
Today's proposals will let us defend our interests in these particularly uneasy times for international trade. As many European jobs are at stake, the EU needs to be equipped to ensure that our partners respect their commitments and that's what this proposal aims for.
Commissioner for Trade, Phil Hogan, said that “with the Appellate Body removed from the equation, we have lost an enforceable dispute settlement system that has been an independent guarantor that the WTO's rules are applied impartially.”
It is added that today's proposal to amend the existing Enforcement Regulation comes as a direct reaction to the blockage of the operations of the WTO Appellate Body yesterday.
In fact, the current regulation, under EU law for adopting trade countermeasures requires that a dispute goes all the way through the WTO procedures, including the appeal stage, before the Union can react; thus a lack of a functioning WTO Appellate Body allows WTO Members to avoid their obligations and escape a binding ruling by simply appealing a panel report.
Thus, through this proposal, the EU will be able to react even if the WTO is not delivering a final ruling at the appellate level because the other WTO member blocks the dispute procedure by appealing into the void.
What is more, the new mechanism aims to apply to the dispute settlement provisions included in regional or bilateral trade agreements to which the EU is party. The EU must be able to respond resolutely in case trade partners hinder effective dispute settlement resolution, such as by blocking the composition of panels.
The proposal is to be subject to validation by the European Parliament and the EU Member States in the Council in a normal legislative process.
Following the recent crisis that the World Trade Organisation’s Appellate Body experienced, the European Parliament called ECSA to join the efforts in resolving this crisis, in favour of the shipping trade.
The European Parliament, which recently published a resolution about the crisis of the WTO Appellate Body, called ECSA to make its efforts to avoid the Appellate's Body ending, from 10 December 2019.