By Peter Ungphakorn
POSTED MARCH 23, 2022 | UPDATED MARCH 26, 2022
Can a member of the World Trade Organization (WTO) be expelled? The short answer is no. There is no legal means of doing that.
The question arises because of a number of calls to expel Russia, to suspend its membership or to suspend its ability to act in the WTO, in response to its invasion of Ukraine.
Those three are not exactly the same. The first two — expulsion or suspending membership — are clearly legal issues. They require decisions by the WTO’s membership.
The response from almost all experts in WTO trade law is simple: there are no provisions in the WTO agreements that would allow expulsion or suspension.
Continue reading or jump to:
Legally ‘no’ | What about the WTO Agreement? | What about the General Council? | But …
Preventing Russia from being able to act in the WTO is another matter because it could be achieved in a number of ways, some of them unilateral rather than requiring a decision by the membership.
Already some members are refusing to engage with Russia or to participate in small group meetings that involve Russia. But that does not gag Russia. It has spoken in meetings of the full membership. It can (and has) circulated documents including notifications on its various trade measures.
Russia and its critics routinely exchange criticisms in meetings of the full membership. The statements largely echo the General Council complaint circulated by Albania, Australia, Canada, the EU, Iceland, Japan, South Korea, Moldova, Montenegro, New Zealand, North Macedonia, Norway, the UK, and the US, and the reply circulated by Russia. Those meetings generally proceed anyway.
Legally ‘no’
The original call came from Ukraine itself. After that a series of bills in both houses of the US Congress have included the possibility of suspending Russia’s membership or its ability to perform as a WTO member.
For example, the Doggett and Blumenauer bill, one of the first in the House of Representatives, proposed that:
“The President shall direct the US Permanent Mission to the World Trade Organization to use the voice, vote, and influence of the United States at the WTO to seek the suspension of the Russian Federation’s membership in the WTO.”
The WTO has no rules for suspending or expelling members, only on how to become a member and how to withdraw. (Or rather, there is one obscure rule in one very specific case, which most people discount.)
“There is no rule in [the Agreement Establishing the WTO] for kicking [a] member out of WTO or even joint sanctions,” tweeted Debra Steger, who as a Canadian negotiator was one of the architects of the WTO agreements.
Almost all experts in WTO trade law agree.
What about the WTO Agreement?
None of the articles in the WTO Agreement that might be cited (in full the “Agreement Establishing the WTO”, the over-arching treaty in the package of WTO agreements) would serve the purpose of expulsion or suspension and are therefore not relevant, according to this argument.
What is more, the agreement does cover a number of other situations, such as when countries might not apply the package of WTO agreements to each other, or areas where the Ministerial Conference and General Council have powers. The implication is: if the possibility is not written into the agreement, it does not exist.
Take Article 4 of the WTO Agreement. Some WTO experts have taken it to mean the Ministerial Conference and General Council have the power to do anything they wish. They can “take actions necessary” for “the functions of the WTO”. Not most trade lawyers. They argue that Article 4 simply defines the WTO structure and does not grant powers that are not defined legally elsewhere.
Or Article 9 on decision-making. It defines how decisions are to be taken and specifies the powers to allow obligations to be waived and to interpret the WTO’s “multilateral trade agreements” (which usually refers to the annexes on goods, services and intellectual property). It does not mention expulsion or suspension.
The fact that the WTO Agreement also includes a provision on the extremely limited “non-application of Multilateral Trade Agreements between particular members” is also cited as evidence that non-application is possible but importantly not in general. In the case of Russia that could only have happened at the time Russia joined the WTO in 2011.
What about the General Council?
What if the Ministerial Conference or General Council (which can act on behalf of the ministers) simply decided to expel a member, how could this be challenged legally?
How this would be policed is open to legal debate.
It’s unclear if the WTO’s own dispute settlement system could be used and how that would work. To overturn a General Council decision, the Dispute Settlement Body would have to adopt a ruling to do so. But the Dispute Settlement Body is the General Council, meeting for a specific purpose. Both consist of the entire WTO membership.
Intriguing as the prospect might be, we can forget the membership overturning its own decision.
Would a General Council decision — or even Russia’s WTO membership — be subject to laws and legal institutions outside the WTO, an international court even? This area of debate is too complicated for me, but see for example the rest of this Twitter thread from Rambod Behboodi, and the subsequent exchanges on whether being at war affects the application of international treaties.
In practice we can forget a General Council decision to expel Russia. WTO decisions are by consensus. Russia and its allies, or even Russia alone, could block consensus.
Voting is possible in theory but never happens because most members don’t want to set a precedent. That includes the US itself, whose law demands decisions by consensus.
“Congressional direction on the issue of voting in the WTO was made clear in 1994 and it is very unlikely that anything has changed. It’s in §122(a) of the Uruguay Round Agreements Act (19 USC §3532),” tweeted Amy Porges.
But some observers are still talking about a vote, so what would happen if anyone insisted?
Suppose the US, EU and others sought a decision in the General Council. Russia would block consensus.
If the US and co pushed for a vote, Russia could block that by refusing to adopt the meeting’s agenda, as happens from time to time.
Russia has experience of this. From March 2006 to November 2011, Georgia blocked the agenda of the working party negotiating Russia’s bid to join the WTO. For over five years the working party could not meet formally, although talks continued informally.
The WTO’s top decision-making bodies would be blocked and an already weakened WTO would be split, at a time when the US and its allies need strong multilateral institutions.
In practice no General Council chair would force a vote so long as objections remained from at least some members. To do so would be asking for trouble and cause turmoil among the membership. Some experts think the chair would be removed.
But …
Buried in WTO rules is an obscure legal means of expelling a country. But for removing Russia, it is a fantasy. It’s a circuitous route that would still have to pass the consensus-or-vote hurdle, twice. It only applies to amendments to the WTO agreements.
For the record, this is how it would work in the face of opposition from Russia:
Amendment proposed → consensus blocked → vote forced (but see above) → amendment passed by consensus or 67% majority vote → 67% of members ratify the amendment (takes time) → Not Russia → Ministerial Conference or General Council (by consensus or ¾ majority) decides Russia is “free to withdraw” → Russia wants to stay → Ministerial Conference or General Council decides on whether it can stay: rejected
That comes from the text of Article 10.3 of the WTO Agreement. Read carefully:
3. Amendments to provisions of this Agreement, or of the Multilateral Trade Agreements in Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would alter the rights and obligations of the Members, shall take effect for the Members that have accepted them upon acceptance by two thirds of the Members and thereafter for each other Member upon acceptance by it. The Ministerial Conference may decide by a three-fourths majority of the Members that any amendment made effective under this paragraph is of such a nature that any Member which has not accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw from the WTO or to remain a Member with the consent of the Ministerial Conference.
This is the route proposed by former WTO Appellate Body judge James Bacchus, now of Central Florida University and the Cato Institute, although he does not consider the possibility of Russia blocking voting (twice) by blocking the agendas of two meetings. He wrote in the Wall Street Journal on February 28, 2022:
“No specific WTO provision relates to expelling a member. Expulsion would be possible under Article X of the WTO agreement, however, if two-thirds of the WTO’s current 164 members vote to alter the agreement. If Russia were to refuse to accept the changes, then a three-fourths vote could expel the Russian federation.”
Either way, we can assume Russian suspension is a non-starter. Other types of action within the WTO are more feasible.
Finally, Simon Lester also raises the question of current legal disputes involving Russia in the WTO, which is one area of its participation in the organisation:
“One other point about Russia and the WTO is the impact of all this on ongoing disputes involving Russia. There are several of these, and two of them are just getting going: The EU requested consultations on Russian wood export measure in January (and just submitted a revised request); and a panel was just composed in the Russian Federation – Certain Measures Concerning Domestic and Foreign Products and Services (DS604) case brought by the EU. I assume these disputes will be put on hold.”
On March 8, 2022, the dispute between the EU and Russia (DS604) was indeed put on hold. The EU asked for the panel proceedings to be suspended.
● See also “Waiving Russia Adieu in the WTO?” by Tomer Broude, International Economic Law and Policy Blog — Broude lists a number of reasons why a waiver might be easier to achieve than the various other options. But that includes winning a ¾ majority vote rather than sticking with a consensus decision. Personally, I think getting to a vote will be difficult for all the reasons outlined here, even for a waiver.
Updates:
March 26, 2022 — adding the end note on Broude’s waiver proposal
March 23, 2022 — Correction: in the paragraph showing the flow of events for an amendment, the initial vote on the amendment would require a 67% majority, not a simple one. Also adding the follow up on the EU suspending panel proceedings in DS604
Image credits:
Main image: WTO building | Jay Louvian, WTO. Red card | Marco Verch via flickr, CC BY 2.0
Trade β Blog 