Opinion: Phase One’s Dispute Settlement Mechanism a poor alternative to WTO Appellate Body

By Jayne He


After 13 rounds of negotiation, the US-China Phase One Deal was eventually signed by the two largest economies on 15 January 2020. The full text of the deal, officially titled ‘Economic and Trade Agreement between the Government of the United States of America and the Government of the People’s Republic of China’, was released by the US on the same day.

Member of the Herbert Smith Freehills China International Business and Economic Law (CIBEL) Centre Dr Weihuan Zhou soon published “US-China Phase One Deal: A Brief Account” on “Regulation for Globalization”, a Kluwer Law International blog, with Professor Henry Gao from Singapore Management University.

This article looks at the Phase One Deal chapter by chapter and puts a particular focus on the relationships between China’s obligations under this deal and its WTO commitments. 

Further, in another article titled “Phase One’s Dispute Settlement Mechanism a poor alternative to WTO Appellate Body”, a thought leadership article published by the Hinrich Foundation, Dr Zhou took a more systemic and detailed look into the dispute resolution chapter of the deal and its implications for the US-China trade relations, China’s other trading partners and WTO’s Dispute Settlement Mechanism (DSM).

Dr Zhou argued that “The dispute resolution chapter does not establish a standard adjudicative framework based on an independent adjudicating body, binding dispute settlement decisions and enforcement in a rules-based manner.”

By analysing the dispute resolution mechanism implemented in agreements between other countries to find an alternative to the DSM, Dr Zhou indicated that the US may come around to the idea of rescuing the Appellate Body, which is called the “crown jewel” of the WTO if it cannot use the DSM to enforce its rights against all major trading partners due to the absence of the Appellate Body.