Blockage of the WTO Appellate Body and Multi-party Interim Appeal arbitration arrangement (MPIA)

Abstract

The World Trade Organization (WTO) dispute settlement system is organized in two stages. In the first instance, the existing dispute between the members is resolved by ad hoc panels. In case the parties are dissatisfied with the panel's report, the dispute is finally resolved by the second instance body - the Appellate Body (AB). Since 2017, the United States has repeatedly blocked the appointment of members of the Appellate Body, which has caused a progressive reduction in the number of members. As the mandate of two of the three remaining members ended on 10 December 2019, the highest institution in the WTO dispute resolution system has thus become de facto dysfunctional. The blockade of the Appellate Body has resulted in a crisis in the WTO dispute settlement mechanism, which ultimately implies that the disputes are not being definitively resolved. In order to remove the blockade of the Appellate Body and its consequences, some WTO members have established a complaint redress mechanism in accordance with Article 25 of the Agreement on Dispute Resolution Rules and Procedures (DSU). Article 25 of the DSU envisages the possibility of establishing arbitration for resolving disputes at the multilateral level. This provision serves as a basis for establishing an arbitration mechanism that would act as an alternative to the Appellate Body while it is under blockade. On 30 April 2020, after intensive debates on how to implement this idea, the Multi-party Interim Appeal Arrangement (MPIA) came into force. The MPIA arrangement offers a short-term solution to overcome the problem of blocking the Appellate Body, while members try to find a more permanent solution. This article examines the role that the newly established MPIA would play in the future of the WTO, as well as the procedural innovations it has introduced, which can serve as a trigger for systematic changes in resolving disputes in front of the WTO.