Finding a Rule-Based Solution to the Appellate Body Crisis: Looking Beyond the Multiparty Interim Appeal Arbitration Arrangement

Abstract

The WTO dispute settlement system is in crisis due to the persistent blockage of the appointment of Appellate Body members by the United States. This paper reviews the US criticisms against the Appellate Body and argues that its allegations are unfounded and its approach is wrong. To deal with the US blockage, various proposals have been made, with the most popular being the Multiparty Interim Appeal Arbitration Arrangement (MPIA) set up by several key Members including the European Union and China. After a thorough analysis of the key features of the MPIA from both theoretical and practical perspectives, this paper argues that the MPIA fails to provide a proper solution to the Appellate Body crisis due to its many defects. Instead, the paper suggests the appointment of Appellate Body members based on majority voting at the General Council. This paper concludes by noting that only such a rule-based solution can not only solve the current Appellate Body crisis but also deter similar attempts to sabotage the WTO dispute settlement system in the future.

MPIA as Solution of Appellate Body Dilemma: An Overview of the Advantages of New Mechanism of WTO Dispute Settlement

“…As of the next day, the Appellate Body was paralyzed without a quorum due to one Member's absence. 13…”

“…17 To analyze the workability of the MPIA, the motives of the United States for blocking the appointments of judges to the Appellate Body need to be evaluated. The U.S. has a long list of complaints regarding the 13 Mariana de Andrade, "Procedural innovations in the MPIA: A way to strengthen the WTO dispute settlement mechanism", Aug, (2020) 14 John H. Jackson, Robert E. Hudec and Donald Davis, "The Role and Effectiveness of the WTO Dispute Settlement Mechanism", Brookings Institution Press, (2000), pp. 179-236 15 GAO, Henry S. "Finding a rule-based solution to the appellate body crisis: Looking beyond the multiparty interim appeal arbitration arrangement", Journal of International Economic Law.…”

“…This approach aids in streamlining the dispute resolution process, making it more efficient and focused. 95 The MPIA's approach to the standard of review reflects a significant commitment to the principles and practices of the WTO dispute settlement system. It demonstrates a respect for the original panel's findings, limiting its scope to correcting legal interpretations and applications.…”

Hong Kong as a separate customs territory: Past, present and prospect

“…This means that the Appellate Body no longer has the minimum of three persons needed to hear new appeals, and that it was eventually shut down [ 62 ]. The US government seems to insist on bringing a fundamental reform to the current multilateral trading system and refused to solve the pressing problem of the Appellate Body [ 63 , 64 ].…”

The Expectation of the WTO Dispute Settlement Mechanism after the "Paralysis"

“…World Trade Organization (WTO) since its inception, to promote the development of world trade and global economic contribution is indelible, but in recent years the United States out of its interests frequently obstruct the development of the appellate agency (AB), 2013 the appeal agency failed to comply with the agreed rules concerns prevented Kenya law professor James tier (James Gathii) become a member of the appellate body [1]. In 2016, the United States blocked the re-election of South Korean law professor Zhang (Seung Wha Chang) for the same reason [2] The United States has since opened Pandora's box, and the appellate agency became paralyzed and died when the last member expired in December 2020.…”