To AB or Not to AB? Dispute Settlement in WTO Reform

Abstract

Recent debates on the operation of the WTO’s dispute resolution mechanism have focused primarily on the Appellate Body (AB). We argue that this neglects the first-order issue confronting the rules-based trading system: sustaining the principle of de-politicized conflict resolution that is reflected in the negative consensus rule for adoption of dispute settlement findings. Improving the quality of the work of panels by appointing a roster of full-time professional adjudicators, complemented by reforms to WTO working practices that reduce incentives to resort to formal dispute settlement, can resolve the main issues that led to the AB crisis. Effective, coherent, and consistent WTO dispute resolution need not include an AB. An appropriately redesigned single-stage process can serve just as well, if not better.

Keywords: Trade disputes; adjudication; Appellate Body; panels; WTO reform

JEL Classification: K40