The Appellate Body Deadlock at the WTO: Identifying Solutions Within the DSU and Beyond

Abstract

The World Trade Organization has grown into one of the most influential international organizations on the international plane. Its rise to prominence has also been a direct result of the success of the WTO dispute settlement mechanism, which has addressed more than 570 alleged violations of WTO agreements to date. Nevertheless, some WTO Members have sharply criticized the dispute settlement system in the past and have expressed dissatisfaction especially with the functioning and overreach of the Appellate Body. From 2017, the United States government emerged as one of the fiercest critics of the Appellate Body and in order to compel systemic reform, it blocked the selection process for new members to the Appellate Body. Typically composed of seven members, the Appellate Body today has only three members that can accept new cases, the minimum number necessary for it to function. Several academics and governments have worked on solutions to overcome this deadlock. This contribution aims at illustrating the most important proposals and to provide a critical analysis thereof. The first section of this contribution provides a brief background of the events leading up to Appellate Body deadlock at the WTO. This is followed by a study of the rather progressive suggestion to use ad-hoc arbitration instead of review proceedings before the Appellate Body. In the third section, this contribution addresses some of the other proposals on the table dealing with the concerns voiced by the United States. Finally, the last section highlights the key takeaways of the critical analysis and concludes that while arbitration may certainly look attractive at first glance, it presents significant issues in practice that could weaken the WTO dispute settlement mechanism instead of strengthening it in the long term.

Keywords: WTO; Appellate Body; Trade; Trade Law; World Trade Organization; WTO Deadlock; DSU; Arbitration; Article 25 DSU

JEL Classification: K20; K00; K10