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

Abstract

Over the past three years, the United States have been persistently blocking the appointment of members to the WTO Appellate Body, citing various concerns with its alleged “failure to follow the agreed rules”. The US blockage has resulted in an unprecedented crisis of the WTO dispute settlement system, which led to the paralysis of the Appellate Body in December 2019 when its membership was reduced to the last one, and ultimately its death in December 2020 when the term of the last member expired.

Initially focusing on the minor procedural errors of specific Appellate Body members, the US criticisms on the Appellate Body has morphed into broader attacks on the substantive jurisprudence and judicial approach of the Appellate Body, as well as the more serious systemic issues on the function of the Appellate Body as an institution. While the US has been gaining more and more sympathizers among the WTO Membership, this paper argues that the US is barking at the wrong tree because most if not all of these problems are not of the Appellate Body’s making.

In response to the US complaint, various solutions have been proposed. Currently, the most popular solution seems to be the Multiparty Interim Appeal Arbitration Arrangement (MPIA), set up by a few key Members to provide a makeshift Appellate Body when the real one is not functioning. While recognizing the practical utility of this solution, this paper argues that the MPIA, due to its many defects, cannot provide a proper solution to the Appellate Body crisis. Instead, the paper calls for a rule-based solution, i.e., appointment of Appellate Body members based on majority-voting at the General Council. This paper provides detailed analysis on the legal basis for such a solution, which will not only solve the current Appellate Body blockage but also deter similar attempts in the future.