WTO Members Announce Temporary Dispute Settlement System

A group of 17 World Trade Organization members announced plans for an interim appeals process to settle disputes between members, according to a Jan. 24 joint statement. The members, including the European Union and China but not the U.S., said they will put in place “contingency measures” to allow for appeals of WTO panel reports “in disputes among ourselves.” The system would only be in place until a reformed WTO appellate body “becomes fully operational,” the statement said.

The members said the “arrangement will be open to any WTO Member willing to join it,” adding that they will “expeditiously finalise work on such an arrangement.” The appellate body ceased to function in December after the U.S. blocked appointees to the body (see 1912240016). President Donald Trump said he plans to discuss a “whole new structure” for the WTO with WTO Director-General Roberto Azevedo in Washington (see 2001220009).

The announcement is a “big vote of confidence” in the WTO and a quick response to the U.S’s blockage of appellate body members, trade lawyer Nicolas Lockhart said from Geneva. He also said the announcement will likely convince other members to join the effort. “I think there will be a snowballing effect,” Lockhart said, adding that the participation of the EU and China is pivotal because of the large number of disputes between them. They represent “a big part of the docket,” Lockhart said.

Although the temporary system is likely welcome news for WTO members, Lockhart said the announcement will not take focus away from finding a “long-term solution” to the appellate body issue. “I think it’s a positive development for predictability and for continuation of the system,” he said.