WTO dispute settlement mechanism created

A total of 46 members of the World Trade Organization (WTO) were able to put in place a mechanism to ensure dispute settlement, as a measure to replace the Appellate Body.

Unlike panels, the WTO Appellate Body is a permanent body and is made up of seven members, which deal with examining the legal aspects of panel reports. Thus, the Appellate Body is the second (final) instance of the jurisdictional stage.

As this body did not exist in the old GATT 1947 dispute settlement system, the addition of this second jurisdictional stage was one of the main novelties of the Uruguay Round of Multilateral Trade Negotiations.

But this mechanism stopped operating, because the panelists who concluded their term of office were no longer replaced.

The alternative mechanism will function until the permanent Appellate Body of the WTO is reconstituted.

Dispute settlement

Australia, Brazil, Canada, China, Chile, Colombia, Costa Rica, Guatemala, Hong Kong, China, Iceland, Mexico, New Zealand, Norway, Pakistan, Singapore, Switzerland, Uruguay and the European Union (and its 27 member states plus the United Kingdom temporarily) have signed the Multi-Party Interim Appeal Arbitration Agreement (MPIA).

WTO members who are parties to the agreement will use the arbitration procedures currently provided for in the WTO Dispute Settlement Understanding (DSU) to make any appeal to the conclusions of the WTO panels. Appeals are expedited with a maximum period of 90 days to complete them.

The conclusions of the panels and the appeal arbitrators will be enforceable in accordance with the ESD procedures. Parties that have adopted laws, regulations or administrative decisions that are inconsistent with their WTO obligations will be subject to trade retaliation if they do not promptly comply with their conventional obligations.

WTO members who are parties to the agreement agree not to appeal the panel’s findings to the permanent Appellate Body while it is out of service.