Can Interim Appeal Arbitration Preserve the WTO Dispute System?

The precise scope of the WTO dispute system's authority is a proper subject of debate: Just how enforceable should the rules of the WTO be? There are degrees of enforceability, and it is up to the governments that make up the system to decide how much power to delegate to international organizations and other bodies.

For the WTO dispute system to function properly, two features are crucial: dispute settlement decisions must have automatic effect, and some form of appellate review must be available.

Ideally, the Appellate Body itself would be revived, but if that is not possible, many governments are hoping that the MPIA can preserve the effectiveness of the WTO dispute system during the continued shutdown of the Appellate Body.

If there is a right of appeal, as there is under the DSU, but no Appellate Body to hear the appeal, a party that loses a complaint brought against it can effectively block a panel report by appealing into the void.11 Does that mean the system has, for practical purposes, returned to its form under the GATT? Or, instead, will parties to disputes refrain from appealing and apply the principle of automatic adoption to WTO panel reports?12 That would be an improvement on the situation under the GATT, although it could lead to incoherence in the jurisprudence if different panels interpret core WTO principles differently.

Inspired by a 2017 paper from a group of experienced WTO lawyers, the EU initiative has now been joined by 22 other WTO members and is known as the Multiparty Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU.13 MPIA appeals are only available to parties to the MPIA, but other WTO members may join the MPIA at any time.14.

16 All 10 MPIA arbitrators have extensive experience working on WTO disputes, with many of them having served as panelists or arbitrators or in the WTO Secretariat divisions that assist panels and the Appellate Body.17 The experience of these arbitrators with WTO disputes, combined with their awareness of the circumstances of the MPIA's creation, could affect how the MPIA treats the work of the panels they are reviewing.

While many of the specific details can be subject to legitimate disagreement, it is crucial for the WTO to maintain automatic effect of dispute settlement reports and some form of appellate review to preserve the coherence and effectiveness of the system.

https://www.cato.org/publications/free-trade-bulletin/can-interim-appeal-arbitration-preserve-wto-dispute-system