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The IUP Journal of International Relations

Evolution of WTO Dispute Settlement System and its Current Crisis

Article Details

Pub. Date	: April, 2023
Product Name	: The IUP Journal of International Relations
Product Type	: Article
Product Code	: IJIR010423
Author Name	: Giorgio Sacerdoti
Availability	: YES
Subject/Domain	: Arts & Humanities
Download Format	: PDF Format
No. of Pages	: 18

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Abstract

The World Trade Organization (WTO) dispute settlement system has been further affected in 2022 by the absence of a functioning Appellate Body (AB), allowing a losing party to block the adoption of a panel report appealing it "into the void". This semi-paralysis notwithstanding, the system has witnessed two noteworthy developments at the end of 2022. First, the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) has started operating with the issuance within a short time framework of the first appellate arbitration report in the Colombia-Frozen Fries (DS 591) dispute between the European Union and Colombia. Secondly, in disputes against the US, where the US has relied on the Article XXI GATT security exception to shield its WTO-inconsistent measures, panels have issued their reports rejecting US arguments on the self-judging nature of the exception (DS 544/552/556/564, concerning US extra-duties on steel and aluminum imports, and DS 587, US-Origin Marking (Hong Kong)). The panels have confirmed past case law, established in DS 512 and DS 567, that the exception is only partially self-judging, is subject to objective evaluation by panels and requires an emergency in international relations akin to a war or a near breakdown of bilateral relations to be applicable. The study examines the procedural and substantive issues dealt with in the reports handed down by panels and arbitrators in 2022, in the context of the current WTO crisis and the outcome of the 2022 Ministerial Conference.

Introduction

WTO Dispute Settlement System Through Crisis in 2022
The crisis of the WTO dispute settlement system has been further exacerbated in 2022 since the key stumbling block to its normal functioning, the blocking of the Appellate Body's (AB) members selection by the US, has not been overcome. In December 2022, for the 61st time, more than 120 WTO members requested at a Dispute Settlement Board (DSB) meeting the relaunching of the AB members selection process, but to no avail since the US went on withholding its consent.1