Trade: EU and 16 WTO members agree to work together on an interim appeal arbitration arrangement

Last week, in Davos Switzerland, the EU and Ministers from 16 Members of the World Trade Organization (WTO) agreed to develop a multi-party interim appeal arrangement that will allow the participating WTO members to preserve a functioning and two-step dispute settlement system at the WTO in disputes among them.

This initiative was launched in mid-December 2019 by the EU and a number of other WTO members following the effective paralysis of the WTO Appellate Body, due to the blockage of any new appointments since 2017.

Trade disputes

The multi-party interim arrangement will be based on Article 25 of the WTO Dispute Settlement Understanding (DSU). It will secure the participating WTO members (Australia, Brazil, Canada, China, Chile, Colombia, Costa Rica, the European Union, Guatemala, Republic of Korea, Mexico, New Zealand, Norway, Panama, Singapore, Switzerland, and Uruguay) an effective and binding dispute settlement process for potential trade disputes among them.

The arrangement is a contingency measure and it will only apply until the WTO Appellate Body becomes operational again. The EU believes that an independent and impartial appeal stage, giving the necessary guarantees of rulings of the highest quality, must continue to be one of the essential features of the WTO dispute settlement system.

About this agreement, Commissioner for Trade Phil Hogan said: “This statement testifies to the high importance that the EU and the participating WTO members attach to retaining a two-step dispute settlement process in WTO trade matters.

The multiparty appeal arbitration arrangement will guarantee that the participating WTO members continue to have access to a binding, impartial and high-quality dispute settlement system among them. Let me underline again that this remains a contingency measure needed because of the paralysis of the WTO Appellate Body. We will continue our efforts to seek a lasting solution to the Appellate Body impasse, including through necessary reforms and improvements.”