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Trade
The WTO Appellate Body Crisis: FTAs and the Enforceability of World Trade Law By Ursala McDonnell, JS Law and Political Science The World Trade Organisation (WTO) has been the champion of world trade law enforcement since its inception in 1995. The WTO’s dispute settlement mechanism (DSM) has prevented harmful cycles of tariffs and retaliation by facilitating arbitration between its Members. Today, the WTO-DSM function is in jeopardy of collapsing, the consequences of which may be disastrous for the enforceability of world trade law. World trade law refers to the branch of public international law which governs the regulation of the international flow of goods and services. World trade law is an outlier amongst typically fragmented and decentralised public international law enforcement mechanisms. This can be attributed to its concrete mechanisms which have, until recently, been effective in ensuring that relevant parties implement obligations contained in international trade treaties. World trade law is primarily enforced by the World Trade Organisation. The WTO was formed during the Uruguay Round of the General Agreement on Tariffs and Trade in response to a general belief amongst world leaders that the global community was missing a multilateral organisation to effectively oversee and enforce complex interstate trade relations. It was ratified by the Marrakesh Agreement and began to facilitate a common organisational structure for the management of trading ties between Members on 1 January 1995. The establishment of the WTO essentially solidified the law governing world trade and has been viewed by many as one of the most important advances in multilateralism. The Marrakesh Agreement created an exclusive, centralised, and integrated DSM for WTO Members to settle disputes. The mechanism is supported by the WTO Dispute Settlement Understanding, which specifies that its judicial scope extends to resolving disputes emerging from violations of WTO covered agreements, i.e. all the multilateral WTO agreements. Previously proclaimed the ‘jewel in the crown’ of the WTO, the WTO-DSM was once extremely productive. Its sophisticated organisational structure and accessible procedural phases were very active, with 610 disputes being submitted since its inception. Its extensive application reflects the confidence that Members once had in its ability to resolve disputes and maintain Members’ rights under the covered agreements. Today however, the WTO-DSM is a system in crisis.
As more complex disputes have entered the WTO-DSM, Members are increasingly critical of the inadequacy of WTO rules to resolve them. The most vociferous of critics has been the United States. In particular, the US takes issue with the judicial organ of the WTO-DSM, the Appellate Body (AB). The AB is a standing international body of seven independent jurists authorised to hear and decide appeals of panel judgments. Jurists are appointed for a four-year term by consensus of Members. Since 2017, the US
