Dispute Settlement at the WTO: How Did We Get Here and What’s Next for Commonwealth States?

Barbados - 1 September 2020

Trade topics: Trade Policy

By 10 December 2019, the number of judges (or Appellate Body members) serving on the Appellate Body – the final appeal court of the World Trade Organization (WTO) – had dwindled to just one, well short of the full complement of seven envisaged under the rules establishing the court (the Dispute Settlement Understanding or the DSU) or the three required to hear a given appeal. Still, by operation of a special rule of appellate procedure (Rule 15 to be precise), judges who had already commenced stayed on to complete the few remaining cases in the docket, with a bare-bones secretariat providing legal and technical support.
It was not until the final report of the Appellate Body was issued on 9 June 20202 that the certainty of the Appellate Body’s demise finally materialised, signalling the end of an era in dispute settlement that began in 1995 when the Appellate Body emerged as one of the innovations accompanying the establishment of the WTO. Less certain, however, are the consequences of the loss of the Appellate Body for dispute settlement and the legitimacy of the WTO, at a time of increasing unilateralism by some WTO members and a fragile world economy plagued by the unforeseen COVID-19 pandemic.
This issue of Trade Hot Topics examines the current state of WTO dispute settlement with a focus on repercussions for Commonwealth countries. Specifically, it begins by outlining the dispute settlement profile of Commonwealth states, and then turns briefly to the history of the Appellate Body, highlighting its successes and the criticisms it attracted, as well as the reasons for its demise. This is followed by a discussion of the technicalities of one proposed option to temporarily fill the void left by the Appellate Body’s absence, assessing its merits and explaining what it might portend for participating and non-participating members. It concludes with recommendations for the consideration of Commonwealth states as they seek to define and promote their dispute settlement interests in the current WTO environment.