EU, 16 WTO members form alliance to settle trade disputes

The mechanism come a month after the United States paralyded the WTO’s appeals body

Commissioner for Trade Phil Hogan

The EU along with Ministers from 16 Members of the World Trade Organization (WTO) have 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 organisation in disputes among them.

This initiative was launched in mid-December 2019 by the EU and a number of other WTO members following Unites States decision to freeze the Appellate Body, which acts as a supreme court for international trade, by blocking appointments for over two years. Two of the body’s three members came to the end of their terms in December, leaving it unable to issue rulings.

"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. ", Commissioner for Trade Phil Hogan said.

"We will continue our efforts to seek a lasting solution to the Appellate Body impasse, including through necessary reforms and improvements,” he said.

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, agreed in Davos Switzerland, 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.

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