• Arman Melikyan

Resolving WTO Appellate Body Crisis: A Life Vaccine to the Infected Rule-Based Global Trade?


Introduction

With each departing Appellate Body judge, the “central pillar of the multilateral trading system”, as described by the WTO Director-General, Renato Ruggiero, back in 1997[1], was coming closer to its sunset. After nearly two decades of consistent dispute mediation in the area of international trade, on December 10, 2019 the WTO Appellate Body lost its quorum with the expiration of the term of two of the three remaining judges, as a result of blockage of appointment of new judges by the United States of America. This already largely debated crisis with its numerous international negotiations and tabled proposals of legal and institutional resolutions were meant to be advanced during the Twelfth Ministerial Conference of ETO (MC12) in June, 2020, when the hopes of the EU and the international community were frustrated by the sudden spread of a global pandemic.[2] The WTO’s predictions of “a very sharp decline in trade” and “a worse economic downturn and job loss than during the global financial crisis”[3] due to the COVID-19 and the disruption of complex supply chains through the massive restrictions and emergency regulations aimed at social distancing by some of the most important world economic hubs made it clear that the real international trade crisis is no longer contained inside the judicial branch of the World Trade Organisation. In particular, the global trade fall in 2020 is forecasted to be between 13% to 32%, when it dropped only 12.5% at the height of the financial crisis[4]. The recent developments of the global economic turnover, together with the world health crisis dictate a complete review of not just the WTO dispute settlement body, but a comprehensive relaunch of the global economic governance system. It is clear that a handicapped WTO will not be able to save the rule-based fair international trade. These circumstances make the WTO reforms more crucial than ever



Broader Picture