A Framework for a Reformed WTO Appellate Body

World Trade Organization, Geneva, Switzerland. Photo via Shutterstock.

The World Trade Organization’s (WTO) Appellate Body (AB) was established in 1995 to hear appeals on trade disputes between member countries. However, following the end of the final member’s term in 2020, it has been effectively disbanded, and the United States has since blocked all new appointments. The inability of a multilaterally accepted AB to hear appeals, however, severely undermines the goal of providing a predictable, multilateral, non-discriminatory and transparent international trading system. Thus, strengthening the WTO’s dispute settlement mechanism by re-establishing a more effective AB is a priority for many WTO member countries, including members of the Group of 20 (G20).

In a new Think20 (T20) policy brief, Purvaja Modak and Rachel Thrasher draw from existing proposals to outline a framework for procedural and substantive reforms suited to changing institutional needs and allow for regulatory flexibilities to address emerging climate and developmental concerns.

The authors write that any negotiated outcome will need to balance a range of legitimate perspectives on how the reformed AB should function. Such a revision must include modifications to the procedural rules, providing guardrails that clarify the timeline, the scope of decisions to be reviewed and the role of prior case decisions for a forward-looking AB. Once those procedural hurdles are overcome, substantive reform will be more likely through good faith negotiations among parties.

Reaching an agreement on a dispute settlement system that is compulsory, impartial and enforceable, can help preserve, and even enhance, multilateral cooperation on trade. Focused and serious discussions on this reform process can begin at the G20, under the Indian presidency of 2023, followed in the next two years by Brazil and South Africa.

Read the Policy Brief