The Legitimacy of the MPIA's Decisions in the WTO Dispute Settlement System
Published 3 May 2023
The WTO Dispute Settlement System, created in 1994 by the Marrakech Agreement, consists of a structure built to ensure rule-based decisions and compliance with its provisions, assured by its negative or reverse consensus. The standoff created by the United States in 2015, due to the disagreement in the Appellate Body's judgments, has effectively blocked the operation of the WTO since December 2019. This scenario produced a number of deadlocked cases in which WTO members began to "appeal into the void" and, therefore circumvent WTO rules. Faced with the non-functioning multilateral trade system, a number of WTO members approved an alternative mechanism to provide second tier decisions, known as the Multi-Party Interim Appeal Arbitration Arrangement (MPIA). Since its establishment in 2020, a single arbitral award that complied with its rules is found in DS591 between Colombia and the European Union. The MPIA's alternative mechanism, although quite recent, enables the debate about a potential fragmentation of the jurisprudence of the WTO, considering that only 25 members adhered to the mechanism. Furthermore, due to the reluctant position of the United States in blocking the Appellate Body and ensuring its protectionism based on the allegation of national security, the multilateral trade system will gradually fragment into a set of plurilateral and regional rules, resembling the international investment protection system, essentially composed by bilateral and regional agreements.