The dispute settlement system, often considered as the “crown jewel” of the WTO, is in a present crisis and becomes the crown of thorns. Over the past years, the United States through the use of the WTO’s consensus requirements has successfully blocked the launch of a process to select the Appellate Body members. This is carried forward by the Trump administration. With a Settlement of Disputes Understanding (DSU) requirement that appeals be heard by three AB members, with the AB membership down to zero at the present time, the Appellate Body ceased to operate in December 10, 2019. The U.S. Administration makes clear that the U.S. long-standing concerns involve systemic, substantive and procedural issues. However, many WTO members have been pressing for the filling of Appellate Body vacancies first and addressing U.S. concerns over time. Without the Appellate Body, the dispute settlement system loses much of its effectiveness and credibility since the core objective of the system is to “provide security and predictability to the multilateral trading system” as stipulated in Article 3.2 of the DSU. The collapse of the Appellate Body may indicate that the rule-based multilateral trading system will be in peril. In view of the importance of the Appellate Body, this article looks into the reasons for the U.S. blockade and the nature of its concerns. This article also explores the proposals put forward by the European Union and the options available to overcome the impasse.
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