The European Union and 16 WTO members including China and Australia have signed a pact to develop a multi-party interim appeal arrangement at the global trade body. The arrangement, signed on Friday on the sidelines of the World Economic Forum (WEF) annual meeting, will allow the participating WTO members to preserve a functioning and two-step dispute settlement system at the World Trade Organization (WTO).

This initiative was launched in mid-December 2019 by the EU and a number of other WTO members following the effective paralysis of the WTO Appellate Body due to the blockage of new appointments since 2017.

EU Commissioner for Trade Phil Hogan said: “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, dispute settlement system among them.”

“Let me underline again that this remains a contingency measure needed because of the paralysis of the WTO Appellate Body. We will continue our efforts to seek a lasting solution to the Appellate Body impasse, including through necessary reforms and improvements,” he added.

The multi-party interim arrangement will be based on Article 25 of the WTO Dispute Settlement Understanding. 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.