The hostile behavior of the United States against the WTO Appellate Body, the purpose of it and its implications on the existence of the WTO in the future.

Abstract

The Appellate Body of the dispute settlement mechanism under the World Trade Organization is not functioning any longer, since the 10th of December 2019. That is because it has been reduced to only one Appellate Body member lacking the minimum number required to hear an appeal according to the Dispute Settlement Understanding. The current situation occurred due to the continuous opposition of the American Administration, they had issues on the reappointment of Appellate Body members. The American Administration argues on the Appellate Body practice of the judicial activism against the US interests and the treatment for the Chinese state-owned enterprises. Moreover, the mischaracterizing of certain country’s status as developing WTO country rather than a developed country. All of such arguments were provided as justification by the US government for the hostile behaviour against the Appellate Body. This dissertation will cover the arguments presented by American government and the reasons provided by China for rejecting those claims. One of the recent development for settlement of this problem is the Multiparty Interim Appeal Arbitration Arrangement which is an alternative presented to the nonfunctioning Appellate Body. However, the question remains if the provided solution be effective without the participation of the US, since huge trade players such as China and the EU take part in this arrangement. Will this situation lead to the end of the multilateral trade system as enhanced by the nationalism or the situation goes otherwise leading to trade wars with retaliation actions outside of the World Trade Organisation system.