Addressing the Appellate Body Crisis : A Plurilateral Solution?

The crisis over appointments to the Appellate Body risks dismantling the WTO's compulsory dispute settlement system. This paper argues that solutions to the crisis that seek to overcome the opposition of the United States and reinstate the system through majority rule are legally fragile and politically unwarranted, while purely ad hoc bilateral solutions fall far short of ensuring the security provided by compulsory dispute settlement. The paper examines the possibility of a ‘plurilateral' solution, through an ex ante agreement among willing Members, to establish an alternative means of achieving compulsory dispute resolution. Among the possible arrangements, the one that best fits the letter and spirit of the Dispute Settlement Understanding is an agreement to maintain panel proceedings in place and allow parties to appeal to an ‘appeals Arbitrator' in case of a non-operational Appellate Body. If appropriately designed, such an ex ante agreement not only allows willing Members to restore a high degree of security and predictability in their mutual trade relations but also allows appeals Arbitrators to produce authoritative legal interpretations of WTO law, increasing the incentives for multilateral negotiations leading to a permanent resolution of the crisis