The WTO Appellate Body Crisis: Causes, Consequences and the Future of Dispute Settlement

Abstract

The WTO dispute settlement system, once a key pillar of the multilateral trading system, has been paralyzed since December 2019 because the US systematically blocked judicial appointments. This paper examines how this paralysis has affected the overall functioning of the dispute settlement mechanism. By analyzing the Appellate Body’s institutional design, its interpretive function, the root cause of the crisis, and its systemic consequences, the study argues that the paralysis has severely damaged the system’s effectiveness, predictability, and credibility. The suspension has not merely created a backlog of unresolved appeals; more fundamentally, it has disrupted the finality and enforceability of rulings, thereby weakened compliance incentives and undermined public trust in the rule-based system. The crisis also reveals that the institutional framework designed in 1995 no longer fits contemporary political realities, and that major-power politics can exploit procedural rules to neutralize international adjudication. Through textual analysis, the paper argues that reviving the Appellate Body requires more than just fixing rigid appointment rules. On a deeper level, the problem lies in the structural imbalance between the WTO’s judicial and legislative functions. To prevent interference from power politics, the system must address both procedural vulnerabilities and the latent malfunction of multilateral negotiation.