Unravelling of the trade legal order: enforcement, defection and the crisis of the WTO dispute settlement system

The WTO dispute settlement mechanism is the crown jewel of the multilateral trading system, essential to enforcing global trade rules. However, the United States disabled the Appellate Body in 2019 by blocking all judicial appointments. Five years since the Appellate Body collapse, there has yet to be a concrete assessment of its impact on the multilateral trading system. This policy paper draws on available data to analyse the effects of the Appellate Body blockage on the WTO dispute settlement system. It shows that many states—not just the US—are increasingly taking advantage of the absence of a functional Appellate Body to block WTO panel rulings by appealing into the void. In fact, most WTO disputes are now being appealed into the void, depriving them of any legal force. Moreover, the Appellate Body crisis now appears to be turning into a broader crisis of the WTO dispute system. The number of cases taken to the WTO has plummeted to approximately one-third of the level prior to the Appellate Body collapse. This signals that states no longer see the WTO dispute settlement system as an effective means to enforce the rules and defend their trade rights. The legal order that previously underpinned global trade is now beginning to crumble.