Ifo Calls for New Dispute Resolution Body at the WTO

World Trade Organization (WTO) logo at the entrance of the WTO headquarters in Geneva

Germany’s Ifo Institute has called for a replacement solution to be found quickly for the Appellate Body at the World Trade Organization (WTO). This body will soon cease to be operational, since the terms of office of two of its remaining three members end today, leaving the body unable to make decisions. “However, the resolution of trade disputes by the Appellate Body is very important for Germany as an export nation,” says Martin Braml, a researcher at the ifo Institute’s Center for International Economics.

“It’s very unfortunate that the US has for some years now been blocking the appointments of new judges to replace outgoing ones,” Braml says, adding that it is crucial to find a replacement solution quickly and that this is something Germany should be pushing for.

However, the only way forward currently is to find a solution outside the WTO. It would be possible to establish a body that would be recognized by all countries (except the US) to temporarily take over the WTO Appellate Body’s tasks.

“But this risks undermining the integrity of the WTO, so it’s only a second-best solution,” Braml says. “In the long term, the old body should be reinstated and some US concerns taken into account, such as how far-reaching the powers of the WTO appellate judges should be.” There have been repeated criticisms that the Appellate Body has independently developed commercial law without obtaining the consent of WTO member states.