World Trade Organization (WTO) Dispute Settlement Crisis (DSC): Legal Implications and Reform Proposals

Abstract

The World Trade Organization’s dispute settlement mechanism is currently facing a profound institutional crisis, primarily due to the paralysis of the Appellate Body. This paralysis stems from the sustained obstruction by the United States of the appointment of new members, resulting in the suspension of the Appellate Body’s functions. Therefore, the legal credibility and enforceability of the WTO’s dispute resolution framework have been significantly undermined, rendering it less binding and thereby eroding its authority. This impasse carries serious legal ramifications and threatens the structural integrity of the multilateral trading system. In response, various reform initiatives have been proposed, aimed at restoring functionality and legitimacy through enhanced political oversight, curtailing the interpretative scope of the Appellate Body, and strengthening the institutional capacity of the dispute settlement mechanism.

Keywords: World Trade Organization, Dispute settlement crisis, Appellate Body, Legal implication, Reform Proposals

DOI: 10.7176/JLPG/148-06

Publication date: June 28^th 2025