New Delhi: The European Union, China, Australia, Singapore and Canada, among others, have agreed for an interim mechanism for appeals to resolve trade disputes with the World Trade Organization‘s (WTO) dispute settlement mechanism becoming defunct.

The Multi-party Interim Appeal Arbitration Arrangement (MPIA), set up under Article 25 of the Dispute Settlement Undertaking, offers arbitration outside the Appellate Body contingent upon mutual agreement of the parties. The arrangement was finalised on March 27.

As per the agreement, final arbitration rulings will be binding and notified to the Dispute Settlement Body (DSB), although they will not be adopted as Appellate Body reports.

Members in an individual dispute can “mutually agree to depart from the procedures set out in the appeal arbitration agreement”.

The mechanism comes in the wake of the US blocking the appointment of judges for more than two years, crippling the multilateral trade agency’s dispute settlement mechanism.

It applies to any future dispute between any two or more participating members and will apply only as long as the Appellate Body is unable to hear new appeals.

“The participating members request the WTO Director General to ensure the availability of a support structure meeting these criteria,” they said in the proposed arrangement.

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