GENEVA, March 10 (Reuters) – Japan has become the latest
country to join an alternative mechanism for resolving disputes
to the World Trade Organization, it said in a statement on
Friday, in a move that observers say could urge others to follow
suit.
The top appeals bench of the global trade watchdog which
rules on trade disputes has been idle for more than two years
because of holds on appointments during the administration of
former President Donald Trump. The United States, which
continues to resist regular calls to approve appointments, is
instead leading discussions on how to reboot the dispute system.
“As an interim measure until the dispute settlement function
is restored, the Japanese government decided to join the MPIA,”
Japan’s economy ministry said in a statement, referring to the
Multi-Party Interim Appeal Arbitration Arrangement.
European Union Trade Commissioner Valdis Dombrovskis
welcomed the move on Twitter, saying that global trade rules
were the best “guard rail against economic fragmentation.”
Japan, a regular user of the WTO dispute system including in
a recent case with South Korea, is the 26th member to join the
alternative arrangement, according to the MPIA website. Parties
include the European Union, Canada and Brazil.
“Japan’s membership may increase pressure on wavering
potential members, like the United Kingdom and South Korea,”
Dmitry Grozoubinski, executive director of the Geneva
Trade Platform, told Reuters. He added that its adhesion would
offer a legal path forward for any future disputes between Japan
and China, since they are both members.
The paralysis of the WTO’s top dispute bench means that the
losing side can appeal the outcome from the lower court into a
legal void, as has happened to Japan twice. This has led to
fewer cases being brought to the WTO.
(Reporting by Emma Farge in Geneva
Editing by Christian Schmollinger and Matthew Lewis)
