The Dispute Settlement Body in the World Trade Organisation: reform and challenges

As trade disputes increased after the pandemic era, the study of international mechanisms became more crucial. This thesis begins by outlining the historical context and the foundational role of the WTO as a critical institution in promoting trade equality, fairness, and stability in global trade since its establishment on January 1, 1995. The WTO, which succeeded the General Agreement on Tariffs and Trade 1947(GATT 1947), was designed to create a rules-based framework for international trade, helping to resolve disputes and prevent economic losses due to illegal trade practices. The WTO’s Dispute Settlement Body (DSB), often called the “Jewel of the Crown,” is central to enforcing trade rules and resolving disputes between member nations. The DSB functions similarly to a court of law within the WTO framework, reviewing consultation requests and ensuring that member nations comply with their trade obligations. However, the thesis emphasises that the WTO’s dispute settlement system is currently in crisis. This crisis has been exacerbated by the United States’ decision in 2018 to block the appointment of judges to the Appellate Body, the highest judicial authority within the DSB. The Appellate Body became paralysed after the last judge’s term ended in 2020, leading to significant concerns about the effectiveness and credibility of the WTO’s dispute resolution mechanism. It also looks at the political and legal implications of the DSB’s difficulties, examining the WTO's constraints in the larger framework of public international law by talking about how the WTO has its own set of restrictions as a subset of public international law, including the influence of state sovereignty, a lack of central authority, and inadequate enforcement tools. The WTO’s ability to uphold order in global trade relations and enforce its rules is hampered by these problems. The research also develops into the reform process of the DSB, highlighting the jurisdictional issues and the ongoing debates among WTO members about the future of the organisation, examines the competing interests of major WTO members, including the United States, the European Union, and China, and how these interests impact the prospects for meaningful reform. Furthermore, the thesis analyses the effectiveness of the WTO and its decision-making processes, particularly in the context of the complex interdependence theory proposed by scholars like Robert O. Keohane and Joseph S. Nye Jr. This theory suggests that international relations are increasingly characterised by complex interdependence, where states interact through both formal and informal channels, and where issues such as military security, economic stability, and environmental protection are interconnected. In the end, it concludes by arguing that while the WTO has made significant contributions to global trade, its dispute settlement system requires urgent reforms to address the challenges posed by the paralysis of the Appellate Body, the lack of judges, and the broader structural issues within the organisation. Without such reforms, the WTO may face a decline in its relevance and effectiveness as a global trade institution. In essence, this thesis provides a comprehensive analysis of the WTO’s Dispute Settlement Body, highlighting its historical significance, current challenges, and the urgent need for reform in the face of a rapidly changing global trade environment.