Tuesday, May 30, 2023
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Alternatives to trade arbitration gain popularity as Japan joins WTO

GENEVA (Reuters) – Japan said in a statement on Friday that it had become the latest country to join the World Trade Organization’s alternative dispute settlement mechanism, a move observers said could urge others to follow suit.

The top appeals seat of the global trade watchdog that adjudicates trade disputes has been idle for more than two years as appointments under former President Donald Trump were put on hold. The United States continues to resist conventional calls to approve appointments, instead leading discussions on how to restart the dispute system.

“As an interim measure pending resumption of the dispute resolution function, the Japanese government has decided to join the MPIA,” METI said in a statement, referring to the multi-party interim appeals arbitration arrangement.

EU Trade Commissioner Valdis Dombrovskis welcomed the move on Twitter, saying global trade rules were “the best guardrail against economic fragmentation”.

Japan, a regular user of the WTO dispute system, including 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.

Geneva trade platform executive director told Reuters. Its accession would provide a legal avenue for any future disputes between Japan and China, since they are both members, he added.

The paralysis of the WTO’s top dispute court means that the losing party can appeal the results of lower courts to be legally invalid, which has happened twice in Japan. This has resulted in fewer cases being brought to the WTO.



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