Cabinet Approval on the participation in the MPIA (Multi-Party Interim Appeal Arbitration Arrangement)

1. WTO dispute settlement system

The WTO dispute settlement system is a mechanism for the objective resolution of trade disputes between WTO members based on WTO rules. The WTO has a two-tiered dispute settlement system consisting of panels and the Appellate Body that determine the consistency of measures in dispute with the WTO rules.
Since its establishment in 1995, the WTO has adjudicated nearly 300 disputes, contributing significantly to the maintenance of a rules-based international economic order. While the rulemaking at WTO has become difficult partly due to the increase in the number of WTO members, the actively used dispute settlement system has been commended as the “crown jewel” of the WTO system. 
However, since December 2019, the Appellate Body has been dysfunctional.

2. The launch of MPIA (Multi-Party Interim Appeal Arbitration Arrangement)

In response to this situation, in April 2020, some WTO members launched the Multi-Party Interim Appeal Arbitration Arrangement (MPIA) as an interim response to the impasse of the Appellate Body. The MPIA is an arrangement which provides that the participating members will resolve disputes by using arbitrations, instead of appealing to the non-functional Appellate Body (the so-called “appealing into the void”), when they are unable to accept the adoption of the panel decisions. As of March 2023, 52 countries and regions, including the European Union, Australia, Brazil, Canada, China, Singapore, and New Zealand are participating in this arrangement.

3. Actions to be taken by the Japanese government

More than three years have passed since the Appellate Body ceased functioning, and the annual number of WTO dispute settlement cases has dropped to less than half of what it was before the current situation began. In addition, two of the dispute cases that Japan has filed with the WTO have already been “appealed into the void,” and those cases have been virtually left in limbo. In the future, further panel reports will be issued on the other two dispute cases that Japan has filed with the WTO.
As an interim measure until the dispute settlement function is restored, the Japanese government decided to join the MPIA. The Japanese government will notify the WTO Dispute Settlement Body of its intent to join the MPIA pursuant to the Cabinet Approval as of today. 
Japan will continue to work actively toward the earliest possible restoration of the WTO dispute settlement function and will also contribute to maintaining a rules-based international economic order through the utilization of the MPIA.

Division in Charge

Office of WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau