Japan Newest Country To Join WTO's Dispute Resolution

Japan has become the latest country to join an alternative dispute resolution mechanism to the World Trade Organization, according to a statement issued on Friday, in a move that observers say may encourage 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 due to appointments held up during former President Donald Trump's administration. The US, which continues to reject repeated calls to approve appointments, is instead leading private discussions on how to restart 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.

According to the MPIA website, Japan, a frequent user of the WTO dispute system, including in a recent case with South Korea, is the 26th member to join the alternative arrangement. The European Union, Canada, and Brazil are among the signatories.

"Japan's membership may increase pressure on wavering potential members, like the United Kingdom and South Korea," Dmitry Grozoubinksi, 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.

Because the WTO's top dispute panel is paralysed, the losing party can appeal the lower court's decision into a legal void, as Japan has done twice. As a result, fewer cases have been brought to the WTO.