In a WTO complaint by Canada against Chinese restrictions on the importation of canola seed (DS589), China and Canada have agreed to procedures for using an alternative mechanism for a potential appeal in the case. This agreement ensures that any WTO panel report in the case will be enforceable through the standard WTO dispute settlement procedures.
The panel was established on July 26, 2021, and has not yet been composed, so it would be a while until a panel report is ready to be appealed. Nevertheless, agreeing to these procedures now is an important step in ensuring that this complaint can take its proper course and reach the enforcement stage if necessary.
As provided in the WTO's Dispute Settlement Understanding, a WTO complaint will be heard by a panel and can be appealed to the Appellate Body. Upon adoption of these reports by the WTO's Dispute Settlement Body, a successful complaining party can impose trade sanctions against the responding party in order to induce compliance with the rulings.
Under the Trump administration, however, the United States began blocking all appointments to the Appellate Body as the Appellate Body Members' terms expired, which left the Appellate Body without any "judges" as of December 2019. As a result, when a responding party lost a case decided after that, it could appeal the panel report "into the void," and leave it an unenforceable state of limbo.
To deal with this issue, the European Union led an effort to create an alternative mechanism for appeals, called the Multi-Party Interim Appeal Arbitration Arrangement. Along with the European Union, there are currently 24 other WTO Members who are parties to this arrangement, including both China and Canada.
There have been five previous WTO disputes in which the parties agreed to use the MPIA as an appeals mechanism, in order to prevent appeals into the void. Now for the second time, China has signed on to these procedures in a dispute. (China and Australia agreed to use the arbitration appeal mechanism in a dispute over Chinese AD/CVD measures imposed on Australian barley.)