International Law, Power Politics, and the WTO Appellate Body Crisis: Reconfiguring the Rules-Based International Economic Order

The paralysis of the World Trade Organization (WTO) Appellate Body since December 2019 represents one of the most significant challenges to the contemporary rules-based international trading system. Once regarded as the cornerstone of the WTO’s dispute settlement mechanism, the Appellate Body ensured consistency, predictability, and legal certainty in interpreting and enforcing multilateral trade rules. Its inability to function has generated a profound institutional and normative crisis, raising fundamental questions regarding the relationship between international law, state sovereignty, and power politics in global economic governance. This work critically examines the causes and consequences of the WTO Appellate Body crisis within the broader context of the changing international economic order. It argues that the institutional paralysis extends beyond a procedural dispute over judicial appointments and reflects deeper tensions concerning treaty interpretation, judicial legitimacy, geopolitical rivalry, and the evolving balance of power among major trading nations. Drawing on Realism, Liberal Institutionalism, Legal Positivism, and Third World Approaches to International Law (TWAIL), the paper shows how competing conceptions of law and power shape the functioning and legitimacy of international adjudicatory institutions. It further analyses the legal and institutional consequences of the crisis, including the erosion of legal certainty, the resurgence of unilateral trade measures, and the growing fragmentation of the multilateral dispute settlement framework. Particular attention is devoted to the implications for developing countries, with a special focus on India, whose economic interests depend significantly on an effective, impartial, and enforceable rules-based trading system. The present work also evaluates recent reform initiatives, including the Multi-Party Interim Appeal Arbitration Arrangement (MPIA), and proposes measures to restore the credibility, independence, and effectiveness of WTO dispute settlement. It concludes that the future of international economic law depends not merely on institutional restructuring but on renewed political commitment to multilateralism, respect for international legal obligations, and the preservation of a dispute settlement system capable of balancing state sovereignty with the rule of law in an increasingly multipolar world.