Jakarta. Indonesia is exploring the possibility of joining the alternative arbitration mechanism MPIA as a temporary fix amidst the Appellate Body crisis at the World Trade Organization (WTO), according to a deputy minister. 

Almost five years have passed since the WTO's seven-member Appellate Body ceased to function. This body of judges is in charge of reviewing any appeals submitted by WTO members who are unhappy with a panel conclusion. They will then deliver the final verdict either by upholding, modifying, or reversing the WTO panel’s conclusion. Donald Trump had been a sharp critic of the WTO during his first US presidential term and had blocked the appointment of new judges to the Appellate Body, thus putting many disputes in limbo. With Trump’s imminent return to the White House, the future of the WTO's highest dispute-resolution body remains uncertain. 

In 2020, the European Union (EU) and Canada, among others, established the Multi-Party Interim Arbitration Arrangement (MPIA) as an alternative. Countries that wish to lodge an appeal can use the MPIA instead of the dysfunctional Appellate Body. Deputy Trade Minister Dyah Roro Esti Widya Putri said Saturday that Indonesia was currently weighing the pros and cons of joining the MPIA so the country could file an appeal if needed.

“We are probably leaning towards that,” Dyah Roro told reporters when asked about Indonesia’s interest in joining the MPIA on the margins of the Conference on Indonesian Foreign Policy (CIFP) in Jakarta.

“But we would like to make some assessments first before we come to a conclusion. These [assessments] are currently underway,” Dyah Roro said. 

Earlier that day, President Prabowo Subianto’s economic advisor Mari Elka Pangestu proposed that Indonesia should consider becoming an MPIA member, although Jakarta needs to keep its drawbacks in mind.

The EU has sued Indonesia at the WTO over the latter’s nickel export ban, saying that such restrictions were incompatible with international trade rules. Indonesia lost the lawsuit but lodged an appeal in 2022. The Appellate Body has put the case in queue, and Indonesia still continues banning nickel ore exports to this day. According to Mari Elka, the Appellate Body’s absence gives Indonesia an edge when it comes to the nickel dispute. But that might not be the case if Indonesia wants to make an appeal over an unfair panel ruling in the future.

“Trump’s return means that the discussions on reviving [the Appellate Body] are closed. So it’d be best for Indonesia to join the MPIA because we would need it if we have another dispute. I believe dispute settlements actually benefit the small and developing economies, and we could get bullied without it,” Mari Elka told a CIFP panel discussion.

Over 50 WTO members are currently part of the MPIA.

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