[Podcast] MPIA Solution: A Temporary Way Out of the International Trade Crisis?
23 November, 2024
Keywords: MPIA, WTO, dispute settlement, international trade, appellate body, international arbitration, trade crisis, Vietnam.
WTO used to be a symbol of free and fair trade; on the other hand, it is, currently, facing a serious crisis as its appellate body ceased to function. In an attempt to maintain the continuity of the dispute settlement system, the Multi-Party Appellate Arbitration (MPIA) mechanism was invented as a temporary solution. A research team from the School of Law, University of Economics Ho Chi Minh City (UEH) conducted a research project on “Multi-Party Appellate Arbitration (MPIA) Mechanism and Recommendations for Vietnam” to analyze MPIA from the perspective of benefits and risks along with some recommendations on the role of this mechanism in maintaining the international trade order.

WTO crisis and the need for MPIA
WTO has spent decades ensuring transparency and fairness in international trade, contributing to a stable global trading system. However, since 2019, this system has been threatened when the WTO Appellate Body (AB) has been paralyzed because of the US blocking the appointment of new members. As a result, many disputes cannot be resolved at the appellate level, causing the WTO’s dispute settlement system to almost stagnate.
In this context, WTO members have to look for temporary solutions to ensure that disputes are handled transparently and to avoid trade risks. MPIA was launched in 2020 as an initiative from the EU to replace the WTO Appellate Body until the system is restored.
MPIA – Interim Appeal Arbitration Mechanism
MPIA allows members to resolve disputes at the appeal level through independent arbitrators selected from a list of experts in international trade law. The highlight of MPIA is the dispute resolution process according to strict standards and must be completed within 90 days to ensure speed and efficiency.
The fact that many large countries like those in the EU, China and Canada participating in MPIA indicates that this mechanism receives high trust from the international community. However, MPIA has been only a temporary and limited solution. Only signatory members can use this mechanism, making it unable to be widely applied to all disputes in the WTO.
MPIA Challenges and Opportunities
MPIA provides opportunities for countries to protect economic interests and to avoid unnecessary trade retaliation. However, this mechanism faces many challenges as follows:
- Limited scope of application: Only countries that have signed the MPIA can use this mechanism, causing division within the WTO community.
- Risks in enforcement: Enforcement of arbitral awards depends on the voluntary compliance of the parties. If one party refuses to comply, the settlement will be difficult.
- Lack of comprehensiveness: Some experts criticize that the MPIA cannot replace the WTO’s appellate body in making binding and highly unified decisions. This can lead to inconsistencies in the interpretation and the application of international trade law.
Nevertheless, despite its limitations, the MPIA plays an important role in maintaining trade order and confidence in the international system during the crisis time.
Policy implications for Vietnam
Vietnam’s consideration of joining the MPIA has many important strategic implications for both the legal system and the national economy. In the context of Vietnam’s economy being heavily dependent on international trade, having a mechanism to protect trade interests against disputes is essential. The MPIA is not simply a temporary measure to resolve the deadlock of the WTO system but also an opportunity for Vietnam to improve their legal capacity and consolidate their position in the multilateral trading system.
First of all, joining the MPIA will help Vietnam better protect their interests in trade disputes. As a country exporting a great deal of goods to large markets, Vietnam faces many disputes over tariffs, technical barriers and trade defense measures. When the WTO’s appeal system is paralyzed, having a temporary arbitration mechanism will help Vietnam avoid the risk of being damaged by unfair decisions. MPIA allows Vietnam to appeal decisions at the first instance level quickly and effectively and to minimize retaliation from trading partners.
Second, joining MPIA will require Vietnam to invest heavily in human resources and legal capacity, including experts in international dispute resolution and commercial law. Legal experts need to both understand international commercial law and be proficient in international arbitration and negotiation skills. This is also an opportunity for Vietnam to improve the capacity of its legal advisors for the government and enterprises, contributing to the building of a more professional commercial legal system.
In addition, joining MPIA also helps Vietnam build the image of a responsible and active country in the multilateral trading system. Proactively participating in international initiatives like MPIA demonstrates Vietnam’s commitment to complying with and contributing to the development of global trade. This will not only strengthen the confidence of trading partners but also help Vietnam attract more foreign investment, especially from partners who value legal stability and transparent trade policies.
However, Vietnam needs to carefully assess the risks and the challenges of joining the MPIA. One major issue is that arbitration awards under the MPIA can cause financial and political pressure if not prepared well. In addition, the lack of consensus in the interpretation of international trade law between the MPIA and the WTO in the future can create difficult-to-handle legal conflicts. Therefore, Vietnam needs to prepare contingency strategies and to build effective negotiating capacity to deal with other arising situations.
In the long term, joining the MPIA also creates an opportunity for Vietnam to accumulate experience in handling international trade disputes, strengthening its position in the WTO when the appellate system is officially restored. Participating in this mechanism is not only a response to the current situation but also a strategic step for Vietnam to be more proactive in multilateral and bilateral trade relations.
Conclusion
MPIA is a necessary initiative during the WTO crisis, helping to maintain continuity and transparency for the international trade dispute settlement system. Although any solution is imperfect and implies many limitations, MPIA brings some important opportunities for countries to protect their interests. For Vietnam, participating in the MPIA will be a strategic step in strengthening their international position and ensuring economic benefits in the upcoming time.
The full-text article on Multi-Party Appellate Arbitration Mechanism (MPIA) and Recommendations for Vietnam can be accessed HERE.
Authors: Dr. Dinh Khuong Duy and Dr. Nguyen Thanh Tran – University of Economics Ho Chi Minh City.
This article is part of the series spreading research and applied knowledge from UEH with the message “Research Contribution For All”. UEH cordially invites readers to wait for the next UEH Research Insights newsletter.
News, photos: The Authors, UEH Department of Communications and Partnership

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