Some of the world's major trading nations have agreed on a way to circumvent U.S. obstruction of the World Trade Organization (WTO), the body responsible for resolving international trade disputes.

The WTO's Appellate Body, which normally deals with trade disputes among members, is paralyzed after a two-year campaign against the panel by the Trump administration, as well as push-back and complaints from previous U.S. administrations.

The body has been unable to hear appeals since 11 December last year because the US administration had blocked the appointment of new judges.

But in a widely welcomed move, the European Union and China, among other key WTO members, have formed an alternative system of appeals to deal with disputes.

"This is a significant move to unblock the WTO appeal system and keep it functioning," Renata Amaral, international trade scholar at the American University Washington College of Law, told CGTN Europe.

The members' multi-party interim appeal arbitration arrangement (MPIA) was formally notified to the WTO as a "stop-gap measure," with the coalition saying "as soon as the Appellate Body is again able to operate, appeals will be brought before the Appellate Body."

"This interim system is a result of the European proposal presented in 2019, which takes the form of a bilateral agreement to be signed between the participants of the multi-party interim appeal arbitration arrangement (MPIA)," explained Amaral.

Why is this a significant move?

"The interim system is massively important. It ensures that trade amongst these WTO Members continues to be based on rules that are enforceable," according to international trade expert Alan Yanovich, who was previously a senior lawyer at the Appellate Body.

"The MPIA will help maintain open trade flows and will weigh against growing protectionist pressures," he added.

Although the coalition has said the arrangement isn't meant to replace the Appellate Body, it will give back participating members their right to a functioning dispute settlement system in the WTO and an independent and impartial appeal process based on WTO rules.

This "is of the utmost importance for a rules-based trading system," the group said in a statement.

Over the next couple of months, the 19 subscribing WTO members will start pulling together a pool of 10 independent arbitrators that can be called upon to hear future appeals once they begin.

"It is an example of what WTO members who are committed to an open and rules-based trading system can achieve when they work together," said Yanovich, who is a partner at the Geneva office of law firm Akin Gump.

Will it solve the WTO's problems?

Many welcomed the creation of the MPIA, as the effective shuttering of the Appellate Body by the Trump administration provoked fears for the entire global trading system, especially at this time of economic uncertainty made worse by the global coronavirus pandemic.

But Renata Amaral said that, although it may partially solve the problems facing the dispute settlement system, "it will not solve the long-term problems facing the WTO with the current paralysis of the Appellate Body."

She added: "WTO members need to work in a long-term solution," Amaral said. "They also need to work on addressing concerns with the entire functioning of the WTO, which has been significantly prejudiced, among other reasons, by the current U.S. administration's resistance with the multilateral trading system."

Nevertheless, the MPIA is seen as providing a necessary bridge to overcome short-term challenges facing the WTO and the global trading system.

Yanovich said those who negotiated the coalition, China, the EU and other key members, should be "recognized for their leadership and commitment to an open and rules-based global trading system."

He added: "To overcome the long-term problems of the WTO, we need all WTO members to show a similar commitment. Until that happens, it is important that key members continue to show leadership by concluding plurilateral initiatives like the MPIA."