WTO despite settlement system



Abstract

The increasing level of trade in the contemporary world has resulted in greater international economic interdependence among states. As a consequence, states perceive that a strong rule-based, multilateral institution regime may promote stability and cooperation in international economic relations. This belief led to the establishment of the World Trade Organization (WTO) in 1995, which replaced the old trading regime under the General Agreement on Tariffs and Trade (GATT). In an effort to operate the WTO effectively, its members were cognizant of the need to fulfill their obligations and to have an effective instrument to deal with disputes. In this paper we, try to focus on the Countermeasures in the WTO despite settlement system.



Table of Content

Abstract2

Introduction4

Discussion4

Countermeasures in the WTO despite settlement system5

Jurisdiction6

The Panel Process6

Consultations6

Requests to Establish a Panel7

Composition of Panels7

Procedures8

The Appellate Process9

Adoption and Implementation of Reports10

Remedies11

Conclusion12

End Notes14

Further Readings15

WTO despite settlement system

Introduction

The dispute settlement system of the World Trade Organization (WTO) is the mechanism through which members thought to be in violation of their trade agreement commitments present their cases to a third-party panel for decision. The system evolved from the dispute settlement process of the WTO's predecessor, the General Agreement on Tariffs and Trade (GATT), which first embarked on the process of resolving disputes among its signatories in 1948. GATT's dispute settlement process was initially referred to as a process of “conciliation,” not arbitration, and was supervised by a panel of experts that generally consisted of diplomats, not lawyers.

Discussion

The goal of this process was to reach a solution mutually agreeable to the parties rather than to establish and apply binding legal principles. It did this reasonably well, but there was one major shortcoming. GATT, as its name makes clear, was a multilateral agreement. Indeed, strictly speaking, GATT had no “members.” Signatories were known as “Contracting Parties.” Since GATT was simply a contract among a group of parties, any action required a consensus of all of those parties. This allowed parties whose practices were challenged to block the establishment of a dispute settlement panel or the adoption of an adverse panel report. There was considerable dissatisfaction with this aspect of the system. Although some amendments to improve the GATT dispute settlement system were made over the years, it took the establishment of the WTO's dispute settlement system in 1995 to put in place an effective legal system, including an Appellate Body to which panel decisions may be appealed.

The power of the DSB is, perhaps, the biggest difference between the GATT and WTO systems. Consensus is still required, but it is “reverse consensus.” Consensus is required not to establish a panel when a request is made, reversing the GATT practice of requiring consensus to do so. Since at least one member, the complaining party, always wants the panel to be established, this effectively means there can be no reverse consensus. This reverse consensus rule also applies to the other major functions of the DSB, including the adoption of reports and the authorization of the prevailing member to impose the ...