126 CChapter4. The WTO: History, Structure, and Future Summary of WTO History, Structure, and Future ‘+ The GATT 1947 was replaced by the WTO in 1994, ‘The WTO was ushered in through a single package containing a variety ‘of agreements on a diverse set of topics + Decision by consensus is central to the institution, ‘© Membership is quasi-universal. New members must negotiate a set of concessions that they will make in order to be admitted. ‘+ The GATT/WTO system is best understood as motivated by multiple, overlapping objectives (improving terms of trade; making commitments against domestic interests; pursuing political objectives). + The key to GATT/WTO commitments remains a reciprocal exchange of market access commitments, + The legitimacy and accountability of the WTO as an international organization ate highly contested. ‘In the wake of the 2008 financial crisis, partly thanks to the WTO, countries resisted a major increase in trade restrictions. Atthesame time, the current round of WTO negotiations, started almost 15 years ago, remains unconcluded, raising questions as to the future of the WTO. ‘The material in this chapter has aid out basic outline of the WTO'shistory, structure, and some decision-making procedures. The next chapter provides ‘a more detailed discussion of how enforcement and conflict resolution oper ate in the WTO, and later chapters will describe several particular features of the WTO system and how they address many specific international concerns, As you study these features, consider how well-equipped the WTO is to han- dle the various challenges it faces. You will likely fine thatthe organization Is well-designed for some Issues, but less so for others. Keep in mind that there are limits that the WTO's structure imposes upon its ability to solve particu: lar problems, but these limits accompany certain advantages that the WTO system offers. In what ways can the WTO's structure be improved to address issues in which the WTO should be invested? Chapter 5 WTO Dispute Settlement (One of the most remarkable and succesful aspects of the WTO Is Its auto matic and compulsory dispute settlement system. Iis one thing for countries fo agree toa treaty and quite another to enforce compliance with that treaty Under international law, states can only be brought before an international ‘oust or tibunal they have consented tothe jurisdiction ofthat court oF - ‘buna. In many cases, thisimplies that breach ofa treaty cannot be challenged | in third-party adjudication, or that when a dispute arses It canbe settled ina judicial fashion only with the explicit consent ofboth parties. | in the WTO, the situation is dramatically different. Whenever a WTO | ‘Member has a complaint against another WTO Member for any mater fall ing under any WTO-covered agreement (as defined in DSU Article 1), 1t can invoke the WTO's dispute settlement system, without needing the approval of the defending party. This remains the ease even i the mater raised not only Involves tade but also more sensitive questions such as health or enviton- ‘mental protection, public morals, or national security "As compaed to most other niernational adjudication tegimes, WIL dls- pute settlement has detailed procedural rule, an appellate process, and backup abitration mechanisms to deal with non implementation and the cal- culation of trade sanctions in response to continued non-compliance. Most important, WTO Members have frequently used the dlspute settlement sy tem (between 1995 and April 2011, 424 disputes were filed) and in the large majority of cases (with some notable exceptions), the system has managed | resolve the dispute. ‘better understanding of the WTO dispute settlement system not only allows one to formulate and guide complaints through the multiple stages of ‘enforcing trade agreements atthe WTO, be tin pursuitof government or pri ‘ate client interest, but it also offers fascinating study of state to-state adj Aication and international law enforcement more broadly Key Legal Provisions GATT XXM GATT xm ¢ DSU4.3,47,6.1, 164, 178, 17.6, 17.13, 17.14, 21.3, 21.5, 224, 22.6elected ete elect ees eiese eter ese eietee ce teete 128 Chapter. WTO Dispote Settlement A. UNDERSTANDING THE WTO DISPUTE SETTLEMENT SYSTEM ‘Compared to what existed under the GATT system, the WTO introduced a more structured and formal system for resolving disputes, The WTO system rose to a significant degree out of dissatisfaction with certain aspects of the GAT? procedures, and so its useful to understand something about how the former system worked before examining the currentsystem. The excerpt below provides a sketch of dispute resolution under the pre-WTO GATT, including Tome of the exticisms it faced, and then describes the current WTO system for “ispute resolution, As you read it you should also note that the WTO system fray not divorced itselt from the formal rules in the GATT Agreement (espe- Cally GATT Articles XXII and XX). Those rules remain an important part of the dispute settlement system. "THE WTO DISPUTE SETTLEMENT MECHANISM" William Davey “The WTO agreements provide extensive rights and impose many duties on ts ‘Members and their conduct of international trade. A key issue is how the WTO Gnforces those tights and duties. A critical part of any enforcement mecha- hhlsm is an effective system to resolve disputes over what the rales mean and ‘whether they have been broken in a specific case. This is essential to promote ‘Compliance with those rules, Without such a system, an elaborate structure of rights and duties means little. . 1B. Tue GATT Drsrere Sermueaant System Generally speaking, dispute settlement under the WTO Agreement, including Sispute settement under GATS, TRIPS and the side agreements to the General ‘Agreement, is based on the piaciples of GATT Article XXL. Article XXIILis ‘the General Agreement’s basic dispute settlement mechanism. Article XXIIEE provides that the dispute settlement process may be invoked when one party faim that a benefit accruing to itunder the General Agreement has been nisl lifed oF Impaired by another party or thatthe attainment of any objective of the General Agreement is being impeded asa result of (@) the failure ofanothercontracting party to carry outits obligations under {the General] Agreement, or {(b) the application by another contracting party of any measure, whether ‘ornot itconflics with the provisions of [the General] Agreement, oF 1, Pb Law Legal Theory Research Papes Series, Research Fapet No, 03-8, 25, 20a bus co asta -419953, A. Understanding the WTO Dispute Settlement System (© the existence of any other situation ‘The vast majority of complaints brought under Article XXIII have alleged @ ‘lolation of the General Agreement (paragraph (a), butthere have been afew ‘Gases based on paragraph (b), which are known as non-violation cases. Nosuc- ‘cessful cases have been based on paragraph (0). It is important to note that proof of a violation is not sufficient to state a cause of action under Article XXII. Its also necessary to show that ben- thts have been nullified or impaired or the attainment of objectives of the Ggreement has been impeded. In practice, there has not been a finding of the latter condition, All successful cases have claimed that the violation or ‘measure at issue nullified or impaired benefits. In fact, over time in GATT practice, it became the case that ifa violation were established, then null fication or impairlment] would be presumed and no party has ever rebut- ted that presumption, The presumption has been made explicit in the DSU [article 3.8} {Although the GATT does not provide any particular process for consider- ation of complaints, there evolved a practice of having panels of three to five people to heat disputes and issuea report}. b, Shortcomings of GATT Dispute Settlement ‘The principal criticisms leveled at the GATT dispute settlement system arose from the GATT practice of consensus decision-making. The practice meant that the target of a complaint could delay or block the operation of the dis- pute settlement process at several distinct stages. For example, it could refuse To ngree to tfer the matter toa panel in the fest place. Even ifsuch a reference were made, it could delay or block agreement on the identity ofthe panelists And the panel's terms of reference. Ifitwere not satisfied with the results in the panel's report, it could refuse to join a consensus to adopt the panes report, thereby leaving the report in limbo. Finally, even if t permitted the adoption Of the report, it could cefuse to implement the recommendations and not suf- fer any consequences under GATT rules since it could block authorization of sanctions against ‘While it appears that persistent complainants were generally able to get ;panelfs] established and Composed, the problem of blockage of adoption of Panel reports became more serious over time... Indeed, only about one-half Df the panel reports issued In the 1990's were adopted by the GATT contract- ing patties. As a consequence, the GATT dispute settlement system became perceived as being incapable of handling controversial cases, since It was Essumed that one of the parties would block adoption ofthe panel report. This ‘meant that disputes that should have fbeen] considered in the system were ‘hot brought to it because ofa belief that no positive results could be obtained. ‘ss a consequence, one of the major concerns in the Uruguay Round was to Conrect these problems of delay and blockage, and as will be seen, the DSU faddesses both problems, providing for strict time limits and what is referred toas “automaticity,” which effectively removes the power ofa party to block the process130 Chapter. WTO DispsteSettement © Tae WTO Disrure Serrumeexr Sesto Ag noted above an effective dispute setiement sytem fs critical othe oper ation ofthe World Trade Oxganizaon. Ie would make ltl sense pend Yeats negotiating dalled rules in intermatonal trade agreements If those Fules could be ihe Terefore sytem of rule enforcement x neces. inthe WTO, tht function s performed by the Understanding on Roles and Procedures Governing the Settlement of Disputes usally ale the “Dispute Sertement Understanding” orsimply the “DSU") As stated in Article 3.2 of the, re dpe setement ye ofthe WTO acetal roving secur and prediabity to the mullateral trading syste.” In Ehecommercel word such security and predictably sxe vee a fanda mental prerequistes to conducting busines internationally “tneDSU eecvelyaninterpeation and laboration ofGATTArttesXXI ant XXII which were not mosned in te Uivguny Round. As noted above, these articles were the bss for dsputesetement fa the GATT sytem, and Since allo the aeements annexed to the Marrakesh Agreement Etbishing the World Trade Organization rely on GATT Articles XXIl and XXII or very Snir provisions aa ass fox dapat setilemen, they are the basis for ci putein the WTO sjstem a wel Arce Akl proves hat one WO Member fay request smother Member to consult with respect to any matter allecting The operation of the agreement. Generally speaking, Ail XXII provides for ‘onsttations and digptesetement protedzes where ne Member considers thatanother Member fang cary out isobligons under theagreement There ave essentially four phases inthe WO cspute setement proces consutarions, ie pane process te appelae process and suvelence of Implementation After oulning tome ofthe more important general row. Stns ofthe DSU, each ofthese far pases cscs tm. 1. GENERAL DSU PROVISIONS 4. Applicability of the DSU to Covered Agreements ‘The WTO Dispute Settlement Understanding applies to the covered agree- ‘ments, which are listed in its Appendix 1. The covered agreements consist of, all of the Multilateral Trade Agreements, plus the plurilateral Agreement on Government Procurement. The Agreement on Trade in Civil Aircraft Is not subject to the DSU rules, There are special or additional provisions on dispute settlement in a number of the covered agreements that are identified in DSU Appendix 2 and those provisions apply to the extent that there isa difference between them and the provisions of the DSU. In disputes under more than ‘one agreement, f there isa conflict between the applicable special/additional provisions, the chairman of the DSB (see below) Is authorized to resolve the conflict ifthe partes cannot. 1b. ‘The Dispute Settlement Body (DSB) ‘The DSU is administered by the Dispute Settlement Body (DSB), which is the WTO's General Council meeting to discharge the responsibilities of the A, Understanding the WTO Dispute Settlement System 131 DSB under the DSU. As uch, all WTO Members are members and may particl- pate in the DSB, Under the WTO Agreement, the DSB is authorized to elect its ‘own chait (as opposed to having the General Council chair preside) and has ‘done soto date. In particular, and asis discussed in more detail belovr, the DSB has the authority to establish panels, adopt panel and Appellate Body zeports, ‘maintain surveillance of implementation ofits recommendations and rulings, and authorize suspension of concessions. The DSU provides that the DSB shall take decisions provided for in the DSU by consensus. As we will se, this con- sensus requirement is sometimes a reverse consensus requirement in that the SB is deemed to take a decision unless there is a consensus not to take the decision Uniler the procedures ofthe WTO dispute settlement system, the first step in the processis consultations. A Member may ask for consultations with another WTO Member ifthe complaining Member believes that the other Member has violated a WTO agreement or otherwise nullified or impaired benefits accru- Ing to it. The goal of the consultation stage is to enable the disputing parties to understand better the factual situation and the legal clalms in respect of the dispute and to resolve the matter without further proceedings. As noted above, the DSU provides that “[Jheaim ofthe dispute settlement mechanism Isto secure a positive solution to a dispute. A solution mutually acceptable to the parties toa dispute and consistent with the [WTO] agreements is clearly to be preferred.” At this stage, as well a at later stages in the process there isa possiblity of ualzing the good offices of the WTU Lirector-Ceneral or medi ation tosette a dispute. (Formally, consultations can be requested under ether Aticle XXII or XXIII of the GATT 1994 (or the equivalent provisions of other WTO agreements). ‘The only difference is that] under Article XXIT... WTO Members with a sub- stantlal trade interest may request to be joined in the consultations as thied parties. If the Member asked to consult agrees that the claim of substantial Interest is well-founded, tne request to join will be honored. If, however, con- sultations are requested under Article XXII [nullification or impairment] (or lis equivalent), there is no provision for third parties to join In the consulta- tions see Article 4.11 of the DSU on third parties in consultations, which is Limited to “consultations being held pursuant to paragraph 1 of Article XXII of GATT 1994....orthe corresponding provisions in other covered agreements. ‘The manner in which the consultations are conducted Is up to the partes. ‘The DSU has no rules on consultations beyond that they are to be entered into in good faith and are to be held withfin] 30 days of a request. Typically, they are held in Geneva and involve capital-based officials, as well asthe local ‘WTO delegates ofthe parties. During the consultations, both patties are likely to try and learn more about the facts and the legal arguments of the other party, Written questions may be exchanged and written answers requested, Despite the fact that the structure of consultations is undefined and there are ‘no ules for conducting them, consultations lead to settlements (orat least the132 Chapter. WTO Disputesettlement apparent abandonment of a case) in respect ofa significant number of consul- tation requests, 4. Panel Establishment If consultations fal to resolve the dispute within 60 days ofthe request for consultations, the complaining WTO Member may request the DSB to estab- lish a panel to rule on the dispute. Pursuant to the DSU, if requested, the DSB is required to establish a panel no later than the second meeting at which the ‘request for a panel appears on the agenda, unless there isa consensus in the DSB to the contrary. Thus, unless the Member requesting the establishment ‘of a panel consents to delay, a panel will be established within approximately ‘90 days ofthe intial request for consultations. Itshould be stressed, however, ‘that parties are not required to request a panel at any particular point in time and that in most cases, a panel is not requested until considerably more than (60 days after the start of consultations. 1b. Panelist Selection After the pane! is established by the DSB, itis necessary to select the three Individuals who will serve as panelists, The DSU provides that panels shall be ‘composed of ‘well qualified governmental and/or non-governmental individuals, including puisons wito have served on or pieseated a case toa panel, served asa represe {ative ofa Member or of a contrecting party to GATT 1947 or asa representative to the Councilor Committee of any covered agreement or Is predecessor agree ‘ment, orin the Secretariat, aught of published on international trade law a: pol ley. or served as senior trade policy oficial of a Member ‘These criteria could be roughly summarized as establishing three categories of panelists: government officials (current or former), former Secretariat officals, ‘and trace academics or lawyers. Its specifically provided that panelists shall not be nationals of partes or third partis, absent agreement ofthe parties. Itis also specified that n a case involving a developing country, one panelist must ‘be from a developing country (if requested), ‘The DSU provides for the creation of an indicative list of individuals qual ified for panel service. Members have followed varying practices in respect of ‘nominations to the list—most nominate non-governmental individuals, but many also nominate non-Geneva governmental individuals and some even ‘nominate Geneva-based officals. Most Members do not nominate anyone. Pursuant to the DSU, the WTO Secretariat suggests the names of possible ‘panelists to the disputing parties. Thenames may, but often do not, come ftom the indicative list. The DSU allows the parties to reject a Secretariat proposal ‘only for “compelling reasons,” but in practice the partes have rather free rein ‘to object since their agreement to the composition of the panel is necessary, unless the Director-General of the WTO is requested to appoint the panel. The A. Understanding the WTO Dispute Settlement System 133, practice of frequent objections means thatthe panel selection process is often rather slow and often takes one or two months and even longer in some cases. If the parties cannot agree on the identity of the panelists within 20 days, of the panel’s establishment, any party to the dispute may request the WTO Director-General to appoint the panel, which he is required to do within ten {days ofthe request. Over time, it has become more common for the Director General to appoint panels. In 2002, he appointed over one-half ofthe panels. t should be noted, however, that itis common forthe parties to have agreed upon ‘one or two of the panelists on the panels appointed by the Director-General In considering the characteristics of the individuals actually chosen for panel service, itappears that the vast majority of panelistsare current or former {government officials. Panelists have come from a wide range of Members (around 40). Interestingly, most panelists are not on the indicative list when they ae first selected. As of the end of 2001, in terms of experience, it appears that more than one-half of the WTO panelists selected to date had served on a previous GATT or WTO panel at the time oftheir selection. 6 Rules of Conduct for Panelists and Secretariat Staff ‘The DSU provides that panelists serve in their individual capacitiesand that ‘Members should not give them instructions or seek tolnfluence them, In addi- tion, in December 1996, the DSB adopted rules of conduct applicable to par- ticipants in the WTO dispute settlement system. There were no such rules in the past. The rules require that Appellate Body members, panelists, arbitrators, experts and Secretariat staff assigned to assist in the dispute settlement process “shall be independent and impartial, shall avoid direct Indirect conflicts of interest and shall respect the confidentiality of proceedings.” To ensure com- pliance with the rules, such persons are to disclose “the existence or develop- ‘ment of any interest, relationship or matter that person could reasonably be expected to know and that [is] likely to affect, or give rse to justifiable doubts sto, that person’s independence or impartalty.” Disputing parties have the right to raise an alleged material violation of the rales, which if upheld, would lead to the replacement of the challenged individual. 4. ‘The Panel's Functions and Terms of Reference Unless the partiesagree upon special terms of reference, which rarely occurs, apanel’s terms of reference are determined by the complaining party's request fora panel. The DSU requires that such a request bein writing and Identity the specific measures at issue and provide brief summary ofthe legal basis of the complaint. The standard terms of reference provided for in the DSU state that tine panel shall examine, in light ofthe relevant WTO agreements, the mattet referred to the DSB by the complainant and make such findings as will assist ‘the DSB in making the recommendations or in giving the rulings provided for in those agreements. More generally, DSU Article 11 provides that a panel shall make an objec- tive assessment of the matter before it, including an objective assessment of the facts ofthe case and the applicability of and conformity with the relevant WTO agreements.134 chapter, WTO DispteSettement ©. Panel Proceedings ‘A panel normally meets with the parties shortly after its selection to set its ‘working procedures and time schedille. The standard proposed timetable for panels provides for two meetings between the panel and the parties to discuss thesubstantiveissuesin the ease. Each meeting is preceded by the filing of wit- ten submissions. In the case ofthe first meeting, the complainant files first and the respondent is expected to file two or three weeks thereafter, Rebuttal sub- missions filed after the first meeting are typicaly filed simultaneously. fi Bvidentiary Issues To evaluate a complaint, panels must follow certain basic evidentiary cules. “The most basic rule concerns the assignment of the burden of proof. Generally speaking, the decisions of the Appellate Body have held that the burden of proof rests upon the party who asserts the affirmative of a particular claim or Aefense. If that party adduces sufficient evidence to ralse a presumption that ‘what is claimed is true then the burden shifts to the other party to rebut the presumption. The Appellate Body has also spoken in terms of the need for a ‘lalmant to establish a prima facie case. InGATT dispute settlement, itwas often the case that factual issues were not that important. The basic issue was typically whether a particular governmen- tal measure violated GATT rules and, as noted above, fit was found to do so, nullification or impairment of benefits was presumed, To date, comparatively ‘more WTO disputes have involved disputed factual issues. In order to estab- lish fats, panels normally ask oral and weitten questions to which the parties are expected to respond. The parties often bring government experts versed {in the relevant fed to panel meetings. Some parties have subuuitted affidavit evidence to establish facts. By and large, the fact-finding procedures of panels are relatively less sophisticated than those of national courts, although it can be expected that more sophisticated fact-finding techniques will develop as the need for fact-finding becomes more acute. 1. The Finat Report Several aspects of panel reports merit mention. First, it has become common in WTO dispute settlement cases for the complaining party to assert a broad range of violations, often under several WTO agreements. Considering that the purpose of WTO dispute settlement is to resolve disputes and not make law, panels often exercise what is referred to s judiclal economy. That sto say, they Often decide fewer than all ofthe issues raised by a complainant. This practice hasbeen approved by the Appellate Rody, so long as the panel resolves the dis- pute before it ‘Second, as noted above, ifa panel finds that a WTO rule has been violated, it typically cites the DSU presumption that there has been a nullification ot Impairment of benefits. Third, the standard practice of panels, which is spe- cifically provided for in the DSU, is to recommend that any measure found to be in violation of WTO rules be brought into conformity with those rules. Panels are authorized to make suggestions on how that recommendation could be implemented, but panels tend not do so. Typically, the responding, party opposes requests for suggestions and argues that it should be allowed A. Understanding the WTO Dispute Settlement System 135 to exercise freely its own discretion in deciding how to bring an inconsistent ‘measure into conformity with the relevant agreement() J. Adoption of the Panel Report ‘After its circulation to WTO Members, the final reports referred to the DSB {or formal adoption, which is to take place within 60 days unless there isa con- sensu not to adopt the report or an appeal ofthe report to the WTO Appellate Body. This negative consensus rule ls a fundamental change from the GATT lspute settlement system where a positive consensus was needed to adopt a panel report, thus permitting a disstisled losing party to block any action on the report. Now, as long as one Member wants the report adopted, it will be adopted, However, while the losing party cannot block adoption of a report, ithas a right of appeal. Ifa panel report Is appealed, ater completion of the appeal, itisadopted asaffirmed, modified or reversed by the Appellate Body. The Structure of the Appellate Rody ‘The possibility of an appeal isa new feature of the WTO dispute settlement system, The Appellate Body consists of seven individuals, appointed by the [DSB for four-year terms. ... Only one reappointment is permitted, ‘The Appellate Body is authorized to draw up its own working procedures, in consultation with the Chairman of the DSB and the Director-General, These procedures regulate the operation of the Appellate Body and process by which appeals are made and considered. ‘The Appellate Body hears appeals of panel reports in divisions of three, although its rules provide for the division hearing a case to exchange views ‘with the other four Appellate Body members before the division finalizes its report. The members ofthe division that hears a particular appeal ae selected by a secret procedure that is based on randomness, unpredictability and the ‘opportunity for all members to serve without regatd to national origin, The ‘Appellate Body Is zequlred to issue its report within 60 (at most 90) days from the date ofthe appeal, and its report is tobe adopted automatically by the DSB within 30 days, absent consensus to the contrary. 1b, ‘The Role and Effect of the Appellate Body ‘The Appellate Body's review i limited to issues of law and legal interpreta- tion developed by the panel. However the Appellate Body has taken a broad ‘view ofits power to review panel decisions. Ithas the express power to reverse, ‘modify or affirm panel decisions, but the DSU does not discuss the possibi ity of a remand to a panel. Partly as a consequence, the Appellate Body has adopted the practice, where possible, of completing the analysis of particular issues in order to resolve cases where it has significantly modified a panel's reasoning. This avotds requiring a party to start the whole proceeding over as result of those modifications, ‘Overall, to date there seems fo be general satisfaction with the overall per formance of the Appellate Body and none of the proposals for reform of theETE ESTES ESTES ESTES ESTESESTOSESTSSESTOSES TICES TISES TICES TISEITISSITIEEITIEEETIREITE 136 CChapterS. WTO DisputeSettlement DSU... propose any fundamental change to the Appellate Body or the way it would work, except for the possibilty of extending the scope of its review powers and permitting it to remand cases to the original panel for reconsider- ation in ight of its decision. ‘The final phase of the WTO dispute settlement process is the surveil lance stage. This I designed to ensure that DSB recommendations (based on adopted panel/ Appellate Body reports) are implemented. As noted above, if a ;panel finds that an agreement has been violated, it typically recommends that {the Member concerned bring the offending measure into conforming with its WTO obligations. While a panel may suggest ways of implementation, it is, ultimately lef¢o [the] Member to determine how to implement. Under the surveillance function, the offending Member is required to state its intentions with respect to implementation within 30 days ofthe adoption (of the applicable reports) by the DSB. If immediate implementation is imprac- tical, a Member is to be afforded a reasonable period of time for implement tion’ Absent agreement, that period of time may be et by arbitration. The DSU provides that, asa guideline forthe arbitrator, the period should not exceed 15 ‘months. In the frst six eases, the easonable perlods of time, whether set by abi- tation oragreement, happened tobe 15 months. Overall, in non-export subsidy cases, the median time has been 9 months. Starting six months after the deter ‘mination of the reasonable perio of time, the olfending Members required 10 report to each regular DSB meeting as to its progres in implementation. fa party fails to Lmplement the report within the reasonable period of ‘time, the prevailing party may request compensation. If that is not forthcom: Ing, it may request the DSB to authorize it to suspend concessions (je. take retaliatory action) owed to the non-lmplementing party. DSB authorization {s automatic, absent consensus to the contrary, subject to arbitration of the level of suspension if requested by the non-implementing Member. To date, suspension of concessions has been implemented in only three cases—by. ‘the United States vi a vis the European Community in respect of the Bananas ‘ase; by Canada and the United States vis avis the European Community in respect ofthe Hormones case. However, there have been four other completed arbitral proceedings to determine the level of suspension (Brazi!— Aircraft: Canada—Aicraft 21.5; EC—Bananas (by Ecuador); and United States—FSC) land three others started (Canacda—Dairy; United States—1916 Act; United ‘States — Copyright) Suspension of concessions is viewed as a last resort and the preference's for the non-implementing Member to bring its measure into con- formity with its obligations. “The above-described rules on suspension of concessions work without problem when itis agreed that there hasbeen no implementation. However, if there i a disagreement over whether there has been satisfactory implementa- tion, the provisions of the DSU do net work harmoniously. On the one hand, [Article 21.5 of the DSU provides that such a disagreement shall be referred 10 the original panel, where available, which shall issue its report in 90 days... ‘AL Understanding the WTO DisputeSettlement System 137 Atthe same time, Article 22.2 of the DSU provides that Ifa Member falls to bring its nonconforming measure into compliance, the DS8 must authorize (f requested and absent consensus to the contrary) the suspension of conces- ‘ions within 30 days of the explration of the reasonable period of time. An [Article 21.5 proceeding would normally not be completed within 30 days of the expiration of the reasonable period of time. Asa consequence, 2 number ‘of questions arise. Can the procedures be followed simultaneously or must the Article 21.5 procedure precede the Article 22 procedure? Can the deadline for DSB authorization of suspension pursuant to the negative consensus rule be suspended until completion of an Article 21.5 proceeding? Would the right to a decision absent negative consensus still apply? These issues are not clearly ‘dealt with in the DSU and became quite controversial in the Bananas case. As a result. he 1998-1999 review of the DSU focused on these issues. & General Rules on Timeframes ‘The DSU establishes a number of benchmarks for completion of various stages of the dispute settlement process. These are designed to prevent the delays that had led to criticism of the GATT system. For panels, the DSU sets as ‘goal that the final report should be issued to the parties within six months of the panel's composition and that, atthe latest, the report should be circulated toall Members within nine months ofthe panel's establishment. In fact, most panel reports azenot circulated within that nine-month period. While failures {o meet the nine-month target have often involved cases where the panel felt it necessary to have recourse to outside experts, where there were translation delays and where the cases were extraordinarily complex, the frequency with ‘which the target is missed suggests that inadequate resources are devoted to the dispute settlement system. ‘Asnioted above, the Appellate Body report isto be circulated within at most {90 days of an appeal. To date, the Appellate Body has usually issued its report ‘on the 90th day; it has missed that deadline only in a couple of cases. "There are also timeframes set for the time by which panel and Appellate Reports are tobe adopted and the time by which the reasonable period of time {for implementation isto be set. To the extent that panels do not meet the goals ‘mentioned above, these other timeframes will also not likely be met. For some types of cases —notably cases involving subsidies and government procurement —there are expedited dispute settlement procedures provided for. 1b. Now-Violation and Situation Complaints [Recall that although most cases involve allegations of violation of WTO rules, nullification or impairment of member benefits can be associated with measures that do not, in and of themselves, violate WTO rules. These are feferred to.as “non-violation” complaints, set out in GATT Article XXI:1(D).) ‘The DSU contains special rules for non-violation and situation complaints. For non-violation cases, complaining parties are required to present a detailed