Dispute Settlement in the WTO

“a central element in providing security

and predictability to the multilateral
trading system”
Article 3.2 DSU

Presented by: Peter Morrison

Trade in Services Division
WTO Secretariat

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Dispute Settlement in the WTO:
Overview
Overall aim: Quasi-judicial
 to secure Nature
compliance with  Secured access
the Agreements  Detailed
procedures
 Automaticity in the
proceedings
 Deadlines

 Possible appeal

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Dispute Settlement in the WTO
Scope
 An integrated  Applies to all the
system: multilateral
agreements
 A single set of
rules for all
disputes
 Only a few specific
rules in some
agreements

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Dispute Settlement in the WTO
Main players

 Dispute Settlement Body (DSB)

 Panel and Appellate Body
 Parties: WTO Members
 WTO Secretariat

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Dispute Settlement in the WTO:
WTO
Relationship of players

Ministerial Conference

Appellate Body

Dispute Settlement Body

(General Council)

Panel

Request for Panel

by WTO Member
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Dispute Settlement in the WTO:
WTO
Main Procedures

C o n s u lt a t io n s
60 days

P anel
9 months

A p p e la t e B o d y
90 days

I m p le m e n t a t io n
15 months

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Dispute Settlement in the WTO
Consultations: the request

 Indicates reasons for the

request: identification of
 the measures
 legal basis for complaint

 Notified to DSB and

circulated to all Members

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Dispute Settlement in the WTO:
WTO
Consultations: function

 to “accord sympathetic consideration

to and accord adequate opportunity
for consultation…”
 confidential, only between the
Members concerned

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Dispute Settlement in the WTO:
WTO
Consultations: third parties

 But, in some instances, other Members

can request to be joined in the
consultations Article 4.11 DSU
 “substantial trade interest”

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 Dispute Settlement in the WTO:
WTO
Consultations: if not successful

 If consultations fail to resolve the matter

within 60 days from receipt of request…..
 Or if no response or no entering into
consultations

 …. A request for establishment of a panel

can be made

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Dispute Settlement in the WTO:
Establishment of panels
 Request for establishment:
establishment
 must “identify the specific measures at issue and
provide a brief summary of the legal basis of the
problem sufficient to present the problem clearly”
 Establishment
 at the latest at the second DSB meeting at which
the request is made; decided by negative
consensus

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 Dispute Settlement in the WTO:
Terms of reference and composition of panels

Terms of Panel Composition:

reference: (Article 8 DSU)
(Article 7 DSU)  “well-qualified
 Standard, or government and/or
 Special terms of non-governmental
reference individuals”
 Secretariat proposals
 indicative list of
panelists
 nomination by DG
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Dispute Settlement in the WTO:
Panels: how they function
Functions of the Panel
“…a panel should make an objective assessment of the
matter before it, including an objective assessment of
the
facts of the case and the applicability of and conformity
with the relevant covered agreements…”

Functions of the dispute settlement system

“… to preserve the rights and obligations of Members
under the covered agreements, and to clarify the existing
provisions of those agreements in accordance with
customary rules of interpretation of public international
law…” Art. 3.2 DSU

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Dispute Settlement in the WTO:
Panel Procedures: main steps
 Oral hearings (usually 2), on basis of written
submissions

 Descriptive part of report issued to parties

 Interim review based on draft report

 Final report issued to parties

 Final report circulated to all Members

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Dispute Settlement in the WTO:
Panel Procedures: other sources of input

 Third parties have make presentations

 need “substantial interest” (Article 10
DSU)
 Panels may seek
 factual information from any relevant

source (Article 13 DSU)

 scientific or technical advice from an

Expert review group (Appendix 4 DSU)

 Requirement of confidentiality (Article 14
DSU)

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Dispute Settlement in the WTO:
Panel Procedures: duration

 As a general rule, 9 months from

establishment of panel to consideration of
report for adoption (if no appeal)
 12 months where report is appealed
(Article 20 DSU)

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Dispute Settlement in the WTO:
Panel procedures: Adoption of Panel Reports

 Adoption within
60 days of
circulation, by
negative
consensus….

… Except if
appealed

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 Dispute Settlement in the WTO:
Appellate Review
 Appeals limited to Appellate Body
“issues of law and  7 members
legal interpretations  members to have
developed by the
recognized authority
panel”
and expertise in
 Appeal only open to international trade law
parties to the  members unaffiliated
dispute with any government

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Dispute Settlement in the WTO:
Appellate Review: report and adoption

Report of the Appellate Body:

Body
 “may uphold, modify or reverse the
legal findings and conclusions of the
panel” (Art. 17.12 DSU)
 Adoption of Appellate Body report:
by reverse consensus within 30 days
of circulation to Members

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 Dispute Settlement in the WTO:
WTO
Implementation
If there is a finding
of violation:

 Member must bring  Member must inform

the measures into DSB of its intentions in
conformity with its for implementation of
WTO obligations the recommendations
(Article 19 DSU) (Article 1 DSU)

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Dispute Settlement in the WTO:
Implementation: reasonable period of time
Determination of “reasonable
period of time”
time for implementation:

 proposed by Member, and approved by

DSB, or
 mutually agreed by the parties, or
 determined through arbitration:
arbitration
 “guideline for the arbitrator”: 15 months from the
date of adoption (Article 21.3 DSU)

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Dispute Settlement in the WTO:
Implementation: surveillance
 Surveillance by the DSB
 Status reports on implementation
 Temporary measures
 If Member fails to bring measure into
conformity within reasonable period of
time, possibility
 compensation or
 suspension of concessions (retaliation)

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Dispute Settlement in the WTO:
Implementation

Compensation:
(Article 22 DSU)
 Voluntary
 Negotiated
 Compatible with WTO Agreements
 If no compensation agreed within 20 days
after expiry of reasonable period of
time….

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Dispute Settlement in the WTO:
Implementation
Suspension of concessions:
 when authorized?
 on expiry of 20 days after the end of the
reasonable period of time
 which products?
 same sector/other sector/ other agreement
 level of suspension?
 “equivalent to the level of nullification or
impairment” (Art. 22.4 DSU)
 arbitration on level of suspension, or principles of
Art. 22.3 DSU

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Dispute Settlement in the WTO
Performance to Date

 Requests for consultations: 315

 Adopted reports: 82
 Mutually agreed solutions: 45

 Adopted compliance reports: 12

 Authorization for suspension: 7
(retaliation)

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