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WTO Dispute Settlement. A short introduction. How were disputes settled under the GATT 1947?. Nearly 50 years of dispute settlement under the GATT 1947 ... Positive consensus in the GATT Council to refer a dispute to a Panel, and to adopt a Panel report.

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wto dispute settlement

WTO Dispute Settlement

A short introduction

how were disputes settled under the gatt 1947
How were disputes settled under the GATT 1947?

Nearly 50 years of dispute settlement under the GATT 1947 ...

Positive consensus in the GATT Council to refer a dispute to a Panel, and to adopt a Panel report

 Articles XXII and XXIII of the GATT 1994

challenges under the gatt 1947 dispute settlement system
Challenges under the GATT 1947 dispute settlement system
  • Rule of positive consensus
    • Referring a dispute to a panel, adopting a panel report, authorizing countermeasures
    • Risk of veto
    • Diplomatic character
  • Yet, good results
    • 101 adopted reports / 132 issued reports
    • Empirical research
structure of the wto agreement
Structure of the WTO Agreement

Annex 1

1A: MTAs

on goods

(GATT + 12)



Annex 2




Annex 3

Trade Policy



Annex 4



Marrakesh Agreement Establishing

the World Trade Organization (WTO Agreement)

dsu builds on articles xxii and xxiii of the gatt 1947
DSU builds on Articles XXII and XXIII of the GATT 1947

Members affirm their adherence...

To the principles for the management of disputes applied under Articles XXII and XXIII of GATT 1947...

And the rules and procedures as further elaborated and modified in the DSU

 Article 3.1 of the DSU

main actors in the wto dispute settlement system
Main actors in the WTO Dispute Settlement SystemMain actors in the WTODispute Settlement System

 Art 2 DSU, The Dispute Settlement Body (DSB)

Administers the WTO Dispute Settlement System

Establishes panels

Adopts panel and Appellate Body reports

Maintains surveillance of implementation

Non-implementation? Authorizes retaliatory measures

The panel

3 – 5 panelists, ad hoc body

Standing body of 7 members, 4-year term

The Appellate Body

WTO and AB Secretariat

Assist panels and the AB

how the dispute settlement system works

The Dispute Settlement Body,

All Members


No appeal? DSB adopts the report

DSB adopts the reports

Appellate Body



How the Dispute Settlement System works
novelties in the dsu
Novelties in the DSU
  • Standing Appellate Body
  • DSB establishes panels and adopts panel reports by negative or reverse consensus
    • Difference from dispute settlement under the GATT 1947?
    • Under the GATT 1947: positive consensus
  • Surveillance of implementation
recourse to wto dispute settlement who
Recourse to WTO dispute settlement: Who?

Only WTO Members (153 as of November 2009)

NOT NGOs, individuals (although may lobby governments – indirect access)

Right to bring claims

Appellate Body:

  • No DSU provision requiring “legal interest”
  • Members have a broad discretion whether or not to bring a case
recourse to wto dispute settlement regarding what
Recourse to WTO dispute settlement: Regarding what?

 Appendix 1 to the DSU

Disputes under the following agreements (so-called covered agreements, “CA”),must be resolved pursuant to the DSU

  • WTO Agreement
  • Multilateral Trade Agreements (GATT 1994 + 12 other agreements on trade in goods)
  • GATS
  • DSU
  • (Plurilateral Trade Agreements)
integrated system for dispute settlement
Integrated system for Dispute Settlement

 Article 23 of the DSU ... A single set of rules for all disputes

  • Article 1.2 of the DSU, Appendix 2 to the DSU …Only a few special or additional rules in the covered agreements which prevail over the DSU. For example:

 Article 4.4 of the SCM Agreement ... Consultation period 30 days rather than the standard 60 days

  • Compulsory jurisdiction
    • Members obliged to bring disputes under the Covered Agreements to WTO dispute settlement
    • Accession: Consent to accept jurisdiction
  • Exclusive jurisdiction
    • No other fora
    • No unilateral action

 Article 3.2 of the DSU

  • Security and predictability in international trade
  • Preserving Members’ rights and obligations
  • Clarifying the existing provisions of the CA

 Article 3.7 of the DSU

Positive solution to a dispute

Preferred outcome: Mutually acceptable solution

Withdrawal of measures inconsistent with the

covered agreements

and if no mutually agreed solution reached


...and if no mutually agreed solution reached
  • Panel proceedings
  • (Appellate Body review)
  • Inconsistent measures...
    • Withdrawal
    • Compensation / Suspension of concessions
main stages
Main Stages


60 days

Good offices,

conciliation and


possible at any


Panel review

6 – 9 months

AB review

60 – 90 days

Adoption of report by the DSB



As of April 2010:

406 requests for consultations



  • Diplomatic method of settling the dispute
  • Confidential – No intervention by the Secretariat
  • “Without prejudice to the rights of any Member in further legal proceedings”

 Article 4 of the DSU

third parties joining consultations
Third parties joining consultations

 Article 4.11 of the DSU

Request filed under  Article XXII of the GATT

Substantial trade interest

  • Notification to the consulting Parties and the DSB
  • Within 10 days of the circulation of the original request (WT/DSXXX/1)

Respondent decides:

  • Substantial interest? No review, but the Member can separately request consultations

DSB informed about the decision to accept

panel establishment

 Article 6 of the DSU

  • Establishment of a panel
  • Established by the DSB by negative consensus (2nd DSB meeting, defendant cannot block ( Article 6.1 of the DSU)
  • Strict requirements for the request for the establishment of a panel (Article 6.2 of the DSU)
Panel establishment

Matter not resolved in consultations?

request for the establishment of a panel
Request for the establishment of a panel


In writing

To whom?

Addressed to the DSB

Indicate whether consultations were held

Identify the specific measures at issue

Brief summary of the legal basis (claims)


Article 6.2 of the DSU and specific dispute settlement provisions of the CA

Legal basis?

to Members as document WT/DSXXX/X


rationale for precision in the request
Rationale for precision in the request

Measure 1

Panel request

Defines measures + claims …

Which form the panel’s mandate …

Jurisdiction + due process …

first element identify the measure s at issue
First element: Identify the measure(s) at issue

Definition of a measure

AB: “Any act or omission attributable to a WTO Member can be a measure of that Member for the purposes of dispute settlement proceedings”

Measures may take the form of...

Laws, regulations, administrative instructions, specific application of laws etc (tariffs, quotas, anti-dumping/CVD measures, safeguards ...)





second element identify the claims
Second element: Identify the claims

Definition of a claim

AB: “A claim that the respondent party has violated, or nullified or impaired the benefits arising from, an identified provision of a particular covered agreement.”

How to identify the claims

AB: “Provide a summary – and it may be a brief one – of the legal basis of the complaint that is ‘sufficient to present the problem clearly’.”



panel composition
Panel composition

No permanent panels / panelists, ad hoc

Indicative list of panelists

Secretariat proposes nominations, parties can oppose for compelling reasons

Well-qualified government and/or non-governmental individuals

If disagreement: Nomination by DG

(at the request of complainant)

As of April 2010:

148 panels composed (88 by the DG)



 Article 8 of the DSU

third parties
Third Parties

“Substantial interest”

No DSU deadline

In practice Members notify their “substantial interest” at the DSB meeting at which the Panel is established

Limited rights

Right to receive the first written submissions

Right to make written submissions to the panel

Right to be heard by the panel

Enhanced third-party rights? Granting within the

“sound discretion of the panel”

 Article 10 of the DSU

panel proceedings
Panel proceedings


3 DSU –




1. First written submissions of the parties

2. [Third party submissions]

3. First substantive meeting with the parties and third parties - Third party session

4. Written rebuttals of the parties

5. Second substantive meeting with the parties

6. Descriptive part of the report to the parties

7. Parties’ comments on the descriptive part

8. Interim review

9. Final report issued to parties

10. Final report circulated to all Members

standard of review
Standard of review

Objective assessment of the matter

Facts of the case

Applicability of covered agreements

Conformity of the measures with covered agreements

* More deferential standard of review under  Art. 17.6 ADA

appellate body

Established in 1995, innovation of the

WTO dispute settlement system


Authority and expertise in international trade law

“Unaffiliated with any government”

Impartiality, broad representativeness

A standing body of 7 Members. 4-year term, renewable once, a part-time job.

Appointed by the DSB on consensus, based on nominations by WTO Members

Appellate Body
the current members of the appellate body
The current members of the Appellate BodyThe current members of the Appellate Body

Ms Lilia Bautista – Philippines

Mr Peter van den Bossche - Belgium

(recently appointed)

Ms Jennifer Hillman – United States

Mr Shotaro Oshima – Japan

Mr Ricardo Ramírez Hernández - Mexico

(recently appointed)

Mr David Unterhalter – South Africa


Ms Yuejiao Zhang – China

what can be appealed

Issue of law

What can be appealed?What can be appealed?
  • Appeals limited to

“issues of law covered in the panel report and legal interpretations developed by the panel”

  • No factual findings by the Appellate Body
  • Panels’ factual findings: In principle, outside the scope of appellate review

 Article 17.6 of the DSU

third participants
Third participants
  • Only those Members that were third parties on the panel stage
  • Cannot appeal
  • Right to file written submissions and to participate in the oral hearing
adoption of panel appellate body reports
Adoption of Panel / Appellate Body reports
  • The DSB adopts
  • Panel Report (as upheld/modified/ reversed)
  • Together with the Appellate Body Report
  • By negativeconsensus

Within 30 days from circulation of AB Report

(60 days from circulation of Panel Report if no appeal)

order of compliance related procedures

Implementation within reasonable period of time (RPT)

Request for review of compliance

(referred to original panel)

Negotiations to agree mutually satisfactory

compensation if no compliance

Order of compliance-related proceduresOrder of compliance-related procedures

DSB adopts report

Arbitration to determine RPT if no agreement

Request for DSB authorization to suspend concessions

if compensation not agreed

Arbitration on level and procedure

DSB authorization to suspend concessions