DISPUTE SETTLEMENT UNDERSTANDING

In 1994, the WTO members agreed on the Understanding on Rules and Procedures
Governing the Settlement of Disputes or Dispute Settlement Understanding (DSU)
(annexed to the "Final Act" signed in Marrakesh in 1994). Pursuant to the rules
detailed in the DSU, member states can engage in consultations to resolve trade
disputes pertaining to a "covered agreement" or, if unsuccessful, have a WTO panel
hear the case. The priority, however, is to settle disputes, through consultations if
possible. By January 2008, only about 136 of the nearly 369 cases had reached the full
panel process.

The operation of the WTO dispute settlement process involves the parties and third
parties to a case and may also involve the DSB panels, the Appellate Body, the WTO
Secretariat, arbitrators, independent experts, and several specialized institutions. The
General Council discharges its responsibilities under the DSU through the Dispute
Settlement Body (DSB). Like the General Council, the DSB is composed of
representatives of all WTO Members. The DSB is responsible for administering the
DSU, i.e. for overseeing the entire dispute settlement process. It also has the
authority to establish panels, adopt panel and Appellate Body reports, maintain
surveillance of implementation of rulings and recommendations, and authorize the
suspension of obligations under the covered agreements. The DSB meets as often as
necessary to adhere to the timeframes provided for in the DSU.

WTO DISPUTE SETTLEMENT

WTO members have agreed that if they believe fellow-members are violating
trade rules, they will use the multilateral system of settling disputes instead of
taking action unilaterally. That means they should abide by the agreed procedures,
and respect judgments.  The WTO’s dispute settlement agreement is formally known
as the Understanding on Rules and Procedures Governing the Settlement of
Disputes (DSU).  The DSU provides the primary legal means of settling trade related
conflicts in the WTO.  Settlement of disputes is the responsibility of the Dispute
Settlement Body (composed of all Members of the WTO). The Dispute Settlement
Body (DSB) has the sole authority to establish “panels” of experts to consider the
case, and to accept or reject the panels’ findings or the results of an appeal. It
monitors the implementation of the rulings and recommendations, and has the
power to authorize retaliation when a country does not comply with a ruling.

Typically, a dispute arises when a country adopts a trade policy measure or

takes some action that another member considers to be a violation of a WTO
agreement.  A dispute may also arise if a member feels that, as a result of another
country’s action, it has been denied WTO benefits to which it is entitled.  A third
group of countries can also declare that they have an interest in the case and, when
that is the case, they enjoy some rights as Third Parties.

A procedure for settling disputes existed under the General Agreement on

Tariffs and Trade (GATT), which preceded the WTO, but it had no fixed timetables,
rulings were easier to block, and many cases dragged on for a long time
inconclusively. The DSU introduced a more structured process with more clearly
defined stages in the procedure and times limits for these stages.  The agreement
emphasizes that prompt settlement is essential if the WTO is to function effectively.
It sets out in considerable detail the procedures and the timetable to be followed in
resolving disputes. A case that runs its full course should normally take no more
than about one year to a first ruling and15 months if there is an appeal. If the case is
considered urgent (e.g. if perishable goods are involved), then the allowed time is
shorter.

Under the DSU the country losing a case cannot unilaterally block the
adoption of the ruling.  Under the previous GATT procedure, rulings could only be
adopted by consensus, meaning that a single objection (including from the country
which lost the case) could block the ruling. Under the DSU the situation is now
reversed; rulings are automatically adopted, unless there is a consensus to reject a
ruling.  Any country that wants to block a ruling has to persuade all other WTO
members (including its adversary in the case) to share its view.

Although much of the procedure resembles a court or tribunal, the preferred

solution is for the countries to settle the dispute by themselves. Before a country can
request the formation of a dispute settlement panel, it must consult with the other
side for a minimum period of 60 days after it first requests a formal consultation.
Therefore, formal consultations invoked under the specific provisions of the DSU are
the first stage of the process.  Even when the case has progressed to other stages,
consultation, negotiation and mediation remain an option for resolving the issue.   

CONSULTATIONS

Before taking any other actions, the countries in a dispute have to talk to each
other to see if they can settle their differences by themselves. If that fails, they can
also ask the WTO director-general to mediate or try to help in any other way (So
called “good offices”).  The consultations also offer a country an opportunity to
assess the merits of the other country’s case and to clarify the facts.  To facilitate the
process, the complaining country may sometimes submit written questions that it
wants the defending country to answer during the consultations.  The countries may
hold more than one round of consultations if they find the process informative or if
they think they may be able to reach a settlement.

Consultations are not always followed by a request for a panel.  Since sometimes the
threat of action is more potent than the action itself, consultations may provide
information and leverage for negotiations that lead to a successful resolution of the
dispute. On occasion, a complaining party may learn from the consultation process
about weaknesses in its arguments or damaging facts; either situation could lead to a
decision not to press the matter.  

Panels (up to 45 days for a panel to be appointed, plus 6 months for the panel to

conclude).

If consultations fail, the complaining country can ask for a panel to be

appointed. The country against whom a case has been brought can block the creation
of a panel once, but when the DSB meets for a second time, the appointment can no
longer be blocked (unless there is a consensus against appointing the panel).  All
Parties are involved in selection of the Panel from a list of qualified persons.
 Officially, the panel is helping the DSB make rulings or recommendations.
But because the panel’s report can only be rejected by consensus in the DSB, its
conclusions are difficult to overturn. The panel’s findings have to be based on the
agreements cited.

The panel’s final report should normally be given to the parties to the dispute
within six months. In cases of urgency, including those concerning perishable goods,
the deadline is shortened to three months.

The role of the WTO Secretariat during the dispute settlement process is to
assist panels.  In particular, the Secretariat assists with legal, historical and
procedural aspect of the case and provides secretarial and technical support.  In
particular, the Secretariat researches issues and prepares draft report language.  The
Secretariat also assists WTO members regarding dispute settlement questions by
answering technical questions regarding the process and the WTO
agreements.  Because developing country members may need special legal advice,
the Secretariat can upon request assign a qualified legal expert from its staff to work
with a country.   Such assignments are on made in a manner that ensures the
Secretariat ‘s continued impartiality.   
 

PANELISTS

Selecting panellists in the WTO is equivalent to selecting a judge and jury.  In

order to facilitate the panel formation process, the DSU requires the WTO Secretariat
to maintain an indicative list of governmental and non-governmental individuals
who are suppose to be qualified to be panelists.  Furthermore, the DSU rules provide
that if there is no agreement on panelists within 20 days after the establishment of
the panel, the Director–General of the WTO, at the request of either party, can
determine the composition of a panel.  Therefore, a party cannot block the
proceeding indefinitely by rejecting panelists.  

As panels can differ in composition, outlook and expertise, prospective

panelists are scrutinized closely and parties can reject prospective panelists in
advance.  Panelists may have decided prior cases in ways that might influence the
present one, they may have very little expertise in the subject matter, they may come
from countries known not to be neutral on the subject, or they may have
personalities that are not disposed to neutrality.  Given the role the WTO Secretariat
staff plays, if the matter is one on which the Secretariat is known to have an opinion,
a party may decide it wants a panel composed of independent minders individuals.
Despite its status as a global institution, the WTO is really a rather small
community, and reputations are always accessible as in a local court.  Parties chose
their presenters with care since panel proceedings involve small numbers of people,
can be relatively informal and personalities do count. 
   

STANDING AND ASSESSMENTS OF DAMAGE

The need to show economic injury or harm to potential export or trade

interests varies depending on the circumstances in a dispute settlement
proceeding.   The right to initiate a complaint under the DSU (i.e., the standing
requirement) is not stringent.  The DSU grants WTO members broad discretion in
deciding whether they have sufficient “legal interest” to bring a case.   Article 3.3 of
the DSU indicates that if a member “considers” that benefits accruing to it directly or
indirectly under a WTO Agreement are being impaired by another Member’s
measures, it can use the DSU process.  Article 3.7 implies that it is up to the member
to determine whether in its “judgment” bringing a case would be fruitful.   

Nevertheless, under Article 4.11 of the DSU, a Member wishing to join in

multiple consultations must have "a substantial trade interest", and under Article 10.2
of the DSU, a third party must have "a substantial interest" in the matter before
becoming a third party in a panel proceeding.   Further, the ability of a complaining
party to show economic harm is important in negotiating compensation or taking
retaliatory measures in the event a country fails to withdraw a WTO inconsistent
measure after an unfavorable panel ruling.  Article 22.3 requires the complaining
party to take into account the trade involved, the importance of such trade to it, and
the broader economic elements or consequences.  Article 22.4 of the DSU requires
that the level of retaliation authorized by the DSB must be equivalent to the level of
WTO benefits denied the complaining party.  In the WTO context retaliation takes
the form of suspension of trade concession the complaining party has provided in
the past.  The role of experts in establishing economic harm or injury is noted
below.  The issue is of course even more important in cases involving the subsidies,
dumping or safeguard measures.  
   

BURDEN OF PROOF

In preparing for WTO litigation, a party must consider which party has the
burden of proof.  The Appellant Body has stated that:  

The burden of proof rests upon the party, whether complaining or defending,
who asserts the affirmative of a particular claim or defence.  If that party adduces
evidence sufficient to raise a presumption that what is claimed is true, the burden
then shifts to the other party, who will fail unless it adduces sufficient evidence to
rebut the presumption.

In the context of the GATT 1994 and the WTO Agreement, precisely how much
and precisely what kind of evidence will be required to establish such presumption
will necessarily vary from measure to measure, provision to provision, and case to
case. (Appellate Report, United States –Measure Affecting Imports of Woven Wool Shirts
and Blouses from India, WT/DS33/AB/R and Corr. 1, adopted 23 May 1997, at 335.  

However, once a complaining party proves that a measure infringes a WTO

Agreement, Article 8 of the DSU provides that the infringement is presumed to have
harmed the complaining party and deprived it of benefits to which it was
entitled.  In WTO terms, the infringement has nullified and impaired WTO
benefits.  In this situation, the burden of proof falls on the defending party to rebut
that presumption. Article 8 of the DSU states that:  

 In cases where there is an infringement of the obligations assumed under a

covered agreement, the action is considered prima facie to constitute a case of
 nullification or impairment. This means that there is normally a presumption
that a breach of the rules has an adverse impact on other Members parties to
that covered agreement, and in such cases, it shall be up to the Member
against whom the complaint has been brought to rebut the charge.  
 The DSU process is also available to a country that feel that a trade measure of
another country is denying WTO benefits to which it is entitled even though
the measure itself does not violate any WTO Agreement. This situation is
called “non-violation nullification and impairment” and the complaining
country has to prove that it is being harmed by the measure.  A party may
also complain if it feels that a general situation rather than a specific measure
is denying it WTO benefits.

The below charts summarizes the approximate time periods for each of the stages of
a WTO dispute settlement proceeding.

DISPUTE SETTLEMENT TIME LINE

The approximate periods for each stage of a dispute settlement procedure are
target figures and can be extended somewhat. In addition, the countries can settle
their dispute themselves at any stage. Totals for each stage are approximate.

Disputes in the WTO are essentially about broken promises. WTO members
have agreed that if they believe fellow-members are violating trade rules, they will
use the multilateral system of settling disputes instead of taking action unilaterally.
That means abiding by the agreed procedures, and respecting judgements.

A dispute arises when one country adopts a trade policy measure or takes
some action that one or more fellow-WTO members considers to be breaking the
WTO agreements, or to be a failure to live up to obligations. A third group of
countries can declare that they have an interest in the case and enjoy some rights.

A procedure for settling disputes existed under the old GATT, but it had no
fixed timetables, rulings were easier to block, and many cases dragged on for a long
time inconclusively. The Uruguay Round agreement introduced a more structured
process with more clearly defined stages in the procedure. It introduced greater
discipline for the length of time a case should take to be settled, with flexible
deadlines set in various stages of the procedure. The agreement emphasizes that
prompt settlement is essential if the WTO is to function effectively. It sets out in
considerable detail the procedures and the timetable to be followed in resolving
disputes. If a case runs its full course to a first ruling, it should not normally take
more than about one year — 15 months if the case is appealed. The agreed time
limits are flexible, and if the case is considered urgent (e.g. if perishable goods are
involved), it is accelerated as much as possible.

The Uruguay Round agreement also made it impossible for the country
losing a case to block the adoption of the ruling. Under the previous GATT
procedure, rulings could only be adopted by consensus, meaning that a single
objection could block the ruling. Now, rulings are automatically adopted unless
there is a consensus to reject a ruling — any country wanting to block a ruling has to
persuade all other WTO members (including its adversary in the case) to share its
view.

Although much of the procedure does resemble a court or tribunal, the preferred
solution is for the countries concerned to discuss their problems and settle the
dispute by themselves. The first stage is therefore consultations between the
governments concerned, and even when the case has progressed to other stages,
consultation and mediation are still always possible.
 Duration of a Dispute Settlement procedure

These approximate periods for each stage of a dispute settlement

procedure are target figures
The agreement is flexible. In addition, the countries can settle
their dispute themselves at any stage.
Totals are also approximate.

60 days Consultations, mediation, etc

45 days Panel set up and panellists appointed
6 months Final panel report to parties
3 weeks Final panel report to WTO members
60 days Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1 year 3 months (with appeal)

STEPS IN THE PANEL PROCESS

The DSU describes in some detail how the panels are to work. The main stages are:

Before the first hearing: The panel will meet for an organizational meeting at which
it sets a schedule for the case.   Each side in the dispute presents its case in writing to
the panel. These written submissions are essentially legal “briefs” in which the
parties state the facts, the findings that they want the panel to make and the legal
arguments supporting their position.

First hearing: At the first sustentative meeting of the panel: the complaining

country (or countries), the responding country, and those that have announced they
have an interest in the dispute, make their case.  The complaining party will present
its case and make its oral arguments first, followed by the responding country and
then the third parties.  The first hearing may run two to three days, with panel
meeting in several sessions to hear the presentation.
Second hearing-Rebuttals: Following the first hearing, the parties will usually have
two to three weeks to submit written rebuttals.  One to two weeks later, the Panel
will hold a second meeting at which the parties present oral rebuttal arguments.  The
defending party has the right to present its statement first at this meeting.  Third
parties will not participate at the panel’s second meeting.  During oral presentations,
the panel may interrupt with questions for the presenter. The panel also at any time
has the right to ask the parties to submit written answers to questions posed during
or outside of hearing.

Experts: if one side raises scientific or other technical matters, the panel may consult
experts or appoint an expert review group to prepare an advisory report.

First draft: the panel usually submits within two to four weeks after the second
hearing the descriptive (factual and argument) sections of its report to the two sides,
giving them two weeks to comment. This report does not include findings and
conclusions.

Interim report: The panel then submits an interim report to the two sides, including
its findings and conclusions.  The parties will have one week to ask for a review.

Review: The period of review must not exceed two weeks. During that time, the
panel may hold additional meetings with the two sides.  To ensure transparency,
presentations to the panel are made only in the presence of both sides and all written
submissions, including comments on the descriptive part of the report and the
response to questions, are given to both sides.

Final report: A final report is submitted to the two sides and three weeks later, it is
circulated to all WTO members. If the panel decides that the disputed trade measure
is inconsistent with a WTO agreement or an obligation, it recommends that the
measure be brought into conformity with WTO rules. It does not tell the Parties
exactly how to do this.   This is left to the discretion of the country concerned.  The
panel may however suggest how this could be done.  If the panel finds that the trade
measure is consistent with the relevant WTO agreements, but that the measure has
denied the complaining party WTO benefits, it may recommend a solution, but the
defending country cannot be required to withdraw its measure.

The Report Becomes A Ruling: Once Members have had 20 days to consider a
circulated report, the report can be considered for adoption by the DSB, unless it is
appealed.  The DSB must adopt the report within 60 days unless there is a consensus
to reject it.  The adopted report with a recommendation to bring a measure into
conformity, if appropriate, becomes the ruling of the DSB.

THE PANAL PROCESS

APPEALING A PANEL DECISION:

 Either side can appeal a panel’s ruling. Sometimes both sides do so.  Appeals have
to be based on points of law such as legal interpretation — they cannot request
reexamination of existing evidence or examination of new evidence.

Each appeal is heard by three members of a permanent seven-member Appellate

Body set up by the DSB (DSB).  Members of the Appellate Body have four-year
terms.  They have to be individuals with recognized standing in the field of law and
international trade, not affiliated with any government.

The appeal can uphold, modify or reverse any of the panel’s legal findings and
conclusions.  Normally appeals should not last more than 60 days, with an absolute
maximum of 90 days.  In other words, the Appellate Body should normally issue a
report within 60 days from the date the notice of appeal is filed.

The DSB has to accept (i.e., adopt) the panel report, as modified by the ruling of the
Appellate Body, within 30 days following circulation of the Appellate Body’s report
unless there is a consensus to reject in

AFTER THE DSB RULING

After DSB adoption of a report in which a country’s trade measure has been found to
violate its WTO obligations, the country is required to act on the recommendations
in the report and bring the measure into compliance with its obligations.  The DSU
stresses that “prompt compliance with recommendations or rulings of the DSB… is
essential in order to ensure effective resolution of disputes to the benefit of all
Members”.  The country must state its intention to comply at a DSB meeting held
within 30 days of the report’s adoption. If complying with the recommendation
immediately proves impractical, the member will be given a “reasonable period of
time” to do so.  Article 21 of the DSU provides that the “reasonable period of time”
can be (a) the time proposed by the losing country, if the DSB approves,  (b) a time
period mutually agreed to by the parties or (c) a time period determined through
arbitration.   Article 23 also indicates as guidance to the arbitrator that the period of
time should not normally exceed 15 months.  To date in most WTO disputes the
losing party has brought its measure into compliance.
If a losing party fails to act within a reasonable period of time, it has to enter into
negotiations with the complaining country (or countries) in order to determine
mutually acceptable compensation — for instance, tariff reductions in areas of
particular interest to the complaining side.  If after 20 days, no satisfactory
compensation is agreed, the complaining side may ask the DSB for permission to
impose limited trade sanctions (“suspend concessions or obligations”) against the
other side. The DSB should grant this authorization within 30 days of the expiry of
the “reasonable period of time” unless there is a consensus against the request.  If the
two sides cannot agree on what constitutes “a reasonable period of time” or the level
of compensation, the complaining country may request an arbitrator to decide what
a “reasonable period of time” is or the appropriate amount of compensation/trade
retaliation to be authorized by the DSB.   If a country has taken steps to comply with
a panel’s findings, but the complaining party does not feel that they are adequate,
the complaining party can have the original panel review the measures adopted and
rule on whether they are adequate enough to bring the losing country into
compliance.

In principle, the sanctions should be imposed in the same sector as the dispute. If
this is not practical or if it would not be effective, the sanctions can be imposed in a
different sector of the same agreement. In turn, if this is not effective or practicable
and if the circumstances are serious enough, the action can be taken under another
agreement. The objective is to minimize the chances of actions spilling over into
unrelated sectors while at the same time allowing the actions to be effective.

The DSB monitors how adopted rulings and recommendations are implemented.
Any outstanding case remains on its agenda until the issue is
resolved.                                                            

The second part of this paper focuses on some considerations that may be helpful to
a person who is involved in the process of preparing a case for WTO dispute
settlement or in the Decision to initiate a case.
STRUCTURING A LEGAL ARGUMENT

A cogent legal argument is the key to achieving a successful outcome for your
case.  Legal arguments normally contain a series of factors presented in such a way
as to lead directly to a logical conclusion. Arguments presented in legal briefs should
begin with a statement of the facts of the case.  This should include all relevant facts
to the matter at hand, not just those that support your argument.  Facts that are
inconvenient for your argument can be distinguished or explained during your
analysis and argument.  The presentation of the facts should be as exhaustive as
necessary in order to fully inform the reader of the relevant matters which impact on
the issues at hand.   

Following a presentation of the facts the legal brief should then set out a statement of
the issues before the Panel.  These should be carefully thought out so that they are
presented in a way that highlights and makes clear the legal arguments you will
make.  The issues are the legal subject matter of the case and should clearly reference
any laws that are in question.   In some cases it may be preferable to write the issues
section last after having fully analyzed the arguments.  In others you will need a
clear understanding of all the issues before beginning your analysis.  In most cases,
issues sections may need to be refined following a full exploration of facts, analysis
and argument by the brief writer.  Identifying the appropriate issues for you case
and structuring the issue statement well can be crucial to increasing the
persuasiveness of your argument.  

Analysis and argument bring together the facts and issues in a way that establishes
your claims either as complainant or defendant.  This section should analyze the
facts and legal principles involved and set out clear arguments that support your
position.  Arguments based on precedents from similar previous cases are
fundamental to substantiating your claims about the legal issues.  You should also
use this section to rebut arguments that you anticipate from the other side.  Legal
analysis should be clear, tightly written and apply the appropriate legal principles
and cases to the facts.   
Conclusions should follow from the arguments and should flow in a natural and
logical progression from the analysis and argument.  Each element of your
conclusions should be substantiated by your analysis and arguments.  Conclusions
should give the Panel a clear indication of the findings that you feel it should make
and the logical results of such findings. 

ANALYSIS OF FACTS

At the same time you undertake the legal research, you should verify the facts and
sort and supplement them as necessary. In a WTO proceeding presenting clear and
convincing facts that support the legal arguments is very important. Visual aids can
be useful, but cannot substitute for a clearly written and articulated factual
presentation to which panelists can refer on when they meet together to discuss the
case.  Facts should support not only the case in general, but each aspect of the
case.  A good logical argument should guide you in deciding which facts to present
at each stage of your brief. 

You may need to use experts to present facts.  If so, you should make sure that the
expert’s expertise does not detract from his presentation.  Panelists are normally not
experts in the facts of the cases they hear and may need to be assisted to understand
the details of what is being presented.  Arguments in panel proceedings based on a
showing of assessment of damage, economic injury or harm may in particular have
to be both prepared and presented by experts, unless government personnel are able
to present a convincing and factual story involving considerable mathematical
dexterity.  The tests for determining injury varies among the different WTO
Agreements, so you should take care to find experts who know the subject area and
the agreement, as well as the economic theory and the math.  

The WTO, since it is a government-to-government institution, is understandably

reluctant to acknowledge a role for the private sector in the DSM.  However, it is
often important and sometimes necessary to be able to supplement the contributions
of government-employed specialists with those of private-sector experts.  Experts
are mostly used to draft legal analyses and to present facts.  In most cases, non-
government personnel can be used in almost any capacity except to present an oral
argument before a panel.  However, the Appellant Body has ruled that a
government does have the right to be represented in a proceeding by a private
lawyer if it wants to designate such a person to represent it.  

Panels are allowed to choose whether to access non-requested information

submitted to them by private sector and NGO groups, and any other information
they may find relevant.  You will have to judge whether in your particular case it
will be useful to present to Panels a wide variety of information they can view at
their discretion, but you should always focus most on those facts that support the
argument.  Panels in practice may be more ready to consider non-governmental,
non-requested information if a party submits it rather than a non-governmental
entity.  

WTO DISPUTE SETTLEMENT JURISPRUDENCE

The basic principles of public commercial law are incorporated in the Final Act of
the Uruguay Round and the Marrakesh Agreements establishing the World Trade
Organization.  These are based on the principles established in GATT 1947.  Since the
GATT also incorporated a dispute settlement mechanism, there is significant
jurisprudence, numerous decisions by GATT panels and working parties
interpreting the principles embodied by the agreement.  Given the large number of
WTO panel and Appellate Body decisions approved every year since the founding of
the WTO, the body of interpretative material is growing rapidly.  

Panels and the Appellate Body also often cite principles of public international
law.  In this regard, the Vienna Convention on the Law of Treaties is frequently
referred to as a guide in interpreting the WTO agreements.  

Although much has been written about whether the GATT, and the succeeding
WTO dispute settlement mechanism, operates on a common law or a civil law
model, it is probably fair to say that it operates as an amalgam of the two; that is,
although each dispute settlement panel has reference to decisions of other panels in
which similar arguments and facts have been presented, it is authorized to interpret
the facts and arguments before it on its own authority as well as in light of prior, or
similar cases.  Thus, while there is no formal agreement that the principle of stare
decisis  (the binding nature of previous rulings on subsequent panels) applies in
panels decisions, panelists usually seek to support their reasoning by citing decisions
of prior panels and the Appellate Body on the same principles. This has given rise to
a series of cases in which panels and the Appellate Body have generally agreed that
broad principles set forth in the WTO Agreements and GATT 1947 operate in
specific ways.  For some of the principles, there is also general agreement on the
analytical approach that should be taken in determining whether a specific measure
is inconsistent with the principle.  Nevertheless, panels are not formally bound by
prior decisions or interpretations.  

For example, there is virtual agreement that certain principles of interpretation

should be adhered to.  The Appellate Body in a series of cases has set forth the steps
to be followed in analyzing whether a measure is covered by one of the general
exceptions in Article XX of the GATT.  The cases also spell out the order in which the
steps are to be taken. As the various WTO agreements may have slightly different
rationales and procedures, it is necessary to thoroughly understand the procedural
rules of relevant agreements before you begin.  

The foregoing situation means that the principles of WTO law are evolving
ones.  Furthermore, as the WTO operates by consensus, Members can also agree
upon new WTO principles.  With successive rounds of trade negotiations and the
WTO’s growth as an institution, it is likely that the principles developed under
GATT 1947, now supplemented and clarified by the Uruguay Round Agreements,
will be even more fully elaborated and new areas added as new negotiations take
place.  At the 2001 Doha WTO Ministerial meeting, WTO members agreed to
consider developing principles and disciplines in several new areas. Most likely the
new principles will be augmentative, but the basic principles will remain.
  
DSU PROVISIONS FOR DEVELOPING COUNTRIES:

Like most of the agreements adopted in the Uruguay Round, the DSU
contains several provisions directed to developing countries.  The Understanding
states that members should give "special attention" to the problems and interests of
developing country members.  Further, if one party to a dispute is a developing
country, that party is entitled to have at least one panelist who comes from a
developing country. If a complaint is brought against a developing country, the time
for consultations (before a panel is convened) may be extended, and if the dispute
goes to a panel, the deadlines for the developing country to make its submissions
may be relaxed. Also, the Secretariat is authorized to make a qualified legal expert
available to any developing country on request. Formal complaints against least
developed countries are discouraged, and if consultations fail, the Director-General
and the Chairman of the DSB stand ready to offer their good offices before a formal
request for a panel is made. As to substance, the DSU provides that the report of
panels shall "explicitly indicate" how account has been taken of the "differential and
more favorable treatment" provisions of the agreement under which the complaint is
brought. Whether or not a developing country is a party to a particular proceeding,
"particular attention" is to be paid to the interests of the developing countries in the
course of implementing recommendations and rulings of panels. In order to assist
developing countries in overcoming their limited expertise in WTO law and assist
them in managing complex trade disputes, an Advisory Centre on WTO Law was
established in 2001. The aim is to level the playing field for these countries and
customs territories in the WTO system by enabling them to have a full
understanding of their rights and obligations under the WTO Agreement.

CONCLUSION:

The power to settle international disputes with binding authority

distinguishes the World Trade Organization from most other intergovernmental
institutions. The Understanding on Rules and Procedures Governing the Settlement
of Disputes gives the WTO unprecedented power to resolve trade-related conflicts
between nations and assign penalties and compensation to the parties involved. The
primary goal of dispute settlement is to ensure national compliance with multilateral
trade rules. Accordingly, the Dispute Settlement Body encourages Members to their
make best possible efforts to bring legislation into compliance with the panel ruling
within a “reasonable period of time” established by the parties to the dispute. If a
Member does not comply with rulings, the DSB can authorize the complainant to
suspend commitments and concessions to the violating Member. In general,
complainants are encouraged to suspend concessions with respect to the same sector
as the subject of the dispute; however, if complainants find this ineffective or
impracticable, they may suspend concessions in other sectors of the same Agreement
or even under separate Agreements.