LAW OF
OVERVIEW OF WTO
THE WORLD TRADE ORGANIZATION
LL.M. NGUYEN T. LAN HUONG
SEMINAR 1. OVERVIEW OF WTO
1.5 WTO DISPUTE SETTLEMENT SYSTEM
Information & Resources
• Legal Texts (agreements etc.):
http://www.wto.org/english/docs_e/legal_e/legal
_e.htm
• Panel and Appellate Body Reports:
http://www.wto.org/english/tratop_e/dispu_e/dist
abase_e.htm
http://www.wto.org/english/tratop_e/dispu_e/gt4
7ds_e.htm
• Official WTO Documents:
http://docsonline.wto.org/gen_home.asp
• Advisory Centre on WTO Law:
http://www.acwl.ch
1.5 Dispute Settlement in the WTO:
Objectives
1. Clarify existing provisions of agreements
in accordance with customary rules of
interpretation of public international law.
2. Solving rising conflict: “POSITIVE
SOLUTION”
SEMINAR 1.
1.5 WTO DISPUTE SETTLEMENT SYSTEM
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1.5 Dispute Settlement in the WTO
Aims
• Dispute Settlement Understanding “DSU”
– Mechanism aimed at securing
compliance with the Covered
Agreements (CA)
– Preserves the rights and obligations of
Members under the CA (Art 3.2 DSU)
– Predictability and security in
international trade
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1.5 Dispute Settlement in the WTO - Objectives
“Before bringing a case, a Member shall exercise its judgement as to
whether action under these procedures would be fruitful. The aim of the
dispute settlement mechanism is to secure a positive solution to a dispute.
A solution (i) mutually acceptable to the parties to a dispute and (ii)
consistent with the covered agreements is clearly to be preferred. In the
absence of a mutually agreed solution, the first objective of the dispute
settlement mechanism is usually (iii) to secure the withdrawal of the
measures concerned if these are found to be inconsistent with the provisions
of any of the covered agreements. The provision of compensation should be
resorted to only if the immediate withdrawal of the measure is
impracticable and as a temporary measure pending the withdrawal of the
measure which is inconsistent with a covered agreement. The last resort
which this Understanding provides to the Member invoking the dispute
settlement procedures is the possibility of suspending the application of
concessions or other obligations under the covered agreements on a
discriminatory basis vis-à-vis the other Member, subject to authorization by
the DSB of such measures.” [Art. 3.7 DSU]
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 1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Objectives Scope – Article 1 DSU
To secure a “positive solution” to the dispute. 1. The rules and procedures of this Understanding shall
(Art. 3.7 DSU) apply to disputes brought pursuant to the consultation and
dispute settlement provisions of the agreements listed in
Appendix 1 to this Understanding (referred to in this
• Preferred outcome: Understanding as the "covered agreements"). The rules and
– To reach a mutually agreed solution procedures of this Understanding shall also apply to
consultations and the settlement of disputes between
• If not, Members concerning their rights and obligations under the
– Panel Proceeding …. provisions of the Agreement Establishing the World Trade
Organization (referred to in this Understanding as the "WTO
– [….and AB review.]
Agreement") and of this Understanding taken in isolation or in
combination with any other covered agreement.
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1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Scope – Article 1 DSU Scope (II)

• An integrated • Used by Members only

system: • Applies to all the WTO • Only “measures” may be challenged:
multilateral agreements – Measures are “public” acts and actions
(Appendix 1)
• “Members only”:
• A single set of rules for all
– Disputes between WTO Members and
disputes (Art 23)
non-WTO Members?
• Only a few special or – Sub-national and private entities?
additional rules in some
agreements (Appendix 2)
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1.5 Dispute Settlement in the WTO: 1.5 Dispute Settlement in the WTO
Main Features Main characters

• The DSB (all the Members- Art. 2.1)

• Compulsory jurisdiction • Parties Individual
• Detailed procedures and deadlines • Third Parties [Art.10 DSU] WTO Members
• “complainant-driven” • The Panel (3 or 5 panellists- Art 8.1)
• “quasi-judicial” • Appellate Body (7 persons – Art. 17)
• Experts, NGOs
• “automaticity”
• Director-General, Secretariat

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 1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
The DSB (I) The DSB (II)
1. Establishment Decision Making Rule:
Article 2.1 (DSU)
of Panel [Art. Negative consensus
• Political organ supervising dispute 6.1] If the complaining party so requests,
settlement a panel shall be established at the
2. Adoption of
• Composed of all WTO Members Reports [16.4, latest at the DSB meeting following
• Generally takes decisions by consensus 17.14] that at which the request first
except in three special cases... appears as an item on the DSB's
3. Authorization of
agenda, unless at that meeting the
suspension of DSB decides by consensus not to
concessions establish a panel. [DSU Art. 6.1]
[22.6]
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1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Main Stages Main Stages
Consultations
(60 days)
Consultation phase
Panel established
Good offices, by DSB Good offices,
conciliation and
Panel review conciliation mediation
Composition of the panel
and mediation
possible at Panel review and Report Issued
[AB review] (6-9 months)
any stage
Report issued to the parties Translation in official languages
Adoption of report by the before
circulated to the Members

DSB
Appellate Review and
Report Issued
Implementation (60-90 days)

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DSB adopts Panel / Appellate Report(s)

1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Consultations (Art. 4) (I) Consultations (II)
• Who? • The request for • Includes:
– One or more Members (complainants) consultations:
– identification of the
against another Member (Art. 4 DSU) measures
(defendant/respondent)
– legal basis for
complaint
• Confidential process (Art. 4.6) -
• Addressed to respondent,
• No intervention by the Secretariat
but also circulated to all
WTO Members

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 1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Consultations (III) Consultations (IV)
Third Parties - Joining Consultation Request for Consultations
• Any Member can • No automatic right to
request to be participate Requested Member replies within 10 days Requested Member does not reply
joined in the
consultations • Consultations requested Entry into consultations within 30 days They do not enter into consultations within 30 days
under Article XXII of GATT
Art. 4.11 DSU
only (or corresponding Failure to settle the dispute
( 60 days from receipt of
Deadline: within provision) request for consultations)
10 days of • Substantial trade interest
circulation of MUTUALLY AGREED REQUEST FOR THE ESTABLISHMENT
request for • Notified to parties and DSB SOLUTION OF A PANEL
consultations
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1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Establishment of Panels Terms of Reference and Composition of Panels
Article 6 DSU Terms of reference: Composition:
• Establishment of a • identify the specific (Art. 7 DSU) (Art. 8 DSU)
panel: Automatic measures at issue – Standard terms of • “well-qualified
• When? • brief summary of the reference government and/or non-
Second meeting of the legal basis (claims) – Special terms of governmental individuals”
DSB after the first reference • Secretariat proposals
request is on the • addressed to the Importance of request • indicative list of panelists
agenda unless: Chairman of the DSB for establishment of a • if disagreement:
negative - copy to the defendant Panel nomination by DG
consensus!! Ex.: Guatemala - Cement I
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1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Panel Procedures (II) Adoption of Panel Reports
Function of panels Article 16 DSU
• Standard of review: (Art. 11 DSU) • Panel reports not
– “objective assessment” of facts of the case,
of the applicability of relevant provisions, considered for adoption
and of the conformity of the measure(s) until 20 days after
with those provisions circulation
• Report of the Panel shall set out: (Art. 12.7
DSU) • Adoption within 60 days
– the findings of fact of circulation, unless
– the applicability of the relevant provisions negative consensus…. … Except if appealed
– the basic rationale behind its findings
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 1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Appellate Review Appellate Body Members

• WTO dispute settlement system innovation • A standing body of 7 Members

• Rules applicable to Appellate Review • Appointment by DSB
– Dispute Settlement Understanding • 4-year term, renewable once
(Article 17; Article 16.4; Articles 1, 3, 18 and • Requirements
19)
– authority and expertise in international
– Working Procedures for Appellate Review trade law
– Rules of Conduct – “unaffiliated with any government”
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Appelate Body Members (2016) 1.5 Dispute Settlement in the WTO

Appeal Process (I)
Article 17 DSU
• WHAT? appeals limited to “issues of law and
legal interpretations” developed by the panel,
including “cross-appeals”

• WHO? appeal only open to parties to the

dispute

• WHEN? Appeal must be commenced no later

than 60 days after the Panel Report is
circulated to Members
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1.5 Dispute Settlement in the WTO 1.5 Dispute Settlement in the WTO
Content of AB Report Adoption of Panel/Appellate Body Reports

• What can the Appellate Body • DSB adopts Panel Report (as
do? upheld/modified/ reversed) and Appellate
- Findings and Conclusions Body Report at same time
(Recommendations) • Within 30 days circulation of Appellate Body
- Uphold, modify or reverse the Report (60 days circulation Panel Report if no
findings and conclusions of appeal)
panels • Negative consensus

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Implementation (I) Implementation (II)
• Recommendations: DSB adopts report

If violation: • Within 30 days of Implementation within reasonable period of time

recommendation that the adoption of report,

Member brings the Member concerned Arbitration to determine 'reasonable period of time' if no agreement

informs the DSB of its

measures into Request for review of compliance
intentions in respect of (referred to original panel)
conformity implementation of the
(Art. 19 DSU) recommendations and Negotiations to agree mutually satisfactory
compensation if no compliance
rulings
If no violation [but
impairment]: (Art. 21.3 DSU) Request for DSB authorization for suspension of concessions
if compensation not agreed

Mutually satisfactory Arbitration on level and procedure

adjustment (Art. 26 DSU)

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1.5 WTO dispute settlement mechanism in brief

“MeGoViAc”

Measure

Government

Violation

Action
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