Group: K22

Group member:
1. Huỳnh Thị Ngọc Giang - ID Student: K224020226
2. Võ Thái Bình Nhi - ID Student: K224020244
3. Nguyễn Thị Ngọc Duyên - ID Student: K224020224
4. Chloé Beausseron - ID Student: IE20230013

PRECLASS ASSIGNMENT 03

1. What are differences between the GATT and WTO’s dispute settlement
system?
 Scope
The GATT dispute settlement system only covered trade in goods, while the
WTO dispute settlement system also covers trade in services and intellectual property.
This means that WTO members can challenge each other on measures affecting trade
in services and intellectual property, in addition to trade in goods.
 Formality
The GATT dispute settlement system was less formal than the WTO dispute
settlement system. This means that there were no specific rules and procedures set out
for the establishment of panels or the issuance of panel reports. GATT dispute
settlement procedures were less formal and less time-bound than WTO procedures.
GATT decisions were made on the basis of consensus, which could lead to delays or
deadlocks. WTO decisions are made on the basis of reverse consensus, which makes
it more difficult for a party to block a decision. WTO procedures set out in the DSU
Agreement are more streamlined and efficient, which helps to resolve disputes more
quickly and fairly.
 Binding rulings
GATT panel rulings were not automatically binding on the parties to a dispute.
This means that the parties to a dispute could choose not to comply with the panel
ruling. In the WTO dispute settlement system, panel rulings are automatically
binding.
The reason is, under the GATT dispute settlement system, decisions are made
based on the basis of consensus. Under this principle, a panel can only be established
and the report of a panel can only be adopted with the unanimous agreement of all
members of the GATT Council. Under the WTO dispute settlement system, the
principle of consensus has been replaced by the principle of reverse consensus. Under
this principle, no individual member state can prevent the DSB from making a
decision in the dispute settlement process unless there is a unanimous veto by all
members of the WTO. This means that if the violating country wants the DSB's ruling
not to be adopted, it must convince all other members of the WTO (including the
parties involved in the lawsuit) to oppose it.
 Appellate review
The GATT dispute settlement system did not include an appellate review
mechanism. This means that panel rulings were final. In the WTO dispute settlement
system, there is an Appellate Body that can review panel rulings. This helps to ensure
that panel rulings are accurate and reasonable.
 Dispute Settlement Body
The GATT dispute settlement system did not have a dedicated dispute settlement
body. In the WTO dispute settlement system, there is a Dispute Settlement Body
(DSB) that oversees the dispute settlement process. This helps to ensure that the
dispute settlement process is conducted in an efficient and timely manner.
 Transparency
The WTO dispute settlement system is more transparent than the GATT dispute
settlement system. All panel and Appellate Body reports are made public. This helps
to ensure that the dispute settlement process is conducted in a public and transparent
manner.
 Enforcement
The WTO dispute settlement system has a more effective enforcement
mechanism than the GATT dispute settlement system. If a WTO member does not
comply with a WTO ruling, the DSB can authorize the complaining member to
retaliate by imposing trade sanctions. This helps to ensure that WTO members
comply with WTO rulings.

2. Can a Member challenge the WTO consistency of a measure by a private

party?
A member cannot challenge the consistency of WTO measures because under WTO’s
dispute settlement system, decisions are made based on the basis of reverse consensus.
This means no individual member state can prevent the DSB from making a decision
in the dispute settlement process unless there is a unanimous veto by all members of
the WTO. This means that if the violating country wants the DSB's ruling not to be
adopted, it must convince all other members of the WTO (including the parties
involved in the lawsuit) to oppose it.

3. What is the prime object and purpose of the WTO dispute settlement system
and why is important to the multilateral trading system?
The prime object and purpose of the World Trade Organization (WTO) dispute
settlement system is to resolve trade disputes between WTO members in a fair,
efficient, and transparent manner. The system is important to the multilateral trading
system because it helps to ensure that all WTO members comply with the WTO
agreements and that trade is conducted on a level playing field.
The WTO dispute settlement system is based on the following principles:
 Transparency: All dispute settlement proceedings are open to the public, and all
panel and Appellate Body reports are published.
 Fairness: All WTO members have an equal opportunity to participate in the
dispute settlement process.
 Efficiency: The dispute settlement process is designed to resolve disputes quickly
and effectively.
 Predictability: The dispute settlement system is based on rules and procedures
that are clear and predictable.
The WTO dispute settlement system has been successful in resolving a large
number of trade disputes between WTO members. The system has helped to reduce
trade tensions and promote free trade. The WTO dispute settlement system is
important to the multilateral trading system for the following reasons:
 It helps to ensure that all WTO members comply with the WTO agreements. The
WTO agreements are a set of rules that govern international trade. The dispute
settlement system helps to ensure that all WTO members comply with these rules
by providing a mechanism for resolving disputes.
 It helps to promote free trade. Free trade is when goods and services can be
traded between countries without tariffs or other barriers. The dispute settlement
system helps to promote free trade by resolving disputes that could lead to such
barriers.
 It helps to build confidence in the multilateral trading system. The multilateral
trading system is a complex system of rules and relationships. The dispute
settlement system helps to build confidence in this system by providing a
mechanism for resolving disputes fairly and efficiently.
Overall, the WTO dispute settlement system is an important part of the multilateral
trading system. It helps to ensure that all WTO members comply with the WTO
agreements, promote free trade, and build confidence in the system.

4. What is the WTO dispute settlement system’s preferred method of dispute

settlement? Why?
The WTO dispute settlement system's preferred method of dispute settlement is
consultation. Consultation is a process in which the parties to a dispute meet to
discuss their differences and try to reach a mutually agreed solution.
Consultation is preferred because it is the most efficient and effective way to
resolve disputes. It is also the most consistent with the spirit of the WTO agreements,
which emphasize cooperation and dialogue among members.
If the parties to a dispute are unable to resolve their differences through
consultation, they may request the establishment of a panel. A panel is a group of
three to five experts who are independent of the parties to the dispute. The panel
examines the evidence submitted by the parties and issues a report with its findings
and recommendations.
The panel report is not binding on the parties to the dispute. However, if the
parties are unable to agree on a solution within 60 days of the issuance of the panel
report, the complaining party may request authorization from the Dispute Settlement
Body (DSB) to retaliate by imposing trade sanctions on the responding party.
The WTO dispute settlement system has been successful in resolving a large
number of trade disputes through consultation. The system has helped to reduce trade
tensions and promote free trade.
Here are some of the reasons why consultation is the preferred method of dispute
settlement in the WTO:
 It is the most efficient and effective way to resolve disputes.
 It is the most consistent with the spirit of the WTO agreements, which emphasize
cooperation and dialogue among members.
 It allows the parties to the dispute to maintain control over the process and to
reach a solution that meets their specific needs.
 It helps to preserve the good relationship between the parties to the dispute.
Overall, consultation is the preferred method of dispute settlement in the WTO
because it is the most efficient, effective, and consistent with the spirit of the WTO
agreements.

5. Why is the panels’ and Appellate Body’s task to clarify existing provisions of
the covered agreements an important task?
The task of the panels and Appellate Body in the WTO dispute settlement system
to clarify the existing provisions of the covered agreements is an important task
because it helps to ensure that the WTO agreements are interpreted and applied in a
consistent and predictable manner.
The WTO agreements are a complex set of rules that govern international trade.
The panels and Appellate Body play an important role in interpreting and clarifying
these rules. When the panels and Appellate Body issue rulings, they provide guidance
to WTO members on how to interpret and apply the WTO agreements. This guidance
helps to reduce trade tensions and promote free trade.
The panels and Appellate Body also play an important role in developing the
WTO law. When the panels and Appellate Body issue rulings, they not only interpret
the WTO agreements, but they also develop new case law. This case law helps to fill
gaps in the WTO agreements and to clarify the meaning of ambiguous provisions.
The panels and Appellate Body's task of clarifying the existing provisions of the
covered agreements is important for the following reasons:
 It helps to ensure that the WTO agreements are interpreted and applied in a
consistent and predictable manner. This is important for businesses, which need
to know what the rules are in order to plan their investments and trade activities.
 It helps to reduce trade tensions. When WTO members are confident that the
WTO agreements will be interpreted and applied fairly and consistently, they are
less likely to engage in trade disputes.
 It helps to promote free trade. By reducing trade tensions and clarifying the
meaning of the WTO agreements, the panels and Appellate Body help to create a
more favorable environment for free trade.
 Overall, the panels and Appellate Body's task of clarifying the existing provisions
of the covered agreements is an important task because it helps to ensure that the
WTO agreements are interpreted and applied in a consistent and predictable manner,
which reduces trade tensions and promotes free trade.

6. What are the remedies for breach of WTO law?

Compensation and the suspension of concessions or other obligations are the remedies
for violations of WTO law. This is a compensation and suspension that conforms with
the World Trade Organization's DSU.
Compensation is provided on a voluntary basis, based on potential future injury, and
needs relevant permission.
Suspension of concessions: When a fair length of time has passed without a
compensation agreement, use this criterion. The member who filed the complaint will
then seek DSB approval. Tariff concessions and other commitments are being
postponed.
Finally, remove actions that are no longer in accordance with applicable WTO
agreements.

7. In your opinion, should a Member that causes significant damage to the

economy of another Member as a result of breach of WTO law compensate this
damage?
When a member causes significant economic damage to another member,
compensation must be made. This is not a penalty but a corrective measure to ensure
countries comply with WTO regulations.
Any country that causes economic damage to another country has time to plan
compensation. If compensation is not received on time, the two parties will negotiate
to determine the compensation level.
Furthermore, the WTO recognizes safeguard measures. Countries implementing
safeguard measures must compensate the country implementing the safeguard
measures for goods.

8. Should customs duties, which were imposed in violation of WTO law, be

repaid to the importer?
According to Article 185 of the Customs Law, “Domestic goods, which having been
exported from the customs territory, are returned to that territory within a period of
two years and released for free circulation shall be granted relief from customs duties
at the request of the declarant.
At the request of the declarant the 2-year period may be extended where required by
special circumstances.
Where re-imported goods, prior to their exportation from the customs territory had
been released for free circulation at a reduced customs duty on account of their
end-use, exemption from customs duty shall be granted only where they are
re-imported for the same purpose.
Where the goods are not reimported for the same purpose, the amount of customs
duty shall be reduced by the amount of the duty paid on their first release for free
circulation.
Where the amount of the previously paid customs duty is higher than the amount of
duty payable on reimportation, refund shall not be granted.
Relief from import duties provided for in paragraph 1 of this Article shall not be
granted in the case of:
1) goods exported from the customs territory under the outward processing procedure
unless those goods remain in the state in which they were exported,
2) goods which have been subject to measures involving their exportation to another
country, unless the Government prescribes the circumstances in which and detailed
conditions under which relief may be granted.”
=> The importer is responsible for paying customs duties. However, due to violation
of WTO law, it is possible that in this case, the goods are not qualified to overcome
non-tariff barriers, because the goods do not meet WTO quality criteria. Goods are
not approved. The port should be banned from entering the importer's warehouse.
Therefore, the importer's tax will be refunded.

9. What are the requirements that a panel request must meet? What are the
required qualifications for a panelist?
 A WTO panel request must meet some requirements:
According to the Article 6.2: Establishment of Panels of of Understanding on rules
and procedures governing the settlement of disputes:
The request for the establishment of a panel shall be made in writing. It shall indicate
whether consultations were held, identify the specific measures at issue and provide a
brief summary of the legal basis of the complaint sufficient to present the problem
clearly. In case the applicant requests the establishment of a panel with other than
standard terms of reference, the written request shall include the proposed text of
special terms of reference.
 Qualifications for a WTO panelist:
According to the Article 8: Composition of Panels of Understanding on rules and
procedures governing the settlement of disputes:
1. Panels shall be composed of well-qualified governmental and/or non-governmental
individuals, including persons who have served on or presented a case to a panel,
served as a representative of a Member or of a contracting party to GATT 1947 or as
a representative to the Council or Committee of any covered agreement or its
predecessor agreement, or in the Secretariat, taught or published on international trade
law or policy, or served as a senior trade policy official of a Member.
2. Panel members should be selected with a view to ensuring the independence of the
members, a sufficiently diverse background and a wide spectrum of experience.
3. Citizens of Members whose governments are parties to the dispute or third parties
as defined in paragraph 2 of Article 10 shall not serve on a panel concerned with that
dispute, unless the parties to the dispute agree otherwise. (6)
4. To assist in the selection of panelists, the Secretariat shall maintain an indicative
list of governmental and non-governmental individuals possessing the qualifications
outlined in paragraph 1, from which panelists may be drawn as appropriate. That list
shall include the roster of non-governmental panelists established on 30 November
1984 (BISD 31S/9), and other rosters and indicative lists established under any of the
covered agreements, and shall retain the names of persons on those rosters and
indicative lists at the time of entry into force of the WTO Agreement. Members may
periodically suggest names of governmental and non-governmental individuals for
inclusion on the indicative list, providing relevant information on their knowledge of
international trade and of the sectors or subject matter of the covered agreements, and
those names shall be added to the list upon approval by the DSB. For each of the
individuals on the list, the list shall indicate specific areas of experience or expertise
of the individuals in the sectors or subject matter of the covered agreements.
5. Panels shall be composed of three panelists unless the parties to the dispute agree,
within 10 days from the establishment of the panel, to a panel composed of five
panelists. Members shall be informed promptly of the composition of the panel.
6. The Secretariat shall propose nominations for the panel to the parties to the dispute.
The parties to the dispute shall not oppose nominations except for compelling reasons.
7. If there is no agreement on the panelists within 20 days after the date of the
establishment of a panel, at the request of either party, the Director-General, in
consultation with the Chairman of the DSB and the Chairman of the relevant Council
or Committee, shall determine the composition of the panel by appointing the
panelists whom the Director-General considers most appropriate in accordance with
any relevant special or additional rules or procedures of the covered agreement or
covered agreements which are at issue in the dispute, after consulting with the parties
to the dispute. The Chairman of the DSB shall inform the Members of the
composition of the panel thus formed no later than 10 days after the date the
Chairman receives such a request.
8. Members shall undertake, as a general rule, to permit their officials to serve as
panelists.
9. Panelists shall serve in their individual capacities and not as government
representatives, nor as representatives of any organization. Members shall therefore
not give them instructions nor seek to influence them as individuals with regard to
matters before a panel.
10. When a dispute is between a developing country Member and a developed country
Member the panel shall, if the developing country Member so requests, include at
least one panelist from a developing country Member.
11. Panelists' expenses, including travel and subsistence allowance, shall be met from
the WTO budget in accordance with criteria to be adopted by the General Council,
based on recommendations of the Committee on Budget, Finance and Administration.

10. How and by whom are Members of the Appellate Body appointed?
According to the Article 17.2 of Understanding on rules and procedures governing the
settlement of disputes: The DSB shall appoint persons to serve on the Appellate Body
for a four-year term, and each person may be reappointed once. However, the terms of
three of the seven persons appointed immediately after the entry into force of the
WTO Agreement shall expire at the end of two years, to be determined by lot.
Vacancies shall be filled as they arise. A person appointed to replace a person whose
term of office has not expired shall hold office for the remainder of the predecessor's
term.

11. What can be appealed? Can factual findings ever be subject of appeal?
According to the Article 17.6 of Understanding on rules and procedures governing the
settlement of disputes: An appeal shall be limited to issues of law covered in the panel
report and legal interpretations developed by the panel.
→ So factual findings can not be the subject of appeal