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Dispute Settlement in the WTODispute Settlement in the WTO

“a central element in providing security and predictability to the multilateral trading system”

Article 3.2 DSU

Presented by: Peter MorrisonTrade in Services DivisionWTO Secretariat

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Dispute Settlement in the WTO:Dispute Settlement in the WTO:Overview

Overall aim:Overall aim: to secure to secure

compliance with compliance with the Agreementsthe Agreements

Quasi-judicial Quasi-judicial NatureNature

Secured access Detailed

procedures Automaticity in the

proceedings Deadlines Possible appeal

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Dispute Settlement in the WTODispute Settlement in the WTOScope

An integrated An integrated systemsystem:

Applies to all the 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 WTODispute Settlement in the WTOMain players

Dispute Settlement Body (DSB)Dispute Settlement Body (DSB) Panel and Appellate BodyPanel and Appellate Body Parties: WTO MembersParties: WTO Members WTO SecretariatWTO Secretariat

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Dispute Settlement in the WTODispute Settlement in the WTO:Relationship of players

Panel

Appellate Body

Ministerial Conference

Dispute Settlement Body(General Council)

Request for Panelby WTO Member

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Dispute Settlement in the WTODispute Settlement in the WTO:Main Procedures

Im p lem e nta tion

A p p e la te B o dy

P a n e l

C o n su lta tio ns60 days

9 months

90 days

15 months

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Dispute Settlement in the WTODispute Settlement in the WTOConsultations: 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 WTODispute Settlement in the 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 WTODispute Settlement in the WTO:Consultations: third parties

But, in some instances, other Members can But, in some instances, other Members can request to be joined in the consultationsrequest to be joined in the consultations Article 4.11 DSU

“substantial trade interest”

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Dispute Settlement in the WTODispute Settlement in the 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 A request for establishment of a panel can be madecan be made

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Dispute Settlement in the WTO:Dispute Settlement in the WTO:Establishment of panels

Request for establishmentRequest for 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”

EstablishmentEstablishment at the latest at the second DSB meeting at which

the request is made; decided by negative negative consensusconsensus

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

Terms of Terms of reference:reference:

(Article 7 DSU) Standard, or Standard, or Special terms of Special terms of

referencereference

Panel Composition:Panel Composition:(Article 8 DSU) “well-qualified

government and/or non-governmental individuals”

Secretariat proposals indicative list of

panelists nomination by DG

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Dispute Settlement in the WTO:Dispute Settlement in the WTO:Panels: how they function

Functions of the Panel Functions of the Panel ““…a panel should make an objective assessment of the

matter before it, including an objective assessment of thefacts of the case and the applicability of and conformitywith the relevant covered agreements…”

Functions of the dispute settlement system 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:Dispute Settlement in the WTO: Panel Procedures: main steps

Oral hearings (usually 2), on Oral hearings (usually 2), on basis of written basis of written submissionssubmissions

Descriptive part of report issued to partiesDescriptive part of report issued to parties

Interim review based on draft reportInterim review based on draft report

Final report issued to partiesFinal report issued to parties

Final report circulated to all MembersFinal report circulated to all Members

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

Third parties have make presentationsThird parties have make presentations need “substantial interest” need “substantial interest” (Article 10

DSU)

Panels may seekPanels may seek factual information from any relevant factual information from any relevant

source source (Article 13 DSU)

scientific or technical advice from an scientific or technical advice from an Expert review group Expert review group (Appendix 4 DSU)

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

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

… ExceptExcept if if appealedappealed

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Dispute Settlement in the WTO:Appellate Review

Appeals limited to Appeals limited to “issues of law and “issues of law and legal interpretations legal interpretations developed by the developed by the panel”panel”

Appeal only open to Appeal only open to parties to the parties to the disputedispute

Appellate BodyAppellate Body 7 members members to have

recognized authority and expertise in international trade law

members unaffiliated with any government

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

Report of the Appellate BodyReport of the Appellate Body: “may uphold, modify or reverse the

legal findings and conclusions of the panel” (Art. 17.12 DSU)

AdoptionAdoption of Appellate Body report: by reverse consensus within 30 days of circulation to Members

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Dispute Settlement in the WTODispute Settlement in the WTO:Implementation

Member must bring bring the measures into the measures into conformityconformity with its with its WTO obligationsWTO obligations

(Article 19 DSU)

Member must inform DSB of its intentions in for implementation of the recommendations

(Article 1 DSU)

If there is a finding of violation:

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Dispute Settlement in the WTO:Dispute Settlement in the WTO:Implementation: reasonable period of time

Determination of “reasonable reasonable period of timeperiod of time” for implementation:

proposed by Member, and approved by DSB, or

mutually agreed by the parties, or determined through arbitrationarbitration:

“guideline for the arbitrator”: 15 months from the date of adoption (Article 21.3 DSU)

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Dispute Settlement in the WTO:Dispute Settlement in the WTO:Implementation: surveillance

Surveillance Surveillance by the DSBby 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 concessionssuspension of concessions (retaliation)

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Dispute Settlement in the WTO:Dispute Settlement in the WTO: Implementation

Compensation: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:Dispute Settlement in the WTO: Implementation

Suspension of concessionsSuspension 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 WTODispute 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)