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WTO Dispute Settlement A short introduction. 2 How were disputes settled under the GATT 1947? Nearly 50 years of dispute settlement under the GATT 1947...

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Presentation on theme: "WTO Dispute Settlement A short introduction. 2 How were disputes settled under the GATT 1947? Nearly 50 years of dispute settlement under the GATT 1947..."— Presentation transcript:

1 WTO Dispute Settlement A short introduction

2 2 How were disputes settled under the GATT 1947? Nearly 50 years of dispute settlement under the GATT 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

3 3 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

4 Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) Structure of the WTO Agreement Annex 1 1A: MTAs on goods (GATT + 12) 1B: GATS 1C: TRIPs Annex 2 Dispute Settlement Understanding Annex 3 Trade Policy Review Mechanism Annex 4 Plurilateral Agreements

5 5 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 And the rules and procedures as further elaborated and modified in the DSU Article 3.1 of the DSU

6 Main actors in the WTO Dispute 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 The Appellate Body Standing body of 7 members, 4-year term WTO and AB Secretariat Assist panels and the AB Main actors in the WTO Dispute Settlement System

7 7 How the Dispute Settlement System works Panel Report Appellate Body EstablishesNo appeal? DSB adopts the report DSB adopts the reports The Dispute Settlement Body, All Members

8 8 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

9 9 Only WTO Members (153 as of November 2009) Recourse to WTO dispute settlement: Who? 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

10 10 Recourse to WTO dispute settlement: Regarding what? Disputes under the following agreements (so-called covered agreements, CA), must be resolved pursuant to the DSU WTO Agreement Multilateral Trade Agreements (GATT other agreements on trade in goods) GATS TRIPS DSU (Plurilateral Trade Agreements) Appendix 1 to the DSU

11 11 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

12 12 Nature 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

13 13 Objectives Security and predictability in international trade Preserving Members rights and obligations Clarifying the existing provisions of the CA Article 3.2 of the DSU

14 14 Outcome Positive solution to a dispute Preferred outcome: Mutually acceptable solution Withdrawal of measures inconsistent with the covered agreements Article 3.7 of the DSU

15 15 Panel proceedings (Appellate Body review) Inconsistent measures... –Withdrawal –Compensation / Suspension of concessions...and if no mutually agreed solution reached Mea sure

16 16 Main Stages Good offices, conciliation and mediation possible at any moment Consultations 60 days Panel review 6 – 9 months AB review 60 – 90 days Adoption of report by the DSB Implementation

17 17...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 As of April 2010: 406 requests for consultations !!

18 18 Third parties joining consultations 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 Article 4.11 of the DSU

19 19 Consultations according to the Covered Agreement invoked

20 20 Complainants

21 21 Panel establishment Matter not resolved in consultations? Establishment of a panel Established by the DSB by negative consensus (2 nd 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) Article 6 of the DSU

22 22 Request for the establishment of a panel Form? In writing To whom? Content? Legal basis? Addressed to the DSB Distributed 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 to Members as document WT/DSXXX/X

23 23 Rationale for precision in the request Defines measures + claims … Which form the panels mandate … Jurisdiction + due process … Measure 1 Panel request

24 24 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...) Law 1 Law 2

25 25 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.

26 26 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) Article 8 of the DSU As of April 2010: 148 panels composed (88 by the DG) ! !

27 27 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

28 28 Panel proceedings 1. First written submissions of the parties 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 Appendix 3 DSU – General working procedures 2. [Third party submissions]

29 29 Standard of review Facts of the case Applicability of covered agreements Conformity of the measures with covered agreements * More deferential standard of review under Art ADA Objective assessment of the matter

30 30 Appellate Body Established in 1995, innovation of the WTO dispute settlement system A standing body of 7 Members. 4-year term, renewable once, a part-time job. Requirements: Authority and expertise in international trade law Unaffiliated with any government Impartiality, broad representativeness Appointed by the DSB on consensus, based on nominations by WTO Members

31 31 The current members of the Appellate Body Ms Lilia Bautista – Philippines Ms Jennifer Hillman – United States Mr Shotaro Oshima – Japan Ms Yuejiao Zhang – China Mr David Unterhalter – South Africa (Chairman) Mr Ricardo Ramírez Hernández - Mexico (recently appointed) Mr Peter van den Bossche - Belgium (recently appointed)

32 32 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 Issue of law What can be appealed?

33 33 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

34 34 Adoption of Panel / Appellate Body reports The DSB adopts Panel Report (as upheld/modified/ reversed) Together with the Appellate Body Report By negative consensus Within 30 days from circulation of AB Report (60 days from circulation of Panel Report if no appeal)

35 35 Order 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 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

36 36 Thank you!


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