1. Dispute Settlement General Aspects of WTO Dispute Settlement Russian Federation, September 2012 Susan Hainsworth, ITTC, WTO

2. 2 Part 1: The historic roots of the WTO Dispute Settlement System (GATT 1947) Part 2: The basic characteristics of the WTO Dispute Settlement System In this session you will learn about...

3. 3 Historic roots of the WTO Dispute settlement System (DS under the GATT 1947, 1947-1994) Part 1

4. 4 How were disputes settled under the GATT 1947? Nearly 50 years of dispute settlement under the GATT 1947... 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

5. 5 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

6. 6 Basic characteristics of the WTO Dispute Settlement System (1995 – currently) Part 2

7. 7 What is the Dispute Settlement Understanding (DSU)? 1986 – 1994 Uruguay Round –Punta del Este Ministerial Declaration 1995 Establishment of the WTO Annex 2 to the WTO Agreement: Dispute Settlement Understanding Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement)

8. 8 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 1947... And the rules and procedures as further elaborated and modified in the DSU  Article 3.1 of the DSU

9. 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

10. 10 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

11. 11 developments 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

12. 12 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

13. 13 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 1994 + 12 other agreements on trade in goods) GATS TRIPS DSU (Plurilateral Trade Agreements – subject to decision)  Appendix 1 to the DSU

14. 14 Recourse to WTO dispute settlement: When? DS provisions of the Covered Agreements  When recourse to dispute settlement For example:  Article 17 of the Anti-Dumping Agreement...  Article 11 of the SPS Agreement...  Article 14 of the TBT Agreement... DSU  Rules concerning dispute settlement procedure

15. 15 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

16. 16 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

17. 17 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

18. 18 Objectives Positive solution to a dispute Preferred outcome: Mutually acceptable solution Withdrawal of measures inconsistent with the covered agreements  Article 3.7 of the DSU

19. 19 Panel proceedings (Appellate Body review) Inconsistent measures... –Withdrawal –Compensation / Suspension of concessions...and if no mutually agreed solution reached Mea sure

20. 20 Alternative ways to resolve a dispute Informal means of assisting in reaching a mutually acceptable solution... At any time after request for consultations, parties’ agreement... Parties’ agreement... Notification to all Members... Good offices, conciliation, mediation  Article 5 DSU Arbitration  Article 25 DSU

21. 21 special and differential treatment Consultations: Members should give special attention to the particular problems and interests of developing countries...  Article 4.10 of the DSU Extending consultation periods and according “sufficient time” to prepare argumentation...  Article 12.10 of the DSU Panel composition: Panelist from developing country Member...  Article 8.10 of the DSU All stages: Members “shall give” particular consideration to the special situation of LDCs...  Article 24 of the DSU Additional legal advice from the Secretariat...  Article 27 of the DSU Right to invoke the provisions of the Decision of 5 April 1966...  Article 3.12 of the DSU

22. 22 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

23. 23 Thank you!