Over the past 20 years, nearly 500 disputes have been brought the WTO. About half of these were resolved dring bilateral discussions while the other half proceeded to a panel process, which in recent years generally take about 14 months. Appeals are considered by the WTO’s Appellate Body and – excluding exceptionally busy periods – are completed within three months.
CONTENTS SITUATION MAIN CONTENT The GATT dispute settlement system 2 The WTO dispute settlement system: the DSU and the WTO The Differences between the WTO anh the GATT 1947 dispute settlement systems CONCLUSION .7 REFERENCES SITUATION Over the past 20 years, nearly 500 disputes have been brought the WTO About half of these were resolved dring bilateral discussions while the other half proceeded to a panel process, which in recent years generally take about 14 months Appeals are considered by the WTO’s Appellate Body and – excluding exceptionally busy periods – are completed within three months This makes the WTO’s dispute system one of the fastest in the world The following article will highlight the difference between the WTO and GATT dispute settlement system MAIN CONTENT The GATT dispute settlement system Before evaluating the changes in dispute settlement that were agreed upon during the Uruguay Round and those currenctly proposed in the context of the reform of the DSU, we must cast a look at the system as it existed and evolved in the context of the GATT Only this retrospective vision will allow us to fully understand and judge the DSU as it stands now and the proposed changes forward Back in 1948, the Havana Charter for an International Trade Organization (the "Havana Charter" of the "ITO") included provisions on the settlement of disputes that were similar in the main to GATT Articles XXII and XXIII, although they also contained the possibility of having recourse to the International Court of Justice for advisory opinions.1 As we know, the Havana Charter never entered into force and GATT - which had been negotiated just previously to the Havana Conference by the Preparatory Committee of 23 countries and which was to have Articles 92 through 97 of the Havana Charter for an International Trade Organization, Final Act and Related Documents, United Nations Conference on Trade and Employment, April 1948, New York, Pp 49-50 been incorporated into the ITO through Chapter IV of the Charter - came to have a life of its own as a stripped down version of the failed ITO.2 In its 1947 published analysis of the GATT, the Department of State of the United States simply said that, as it was impossible to foresee and provide in detail for all possible measures which might affect the commercial relations between nations, Articles XXII and XXIII of the GATT provided for consultations and for procedures to be followed in cases of nullification or impairment of benefits Both provisions, and particularly Article XXIII:1, address two causes of action for a contracting party to initiate dispute settlement proceedings under the GATT: - Nullification or impairment of benefits accruing to it from GATT: - impediment of the attainment of any objective of GATT These causes of action could be as a result of: - (a) measures inconsistent with GATT provisions; - (b) measures not inconsistent with GATT provisions; - (c) other possible situations Articles XXII and XIII are a deviation from the standard rules on State responsibility, based mainly in the illegality of wrongful acts, to address similar adverse effects caused, not only by illicit trade measures, but also by "licit" trade measures This type of provisions followed the practice of the United States in the negotiation of bilateral agreements during the 20's and 30's."4 Given this institutional failure, the term "GATT" received dual nature: on the one hand as the General Agreement on Tariffs and Trade containing rights and obligations of the contracting parties thereof; on the other, as the de facto organisation administering the provisions of the General Agreement on Tariffs and Trade Department of State, Analysis of the General Agreement on Tariffs and Trade, Washington DC, Publication 2983, Commercial Policy Series 109, November 1947 4As Professor Hudec states, "[both the form and substance of the General Agreement on Tariffs and Trade draw heavily from the bilateral trade agreements of the 1920s States trade agreements negotiated in the decade after 1935." He also refers to the Agreement Between the United States of America and Mexico of 23 December 1942, as the one that has been compared the most often with the GATT R.E Hudec, The GATT Legal System: A Diplomat's Jurisprudence, in: Essays on the Nature of International Trade Law, (Cameron May, 1999), p.18 Article XIV of that Agreement states that: "[i]f the Government of the United The WTO dispute settlement system: the DSU and the WTO When the Uruguay Round participants determined that they had to jump forward to a more sophisticated dispute settlement mechanism, they also had to move from the reigning system with its strongly-embedded emphasis on negotiated solutions to one that would be of a more judicial nature This explains the criticism that is often voiced in respect of the DSU, to the effect that it is in reality only of a quasi-judicial nature But, in terms of what had occurred in the past, this was the most that a rational observer, aware of the political background prevailing, could have expected at the time In passing, we might remark that the Ministerial Decision determining that a full review of the DSU should take place within four years of the entry into force of the WTO Agreement also provides that at that time a decision should be made as to whether to continue, modify or terminate it.5 Once again, typical GATT caution prevailed, although it is indeed difficult to imagine the WTO membership modifying radically, let alone terminating, the DSU after almost ten years of practical experience in its application The DSU represents an important transitional accomplishment that broke with the past on some issues we will now address and put the WTO on the threshhold of fully introducing the rule of law into its dispute settlement proceedings States of America or the Government of the United Mexican States should consider that any measure adopted by the other Government, even though it does not conflict with the terms of this Agreement, has the effect of nullifying or impairing any object of the Agreement, such other Government shall give sympathetic consideration to such written representations or proposals as may be made with a view to effecting a mutually satisfactory adjustment of the matter." United States Government Printing Office, Reciprocal Trade, Agreement Between the United States of America and Mexico, Executive Agreement Series 311, Washington DC, 1943, p.16 Decision on the Application and Review of the Understanding on Rules and Procedures Governing the Settlement of Disputes, adopted 15 December 1993 It will come as no surprise that governments wanted to maintain the accumulated experience of GATT Article XVI:1 of the WTO Agreement states that except as otherwise provided under the WTO Agreement or the Multilateral Trade Agreements annexed thereto, the WTO shall be guided by the decisions, procedures and customary practices followed by the CONTRACTING PARTIES to GATT 1947 In particular regarding the DSU, Members reaffirm in Article their adherence to the principles for the management of disputes heretofore applied under Articles XXII and XXIII of GATT 1947, and the rules and procedures as further elaborated and modified in the DSU This blanket pronouncement, combined with Article XVI of the WTO Agreement, ensured the preservation of the GATT "acquis" extending over nearly a half century.6 A detailed commentary on the background, negotiating process and intended purpose of all the changes that the DSU has brought to the GATT 1947 system would exceed by far the scope of this paper Therefore, we limit ourselves to painting in with broad strokes those innovations that stand out as being most prominent and deserving of special attention The Differences between the WTO anh the GATT 1947 dispute settlement systems The differences between the WTO and GATT dispute settlement systems are as follows: First, with the enactment of the DSU, the WTO has introduced a common legal order for the whole process of dispute settlement, thereby ensuring that the 29 Thus, the Appellate Body in Japan - Taxes on Alcoholic Beverages has considered in this context for instance that "[a]dopted panel reports are an important part of the GATT acquis" Appellate Body Report, Japan - Taxes on Alcoholic Beverages, adopted November 1996, WT/DS8/AB/R, WT/DS 10/AB/R WT/DS11/AB/R WTO dispute settlement procedures are unified, linked, An automatic sequence takes place easily in high feasibility Second, the principle of consensus understood in the GATT 1947 meaning has been replaced by the "reciprocal" principle of the WTO The revision of the consensus principle is considered one of the biggest advances in the WTO dispute settlement system With this principle, DSB's entire process of decision-making in general and speaking is fast and convenient, thus ensuring time for the dispute resolution process Third, regarding the impartiality, fairness and qualifications of panel members, the DSU has set a series of criteria for panel members, prescribing cases where jurors are not allowed Moreover, the DSU also stipulates the responsibility of jurors to inform all benefits, their relationships may be related to the dispute, as well as to inform issues that may create suspicion doubt about his impartiality With WTO rules, it has overcome this weakness that exists in GATT Fourth, recommendations, conclusions of the Panel and Appellate Body after settlement of the case were approved by the DSB Once adopted, they will become the general provisions of the DSB/WTO binding on the enforcement responsibilities of all parties involved In order to ensure compliance with the implementation, the DSU stipulates that the DSB will directly implement this responsibility Thus, with the above provision, the DSU is both a decision-making body and a supervisory body that enforces the decision Fifth, the issue of retaliation is effectively used in the WTO's dispute settlement system, with the provision that: if within a certain time, the losing party fails to comply with the recommendations of the DSB, then the party winning a case has the right to ask the DSB for permission to take retaliatory measures Upon receipt of the request for retaliation against DSB, decisions will be passed allowing the prevailing party to take retaliatory measures This provision makes retaliation immediately, if the losing party fails to enforce the DSB's decision In fact, retaliation is quite effective in the WTO dispute settlement system In summary, the WTO's Dispute Settlement Mechanism is a combination of WTO legal provisions on dispute settlement bodies (DSB), and procedural rules, dispute resolution (DSU), and Other specific provisions relating to dispute resolution in the areas of specific adjustment of each WTO agreement The WTO's dispute settlement system has substantially differentiated the weaknesses existing in the dispute settlement system in GATT 1947 CONCLUSION The regular use of the WTO’s dispute settlement system by both developing and developed members is a clear indication that the system is working and that WTO menbers continue to have trust in it The system plays a cruial role in enduring that WTO agreements are espected This in turn leads to more harmonious trade relation between members and promotes economic growth REFERENCES Textbook international Tradeand Business Law - Hanoi Law University - The People’s Public Security Publishing Househanoi – 2012 Textbook international trade anh business law- Hanoi Law University – 2018 Dispute Settlement Understanding - legal text GATT 1947 Department of State, Analysis of the General Agreement on Tariffs and Trade, Washington DC, Publication 2983, Commercial Policy Series 109, November 1947 Appellate Body Report, Japan - Taxes on Alcoholic Beverages, adopted November 1996, WT/DS8/AB/R, WT/DS 10/AB/R WT/DS11/AB/R ... 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