WTO dispute settlement procedures - Thesis Example

Table of Contents 2 1Introduction 3 1Background history 3 2Problem ment 4 3Aims and objectives 5 4Significance of the study 5 Bibliography 6 Abstract The Dispute resolution/settlement procedure under the World Trade Organization (WTO) is considered to be at the core of the global multilateral trade of the 21st century. A dispute within the global economy and trade arises when one Member State frames a trade policy or takes up some measures that the other Member States perceive as a direct violation of the WTO treaty agreements.

However, various instances show that the dispute resolution process under WTO has some inherent flaws that give scope to the economically stronger nations to ignore the WTO’s rulings against them. In view of some of the recent cases, it is time that the entire system is reviewed, and new reforms added, so that the developing countries get a fair chance at justice, and an equal share within the global trade and economy. WTO Dispute settlement procedures 1 Introduction 1.1 Background history The Dispute Settlement Understanding (DSU) procedures under the WTO were established owing to the futility of the disagreement settling processes that were previously in existence under the GATT, since 1947.

Under GATT, the procedures for settling disputes were invariably long-drawn and ineffectual, and any nation, especially the one against whom the complaint had been filed, could effectively delay or even block the dispute resolution process (Bello and Holmer, 1994, 1096).  Since the GATT did not function as a formal institution, it lacked official procedures with which it could make the rules obligatory on the contending parties. Later in 1989, the Montreal rules or the Decision on Improvements to GATT Dispute Settlement Rules and Procedures were approved during the Uruguay Round, which gave the dispute system under GATT a more legal outline, and removed the power for blocking the resolution process while also setting a certain time limit for all dispute resolutions (Mora,  1993).

Finally, in 1994 under WTO, the “Final Act” was ratified (in the Uruguay Round), that established the “Understanding on Rules and Procedures Governing the Settlement of Disputes” or DSU, and created an Appellate Body (AB), and a Dispute Settlement Body (DSB), which gave the entire process a more legal standing and rationality. This new stronger dispute resolution procedure under WTO primarily aimed to resolve the "fine line between national prerogatives and unacceptable trade restrictions"(Abels, 1996, 503).

The process of dispute resolution is: Complaint filed Consultations Panel proceedings Appellate Body Compliance Panel Arbitration Panel (Busch, and Reinhardt, 2004, 8). The time limit set for resolving a dispute is one year for a dispute case without appeal, and one year three months for a case with appeal (Understanding the WTO: Settling Disputes, A unique contribution). The process under WTO has shown a fair amount of success, where we find that “by January 2008, only about 136 of the nearly 369 cases had reached the full panel process.

Most of the rest have been notified as either settled “out of court” or remain in a prolonged consultation phase — some since 1995” (ibid). Some of the more famous cases under WTO dispute resolution are the European Hormone case (WTO watch--sample of new report, 1998), the EU Regime Case (World Trade Organization, May 1997), the Kodak-Fuji Case (Holloyway, 1997), and the Japan Alcohol Case (Bhushan, 1997). 1.2 Problem statement Observations reveal that under the GATT dispute resolution, the developing countries like the Asian countries, the Middle East countries, and the Latin American countries, very rarely used the process of adjunction.

The dispute resolution procedure under WTO was framed with the express aim that the new procedure would facilitate the use of the system, especially by the developing countries, despite their small size and relatively less power. However, the process even under the WTO failed to live up to its expectations and the developing countries continue facing problems, regarding the use of the WTO dispute settlement system, though some of them have appeared in the DSM as third parties. Many NGOs have appealed to the DSM as amici curiae, as in the Asbestos dispute case (European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, 2001), and the Shrimp dispute case (United States-Import Prohibition of Certain Shrimp and Shrimp Products, 1998), while pressure is high to allow more economically weaker countries into the system as a third party witness.

There are also complaints that when retaliatory measures against the economically strong nations are awarded by WTO, the former tend to ignore the rulings and do not implement it, thus making the entire dispute resolution process a toothless one (Obijiofor, 2007). 1.3 Aims and objectives The paper aims to study the process of dispute resolution under WTO, right from the time of its conception (under GATT) to the recent times, and will study how the machinery has evolved over the years. It aims to make an in-depth study of the work of the panels, the various procedures that are involved from the time of complaint filing to the final resolution.

It will also seek to explore the various problems associated with this system, while seeking to find resolutions for bringing in various reforms within the dispute resolution process, to make it more suitable for the developing countries. 1.4 Significance of the study The research study is significant, as it seeks to find reformatory processes within the WTO DSM, in favour of the developing countries. In this era of globalisation and thriving global trade and commerce, there must be efforts made to allow the economically weaker nations to voice their opinions and get justice from the trade related dispute cases, where instances show that under the existent system the developed nations with their stronger economy always tend to get an upper hand.

Bibliography Abels, T., 1996. The World Trade Organization's First Test: The United States-Japan Auto Dispute. 44 UCLA Law Review, 503. Bello, J., and Holmer, A., 1994. U.S. Trade Law and Policy Series No. 24: Dispute Resolution in the New World Trade Organization: Concerns and Net Benefits. The International Lawyer (28), 1096. Bhushan B., 1997. 16th December 1997. Face Off. Wall Street Journal. Busch, M., and Reinhardt, E., 2004. Trade brief on the WTO dispute settlements. SIDA, retrieved from, http://userwww.service.emory.

edu/~erein/research/SIDA.pdf. European Communities – Measures Affecting Asbestos and Asbestos-Containing Products, Appellate Body report, March 2001, WT/DS135/AB/R. Holloyway, N., 24th July 1997. Black and White. Far Eastern Economic Review, Vol.60 No.30, 77-78. Lowenfeld, A., 2007. “Preface - First Thoughts on Dispute Settlement in the World Trade Organization.” In, Pierre Pescatore, William J. Davey, Andreas F. Lowenfeld (Eds.), Handbook of WTO/GATT Dispute Settlement. NY: Translations Publishers Inc.

 Mora, M., 1993. A GATT with Teeth: Law Wins over Politics in the Resolution of. International Trade Disputes. 31 Columbia Journal of Transnational Law, 103. Obijiofor, A., 2007. Food Safety, South-North Asymmetries, and the Clash of Regulatory Regimes, 40 Vand. Journal Transnational Law, 1099, 1112. Shell, R., 1995. Trade Legalism and International Relations Theory: An Analysis of the World Trade Organization. Duke Law Journal, Vol. 44, No.5, 339. Understanding the WTO: Settling Disputes.

A unique contribution. Retrieved from, http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm United States-Import Prohibition of Certain Shrimp and Shrimp Products, panel report, WT/DS58/R, 15th May 1998, Appellate Body report, WT/DS138/AB/R, 12th October 1998. . World Trade Organization, 22nd May 1997. European Communities - Regime for the Importation, Sale and Distribution of Bananas. Report of the Panel, WT/DS27/R/USA. WTO watch--sample of new report, January 21, 1998. EU bananas.

 WTO News--Vol. 1, Number 1, retrieved from http://www.mail-archive.com/pen-l@galaxy.csuchico.edu/msg24572.html