“REMEDIES UNDER WTO LEGAL SYSTEM”

FINAL DRAFT SUBMITTED IN THE FULFILLMENT OF THE COURSE INTERNATIONAL TRADE LAW FOR
OBTAINING THE DEGREE OF B.B.A. LL.B (Hons.)

PROJECT PROPOSED BY:

NAME: VISHWAN UPADHYAY
ROLL NO.: 1864
SEMESTER: 6TH

SUBMITTED TO:
Dr. P.P. Rao
Faculty of Law

MARCH, 2020

CHANAKAYA NATIONAL LAW UNIVERSITY, NYAYA NAGAR,

MITHAPUR, PATNA- 800001

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 DECLARATION BY THE CANDIDATE

I hereby declare that the work reported in the B.B.A., LL.B (Hons.) Project Report entitled
“Remedies under WTO Legal System” submitted at Chanakya National Law University is an
authentic record of my work carried out under the supervision of Dr. P.P. Rao.

I have not submitted this work elsewhere for any other degree or diploma. I am fully responsible
for the contents of my Project Report.

SIGNATURE OF CANDIDATE
NAME OF CANDIDATE: VISHWAN UPADHYAY
CHANAKYA NATIONAL LAW UNIVERSITY, PATNA

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 ACKNOWLEDGEMENT

A project is a joint endeavour which is to be accomplished with utmost compassion, diligence and
with support of all. Gratitude is a noble response of one’s soul to kindness or help generously
rendered by another and its acknowledgement is the duty. I am overwhelmed in all humbleness
and gratefulness to acknowledge from the bottom of my heart to all those who have helped me to
put these ideas, well above the level of simplicity and into something concrete effectively and
moreover on time.

I would like to thank my faculty Dr. P.P. Rao, whose guidance helped me a lot with structuring
my project. I owe the present accomplishment of my project to my friends, who helped me
immensely with materials throughout the project and without whom I couldn’t have completed it
in the present way.

I would also like to extend my gratitude to my parents and all those unseen hands that helped me
out at every stage of my project.

THANK YOU,

NAME: Vishwan Upadhyay

COURSE: B.B.A., LL.B. (Hons.)
ROLL NO: 1864
SEMESTER: 6TH

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INTRODUCTION:

Dispute settlement is the central pillar of the multilateral trading system, and the WTO’s unique
contribution to the stability of the global economy. Without a means of settling disputes, the rules-
based system would be less effective because the rules could not be enforced. The WTO’s
procedure underscores the rule of law, and it makes the trading system more secure and
predictable. The system is based on clearly-defined rules, with timetables for completing a case.
First rulings are made by a panel and endorsed (or rejected) by the WTO’s full membership.
Appeals based on points of law are possible.

However, the point is not to pass judgement. The priority is to settle disputes, through consultations
if possible. By January 2008, only about 136 of the nearly 369 cases had reached the full panel
process. Most of the rest have either been notified as settled “out of court” or remain in a prolonged
consultation phase — some since 1995.

AIMS AND OBJECTIVES:

1. The researcher will try to understand and summarise the remedies available under World
Trade Organization’s legal system.
2. The researcher will try to study the effectiveness of the remedies available under WTO’s
legal system.

HYPOTHESIS:

1. The researcher believes that the current system of remedies under WTO legal system are
not effective

RESEARCH METHODOLOGY:

The researcher has followed the doctrinal method of research to make this project. The researcher has
visited the library of Chanakya National Law University to collect relevant research material from books,
articles, law journals, etc. The researcher has also used the source of internet while making the project.

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SCOPE AND LIMITATIONS:

Limited period of time was the biggest limitation of the study.

SOURCES OF DATA:

The following secondary sources of data have been used in the project-

1. Cases

2. Books

3. Journals

METHOD OF WRITING:

The method of writing followed in the course of this research paper is primarily analytical.

MODE OF CITATION:

The researcher has followed a uniform mode of citation throughout the course of this research
paper.

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 TABLE OF CONTENTS

1. WTO over GATT

a. GATT Dispute Settlement Scheme

b. Establishment of WTO and its Specific Objectives

c. Dispute Settlement Understanding

2. Procedure to be by the DSB

a. Consultation and Mediation

b. Establishment of Panel

c. Report of the Appellate Body

d. Necessary Implications

3. Case Analysis

a. Cases Filed by Less Developed Countries

b. Cases Filed against LDC

c. India in DSB

4. Criticism

5. Conclusion

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 1. WTO OVER GATT

GATT Dispute Settlement Scheme:

Main objective of the GATT was to limit the tariff charges and facilitating free trade for the benefit
of all the GATT contracting parties. Under the GATT, there was a procedure for settlement of
disputes in consensus mode, intended to provide an alternative measure to retaliation, under two
provisions. 1 Article XXII allows for consultation among the disputed nations and Article XXIII
provides for panels comprising of all the contracting parties to investigate and present its
recommendations to resolve the conflict. Retaliation can also be recommended under Article
XXIII but it has occurred only once in the GATT history, almost all the parties agree to windup
the policies in question2. In the beginning, disputes under the GATT procedure were decided by
rulings of the chairman of the council and later on disputes were referred to the working parties
which comprise of all the interested party’s representatives. Then all these procedures were
replaced by a new process of establishing an independent expert panel consists of three or five
experts who are not associated to the disputed parties3. The report of the expert panel will sent for
approval to the GATT council and once the recommendations of the panel got approved, it will
become binding on the parties. This evolution of GATT dispute settlement process was the basis
for the foundations for WTO Dispute Settlement Mechanism.

In spite of the salient features of the DSP under GATT, it was not effectively enforceable due to
many reasons like positive consensus and retaliation measures which are not possible in all the
cases. The defects in the GATT underwent eight rounds of multilateral trade negotiations to reduce
tariffs and other barriers to international trade, but none of them were succeeded in restoring the
faith in world trading system4. The seventh round of multilateral trade negotiations named as
Tokyo round (1973-79) concentrated on a new way of promoting free trade by reducing non-tariff

1
Mitsuo Matsushita, Thomas J. Schoenbaum and et. al., The World Trade Organization- Law, Practice and Policy 5
(Oxford University Press, New York, 2nd edn., 2006).
2
Dan Kovenock and Marie Thursby, “GATT, Dispute Settlement and Cooperation”, Working Paper available at:
http://www.nber.org/papers/w4071.pdf (Visited on September 12, 2011).
3
Historic Development of WTO Dispute Settlement System, available at:
http://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c2s1p1_e.htm#txt4 (Visited on March 14,
2011).
4
Surendra Bhandari, World Trade Organisation and Developing Countries 3(Deep & Deep Publications Pvt. Ltd.,
2001).

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barriers. Tokyo round had a significant role in reducing the blocking of consensus by a single party
in the dispute settlement process. The inborn defects in the GATT dispute settlement process led
to number of problems in the mid-80s and the need for improving and strengthening the process
was felt by almost all nations.

Establishment of WTO and its Specific Objectives:

In addition to the non-tariff barrier reduction method introduced in the Tokyo round, dispute
settlement was also included and given higher importance in the later negotiation called Uruguay
round(1986-94) which was the last round of GATT multilateral negotiations concluded with the
creation of a new body to regulate and administer international trade. The final act of the Uruguay
round singed in the ministerial meeting at Marrakesh transformed the GATT in to new
international organization called WTO came into being from 1st January 1995. The new WTO had
its notable feature of creating a new procedure for adjudicating legal disputes under GATT and
WTO with a dispute settlement procedure5. WTO established with four main tasks under the
agreement:

i) to provide a forum for negotiations among members both to current matters and any future
agreements,
ii) to administer the system of dispute settlement,
iii) to administer the trade policy review mechanism, and
iv) to cooperate as needed with the IMF and the World Bank.6

Settling trade disputes between the members is the primary objective of the WTO. For this purpose
the Uruguay round established a new system of dispute settlement with the Understanding on
Rules and Procedures Governing the Settlement of Disputes, in short the Dispute Settlement
Understanding. The concept of Appeal was introduced in the dispute settlement under WTO in
order to have an effective decision making authority called Appellate Body.

5
Robert E. Hudec, “The New WTO Dispute Settlement Procedure: An Overview of the First Three Years”, 8 Minn.
Journal of Global Trade 2 (1999).
6
Art III of the WTO Agreement.

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Dispute Settlement Understanding:
The scheme of the DSU is to be an overall framework for the resolution of disputes in field of
international trade under WTO7. The understanding consists of 27 articles providing the rules and
procedures to be followed by the Dispute Settlement Body in interpreting and enforcing all the
covered agreements that make up the WTO.11 DSU itself under Article 3.1 provides for the
application of Article XXII and XXIII of the GATT 1947.8 General provisions contained under
Article 3 of the understanding addresses a set of objectives of the dispute settlement mechanism
under WTO. It says that the dispute settlement system of the WTO is the central pillar of the
multilateral trading system and the decision or rulings of the DSB shall be aimed at achieving a
satisfactory settlement of the disputes in accordance with the provisions of the understandings and
the covered agreements. Furthermore, Article 3.2 provides for the application of customary rules
of interpretation of public international law to clarify the provisions of the understandings and the
covered agreements. But the link between article 31 and 32 of the Vienna Convention and the
interpretation requirement stated in Article 3.2 of the understanding is now almost eliminated in
the WTO law. In November 2001, at the Doha Ministerial Conference, member governments
agreed to negotiate to improve and clarify the DSU, which was compelled in the 1994 decision
itself to review the DSU after five years9.

Under Article 2 of the understanding, the general council has to establish a DSB which is
responsible for the administration of entire mechanism. DSB is composed of the ambassadors from
all the member countries representing their nation. The conclusion reached by the DSB should be
done only by consensus among the members, but not like the positive consensus as in GATT. This
new procedure under the understanding eliminates the blocking possibility through a procedure
known as ‘reverse consensuses. 10 It is the sole authority responsible for establishing panel,
appellate body and implementing the findings or recommendation of the panel or appellate body.
DSU explicitly establishes in the text itself the procedure for implementation of the reports of the

7
M B Rao and Manjula Guru, WTO Dispute Settlement and Developing Countries 38 (Lexis Nexis, New Delhi, 2004).
8
Bryan Mercurio and Mitali Tyagi, “Treaty Interpretation in WTO Dispute Settlement: The Outstanding Question of
the Legality of Local Working Requirements”, 19 Minnesota Journal of International Law 275 (Summer, 2010).
9
Source: http://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm (Visited on October 17, 2011).
10
John H. Jackson, “International Law Status of WTO Dispute Settlement Reports: Obligation to Comply or Option
to ‘Buy Out’?”, 98 American Journal of International Lsaw 109 (2004).

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panel or the recommendation of the appellate body. It addition, it clearly establishes a choice for
an obligation to implement the findings and the matter shall be kept under surveillance until the
necessary implementation. Article 3.7 of the DSU warns the member countries to be prudent while
invoking the DSB procedures and they should consider whether such action under the procedure
would be fruitful and the aim of the mechanism is to secure positive solution to a dispute.18 Only
when any positive solution is not possible, a member can invoke the dispute settlement procedures.
WTO members have filed over 427 complaints in just fifteen years. The detailed procedures to be
followed by the DSB will be briefly explained under the following heads.

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 2. PROCEDURES TO BE FOLLOWED BY DSB

Generally a dispute arises when it seems to a member government that another member
government is violating an agreement or commitment under WTO. The dispute settlement
mechanism proceeds through three main stages
i) Consultation,
ii) Formal Litigation and
iii) Necessary Implementation. Settling dispute is the responsibility of the DSB and it is
the sole authority to do four main functions:
i) establish a panel of experts to consider the case,
ii) to accept or reject the report(findings) of the panel,
iii) to accept or reject the results of an appeal,
iv) to retaliate the parties which has failed to comply with the rulings.

Consultation and Mediation:

The formal proceeding starts, before taking over any action, when a member country requests
bilateral consultation at the WTO under article 411. This discussion process is to provide an
opportunity to the parties to the dispute to negotiate themselves to see if they can settle their
differences amicably. This is a private process and there will be no secretariat or other member’s
involvement. But additional (third) parties can join the consultation proceedings with the consent
of the respondent. Strict time period should be maintained during the consultation. Once the
process started after joinder of third parties, the parties should complete their consultation within
60 days and if it fails to settle the disputes between parties, the parties can ask the WTO director
general to mediate or try to help in any other way. 46% of the disputes filed before the DSB
resolved among the parties themselves in this consultation process itself.

Establishment of Panel:
Complainant can request the DSB to establish the panel of experts to decide the case when there
is no response from the respondent on their request for consultation within 10 days or the

11
Henrick Horn, Petros C. Mavroidis and et. al., “Is the Use of the WTO Dispute Settlement System Biased?”,
available at: www.econ-law.se/Papers/Disputes000117.PDF (Visited on March 14, 2011).

11
consultation process did not reach any solution within 60 days. A panel of experts should be
appointed by the DSB within 45 days and the panels should consists of three or five persons, well
qualified governmental or non-governmental individuals, including persons who have served on
or presented a case to a panel, picked from a list of persons suggested by the members of the WTO.
Generally the panel should start hearings on the basis of written submission made by the parties.

The procedures to be followed by the panels are given under Article 12, which mandates the panel
to afford enough opportunity to the parties by framing a suitable time table to make their
submissions. The third parties should also be given hearing opportunity by the panel and they can
make their written submissions to the panel. The panel may seek information and technical advices
from any appropriate individual or body when scientific and technical issues were raised by the
parties. It should send its interim reports and should send its final report the parties and all the
members of the DSB within 60 days of its establishment and in case of urgency, the deadline may
be shortened to three months. The panel discussions are highly confidential and the reports shall
be drafted by the panel even without the parties. If there is no consensus among the members
against the findings of the panel, DSB must adopt the panel’s report within 60 days of its
submission. The panel, officially, helps the DSB in making rulings or recommendations. The
panel’s findings have to be based on the agreements cited12.

Report of the Appellate Body:

Any party to a dispute, but not the third party, can appeal the report of the panel, even both the
parties can appeal to the Appellate Body. An appeal is limited to issues of law covered in the panel
report and legal interpretations developed by the panel. Factual findings and conclusions of the
panel cannot be appealed.13 Each appeal is to be heard by a three member division from a
permanent seven member Appellate Body. Permanent members of the AB are appointed by the
DSB for a fixed term of four years, who are not affiliated to any government and at the same time
broadly representing the range of WTO membership. They have to be persons with demonstrated
expertise in law, international trade and the subject matter of the covered agreements. The

12
Source: “Understanding the WTO: Settling Disputes, A Unique Contribution” available at:
http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm (Visited on October 17, 2011).
13
Source: “Understanding the WTO: Settling Disputes, A Unique Contribution” available at:
http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm (Visited on October 17, 2011).

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procedure to be followed by the AB should be drafted by the AB itself in consultation with the
Chairman of the DSB and the Director General. This AB can uphold, modify or overturn the legal
findings of the panel but they cannot re-examine the existing evidence or examine a new issue. As
like the panel’s proceedings, AB hearings are also confidential and AB can draft its final report in
the absence of parties. The proceedings of the AB should be completed within 60 days and in
certain cases additional 30 days shall be permitted. On submission of the AB’s report, the DSB
has to adopt or reject it within 30 days.

Rejection is possible only when the DSB decides by a consensus not to adopt the report. Unless
otherwise agreed by the parties to the dispute, the period from establishment of the panel to
adoption or rejection of the report of the panel or the AB by the DSB shall as a general rule not
exceed nine months if the panel report is not appealed, and twelve months if the report was
appealed.

Once adopted, the report will become the recommendation or rulings of the DSB and the same can
advise the party concerned to bring their policies in conformity with the agreement, if they are
found to be inconsistent with that covered agreement. In order to ensure transparency, all the
written submissions made by the parties to the panel or the AB shall be treated as confidential only
available to the parties, but the parties themselves can disclose any statements or their position to
the public. Furthermore even a party to a dispute cannot disclose any details or any information
which was designated as confidential by the party submitted it.

Necessary Implications:
Once the case is decided in favour of the complainant the DSB may accord the losing
party(respondent) a reasonable period of time, not exceeding fifteen months, to bring their
inconsistent laws, regulations, policies into conformity with the WTO agreements. This is the
possible way or direction emerging from a WTO dispute and there is no concept of punishment or
even restitution, but the trade sanction can be imposed only in exceptional cases. On the expiry of
twentieth day of the ‘reasonable period’, the winning party may request the DSB for retaliation
measures to induce action on the part of the losing party. This is very rare as almost all the WTO

13
members voluntarily fulfill their obligation as per the DSB decisions in time. The SB must grant
the authorisation to impose trade sanctions (suspension of concessions or compensation) within 30
days of the expiry of the time limit given to the losing party.

Furthermore, when a losing party brings is laws into conformity with the concerned agreement, it
can choose how to implement the decision and the DSB should monitor how the adopted rulings
are being implemented. The losing party has no obligation to follow the way of implementation
suggested by the winning party.

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 3. CASE ANALYSIS

Filed by Less Developed Countries:

Developing countries account for seventy five percent of the WTO membership and are
increasingly able to use their power to influence negotiations traditionally dominated by developed
countries14. Seven out of eleven most frequent complainants in the dispute settlement process are
developing countries and they have filed 40% of the total complaints. 15 From the introduction of
the dispute settlement mechanism under WTO the less developed, particularly the developing
nations actively performed in the process. Canada, Brazil, Indian and Mexico are noted as frequent
complainants and third parties while USA and EU are the most frequent users of the mechanism16.

The first case filed before the WTO DSB was by Singapore against Malaysia on prohibition of
imports of polyethylene and polypropylene which was settled on mutual agreement between the
parties on March 1995. The second case filed by Venezuela and Brazil which was an important
one on developing nation’s perspective is US Gasoline case relating to some provisions of the
USA’s Clean Air Act which imposes standards for reformulated and conventional gasoline. But
the fact was that USA’s policy measures restricted imported gasoline and treated it in a less
favoured manner. The panel’s report was in favour of the complainants but in the appeal, the AB
has slightly modified the panel’s reasoning and held the measures taken by USA is not justifiable.
Brazil has participated as a complainant in more than 25 cases and most of them are against USA,
EU and Canada.

Another important cases, which were initially succeeded by Malaysia along with India, Pakistan
and Thailand against USA is the US- Shrimp Case36, in which the USA’s guidelines restricting
certain countries from importing shrimp were questioned. Both the panel and the AB concluded

14
Swapneshwar Goutam, “WTO & Development in Developing Countries Perspective”, available at:
http://legalserviceindia.com/article/l425-WTO-&-Development-In-Developing-Countries-Perspective.html (Visited
on October 2, 2011).
15
Gregory Shaffer and Ricardo Melendez-Ortiz (eds.), Dispute Settlement at the WTO: The Developing Country
Experience 2 (Cambridge University Press, Cambridge, 2010). also see: David Evans and Gregory Shaffer, “The
Developing Country Experience in WTO Dispute Settlement”, available at: http://ssrn.com/abstract=1743727
(Visited on October 17, 2011).
16
Source: http://www.wto.org/english/tratop_e/dispu_e/speech_agah_4mar10_e.htm (Visited on October 2,
2011).

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that the measure at issue, the import prohibition on shrimp and shrimp products was inconsistent
with the GATT provisions. The same issue was, later on, held not in contravention to the agreement
on considering the provisions on preservation of natural resources. Though the ruling was not
complied with by the USA, it was noted in the WTO report that the compliance proceedings
completed without finding of non-compliance. 17 Some other countries like Indonesia, Philippines,
Thailand, Argentina and Mexico have also filed many cases against the developed fronts and failed
in most of them. Another success of the developing countries over the developed nations is the
Chicken Cuts case18. This case was filed by Thailand and Brazil against the EU on their measures
relating to tariff classification imposing duties on frozen boneless chicken cuts and the same
measures were held violative of GATT articles. Korea’s case on imposing additional duty on their
Dynamic RAMs by Japan in the year 2007 was held in consonance with the Agreements.

Cases Filed against LDC:

Developed economies like USA and EU are the nations which are very well using the dispute
settlement mechanism under WTO to enforce their economic rights. As noted earlier, USA and
EU are accepted as the most frequent users of the system. Starting from its first case on Korean
measures concerning the test and inspection of agricultural products, USA has filed 98 cases as a
complainant of which about 50% of the cases against LDCs. As like USA, European Union has
filed 85 cases as a complainant with most of them against LDCs. Canada’s Aircraft case against
Brazil’s export financing programme was a good example for the privileges enjoyed by the
wealthier nations in the DSB proceedings, where Brazil was held violated the Agreement on
Subsidies and Countervailing Measures. Indonesia Autos case19 is another good example for the
national treatment obligations, where finally Indonesia was asked by the DSB to stop providing
luxury tax exemption or import duty exemption to home car companies.

Argentina’s provisional and definitive safeguard measures on imports of footwear, was held
inconsistent with the Agreement on Safeguards20. In Korea Beef case21 also the measures taken by

17
Source: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds58_e.htm (Visited on November 14, 2011).
18
DS269 and DS /286 (2003).
19
DS 54,54, 59 and 64.
20
DS121 (1998).
21
DS 161, 169(1999).

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Korea to restrict the beef imports from Australia and USA on the domestic support programme
was concluded as against GATT agreement and the measures accorded less favoured treatment to
the imported beef. Statistics shows that more than 40% of the cases were filed by the developing
countries and in about 35% of the cases they are the defendants. It was observed by some scholars
that, comparing the WTO dispute settlement mechanism, success rate of developing countries over
developed defendants are more under the GATT settlement process22.

India in DSB:
India as a member of WTO has filed 19 cases before the DSB and involved in the consultation
process of 72 cases as a third party. There were 20 cases filed against India till date. First case was
filed by India on different import regimes for automobiles followed by Poland and a mutually
agreed solution was reached between the parties during the consultation process itself. First case
filed in the DSB against India was by the USA in the year 1996 on India’s product patent stand.
India was ruled to implement, in the patent laws, the mailbox rule and Exclusive Market Right for
pharmaceutical and agricultural chemical product patents. So many cases have been filed by USA
and EU against India regarding the patents regime followed by India. Another important case filed
against India by USA and EU is India Autos case regarding the measures taken by India to impose
certain restriction to use imported components on automobile industry in order to encourage
domestic products was held violation of Article XI of the GATT. Similar case was filed by the
USA on India’s quantitative import restrictions to protect balance of payments under GATT. The
case was decided by the DSB in favour of USA stating that India's monetary reserves were
adequate, and, thus, India's Balance of Payments measures were not necessary to forestall the threat
of, or to stop, a serious decline in its monetary reserves within the meaning of Article XVIII and
India had violated Art. XVIII23. This observation clearly shows the biased nature of the dispute
settlement system in favour of the wealthier nations.

22
Marc L. Busch and Eric Reinhardt, “Developing Countries and GATT/WTO Dispute Settlement”, available at:
http://userwww.service.emory.edu/~erein/research/Berkeley.pdf (Visited on October 17, 2011).
23
DS90(1997).

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Many other cases brought by the developed nations against India like case on additional import
duty imposed by India on alcoholic beverages24, patent case by EU25 were decided against India.
On the other hand, cases filed by India like, shrimp case 26, steel plate case27 and textile case52
were also decided not in favour of India. One recent case filed by India against the EU, particularly
Netherlands, is the case on seizure of generic drugs manufactured in India in transit. This case is
on the repeated wrongful seizure of generic drugs originating in India while transiting through
ports and airports in Netherlands on patent infringement grounds. The consultation process was
started with third parties like Canada, China, Ecuador, Japan and Turkey. The consultation process
succeeded and the EU had accepted their seizure of generic drugs was wrong and their members
will amend their rules soon and India said it will withdraw the case when EU ratifies that
amendment.

24
DS360 (2007).
25
DS79 (1997)
26
DS58 (2000).
27
DS206 (2001) – US imposition of anti-dumping duties on certain imports manufactured by SAIL

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 4. CRITICISM

Critic contends that the smaller countries in WTO exercise very little influence in the dispute
settlement mechanism and despite the WTO was aimed at protecting the developed countries. The
poorest countries in the WTO system are almost completely disengaged from enforcement of their
market access rights through formal dispute settlement litigation28. It was observed by some
scholars that disputes filed by USA and EU appear to have ended with the defendant making the
desired policy changes more frequently under WTO29. The reason for this difference was very well
analysed by a scholar and the reasons given by him for the poor performance of LDC in WTO
dispute settlement are the lack of legal and political capacity in international trade and the fear of
political or trade reprisal of the LDCs. The reason for low success rate of the LDCs are also
analysed in the same study and the reasons were pointed on the LDCs concerns regarding experts,
the need to hire experts for research and testimony to support their cases30.

Two other major issues attached with the WTO dispute settlement process are on transparency and
the right of private parties in the mechanism. Some scholars have emphasised on need for the
participation of public and non-governmental organisations in the dispute settlement process in
order to provide a way for the weaker economies to approach DSB and to attain better achievement
in the liberalised and privatised global trade31. Several ways have been recognized by experts in
which a private non-governmental party might participate in the system like rights to observe,
rights to submit amicus briefs, and rights to bring lawsuits directly32.

Opening the disputes procedures to public scrutiny and public participation was addressed by the
USA in 1998 itself in the ministerial meeting 33. At the same time it was observed by some other

28
Chad P. Bown and Bernard M. Hoekman, “WTO Dispute Settlement and the Missing Developed Country Cases:
Engaging the Private Sector”, available at: http://www.brookings.edu/views/papers/200505bown.pdf
29
Marc L. Busch and Eric Reinhardt, “Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement”, available
at: http://www.ppl.nl/bibliographies/wto/files/1546.pdf
30
Kristin Bohl, “Problems of Developing Country Access to WTO Dispute Settlement”, 9 Chi.-Kent J. Int'l & Comp. L.
130 (2009).
31
Thomas J. Shcoenbaum, “WTO Dispute Settlement: Praise and Suggestions for Reform”, 47 Int’l & Comp. L. Q.
647(1998).
32
Joel P. Trachtman, Philip M. Moremen, “Costs and Benefits of Private Participation in WTO Dispute Settlement:
Whose Right is it Anyway?”, 44(1) Harv. Int’l L.J. 221(2003).
33
The then president of USA Clinton’s address to the WTO Ministerial Meeting, May 19, 1998.

19
scholars that the public access to documents and hearings will have some negative impact on the
legitimacy of WTOs legal rulings. Regarding the biased nature of WTO against developing
countries, the main cause for this situation is that the developing countries are far less likely than
richer countries to induce a settlement before the ruling is issued. It was observed by an expert,
Breuss that the system has a tendency to lead WTO members to shoot in their own feet via
protectionary measures34.

In addition there were some arguments on the involvement of third parties in the dispute settlement
process which would complicate the dispute settlement and would make the process more costly
with more voices and issues.35 Another argument was regarding the powers of AB, to ignore
certain issues raised by the parties, given under Article 17.12 of the understandings36.

34
Wilhelm Kohler, “The WTO Dispute Settlement Mechanism: Battlefield or Cooperation?”, available at:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=764168
35
Marc L. Busch and Eric Reinhardt, “Three’s a Crowd: Third Parties and WTO Dispute Settlement”, 58 World
Politics 446(April 2006).
36
Art. 17.12 says that ‘the AB shall address each of the issues raised’. By exercising this power AB can simple
address few issues and neglect to consider other issues separately

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 5. CONCLUSION

WTO established with the primary objective to promote free trade and stimulate economic growth
and the DSU under the WTO is providing an effective mechanism to enforce the trade agreements
which experience any violation by its member governments. The mechanism itself has its own
positive and negative features. The Uruguay round and Doha declarations were focused primarily
on the involvement of LDCs in the dispute settlement process. The understanding itself under
many provisions gives some superior status for the LDCs to equally use the process, like Article
12.10 and 24 regarding time extension given for the developing countries in consultation process.
But the reality learned from the decided disputes under the DSU clearly shows that the process
does not manage the universal economy impartially. It generally focuses on the commercial
interest of the profit making companies rather than the economic growth of all nations.

Though it is having many inherent defects, as an organization to encourage trade and economic
growth the WTO and the DSM are very well operating towards the stimulation of trade and
economic progress. Regarding the developing countries participation in the panel process, by the
end of 2010, 63 percent of the serving panelists were from developing countries. Due to active
participation of and the experience gained by certain developing countries like India, Brazil,
Argentina, Thailand, now there is a little shift in the mechanism.

Nations started understanding their rights and obligations under the WTO agreements. At present,
ignoring all the issues, the WTO DSB proceedings must be made in an impartial and more
transparent manner keeping in view the economic progress and interest of the humanity rather than
having 100% focus on trade.

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 6. BIBLIOGRAPHY

 Primary Sources:
 Books:
Gregory Shaffer and Ricardo Melendez-Ortiz (eds.), Dispute Settlement at the WTO: The
Developing Country Experience (Cambridge University Press, Cambridge, 2010).
M B Rao and Manjula Guru, WTO Dispute Settlement and Developing Countries (Lexis
Nexis, New Delhi, 2004).
Mitsuo Matsushita, Thomas J. Schoenbaum and et. al., The World Trade Organization- Law,
Practice and Policy (Oxford University Press, New York, 2nd edn., 2006).
Surendra Bhandari, World Trade Organisation and Developing Countries (Deep & Deep
Publications Pvt. Ltd., 2001).

 Web Sources:
• http://wikipedia.org
• http://wto.org
• http://legalserviceindia.com
• http://ehow.com
• http://ssrn.com

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