OVERVIEW OF THE WTO DISPUTE

SETTLEMENT MECHANISM

15 October 2 0 1 9

***

Pir Shah Gul

Ministry of Commerce
STRUCTURE OF THE PRESENTATION

I. Introduction to the WTO dispute

settlement system

II. Panel proceedings

III. Appeal review and implementation

IV. WTO DSS Statistics

OVERVIEW OF THE WTO DISPUTE SETTLEMENT
PROCESS

I. Introduction to the WTO

Dispute settlement system
WHAT IS A DISPUTE?

???
 WHAT IS A DISPUTE?

Definition:

When a member nullifies or impairs the

benefit/rights of another member as
guaranteed under the covered (Annex-1)
agreements of the WTO.
 I. INTRODUCTION TO THE WTO DSM

Marrakesh Agreement establishing the World Trade

Organization
(WTO Agreement)

Annex 1 Annex 2 Annex 3 Annex 4

1A: MTAs Dispute Trade Policy Plurilateral

on goods Settlement Review
Understanding Agreements
1B: GATS Mechanism
(DSU)
1C: TRIPS
 Objectionable Measure

Measures may take the form of...

Laws, regulations, administrative instructions,

specific application of laws etc (tariffs, quotas,
anti-dumping/CVD measures, safeguards...)
 I. INTRODUCTION TO THE WTO DSM
- AIMS OF THE WTO DSM-

 Security and predictability in international trade

(Art. 3.2 DSU)

 Preserving Members’ rights and obligations (Art. 3.2 DSU)

 Clarifying the existing provisions of the CA (Art. 3.2 DSU)

 Secure a positive solution to a dispute (Art. 3.7

DSU) [Preferred outcome: mutually agreed
solutions]
 I. INTRODUCTION TO THE WTO DSS
- JURISDICTION-

 Scope
• All disputes between WTO Members on rights and
obligations under the covered agreements.

 Nature
• Compulsory
• Exclusive
• contention
 I. INTRODUCTION TO THE WTO DSS
- MAIN ACTORS -

 The DSB
• Administers the WTO Dispute Settlement System
• Establishes panels (negative consensus)
• Adopts panel and Appellate Body reports (negative consensus)
• Maintains surveillance of implementation
• Authorises retaliatory measures (negative consensus)
 The parties

 The Panel
• 3-5 Members
• Ad hoc body
 The Appellate Body
• Standing body of 7 Members
• 4-year term
 The WTO Secretariat and the Appellate Body Secretariat
 I. INTRODUCTION TO THE WTO DSS
- METHODS TO SETTLE DISPUTES -

1.Adjudication (Arts. 6-19 DSU)

• Panel proceedings
• Appellate review

2. Good offices, conciliation and mediation (Art. 5 DSU)

• Informal means of assisting in reaching a mutually acceptable
solution
• At any time after request for consultations/Parties’ agreement

3. Arbitration (Art. 25 DSU)

• Parties’ agreement
• Notification to all Members
 I. INTRODUCTION TO THE WTO DSS
- HOW DOES THE WTO DSM WORK? -

Request for Consultations

The Dispute Settlement Body,

All Members

Establishes No appeal? DSB adopts

DSB adopts the reports
the report
 I. INTRODUCTION TO THE WTO DSS
- STAGES-

1)Consultations (60 days)

2) Panel (6-9 months)

3) Appellate Review (60-90 days)

4) Adoption of the 4) Adoption of the AB

panel report report

5) Implementation
OVERVIEW OF THE WTO DISPUTE SETTLEMENT
PROCESS

II. Panel Proceedings

 II. PANEL PROCEEDINGS
- CONSULTATIONS -

 Diplomatic method of settling the dispute

 Confidential → No intervention by the Secretariat

 Time-frame:
• Day 10: response to request for consultations
• Day 30: Consultations start
• Day 60: if consultations fail, request for establishment of a panel can
be made
 528 requests for consultations (as of 06 August 2017)
 II. PANEL PROCEEDINGS
Contd…. - CONSULTATIONS -

REQUEST FOR CONSULTATIONS

Form? In writing

• Defendant
To whom? • Copy to the DSB and the relevant Councils and
Committees

• Art. 4 DSU (general consultation clause)

Legal basis? • Specific consultation clauses of the covered
Agreement

Content? • Identification of the measure

• Indication of the legal basis for the complaint

Circulation To all Members as document

 II. PANEL PROCEEDINGS
- CONSULTATIONS -

Third parties joining consultations

• Substantial trade interest requirement

• Notification to the consulting parties and the DSB
• Within 10 days of the circulation of the request

Respondent decides on substantial trade interest?

• (Third party )Member can separately request
consultations
 II. PANEL PROCEEDINGS
- PANEL ESTABLISHMENT -

 Request for establishment of a panel (if

consultations fail)

 Established by the DSB by negative consensus

(2nd DSB meeting), defendant cannot block
(Art. 6.1 DSU)

 Strict requirements for the request of the

establishment of a panel (Art. 6.2 DSU)
 II. PANEL PROCEEDINGS
- PANEL ESTABLISHMENT -

REQUEST FOR THE ESTABLISHMENT OF A PANEL

Form? In writing

• Addressed to the DSB

To whom? • Copy to the defendant

Legal basis? • Art. 6.2 DSU

• Indicate whether consultations were held

Content? • Identify the specific measure at issue
• Brief summary of the legal basis of the complaint
Circulation To all Members as document
 II. PANEL PROCEEDINGS
- TERMS OF REFERENCE -

To examine case , in the light of the relevant provisions in

(the covered agreement(s) cited by the parties to the
dispute),

Give findings and recommendations to the DSB

 II. PANEL PROCEEDINGS
- 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 therequest
of complainant/defendant)
 II. PANEL PROCEEDINGS
- PANEL COMPOSITION-

S. AFRICA (9) ARG(6)

CH (15) AUSTRALIA (15)

BRAZIL (8)

EU (34) CAN (19)

US (10) IND (7)

JPN(6)
NZ (20) MEX (7)
 II. PANEL PROCEEDINGS

Confidentiality
(Art. 14 DSU)

• Panel usually meets in closed session.

• Additional protection of business confidential
information (Airbus vs Boeing)

• Agreed open hearings!

• Amicus curiae Briefs
 II. PANEL PROCEEDINGS

Interim Review
(Art. 15 ESD)
 Descriptive part
• Parties’ comments
 Interim report
• A party may submit a written request to the
panel to review particular aspects of the interim
report
 Possibility of a further meeting
 Final panel report
 II. PANEL PROCEEDINGS

Adoption of Panel Reports

(Art. 16 ESD)
 First issued to the parties
 Circulated to all Members as
 Adoption by the DSB within 60 days of
circulation unless:
• Negative consensus to not adopt it
• Appeal
 II. PANEL PROCEEDINGS

Recommendations and Suggestions

(Art. 19 ESD)
 If violation, recommendation that the Member bring the measure into
conformity
• Possibly a suggestion on what should
be done
 If no violation (but impairment), mutually satisfactory
adjustment
OVERVIEW OF THE WTO DISPUTE SETTLEMENT
PROCESS

III. APPEAL REVIEW

AND IMPLEMENTATION
 III. APPEAL REVIEW AND IMPLEMENTATION
- APPEAL REVIEW -

The Appellate Body

 Established in 1995
 Standing body of 7 persons
 A term of 4 years,
(with the possibility of being reappointed once)
 Requirements:
 Recognized authority, with demonstrated expertise in law,
international trade
 Unaffiliated with any government
 Impartiality; broad representation
 Appointed by the DSB by consensus based on nominations by
WTO Members
 III. APPEAL REVIEW AND IMPLEMENTATION
- APPEAL REVIEW -

Appellate Body members

Term
expiring
this year

Term
expiring
this year

From left to right: Thomas R. Graham, Ricardo Ramírez-Hernández,

Shree Baboo Chekitan Servansing, Hyun Chong Kim, Ujal Singh
Bhatia, Peter Van den Bossche, and Hong Zhao.
 III. APPEAL REVIEW AND IMPLEMENTATION
- APPEAL REVIEW -

Who can appeal? When to appeal?

Within 60 days of circulation of the
Only parties to the dispute.
panel report ( before adoption by
the DSB – not before 20 days after
circulation)

How to appeal?
1. Written notification to the DSB and
2. Simultaneous filing of a Notice of Appeal with the Appellate Body
Secretariat
.
 III. APPEAL REVIEW AND IMPLEMENTATION
- APPEAL REVIEW -

Third parties in Appeals

Not entitled to appeal a panel report

Participation as “third participants” provided that
they are third parties during the panel process
Rights:
 File written submissions
 Participate in the oral hearing (present oral arguments
and respond to Qs put to them by the Appellate Body
Division hearing the appeal)
 III. APPEAL REVIEW AND IMPLEMENTATION
- APPEAL REVIEW -

What can be appealed?

(Art. 17.6 DSU)

 Issues of law covered in the panel report

 Legal interpretations developed by the panel

To be kept in mind!
 The Appellate Body does not make factual findings
 Factual findings by a panel fall, in principle, outside the scope of
the appellate review
 III. APPEAL REVIEW AND IMPLEMENTATION
- APPEAL REVIEW -

As a result from Completion of the

an appeal … legal analysis
The Appellate Body may:  Purpose: secure a positive solution to a
dispute
UPHOLD / MODIFY / REVERSE
 No remand authority
The legal findings and conclusions
of the panel.

Adoption of AB reports
 WHAT is adopted? The panel report as  By WHOM? By the DSB
upheld/modified/reversed and the AB report
 WHEN? Within 30 days from
 HOW? By negative consesus circulation
 III. APPEAL REVIEW AND IMPLEMENTATION
- IMPLEMENTATION -

Surveillance of implementation of
Recommendations and rulings (Art. 21 DSU)
 One of the functions of the DSB
 Prompt compliance
 Reasonable period of time (RPT).
 Arbitration to determine RPT
 Consistency issues and → Compliance panel
 III. APPEAL REVIEW AND IMPLEMENTATION
- IMPLEMENTATION -

Temporary Remedies (Art. 22 DSU)

Suspension of concessions
Compensation
and other obligations
 Mutually acceptable compensation  Complainant may ask the DSB for permission to
 Voluntary impose countermeasures if no agreement on
 Consistent with the covered compensation within 20 days after the expiry of
agreements the RPT,

 The DSB in principle grants authorization to

suspend concessions or other obligations
within 30 days of the expiry of the RPT by
negative consensus,
OVERVIEW OF THE WTO DISPUTE SETTLEMENT
PROCESS

IV. WTO DSS Statistics

 IV.- WTO DSS STATISTICS

Overall figures (as of 06 August 2017)

 Requests for consultations: 528

 Mutually agreed solutions: 112

 Panels established: 252
 Panels composed: 213
 Panel reports adopted: 171
 Appellate Body reports adopted: 111
 Compliance panels reports adopted: 31
 Appeals of compliance panels: 23
 Arbitrations on "retaliation" : 22
 Authorizations to "retaliate" : 20
IV.- WTO DSS STATISTICS

Consultations according to agreement at issue

IV.- WTO DSS STATISTICS

Complainants (as of 06 August 2017)

IV.- WTO DSS STATISTICS

Respondents (as of 06 August 2017)

 Third Party cases

180 171 166

160
140 140
140 128
120
120
113 112
102
100

80

60

40

20

0
Japan EU China USA India Canada Korea Brazil Australia
 IV.- WTO DSS STATISTICS

Trends in the use of the WTO DSS (as of 06 August 2017)

 IV.- WTO DSS STATISTICS

Trends in the use of the WTO DSS (as of 06 August 2017)

IV.- WTO DSS STATISTICS

Outcome of appeals (as of 06 August 2017)

Thank you for your attention!

Questions…???