Dispute settlement
Foreword
This updated edition of WTO Dispute Settlement: One-Page Case Summaries has been prepared by the Legal Affairs Division of the WTO with assistance from the Rules Division and the Appellate Body Secretariat. This new edition covers all panel and Appellate Body reports adopted by the WTO Dispute Settlement Body as of 31 December 2014.
Developing Countries in WTO Dispute Settlement
revious chapters have addressed at least in part where the DSU specifically refers to developing country Members and provides for special rules applicable to disputes involving a developing country Member. Nevertheless these rules providing special and differential treatment are the subject of this separate chapter in order to examine the subject in more detail. This chapter also addresses other aspects of the developing countries’ role in the dispute settlement system.
E
Accessions to the World Trade Organization (WTO) have profound implications for the private sector. The market liberalization required by accession commitments must be accompanied by deep structural reforms. Even though least-developed countries (LDCs) and developing countries usually benefit from special and differential treatment the liberalization process can still lead to market adjustments that can test the status quo and require actions that will impact the private sector. This chapter discusses how the private and public sectors have cooperated to make the most of accession while mitigating its risks. The chapter concludes that the business community values predictability. Therefore acceding governments should find a way to integrate the private sector in the negotiating process. Gaining a thorough understanding of the objectives and implications of accession in particular for small and medium-sized enterprises (SMEs) is a good starting point for building a partnership between the acceding government and its private sector. The acceding government should also seek consensus with the private sector on key accession commitments on the direction of reform desired by stakeholders at the local level and allow sufficient time to prepare the private sector to adjust to the expected changes in the business environment. The experience of recently acceded governments has shown that regular engagement with the private sector before during and after accession enables new WTO members to make deeper liberalization commitments. When these commitments are the result of a consultative process between policy-makers and business the likelihood of their successful implementation is greater.
Administration of evidence in WTO dispute settlement proceedings
I would like to discuss the use of evidence in a changing WTO dispute settlement landscape shaped by increasingly fact-intensive cases. The recent US – Upland Cotton and Korea – Commercial Vessels disputes brought under Articles 5 and 6 of the Agreement on Subsidies and Countervailing Measures (SCM Agreement) and the numerous sanitary and phytosanitary (SPS) cases are prominent examples of this trend which is likely to increase. In such cases WTO panelists demand and request from the parties (and even third parties) detailed factual information. I want to provide you with a sense of the means by which such facts are produced. I will start by describing how parties have a relatively free hand to produce multiple types of evidence because there are no WTO ‘rules of evidence’. I then discuss how panels have used their freedom to accept and consider – but not always use – multiple types of evidence in making factual findings. I will highlight new – at least for traditionalists of the General Agreement on Tariffs and Trade (GATT) – forms of establishing facts such as affidavits expert testimony and live witnesses appearing before panels. I suggest ways that Members faced with such new types of evidence can raise objections and call into question their reliability. Finally I will address the situation how when one Member faces difficulty in securing information from a non-cooperating Member adverse inferences or best information available could or have been used by panels.
Special challenges at the appellate stage: A case study
The appellate phase of the US – Steel Safeguards case presented certain challenges from a practical perspective that were unusual in nature. This chapter examines those special challenges after first explaining the appellate process in general terms.
Due process in WTO disputes
The principle of ‘due process’ (also called ‘fundamental fairness’ ‘procedural fairness’ or ‘natural justice’) broadly requires administrative and judicial proceedings to be fair. Administrative and judicial systems attempt to achieve due process by exercising their discretion in a fair manner and by developing procedural or evidentiary rules explaining how rights duties powers and liabilities are administered. As will be seen in this chapter the principle of due process is difficult to define precisely because the demands of fairness depend on the circumstances. For example it may be necessary to balance an individual’s interest in additional procedures with the value and cost of such procedures. Thus in particular circumstances due process might require a full trial whereas in other circumstances basic notice and the right to speak might be sufficient. Considerations of due process might also conflict. For instance parties’ rights to be heard and give evidence might weigh in favour of the last minute introduction of evidence. On the other hand the need for equality between the parties and their right to have sufficient time to respond and challenge evidence might weigh against its introduction. Discretion is required to resolve such conflicts.
Panels’ consultations with scientific experts: The right to seek information under Article 13 of the DSU
Commercial disputes brought under the auspices of the WTO are becoming more and more complex. As a consequence of the increasingly judicial nature of the WTO dispute settlement system parties submit increasingly sophisticated legal but also – and this is a relatively new trend – factual arguments. By their very nature instruments such as the Agreement on Sanitary and Phytosanitary Measures (SPS Agreement) or the Agreement on Technical Barriers to Trade (TBT Agreement) mean that WTO panels have to adjudicate disputes entailing scientific issues. But disputes brought under the GATT 1994 have also raised contested scientific issues relating to human health and to the conservation of natural resources. Moreover in the new ‘legalized’ WTO dispute settlement system as opposed to the more ‘diplomatic’ procedures used under the GATT 1947 parties tend to increasingly dispute factual evidence.
Introduction
Provisional application of the General Agreement on Tariffs and Trade (GATT 1947) began 70 years ago in 1948 and the same year the first GATT dispute was initiated. In total 316 disputes were brought under the GATT 1947 and related agreements in its almost 50 years of provisional application.
Introduction to This Handbook
The WTO dispute settlement system plays an important role in clarifying and enforcing the legal obligations contained in the WTO Agreement. It has gained a strong practical relevance as more than 300 disputes have been brought from 1 January 1995 through October 2003. While dispute settlement is certainly not the only activity taking place within the WTO it has become an important part of the practical reality of the Organization. WTO dispute settlement has also become an important tool in the management by WTO Members of their international economic relations at large.
Historic Development of the WTO Dispute Settlement System
The WTO dispute settlement system is often praised as one of the most important innovations of the Uruguay Round. This should not however be misunderstood to mean that the WTO dispute settlement system was a total innovation and that the previous multilateral trading system based on GATT 1947 did not have a dispute settlement system.
The role of lawyers in the WTO dispute settlement system
Before entering the subject matter a terminological specification is necessary. By ‘lawyers’ one can refer both to advocates and more generally to ‘jurists’. In this chapter I will refer to lawyers as advocates in their capacity as representatives of parties in proceedings before the WTO dispute settlement organs (the panels and the Appellate Body). I will also focus on their role as legal advisers to interested private parties; these are first of all enterprises de facto involved and directly affected by the outcome of these proceedings. Other private parties have also to be considered such as Non-Governmental Organizations (NGOs) when they have an interest of a general nature in the result of a given case in the light of the interest they pursue.
Note
The European Union succeeded the European Community for WTO purposes as of 1 December 2009.
Prefacio
Esta edición actualizada de Solución de diferencias en la OMC: Resúmenes de una página por caso ha sido preparada por la División de Asuntos Jurídicos de la OMC con ayuda especial de la División de Normas y la Secretaría del Órgano de Apelación. Esta nueva edición abarca todos los informes de Grupos Especiales y del Órgano de Apelación adoptados por el Órgano de Solución de Diferencias de la OMC hasta el 31 de diciembre de 2018.
Legal Basis for a Dispute
This chapter will explain the conditions under which Members of the WTO can invoke the provisions of the dispute settlement system; that is what constitutes a valid basis for a complaint by one Member against another Member.
Foreword
This updated edition of WTO Dispute Settlement: One-Page Case Summaries has been prepared by the Legal Affairs Division of the WTO with assistance from the Rules Division and the Appellate Body Secretariat. This new edition covers all panel and Appellate Body reports adopted by the WTO Dispute Settlement Body as of 31 December 2012.
Disclaimer
In the interest of accuracy this publication uses the historical names of GATT contracting parties as they were used at the time of each dispute e.g. Ceylon Czechoslovakia Hong Kong the Federal Republic of Germany Yugoslavia or the Federation of Rhodesia and Nyasaland. Likewise this publication makes reference to EEC-6 EEC-9 EEC-10 or EEC-12 to reflect different stages of enlargement of the European Economic Communities. It also refers to individual EEC member States (e.g. France Italy etc.) for cases when these countries acted in their own capacity.
Consultations and the panel process in the WTO dispute settlement system
The WTO dispute settlement system is a rules-based system as opposed to a negotiation-conciliation-mediation type of dispute resolution mechanism. The system includes procedural steps that can be triggered by any WTO Member dissatisfied with another Member’s measure considered to be inconsistent with any provision of the WTO Agreement. The system allows the dissatisfied Member to obtain a legal ruling by an independent adjudicative body on its rights and obligations under the relevant agreements. The dispute settlement system of the WTO is thus quasi-judicial: independent and autonomous bodies are responsible for adjudication of disputes although formally subject to the overall authority of the Dispute Settlement Body (DSB). The jurisdiction of the DSB and therefore that of the adjudicating bodies (i.e. panels and the Appellate Body) operating under its authority has been accepted by all WTO Members through their ratification of the WTO treaty. Thus a WTO Member cannot refuse to participate in a WTO dispute settlement procedure if a complaint is brought against it.
Overview
The year 2018 marked the 70th anniversary of the provisional application of the General Agreement on Tariffs and Trade (GATT 1947). Although it was intended to be applied on a provisional basis the GATT 1947 governed international trade for almost half a century. Its principles rules and procedures evolved over this period to respond to the changing needs and challenges of GATT contracting parties providing the basis for today’s strengthened international trade rules under the GATT’s successor the World Trade Organization (WTO).
Legal Effect of Panel and Appellate Body Reports and DSB Recommendations and Rulings
The previous chapters gave an explanation of the various procedures set out in the DSU. This chapter and the following ones will address specific issues of interest. This chapter addresses the legal effect of rulings made by panels the Appellate Body and the DSB.
Foreword to the 1995–2013 edition
The WTO Appellate Body Repertory of Reports and Awards is intended to serve first and foremost as a source of information for those interested in the field of international trade law. It presents a systematic compilation of Appellate Body jurisprudence over the past 18 years. The Repertory was initially developed as an internal research tool to assist the Appellate Body Secretariat in carrying out its duty to provide legal advice to Appellate Body Members. The Secretariat subsequently decided to make the Repertory available to the public to serve as a practical tool for officials from WTO Members particularly for those who may not have the resources to prepare similar compendiums in-house. We hope that the Repertory will also assist academics students private practitioners and others with an interest in international trade law and dispute settlement practice who need to consult and access precise information about the evolution of and most recent developments in Appellate Body jurisprudence.
Compliance with WTO dispute settlement decisions: Is there a crisis?
Conferences and symposia on the World Trade Organization (WTO) have been proliferating in connection with the organization’s tenth anniversary with a particular focus on the WTO dispute settlement system – how it is working what difficulties have arisen how its rules might evolve etc. These events typically feature a certain amount of hand-wringing over the fact that adopted WTO dispute settlement decisions have only a limited indirect influence on the subsequent behaviour of losing respondents and sometimes are not implemented promptly or at all. Some observers have gone so far as to proclaim the existence of a ‘compliance crisis’ with potentially ruinous consequences for the WTO and the trading system more generally.
Preface
This volume contains a collection of the legal texts related to the settlement of disputes under the Agreement Establishing the World Trade Organization (WTO). To facilitate their use the texts have been grouped by subject matter and cross-references and a subject index have been added by the WTO Secretariat. These additions do not form part of the legal texts and therefore should not be used as sources of interpretation.
Dispute Settlement without Recourse to Panels and the Appellate Body
The previous chapters have devoted much attention to the involvement of panels and the Appellate Body in the WTO dispute settlement system. However it is important to stress that panels and the Appellate Body are not always involved in a WTO dispute and there are various other ways to solve disputes within the framework of the WTO. Indeed the parties often use these other ways and manage to solve their dispute in a cooperative manner and not through recourse to adjudication by panels and the Appellate Body. In this regard parties can settle a dispute by finding a mutually agreed solution in bilateral negotiations or with the help of dispute resolution mechanisms such as good offices conciliation or mediation. In addition they can also agree to refer their dispute to an arbitrator.
Key Issues in WTO Dispute Settlement
This book examines aspects of the operation of the WTO dispute settlement system during the first ten years of the WTO. It covers a representative cross-section of the issues and situations WTO Members have dealt with under the Dispute Settlement Understanding. The book is unique in that it includes contributions from virtually the entire gamut of actors involved in the day-to-day operation of the WTO dispute settlement system: Member government representatives private lawyers who litigate on behalf of Member governments in the system Appellate Body members Appellate Body Secretariat staff and WTO Secretariat staff. It also includes contributions from several academics who closely follow and carefully scrutinize all that goes on within the system. It therefore provides fascinating insights into how the system has operated in practice and how the lessons of the first decade can be applied to make the system even more successful in the years to come.
Foreword
This Handbook explains the rules and procedures of the WTO dispute settlement system explores the practices that have arisen in its operation since its entry into force on 1 January 1995 and provides a comprehensive account of the existing jurisprudence concerning dispute settlement procedures. It also includes useful information on the operation of the WTO dispute settlement system to date including tips about notification procedures templates of working procedures and timetables timelines of actual disputes statistical data etc. The primary purpose of this Handbook is to explain the WTO dispute settlement system to an interested person who may not necessarily have a legal background. With its detailed content and practice-oriented focus it may also serve as a useful reference tool to experienced practitioners of WTO law including not only prospective panelists and private counsel but also government officials from WTO members.
The making of the ‘World Trade Court’: The origins and development of the Appellate Body of the World Trade Organization
The Appellate Body of the World Trade Organization (WTO) heard and decided its first appeals case in 1996. By 1 January 2005 the Appellate Body had heard and decided 64 appeals from WTO panel reports. The body of case law generated by the Appellate Body over the past nine years is both in quantitative and qualitative terms impressive. The Appellate Body’s case law is highly authoritative and has made a significant contribution to the development of international trade law. The decisions of the Appellate Body in for example US – Shrimp and EC – Asbestos have effectively put an end to complex and sensitive disputes between WTO Members. Both panels and parties in WTO disputes have shown and continue to show much deference to the case law of the Appellate Body. The Appellate Body is undisputedly the most important organ of WTO dispute settlement. The Appellate Body is all but in name the ‘World Trade Court’. The key question addressed in this article is: what explains the prominent status which the Appellate Body and its case law have achieved since 1996? Was the ‘success’ of the Appellate Body and its emergence as the World Trade Court ‘predetermined’ by its constituent instruments or is it primarily the result of other factors that have affected the Appellate Body and its case law in the past nine years?
WTO Bodies Involved in the Dispute Settlement Process
The operation of the WTO dispute settlement process involves the parties and third parties to a case the DSB panels the Appellate Body the WTO Secretariat arbitrators independent experts and several specialized institutions. This chapter gives an introduction to the WTO bodies involved in the dispute settlement system. The involvement of the parties and third parties the primary participants in a dispute settlement proceeding has already been outlined above. The precise tasks and roles of each of the actors involved in the dispute settlement process will become clear in the later chapter on the stages of the dispute settlement process.
Foreword
This updated edition of WTO Dispute Settlement: One-Page Case Summaries has been prepared by the Legal Affairs Division of the WTO with assistance from the Rules Division and the Appellate Body Secretariat. This new edition covers all panel and Appellate Body reports adopted by the WTO Dispute Settlement Body as of 31 December 2016.
Introduction to the WTO Dispute Settlement System
The WTO Agreement is a treaty negotiated by dozens of countries over the seven-year span of the Uruguay Round of multilateral trade negotiations. It comprises agreements setting out a delicate and carefully achieved balance of rights and obligations for WTO members in respect of a vast array of measures affecting trade such as tariffs internal taxes subsidies sanitary and phytosanitary measures intellectual property rights and services to name but a few. Some of these agreements were negotiated and concluded in successive rounds throughout the lifespan of the General Agreement on Tariffs and Trade (GATT) the predecessor to the WTO. Others build on and further elaborate previously negotiated agreements. Except for the plurilateral agreements the WTO Agreement was adopted by the WTO members as a “single undertaking”. This means that in agreeing to be bound by the WTO Agreement WTO members must accept the entirety of the WTO Agreement and may not pick and choose among the constituent trade agreements. In so agreeing WTO members consider the balance of negotiated rights and obligations across the entirety of the WTO Agreement.
Avant-propos
Cette édition mise à jour de l’ouvrage intitulé « Le règlement des différends dans le cadre de l’OMC : une affaire une page » a été établie par la Division des affaires juridiques de l’OMC avec l’aide de la Division des règles et du secrétariat de l’Organe d’appel. Elle porte sur tous les rapports des groupes spéciaux et de l’Organe d’appel adoptés par l’Organe de règlement des différends de l’OMC au 31 décembre 2014.
The reasonable period of time for compliance with rulings and recommendations adopted by the WTO Dispute Settlement Body
The need for a reasonable period of time for the implementation of rulings and recommendations adopted by the Dispute Settlement Body (DSB) arises in two situations: first when the responding party in a dispute settlement proceeding has been found to have violated WTO rules or otherwise nullified or impaired benefits accruing to the complaining party; and second when the incriminated measure is still in existence at the time when the responding party that has ‘lost’ the case has to inform the DSB of its intentions in respect of implementation. For this purpose a DSB meeting has to be held within 30 days after the adoption of the panel report and if applicable the Appellate Body report.
The Process – Stages in a Typical WTO Dispute Settlement Case
This chapter explains all the various stages through which a dispute can pass in the WTO dispute settlement system. There are two main ways to settle a dispute once a complaint has been filed in the WTO: (i) the parties find a mutually agreed solution particularly during the phase of bilateral consultations; and (ii) through adjudication including the subsequent implementation of the panel and Appellate Body reports which are binding upon the parties once adopted by the DSB. There are three main stages to the WTO dispute settlement process: (i) consultations between the parties; (ii) adjudication by panels and if applicable by the Appellate Body; and (iii) the implementation of the ruling which includes the possibility of countermeasures in the event of failure by the losing party to implement the ruling.
The power of the WTO dispute settlement system
The dispute settlement system of the WTO is one of the most important elements of a rules-based multilateral trading system. By way of introduction to the very instructive chapters that follow I would like to make several observations about the nature of dispute settlement in a trading system based on national sovereignty followed by some comments on how the system is designed to ensure integrity and fairness in the WTO’s adjudicative process.
Prefacio
Esta edición actualizada de Solución de diferencias en la OMC: Resúmenes de una página por caso ha sido preparada por la División de Asuntos Jurídicos de la OMC con ayuda especial de la División de Normas y la Secretaría del Órgano de Apelación. Esta nueva edición incluye todos los informes de Grupos Especiales y del Órgano de Apelación adoptados por el Órgano de Solución de Diferencias de la OMC hasta el 31 de diciembre de 2020. La publicación también contiene una sección independiente en la que se recogen resúmenes de informes de grupos especiales distribuidos a los Miembros de la OMC y disponibles en el sitio web d esta pero que aún no han sido adoptados por el OSD por ser objeto de procedimientos de apelación pendientes. Debido a las vacantes sin cubrir en el Órgano de Apelación las circunstancias actuales no permiten hacer avanzar ni concluir esos procedimientos de apelación.
Nota
La Unión Europea sucedió a la Comunidad Europea para los fines de la OMC el 1º de Diciembre de 2009.
Note
L’Union européenne a succédé à la Communauté européenne aux fins de l’OMC au 1er décembre 2009.
Avant-propos
Cette édition mise à jour de l’ouvrage intitulé « Le règlement des différends dans le cadre de l’OMC: une affaire une page » a été établie par la Division des affaires juridiques de l’OMC avec l’aide de la Division des règles et du secrétariat de l’Organe d’appel. Elle porte sur tous les rapports des groupes spéciaux et de l’Organe d’appel adoptés par l’Organe de règlement des différends de l’OMC au 31 décembre 2020. Elle contient également une section distincte comportant des résumés de rapports de groupes spéciaux qui ont été distribués aux Membres de l’OMC et mis à disposition sur le site Web de l’OMC mais n’ont pas encore été adoptés par l’ORD car ils font l’objet d’appels en cours. Étant donné les postes vacants non pourvus au sein de l’Organe d’appel ces appels ne peuvent pas être traités et leur examen ne peut pas être achevé dans les circonstances actuelles.
Nota
La Unión Europea sucedió a la Comunidad Europea para los fines de la OMC el 1º de Diciembre de 2009.
Prefacio
Esta edición actualizada de Solución de diferencias en la OMC: Resúmenes de una página por caso ha sido preparada por la División de Asuntos Jurídicos de la OMC con ayuda especial de la División de Normas y la Secretaría del Órgano de Apelación. Esta nueva edición incluye todos los informes de Grupos Especiales y del Órgano de Apelación adoptados por el Órgano de Solución de Diferencias de la OMC hasta el 31 de diciembre de 2020. La publicación también contiene una sección independiente en la que se recogen resúmenes de informes de grupos especiales distribuidos a los Miembros de la OMC y disponibles en el sitio web d esta pero que aún no han sido adoptados por el OSD por ser objeto de procedimientos de apelación pendientes. Debido a las vacantes sin cubrir en el Órgano de Apelación las circunstancias actuales no permiten hacer avanzar ni concluir esos procedimientos de apelación.