Dispute Settlement Understanding of 15 April 1994

The Dispute Settlement Understanding incorporates many features of the existing GATT procedures. However, to deal with the deficiencies identified above, a number of major innovations are also introduced:

1) to deal with the problem of political interference, the role formerly carried out by the GATT Council is assigned to a new organ called the Dispute Settlement Body (DSB). Although still made up of states, the DSB can refuse to establish a panel, or decline to approve a report, only if there is a consensus; these actions therefore become virtually automatic. Since this change effectively removes the political check on panel procedures, an appellate procedure is included as a further innovation.

2) To deal with implementation, new and clearer procedures are laid down. And, to deal with the problem of political interference, the role formerly carried out by the GATT Council is assigned to a new organ called the Dispute Settlement Body (DSB).

3) To deal with norm and forum shopping, the DSU establishes a unified dispute settlement system for the whole GATT/WTO system, including the issues of services and intellectual property.

The general effect of the Dispute Settlement Understanding is thus to consolidate existing procedures and at the same time bring them up to date. The main features of the DSU may now therefore be considered in a little more detail.

As to the Consultations:

· Articles 22(1) and 23(1) of the GATT provide for bilateral consultations in general terms , and the new DSU, based substantially on provisions agreed in 1989, spells out the implications in some detail.

· Article 4(3) contains an obligation to enter into consultations in good faith on request, and Article 4(5) reflects a preference for this method by giving consultations priority over other procedures.

· To remove the possibility of abuse, and also to imbue the parties with a sense of urgency, the DSU contains strict time-limits. The state to which a request for consultations is submitted has just ten days to respond and must enter into consultationswithin thirty days of the request (Article 4(3)). Consultations must also be concluded within sixty days of the request (Article 4(7)). Even stricter deadlines apply in urgent cases (Article 4(8)) and failure to meet any of the deadlines immediately entitles the complaining party to request the establishment of a panel.

· When consultations take place they are confidential and without prejudice to the rights of the states concerned (Article 4(6)).

· Articles 4(4) and 3(6) make it clear that the occurrence and outcome must both be notified to the DSB and relevant bodies. Such notification was not required before 1989, and so this was an innovation.

· International trade disputes are not exclusively bilateral but often involve the interests of third parties. Because this is frequently the situation in trade relations, the DSU contains a number of provisions concerned with disputes of a multilateral character. As regards consultation, the relevant provision is Article 4(11), which allows a third state which considers that it has 'a substantial trade interest' in any consultations to indicate a desire to join them.

Date: 2015-12-18; view: 810