Role of Dispute Settlement Body in Relation to World Trade under WTO By - Varshini B. I.
Role of Dispute Settlement Body in
Relation to World Trade under WTO
Authored By - Varshini B. I.
ABSTRACT:
International trade is highly
complex, and is more complex than domestic trade. International trade involves
more than one national law, rules and policies. There are over 200 countries in
the world trading with other countries in a large number of goods and services.
No country can be self-sufficient, whatever may be its size and resources.
Every country, whether small or big, wants to gain through trade with other
countries through the mechanism of international trade rather than by remaining
closed economies. Besides, international trade plays multifarious functions,
such as high production, increased market share, high profit, acquisition of
modern technology, increase in standard of living, socio economic welfare,
division of labour, large scale economies, optimum and proper utilization of rare
economics resources etc. The WTO dispute settlement procedure has been used by
several WTO (World Trade Organization) members. Nevertheless, there is ongoing
discussion over this mechanism's usefulness, which is a crucial topic. The
purpose of this article is to describe the efficiency of the WTO dispute
settlement process. Its duration, involvement (especially from poor nations),
and accomplishments are used to gauge its efficacy. This article's conclusion
is that the WTO's dispute settlement process successfully settles issues
amongst its members. Keywords: WTO, dispute resolution process, and efficacy.
KEY WORDS: Role and principles of DSB,
Principles of DSB under WTO, The WTO DS process.
LITRARURE
REVIEW
- IS THE SUE PF THR WTO DISPUTE SETTLEMENT SYSTEM BIASED? URL. http://www.cepr.org/pubs/dps/DP2340.asp
During the WTO DSS's first four years
in operation, the larger trading nations were primarily its users, which
sparked a discussion about whether the DSS is unfair to smaller, poorer
nations. The Dispute Settlement Understanding clearly outlines the ability to
file complaints. The panel inquiry's first decisions may be appealed, but the
Appellate Body's review is final and cannot be overturned by the respondent.
However, no proof is shown that large countries attack tiny nations
disproportionately or that small countries complain about large countries less
frequently than would be expected.
- THE DISPUTE SETTLRMRNT SYSTEM 1995-2010
Henrik Horn, Louise
Johan, Petros C. Mavroidis
Journal of world trade
The WTO is currently the busiest
state-to-state court for settling disputes. A perpetual second instance court
and third-party adjudication are included. The author makes an effort to shed
light on how the system is actually used by WTO members. However, the WTO
members are split into five separate groups in order to assess their involvement
in terms of the agreements they frequently use as a legal standard to contest
the actions of other WTO members. The observation period runs from the start of
the WTO in 1995 until the conclusion of 2010.
- SAVING THE WTO FROM THE RISK OF IRRELEVANCE: THE WTO
DISPUTE SETTLEMENT MECHANISM AS A COMMON GOOD FOR RTA DISPUTES . by, Henry Gao, C. L. Lim
In this article the author has
discussed the possibility of using the WTO dispute settlement system as common
good for RTA disputes. the author has separated the doctrinal analysis from the
recommendations for reform that is what could be done to use the WTO dispute
settlement system as a common goof for RTA disputes under the WTO legal
framework as it stands, versus how the current WTO legal framework should be
changed to make it more useful.
- PARTICIPATION OF DEVELOPING COUNTRIES IN THE WTO DISPUTE
SETTLEMENT SYSYTEM
The author of this article compiles a
concise statistical summary of developing member involvement in the WTO
DSS. The WTO DSS participation of developing countries will be examined,
followed by an emphasis on how the WTO's dispute settlement procedures have
argued for and considered the developing condition. However, the WTO DSS did
take some of the requested improvements into account.
- DISPUTE SETTLEMENT AND THE WTO
This article briefly analyses the
Appellate reports' expressions of the current WTO dispute settlement system's
growing jurisprudence. It makes some hazy generalisations regarding the
Appellate Body's methodology, including a potential attitude of national state
regulations judgments to provide those decisions more latitude than is commonly
suggested in first-level panel reports. The author also highlights the potential
constitutional risks of the WTO's inclination to too rely on the dispute system
to fill in the numerous uncertainties and loopholes in the new trading system.
Uruguay elliptical texts.
INTRODUCTION:
WTO is an international body dealing
with the rules and regulations of trade among nations. The main object of WTO
is to liberalise trade among nations. It tends to move towards the goal of free
and fair trade. However, the Uruguay Round Agreement, and ultimate setting up
of the WTO are expected to bring about substantial gains in world trade, and to
increase income from liberalization, improved market access and greater export
opportunity, besides greater predictability of the trading environment.
It is estimated that the entire world
trade exceeds 7000 billion dollars per annum. The Indian share in the total
export is about 0.7%, which comes to only 44.8 billion dollars. At present
India is exporting about 7500 commodities to 290 countries and importing about
600 commodities from 140 countries of the world. The agreements of WTO
established an autonomous body for settlement of disputes among member
countries of the WTO in trade matters at the government level. This body or
institution is known by the name Dispute Settlement Body (DSB) this system of
dispute settlement of WTO is considered as the best international agreement on
matters of trade disputes at the international level.
Settlement of dispute on time and
structured basis is important. By having trade conflicts settled based on laws
rather than having power determine the outcome, this approach serves to
alleviate the disparities between both the economically rich and poor WTO
member countries and prevent the negative impacts of unsolved international
trade wars. The DSS quickly gained practical significance after it was
established as more of its members turned to it to resolve their trade issues.
It offers a venue for ongoing trade discussions and acts as the supreme lawful
power of the world trading system. The WTO is in charge of managing a
complicated web of international agreement law. The most intricate and possibly
most significant international dispute settlement procedure is run and carried
out by it.
STATEMENT OF THE PROBLEM.
WTO has become one of the most
interesting and important global trade organisations of the time at the
intergovernmental level. It does not act as a forum for continued trade
negotiations highlighting the importance of global economy. It operates as the
most important global dispute settlement system.
Despite the importance and prominence
in trade dispute settlements, WTO is poorly understood by many. Hence there
arises a need for an explanation on the basis of the WTO and how it functions
as an organisation, and the scope of its authority and powers. It also requires
to explain the role of the dispute settlement mechanism under the WTO, which
will be discussed in the fourth chapter.
Ø OBJECTIVES OF THE STUDY
1. To study the existing system of
settlement of international trade disputes and suggest measures for
improvements.
2. To ascertain the major differences
between GATT and WTO in the dispute’s settlement process.
Ø ROLE AND PRINCIPLES OF DISPUTE
SETTLEMENT:
The WTO sets the number
rules and regulations governing the export and import relating to goods and
services.
The WTO Institutions for
resolving disputes operate very much like an international trade court. It
possesses mandatory jurisdiction. Its own set of laws apply. The parties must
abide by its rulings, and sanctions may be applied if they are not followed. To
resolve disagreements between WTO Members on their rights and obligations under
the WTO Agreement, the WTO has an unique mechanism in place.
Since January 1st, 1995,
the WTO's dispute settlement process has been in operation. A total of 369
disputes were submitted to the WTO for resolution between 1 January 1995 and 1
December 20071, while the WTO's predecessor received a total of 368 conflicts.
Some of the cases that have been submitted to the WTO dispute settlement system
have generated a great deal of controversy and public discussion, as well as
significant media coverage.
As an illustration, a
disagreement over national legislation protecting the environment or public
health has arisen such as:
1.
the
EC-Hormones dispute on the European communities, import ban on meat for cattle
treated with growth hormones.[1]
2.
the
US-shrimp dispute on the US import ban on shrimp harvested with nets that kill
sea turtles.[2]
3.
the
EC approval and Marketing of Biotech Products, dispute on measures affecting
the approval and marketing of genetically modified products in the European
Union.[3]
PRICIPLES OF DISPUTE SETTLEMENT
UNDER WTO:
The WTO has a robust framework in
place to settle trade disputes amongst its members. The following components of
the system:
The goals and objectives of the WTO dispute resolution process. The
numerous techniques used to resolve WTO disputes such as:
1. Access to the WTO dispute settlement system.
2. The WTO dispute settlement system's
jurisdiction
3. A chronological timeline of the WTO
dispute resolution procedure.
4. The burden of proof and rules of
interpretation that apply to WTO dispute resolution
5. The confidentiality of and guidelines
for WTO dispute resolution.
6. The remedies available for violations of WTO
law
7. Special guidelines and support for members
from developing countries.
OBJECT AND PURPOSE OF THE DISPUTE SETTLEMENT SYSTEM
UNDER WTO:
The primary goal of the WTO dispute
settlement mechanism is to quickly resolve disputes between WTO Members about
their rights and obligations under the UN law.
The fast resolution of such disputes
"is fundamental to the successful functioning of the WTO and the
maintaining of proper balance between the rights and obligations of Members,"
according to Article 3.3 of the DSU.
Article 3.2 of the DSU states:
A key component in giving the
multilateral trade system security and predictability is the WTO's dispute
settlement process. The Members acknowledge what appears to maintain the rights
and obligations of Members under the covered agreement and to make the
provisions of those agreements more understandable in accordance with the
accepted principles of interpretation of public international law.[4]
The DSU is one of the WTO's most crucial tools for ensuring the security
and predictability of the Multilateral Trading System, according to the US
Section 301 Trade Act Panel.
SETTELEMENT OF DISPUTE THROUGH MULTILATERAL
PROCEDURES:
The aim and
goal of the conflict resolution process is for members should use the DSU's
multilateral processes rather than unitlateral action to resolve disputes with
other Members. According to Article 23.1 of the DSU, " When seeking
redress for a breach of commitments, another nullification under the covered
agreements, or an obstruction to the achievement of any aim of the covered
agreements, Members shall have recourse to and abide by the rules and processes
of this understanding.’’
SETTELEMENT OF DISPUTE THROUGH CONSULTATION IF
POSSIBLE.
The purpose of the dispute settlement process, comes under article 7 of
DSS, it is to find the solution that is mutually acceptable by both the
parties’ disagreement and favoured if it is in line with the agreement covered.
SETTLEMENT OF DISPUTE IN GOOD FAITH:
The dispute settlement process comes
under article 3.10. the members of WTO shall take part in this process of
settlement. In other words, it is part of the goal and purpose of the WTO
dispute settlement system that parties interested in the process engage with a
sincere desire to see the dispute resolved.
In US-FSC, the Appellate Body
determined that the United States had acted in bad faith by failing to bring
procedural errors to the knowledge of the complainant and the panel
"reasonably and expeditiously" so that remedy, if necessary, might
have been made.
METHODS OF DISPUTE SETTLEMENT:
There are four ways to
resolve disputes between WTO Members, as stated in the DSU, including
1. Consultation or negotiation.
2. Panel and Appellate Body Decisions
2. Mediation; and
4. Sincere efforts, negotiation, and
mediation
The DSU gives consultations as the
primary option for resolving problems. Therefore, before proceeding with
adjudication, consultation—or at least an attempt at consultation should be
made.
If negotiation fails to resolve the
conflict, the complaint may turn to a panel's adjudication; if either side to
the conflict wants an appeal to the panel's conclusions, then The last
option is to have the Appellate Body decide the case.
The DSU's Articles 4 and 6 through 20
provide the procedures for resolving disputes. However, the WTO dispute
resolution mechanism offers quick "arbitration" as an
alternative method of resolving disputes. However, if a covered agreement
disagreement arises, it may be preferable to use arbitration rather than the
processes outlined in Articles 4 and 6 to 20 of the DSU. In that instance, the
parties must specify the disputes to be arbitrated and agree on a specific
course of action. 21 The arbitration award must also be accepted by both
parties. The arbitration award must adhere to the WTO agreement in accordance
with Article 3.5 of the DSU.
USE OF GOOD OFFICES, CONCILIATION OR
MEDIATION:
The DSU's Article 5 stipulates that
disputes may be resolved through the employment of good offices, conciliation,
or mediation. Any party may ask for good offices, conciliation, or mediation at
any moment. They also may start and end whenever it pleases.
If both parties agree,
conciliation or mediation can continue while the panel process is underway.[5]
JURISDICTION OF THE WTO DISPUTE
DETTLEMENT SYSTEM:
The WTO dispute settlement system is
actively maintained thanks to its extensive jurisdiction, which is also
mandatory, exclusive, and contentious. Here I would like to investigate
the extent and type of the WTO dispute settlement system's jurisdiction.
COMPULSORY JURISDICTION:
The WTO dispute settlement system's
jurisdiction is mandatory by nature, according to Article 23.1 of the DSU.
Where Members request a resolution for a violation. They shall follow the rules
and regulations if there are any or other nullification, benefits which are
covered under this agreement.
This clause mandates that any
disagreement arising under the covered agreement be submitted to the WTO
dispute resolution system by the complaining Member. Alternatively put, a
response.
According to the law, the Member
cannot refuse to recognise the WTO dispute settlement system's authority.
In relation to the latter, Article
6.1 of the DSU stipulates, "If the complaining party so requests, a panel
shall be created at the latest at the DSB meeting following that at the latest
time the complaining party submits a complaint."
Contrary to other international
dispute settlement systems, the parties to a dispute arising under covered
agreements are not required to consent to the WTO dispute settlement system's
jurisdiction to decide that dispute, starting on the date the request first
appears as an item, in a separate declaration or separate agreement. Membership
in the WTO is contingent upon acceptance of the Dispute settlement system.
EXCLUSIVE JURISDICTION:
In the US-Section 301 Trade Act case,
the Panel determined that Article 23.1 of the DSU requires all Members to use
the multilateral process outlined in the DSU when they seek correction of a WTO
contradiction. Members may be obliged to solely employ the DSU in specific
circumstances, rejecting all the other methods, particularly those that entail
the unilateral implementation of WTO rights and obligations.
A crucial new component of the
Members' rights and obligations under the DSU is thus what can be described as
the exclusive dispute resolution clause, or clause 117.
As a result, Members must use the WTO
dispute resolution process instead of any alternative process. The exclusive
use of the WTO is guaranteed by Article 23.1 of the DSU. Compared to other
international forums, and while defending the multilateral system to
prevent unilateral behaviour.
CONTENTIOUS JURISDICTION:
Only contentious, not advisory,
disputes may be resolved through the WTO dispute settlement process.
IN US-SHRIMP, THE APPELLATE BODY RULED:
"It could be a good idea to
emphasise right away that only WTO Members have access to the WTO's dispute
resolution procedure. Under the WTO, this access is not permitted.
To specific people or international
organisations, both governmental and non-governmental, as they are currently in
existence. Only Members may establish a panel as a party to a dispute on their
behalf, and only Members who have a significant stake in the issue at hand may
intervene as third parties in a panel's deliberations.
Therefore, only Members who are
parties to the dispute or who have informed the DSB of their interest in doing
so are legally permitted to submit claims under the DSU.
THE WTO DISPUTE SETTLEMENT PROCESS:
The WTO dispute settlement process
has four major steps, such as
1. Consultation
2. Panel proceedings
3. Appellate review proceedings and
4. Implementation and enforcement
The dispute settlement process begins
with consultations or at least an attempt by the complainant to involve the
respondent in consultations to resolve the dispute in a very cordial way. If
that isn't practicable, the complainant has the option of referring the issue
to a panel for resolution. The panel's deliberations will bring about a panel
report. This Appellate Body will hear appeals about this report. The panel
report will either be upheld, modified, or reversed as a consequence of the
appellate review proceedings. The Dispute Settlement Body will adopt the panel
report or the Appellate Body report in the event of an appeal.
If the respondent is found to have violated WTO regulations
after the reports are accepted, they must follow the DSB's recommendations and
decisions. The final significant element in the WTO dispute settlement process
is the implementation and enforcement of the agreed recommendations and
decisions.
CONCLUSION:
Another important area for future
research is the forum where developing nations contest the WTO incompatibility
of their wealthier counterparts-research.
Even though it is challenging, it is
possible to examine the current situation and get a close-to-certain conclusion
on how the DSB and the yearly publishing of Trade Policy Review (TPRS) reports
relate in the current framework.
However, based on the instances
examined in the preceding chapters, it is clear that a lot more publications
are required in order to increase the reach of the Appellate Body reports,
which are released annually. One may regard the annual release of the Trade
Policy Review report from the WTO as a carefully crafted backgrounder for the
developing nations. This-benefits emerging markets.
SUGGESTIONS:
There is a severe crisis in WTO
dispute resolution. The US has prevented nominations to the Appellate Body,
that has prevented most panel reports from being appealed into effect and left
the matter unresolved. As a result, the appeals process is not working. The WTO
members currently find it very challenging to enforce WTO requirements through
complaints against actions they regard to be in breach. By adding other issues
to the mix, it is also feasible to resolve the conflicts brought up by the
Appellate Body dilemma. The WTO members' conflicts may be successfully settled
using this strategy.
REFERENCES:
·
Bhagirathlal
Das, the WTO: a guide to framework for international trade.
·
K.R
Gupta, A study of WTO
·
https:/www.wto.org
·
From
GATT to the WTO:
[1] EC
Hormones Complaints by the US and Canada Ibid pp.
[2]
US-Shrimp Complaint by India, Malayasia, Pakistan and Thailand, Ibid See pp
[3]
Ibid pp. EC Approval and Marketing of Biotech Products, Complained by the US;
Canada and Argentena.
[4]
Article 3(2) of the Dispute Settlement Understanding.
[5]
Article 5.5 of DSU