[sbinews] What is WTO's Dispute Settlement Body and how does it work? (ET in theClassoom)

  • From: rspai@xxxxxxxx
  • To: sbinews@xxxxxxxxxxxxx
  • Date: Wed, 19 Nov 2003 21:38:28 +0500

What is WTO's Dispute Settlement Body and how does it work?
(The Economic Times)

What is WTO’s Dispute Settlement Body and how does it work? 

THE WTO’s Dispute Settlement Body (DSB) is no different from the organisation’s 
General Council. It consists of all member governments, usually represented by 
their ambassadors or persons of equivalent rank. The current chairperson of the 
DSB is Shotaro Oshima of Japan . 

What kind of disputes does the DSB settle? 

Typically a ‘dispute’ at the WTO involves complaints by one or more member 
countries that another country is violating WTO agreements or failing to honour 
its commitments made to the trade body. The purpose of the DSB and the dispute 
settlement mechanism of the WTO is to resolve such disputes by a rule-based 
system rather than through an unilateral retaliatory action by those 

How does the DSB settle disputes? 

The DSB has a laid down procedure for dealing with disputes. The DSB alone has 
the authority to establish panels of experts to consider the complaint and to 
accept or reject the panels’ findings or the results of any appeals. The DSB is 
responsible for monitoring the implementation of its rulings and 
recommendations on disputes brought before it and also has the power to 
authorise retaliation when a country does not comply with a ruling. The DSB’s 
procedures involve at least two significant departures from the GATT framework. 
The first of these is that, unlike in the Uruguay Round, there is now a 
time-table laid down for dispute settlement. The amount of time each stage of 
the process should take has been indicated, though there is some flexibility in 
the timeframes laid down. The other important change is that the DSB can now 
reject the findings of a panel or of an appeals report only by consensus. Thus, 
it is no longer possible for the country against whom the complaint is
 made to block the decision of the DSB, unless it is able to persuade all 
others including the complainants, of its case. 

What is the procedure? 

There are several stages to the dispute settlement process. In the first stage, 
referred to as consultation, which can last up to 60 days, the countries in 
dispute talk to each other to see if they can settle their differences among 
themselves. They can also ask the WTO director-general to mediate or help them 
reach an understanding. If this yields no results, the next stage is the 
appointment of a panel, which can take up to 45 days. From the third stage, the 
panel takes over. It should normally conclude its job within 6 months. However, 
in cases of urgency, this can be shortened to three months. The panel’s job 
begins with each side in the dispute presenting its case in writing to the 
panel. This is followed by a hearing in which the two sides and any third 
parties, who have declared that they have an interest in the dispute, make 
their case before the panel. At the next hearing each party submits rebuttals 
of the other party’s case. The panel can also consult experts or a
ppoint an expert review group to prepare an advisory report where the issues 
involved are of a technical or scientific nature. The panel then prepares a 
draft report consisting of only the facts and arguments made, not of the 
panel’s own findings and conclusions. This draft is given to the two sides and 
they are given two weeks to comment on it. Then comes the panel’s interim 
report, which includes its findings and conclusions. Again, the two sides are 
given one week to ask for a review if they wish to. In case a review is 
demanded, it has to be completed within two weeks. Finally, the panel submits 
its final report to the two sides and three weeks later to all WTO members. 
With this, the panel’s job is done. 

What comes next, once the panel has reported? 

The panel’s report becomes the DSB’s ruling or recommendation within 60 days 
unless it is rejected by a consensus or is appealed by either or both sides to 
the dispute. Appeals, however, have to be based on points of law such as legal 
interpretation. They cannot re-examine existing evidence or examine new issues. 

Who hears the appeals? 

Each appeal is heard by three members of a permanent seven member appellate 
body. Members of the appellate body have a term of four year. They have to be 
individuals with recognised standing in the field of law and international 
trade, not affiliated with any government. The appellate body can uphold, 
modify or reverse the panel’s findings and conclusions. Normally, appeals 
should not last more than 60 days, with an absolute maximum of 90 days. Once 
the appeals report has been submitted, the DSB has to accept or reject it 
within 30 days, rejection being possible by consensus. 



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  • » [sbinews] What is WTO's Dispute Settlement Body and how does it work? (ET in theClassoom)