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Dispute settlement in the World Trade Organization
Dispute settlement is regarded by the World Trade Organization (WTO) as the central pillar of the multilateral trading system, and as the organization's "unique contribution to the stability of the global economy".〔WTO ("Understanding The WTO" ), ''World Trade Organization'', accessed December 1, 2010.〕 A dispute arises when one member country adopts a trade policy ''measure'' or takes some ''action'' that one or more fellow members considers to a breach of WTO agreements or to be a failure to live up to obligations. By joining the WTO, member countries have agreed that if they believe fellow members are in violation of trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally — this entails abiding by agreed procedures (Dispute Settlement Understanding) and respecting judgments, primarily of the Dispute Settlement Body (DSB), the WTO organ responsible for adjudication of disputes.〔(Settling Disputes:a Unique Contribution ), World Trade Organization〕 A former WTO Director-General characterized the WTO dispute settlement system as "the most active international adjudicative mechanism in the world today."〔S. Panitchpakdi, ''The WTO at ten'', 8〕
==Dispute Settlement Understanding==
In 1994, the WTO members agreed on the Understanding on Rules and Procedures Governing the Settlement of Disputes or Dispute Settlement Understanding (DSU) (annexed to the "Final Act" signed in Marrakesh in 1994).〔Stewart-Dawyer, ''The WTO Dispute Settlement System'', 7〕 Pursuant to the rules detailed in the DSU, member states can engage in consultations to resolve trade disputes pertaining to a "covered agreement" or, if unsuccessful, have a WTO panel hear the case.〔A list of covered agreements is included in (Appendix 1 ) to the DSU〕 The priority, however, is to settle disputes, through consultations if possible. By January 2008, only about 136 of the nearly 369 cases had reached the full panel process.〔
The operation of the WTO dispute settlement process involves the parties and third parties to a case and may also involve the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts, and several specialized institutions.〔(WTO Bodies involved in the dispute settlement process ), World Trade Organization〕 The General Council discharges its responsibilities under the DSU through the Dispute Settlement Body (DSB).〔Article IV:3 of the WTO Agreement〕 Like the General Council, the DSB is composed of representatives of all WTO Members. The DSB is responsible for administering the DSU, i.e. for overseeing the entire dispute settlement process. It also has the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings and recommendations, and authorize the suspension of obligations under the covered agreements.〔Article 2.1 of the DSU〕 The DSB meets as often as necessary to adhere to the timeframes provided for in the DSU.〔Article (2.3 ) of the DSU〕
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