An Analysis of the Merits and Demerits of the World Trade Organization’s Dispute Settlement Mechanism System and the Disadvantageous Position of Developing Countries in it

Abstract

<p>On January 1, 1995, world trade ushered in a new era. An organization used to establish, modify, and enforce rules governing international trade - the World Trade Organization (WTO) - was born.<sup>[1</sup><sup>]</sup> The WTO is the world's largest international economic organization and so far, as many as 164 members have joined.<sup>[</sup><sup>1</sup><sup>]</sup><sup>,</sup><sup>[2</sup><sup>]</sup> The WTO covers a wide range of areas, mainly including trade in goods, services, intellectual property, and other fields.<sup>[3</sup><sup>]</sup> Various trade disputes would arise in the complicated trade process and naturally, resolving disputes has become one of the core activities of the WTO. The WTO Dispute Settlement Mechanism (DSM) is regarded as the central pillar of the WTO and a unique contribution of the WTO to global economic stability.<sup>[4</sup><sup>]</sup> Generally speaking, DSM is excellent and successful. It provides a reliable trading platform for all members of the world and a guarantee for the free, fair, and predictable flow of trade.<sup>[5</sup><sup>]</sup> But on the other hand, nothing is perfect, DSM also has some criticisms, and there is also a certain degree of inequality in the treatment of members with different development levels. This article aims to analyse the merits and demerits of the WTO's DSM and to explain that, although the DSM was originally set up to benefit the weaker countries, in practice developing countries remain at a disadvantage.</p>