World Trade Organization Dispute Settlement Mechanism Research Articles

Research on the Retaliation System in the WTO's Dispute Settlement Mechanism

When conducting trade activities, due to the needs of countries' national interests or due to the general international context, it is inevitable that some acts will be used to disrupt the balance of world trade transactions, thus causing conflicts between two or more nations. If a dispute arises under the framework of the World Trade Organization (WTO) agreement, one party will be deemed to be in breach of the WTO agreement, and the injured party will resort to the WTO Dispute Settlement Body(DSB), and if the "losing party" does not fulfill the agreement, then the "winning party" will request the WTO Dispute Settlement Body to retaliate against it. If the "losing party" does not fulfill the agreement, then the "winning party" will request the DSB to authorize retaliation against it, to stop the behavior of the defaulting party and get certain compensation. Therefore, the retaliation system of the WTO dispute settlement mechanism is of great significance to maintaining the international economic order. The establishment of this system is of great practical significance for resolving disputes between disputing parties and achieving the rebalancing of the international economic order. However, along with the continuous occurrence of various dispute cases, and in the increasingly frequent use of the WTO panel members, member states and academics have gradually recognized certain shortcomings of the retaliation system, resulting in this system for certain violations of the agreement, often helpless. In this regard, all countries have improved the retaliation system under the WTO dispute settlement mechanism from their own or overall interests. This paper discusses the shortcomings of the retaliation system in the WTO dispute settlement mechanism and then makes some suggestions on how to modify and improve it.

What will China do under the New Background of WTO Dispute Mechanism?

In the process of establishing a multilateral rule system, WTO (World Trade Organization) has always been an irreplaceable role, which can promote global economic development and provide a platform for resolving disputes. Nowadays, global economic and trade governance is multi-polar, and traditional governance rules are not enough to maintain the world economic order. There is an international recognition that the WTO is anachronistic and in need of reform. China, one of the world 's largest trading countries, for the sake of acclimatizing itself to the new changes in the global economic environment and respond to challenges as soon as possible, China must firmly safeguard the authority and effectiveness of the multilateral trading regime with the WTO as the core, and propel the recovery of the WTO dispute settlement mechanism actively. This paper mainly studies that the current WTO dispute settlement mechanism cannot play an effective role and therefore needs to be reformed. It also analyzes the crises and challenges that China faces in the new era, and gives suggestions for the crises and challenges. Finally, it calls for the current approach to dispute resolution to be through cooperation rather than conflict.

Reimagining the Special and Differential Treatment Provisions in the WTO's Dispute Settlement Understanding

AbstractThe developed and developing members of the World Trade Organization (WTO) are deeply divided on the concept, scope, and beneficiaries of the special and differential treatment (SDT) provisions. The division was revealed in the Committee on Trade and Development meetings, where developed members rejected the Group of 90's proposals to strengthen and operationalize SDT provisions in WTO agreements. This article focuses on the SDT provisions in the Dispute Settlement Understanding (DSU), positing that the provisions are ineffective in upholding the WTO's development objectives. It analyses the extent to which the needs and circumstances of low-income developing countries and least-developed countries have been considered by the WTO adjudicating bodies through the application and interpretation of SDT provisions in the DSU. The article seeks to reimagine SDT provisions’ role in the DSU through secondary lawmaking and progressive treaty interpretation to ensure development is integrated into the WTO's Dispute Settlement Mechanism.

Maintaining Relevance in a Much-Changed World: Reforming WTO Dispute Settlement

ABSTRACT The World Trade Organization (WTO) and its dispute settlement mechanism were established in 1995 to great acclaim. Both have seen much success: WTO membership expanded apace, and the WTO dispute settlement mechanism proved to be the most active state-to-state dispute settlement mechanism in history. However, in recent years, the WTO has come under increasing criticism as negotiations to expand and modernize WTO disciplines have produced limited results and dissatisfaction with the dispute settlement system on the part of the system’s most active user led to the paralysis of appellate review. Calls for WTO reform have become widespread. At the June 2022 Ministerial Conference, WTO members committed to work toward necessary reform, including by conducting discussions with a view to having a fully and well-functioning dispute settlement system in place by 2024. This is a tall order, given that long-standing efforts to agree on amendments to the dispute settlement system not only failed but also highlighted significant differences in members’ preferred approaches for resolving disputes. In addition, the legal processes required to implement the major change could take years. This paper identifies adjustments to the dispute settlement system that could lead to important efficiencies and that can be effected before the 2024 deadline arrives.

Effect Evaluation of WTO Dispute Settlement Mechanism Based on Artificial Neural Network

In today’s rapid economic development, trade exchanges between countries are increasingly close, and there are inevitable trade frictions that follow as a consequence. The World Trade Organization (WTO) dispute settlement mechanism (DSM) has become a predominant choice to deal with trade frictions for majority of the WTO member states. As part of the process of applying the Sino-US trade friction to the WTO DSM, the rise of US trade protectionism has caused serious damage to the WTO DSM. Also, the DSM similarly exposes its own inherent defects. Hence, the research on improvement of the WTO DSM under the background of trade friction has profound practical value. Based on this background, this paper proposes a framework for the effective evaluation of WTO DSM based on the artificial neural network. The contributions of the paper include the following: (1) Introduction of domestic and foreign scholars’ research on different issues in the WTO DSM, wherein the retaliation mechanism is introduced in detail. Also, it is conducive for further deepening of the purpose and significance of the retaliation system in the WTO DSM. (2) The characteristics and structure of the CNN are introduced, and a suitable evaluation system for analyzing the impact of WTO DSM is constructed. Further, an evaluation model based on the CNN is proposed. (3) As per the dimension principle of CNN interlayer calculation, the network structure parameters are selected considering an optimal comprehensive evaluation index of the network. The results verify the effectiveness of the proposed method. Finally, when compared with the other state-of-the-art network models, it is found that CNN generates the highest evaluation accuracy.

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

<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>

Blokada Apelacionog tela Svetske trgovinske organizacije i Privremeni žalbeni arbitražni aranžman (MPIA)

The World Trade Organization (WTO) dispute settlement system is organized in two stages. In the first instance, the existing dispute between the members is resolved by ad hoc panels. In case the parties are dissatisfied with the panel's report, the dispute is finally resolved by the second instance body - the Appellate Body (AB). Since 2017, the United States has repeatedly blocked the appointment of members of the Appellate Body, which has caused a progressive reduction in the number of members. As the mandate of two of the three remaining members ended on 10 December 2019, the highest institution in the WTO dispute resolution system has thus become de facto dysfunctional. The blockade of the Appellate Body has resulted in a crisis in the WTO dispute settlement mechanism, which ultimately implies that the disputes are not being definitively resolved. In order to remove the blockade of the Appellate Body and its consequences, some WTO members have established a complaint redress mechanism in accordance with Article 25 of the Agreement on Dispute Resolution Rules and Procedures (DSU). Article 25 of the DSU envisages the possibility of establishing arbitration for resolving disputes at the multilateral level. This provision serves as a basis for establishing an arbitration mechanism that would act as an alternative to the Appellate Body while it is under blockade. On 30 April 2020, after intensive debates on how to implement this idea, the Multi-party Interim Appeal Arrangement (MPIA) came into force. The MPIA arrangement offers a short-term solution to overcome the problem of blocking the Appellate Body, while members try to find a more permanent solution. This article examines the role that the newly established MPIA would play in the future of the WTO, as well as the procedural innovations it has introduced, which can serve as a trigger for systematic changes in resolving disputes in front of the WTO.

When the hegemon goes rogue: leadership amid the US assault on the liberal trading order

Abstract Under President Trump, the United States abdicated its traditional leadership role in the trading system, abandoning multilateralism for aggressive unilateralism and launching an active assault on the World Trade Organization (WTO). Most strikingly, the US blocked appointments to the Appellate Body, jeopardizing the WTO's dispute settlement mechanism. With the trade regime in crisis, a key question has been whether other states would have the will and capacity to lead system-preserving initiatives. While most attention has focused on whether China—widely seen as the chief hegemonic challenger to the US—would assume the mantle of leadership, there has been considerable scepticism about the European Union's capacity to exercise leadership amid the crisis. The EU has generally been seen as punching below its weight in terms of leadership at the WTO. In this article, however, I argue that it is the EU, rather than China, that has taken the lead in advancing concrete initiatives directed at defending and maintaining the multilateral trading system. The EU led the creation of an interim appeals arrangement to replace the defunct Appellate Body—in effect, creating an ‘Appellate Body minus the US’. Although the rules-based multilateral trading system remains under threat, it is the EU, not China, that is acting as a system-preserving power, leading efforts to defend the established order.

Reforming the WTO Dispute Settlement Mechanism: Towards a Mega-Multilateral Court?

The Dispute Settlement Mechanism of the World Trade Organization (WTO) is facing serious crisis, which has impeded its normal function. To address this impasse, this article suggests a reform of the WTO’s dispute-settlement mechanism: the establishment of a new megamultilateral court to substitute for the Appellate Body. The first part of this paper addresses the reasons for considering this approach. The second part identifies how to establish a new mega-multilateral court within the WTO. The third part puts forward an idea of the function of the Dispute Settlement Body, which would serve as a forum for adjudicators and State Parties of the mega-multilateral court, in order to balance judicial independence, judicial accountability, and consistency. In discussing the reason for this reform, approaches to implementing it, and other examples of what form it might take, this article concludes that it is appropriate to establish a new mega-multilateral court within the WTO.

US–China trade war and the WTO dispute settlement mechanism

Purpose The paper is prompted by the US–China trade war and its implications for the sustenance of the multilateral trading system. The two rivals resorted to “self-help” without recourse to the World Trade Organization (WTO) dispute settlement system, flouting the WTO as an adjudicator in trade disputes. This paper aims to analyze the drawbacks in the settlement system and examines the urgent need for a retroactive remedy. Design/methodology/approach This paper adopts desk-review and jurisprudential analysis of the relevant rulings of the WTO dispute settlement body. Using desk-review, primary sources such as the relevant domestic legislations invoked by the USA and China to trigger the trade war were discussed and critically analyzed. Findings This paper finds that the unilateral and protectionist actions that characterize the trade war can be linked to the loss of confidence in WTO remedies to redress members’ retroactive economic losses. This finding is useful in arguing for the incorporation of a retrospective monetary remedy to forestall the reoccurrence of a similar trade war and save the WTO from being dysfunctional. Originality/value Although, whether there should be retroactive remedies in the settlement system has been long debated, this paper makes a significant contribution by highlighting why the drawbacks in the settlement system have become so prominent in the context of this trade war. This paper strengthens the urgent need for WTO dispute settlement reform to prevent a reoccurrence of another global distortion of trade.

Domestic political implications of global value chains: Explaining EU responses to litigation at the World Trade Organization

This article shows how mobilized sectors’ degree of integration to global value chains can account for variation in the European Union’s responses to litigation at the World Trade Organization (WTO). The behavior of the EU demonstrates a puzzling picture in bringing about compliance following WTO disputes, sometimes meeting its trade partners’ demands in a timely manner, while resisting resolving the disputes in others. In order to account for this variance, I aim to answer the research question: under which conditions does the EU meet its trade partners’ demands in a timely manner, rather than resist compliance, in the WTO dispute settlement mechanism? Combining comparative analysis with case studies, I find that the EU’s behavior in bringing timely compliance to disputes can be explained by mobilized targeted sectors’ level of integration to global value chains (GVCs). As disputes target certain measures that tend to benefit-specific sectors, the level of integration of these targeted sectors shapes the EU’s preference toward pro or against liberalization. The results of the study corroborate the finding that trade policy is shaped by the interests of domestic economic actors and that those engaged in GVCs foster liberalization multilaterally.

The Economic Sanctions over the Ukraine Conflict and the WTO: ‘Catch-XXI’ and the Revival of the Debate on Security Exceptions

The international conflict over the events in Ukraine led to the application of unilateral restrictive measures by the parties involved – the European Union, the United States and the Russian Federation – all of which are World Trade Organization (WTO) members and permanent members of the UN Security Council. It has been alleged by all sides that specified restrictions on trade in goods and services may constitute a violation of WTO obligations. The possibility of a challenge of the restrictive measures using the WTO dispute settlement mechanism revived the debate on the invocation of security exceptions allowing WTO members to apply otherwise inconsistent measures justified by their ‘essential security interests’. The present article aims at providing a critical analysis of the restrictive measures adopted by the parties and the perspectives for invoking the security exception in case of eventual WTO dispute settlement. The article highlights the ambiguity in the interpretation of the security exceptions and questions the suitability of the WTO dispute settlement mechanism for the resolution of the current Ukraine crisis.

The current EU/US–Russia conflict over Ukraine and the WTO: a preliminary note on (trade) restrictive measures

In 2012, the Russian Federation (RF) joined the World Trade Organization (WTO) as its 156th member. Two years later, an international conflict over the developments in Ukraine in general and the changing status of Crimea erupted, which henceforth saw the RF, the United States (US), and the European Union (EU) drawn into a circle of the unilateral imposition of trade and other restrictive measures. This article looks at the trade aspects of the ensuing conflict and provides a detailed survey of the restrictive measures imposed by the EU, the US, and the RF from the perspective of the national legal orders of the jurisdictions concerned, as well as from the international perspective of the applicable WTO trade rules. It includes a critical assessment of the compatibility of economic sanctions with the parties' WTO commitments, as well as the possibility of addressing the current divergences under the WTO dispute settlement mechanism.

Why Developing Countries are at a Disadvantageous Position in WTO Dispute Settlement Mechanism

The disputes settlement understanding (DSU) of the World Trade Organization (WTO) is a contentious issue. It is often argued that the DSU work more in favor of the richer members. This article argues firstly; how disputes are resolved under the WTO regime secondly; how the DSU adversely affects the interests of the developing countries, resulting into an utter discontent among the member states. The article after analysis of the existing scholarship highlights how and why the developing countries are at a disadvantageous position in the dispute settlement understanding. The article concludes that some legal reforms are essential in the DSU to ensure equality of all the members before the law.

Support to Agriculture in India in 1995-2013 and the Rules of the WTO

India has submitted notifications to the World Trade Organization (WTO) on domestic support to agricultural producers in 1995-2003. This paper reviews India’s notifications and summarizes the related discussion in the WTO Committee on Agriculture of some key issues relating to the rules of the Agreement on Agriculture on domestic support. It calculates price gaps for rice, wheat, cotton and sugarcane in 1995 to 2013 under four scenarios regarding the external reference price and calculates the resulting market price support using total production and procurement quantities. It compares the associated Aggregate Measurements of Support (AMSs) to their limits based on value of production. The AMSs show large excesses above their limits over many years until 2013 for several crops under some readings of the Agreement but much less so if certain adjustments are made. This highlights the differences among alternative interpretations of the Agreement in determining compliance with a country’s obligations, in particular the understanding of the fixed external reference price and the production eligible to receive the applied administered price. The paper puts India’s administered pricing in the context of the 2013 decision of WTO ministers regarding protection under some conditions against challenge under the WTO dispute settlement mechanism.

Enhancing the Efficiency of the Panel Process at the WTO

This paper describes the informal consultation process held by the author and his World Trade Organization (WTO) colleagues, aimed at improving the procedures of WTO dispute settlement panels. In this process, government officials as well as a variety of other practitioners, such as panelists, members of the Appellate Body, the Advisory Centre on WTO Law, trade lawyers, among others, were consulted. The aim was to find ideas that could help enhance the efficiency of the panel process and reduce costs. This exercise was limited to possible improvements that could be made without amending the text of the Dispute Settlement Understanding (DSU) itself. Many of the conclusions reached have been successfully applied in proceedings, such as early questions posed by the panel to the parties to make the first substantive meeting more effective, time-limits on oral statements and the reduction of annexes. Other suggestions have yet to be tested in practice, such as double-briefing, which aims to make the first meeting of the Panel with the parties more fruitful, as well as the selection of experts to assist panels and the questions posed to them. This paper should be of assistance if similar consultations are held in the future, thereby playing a part in making small but significant procedural changes to improve the WTO dispute settlement mechanism.

Neither Reluctant nor Aggressive Legalism: East Asian Countries under the World Trade Organization Dispute Settlement Mechanism

This article explores the distinctive features of East Asian countries' involvement in the World Trade Organization (WTO) dispute‐settlement mechanism (DSM). Existing studies are divided into two opposing groups according to what they argue. The “passive legalism” argument emphasizes the reluctant attitude of East Asian countries, and tends to underestimate their involvement in the WTO DSM. On the other hand, the “aggressive legalism” argument highlights the drastic shift in East Asian countries' behavior from passive avoidance to aggressive utilization of the WTO DSM, and tends to overestimate East Asian countries' status in the system. Analyzing WTO dispute data, this article criticizes the limitations of both arguments and suggests responsive legalism or adaptive legalism as a more accurate concept for describing East Asian countries' legal attitude and behavior under the WTO DSM.

China's Participation in WTO Dispute Settlement Over the Past Decade: Experiences and Impacts

The year 2011 marked the 10th year of China's World Trade Organization (WTO) membership. Acceding to the WTO demonstrates China's attempt to integrate in the global trading system as one of the world's biggest economies. To date, China has been involved in 31 WTO cases as complainant or respondent and has gradually become one of the most frequent users of WTO dispute settlement mechanism. This article provides a skeletal review of China's participation in WTO dispute settlement over the past decade and analyzes some of its salient and systematic impacts on China. Active participation in WTO dispute settlement inevitably poses challenges to China, but it is helpful for China to improve its trade and social--political governance regimes and to maintain healthy and constructive trade relations with other WTO members. Oxford University Press 2012, all rights reserved, Oxford University Press.

An Empirical Study of China's Participation in the WTO Dispute Settlement Mechanism: 2001-2010

On 11 December 2001, China officially became a Member of the World Trade Organization (WTO) after years of negotiations. The paper shows how a major developing country has used the WTO dispute settlement system by examining China’s participation in the WTO dispute settlement mechanism from its entry through 31 December 2010. It provides a comprehensive analysis of the WTO dispute cases in which China has participated as a complainant, a respondent, or a third party.

The Review of the WTO Dispute Settlement Process

The first request for consultations under the dispute settlement mechanism of the World Trade Organization (WTO) was filed ten days after its establishment in 1995. Thus far, more than 423 cases have been initiated under this mechanism. In addition, since 1997, Members have been engaged in a review of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), identifying areas in which the system has problems or may be improved. However, there have been difficulties in agreeing on the nature and the extent of these reforms. In the meantime, panels and the Appellate Body have resolved many of the issues under discussion in the DSU review on an ad hoc basis. There is an element of pragmatism on this approach. However, sometimes the solutions vary from case to case, adding an element of uncertainty to the handling of procedural matters in the WTO dispute settlement mechanism. Certainly, the DSU review process is an opportunity to provide consistency on these issues and is key for the enhancement of the WTO system in general. Currently, it is at risk of being left behind if the Doha Round does not move forward. This paper identifies the areas in which the dispute settlement system is being reviewed. It also identifies other areas in which no proposals have been put forward in spite of the existence of non-codified practice on those issues. Finally, the paper also identifies areas where, if not clarified or improved, would render, in the view of the authors, the DSU review negotiations meaningless.