Dispute Settlement Mechanism under WTO

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Dispute Settlement Mechanism under WTO

Recently, a meeting has been called by the US Trade Representative to discuss dispute settlement Mechanism reforms of the World Trade Organization (WTO).

The Dispute Settlement Process (DSP) of the WTO is non-functional since December 2019. The reason behind this is the ban imposed by the United States on appointments to the appellate body.

Concerns have been expressed on the following issues related to this:

  • Interference by the Appellate Body in the sphere of other organs of the WTO.
  • The nature of the dispute settlement process is based on litigation.
  • This process is lengthy, costly and controversial, etc.

Two main ways to settle a dispute after a complaint is filed with the WTO:

  • The parties involved in a dispute (especially during the bilateral consultation phase) seek a mutually agreed solution.
  • Disposal is done through adjudication (including implementation of panel and appellate body reports).

The Appellate Body is the WTO’s apex body for settlement of disputes. It consists of seven members. These members are constituted by the Disputes Redressal Body (DSB). The term of these members is four years. The DSB is made up of representatives from all WTO members.

Three main phases of the WTO’s DSP-

  • Consultation between the parties;
  • Decision by the panel, and if necessary by the appellate body; And
  • Implement the decision.

Source – The Hindu

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