The Dsu Article 3.8 Presumption that an Infringement Constitutes a Prima Facie Case of Nullification or Impairment: When Does it Operate and Why?

This article considers the origin, meaning and current relevance of the Dispute Settlement Understanding (DSU) Article 3.8 presumption that a government measure which infringes World Trade Organization (WTO) obligations constitutes a prima facie case of nullification or impairment. It is argued that the prevailing interpretation of this provision is inconsistent with its plain language and may have contributed to the tendency of respondent states to invoke the presumption in order to undermine the fundamental principle that General Agreement on Tariff and Trade/WTO rules protect competitive opportunities rather than trade flows. The key to understanding the provision resides in the acknowledgment that the concept of nullification or impairment can be understood in two different senses depending on the stage in the proceedings at which it is relevant. While there is an isolated indication that the Appellate Body is edging closer to a re-interpretation of the provision, it is suggested that the dispute settlement process could be modestly simplified with some amendments to the DSU. Oxford University Press 2010, all rights reserved, Oxford University Press.