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WTO Dispute Settlement at Ten: Evolution, Experiences, and Evaluation

Listed author(s):
  • Thomas A. Zimmermann

    (Swiss Institute for International Economics & Applied Economic Research SIAW-HSG)

ENGLISH ABSTRACT: On 1 January 1995, the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) entered into force. During its first ten years, the DSU has since been applied to 324 complaints – more cases than dispute settlement under the GATT 1947 had dealt with in nearly five decades. The system is perceived, both by practitioners and in academic literature, to work generally well. However, it has also revealed some flaws. Negotiations to review and reform the DSU have been taking place since 1997 (“DSU review”), however, without yielding any result so far. In the meantime, WTO Members and adjudicating bodies managed to develop the system further through evolving practice. While this approach may remedy some practical shortcomings of the DSU text, the more profound imbalance between relatively efficient judicial decisionmaking in the WTO (as incorporated in the DSU) and nearly blocked political decisionmaking evolves into a serious challenge to the sustainability of the system. This article provides an overview of the first ten years of DSU practice, the on- going DSU review negotiations, and the challenges to the dispute settlement system. GERMAN ABSTRACT: Am 1. Januar 1995 trat das Übereinkommen über Regeln und Verfahren für die Streitschlichtung (Dispute Settlement Understanding; DSU) als Teil des WTO-Abkommens in Kraft. In den ersten zehn Jahren seines Bestehens fand das DSU auf 324 Klagebegehren Anwendung – mehr Fälle, als unter den Streitschlichtungsregeln des GATT 1947 in dessen nahezu fünfzigjähriger Geschichte behandelt wurden. Die Funktionsweise des Systems wird sowohl in der handelspolitischen Praxis als auch in der wissenschaftlichen Literatur als gut eingestuft. Gleichwohl hat der Mechanismus in seiner Anwendung auch einige Schwächen offenbart. Diese sollen auf dem Verhandlungswege („DSU Review“) behoben werden, doch blieben die seit Ende 1997 laufenden Gespräche bislang erfolglos. Zugleich ist es den Mitgliedstaaten und den Spruchorganen aber stellenweise gelungen, das System im Rahmen der praktischen Anwendung fortzuentwickeln. Während auf diesem Weg einige praktische Probleme des Verfahrenstextes behoben werden konnten, dürfte das beträchtliche Ungleichgewicht in der WTO zwischen einem vergleichsweise effizienten juristischen Entscheidungsmechanismus (in Form des DSU) und den häufig blockierten politischen Entscheidungsmechanismen fortbestehen. Dieses Ungleichgewicht bedroht die Systemnachhaltigkeit. Der vorliegende Artikel gibt einen Überblick über die ersten zehn Jahre DSU-Praxis, die laufenden DSU-Review-Verhandlungen sowie einen Ausblick auf zukünftige Herausforderungen.

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Paper provided by EconWPA in its series International Trade with number 0504003.

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Length: 35 pages
Date of creation: 08 Apr 2005
Handle: RePEc:wpa:wuwpit:0504003
Note: Type of Document - pdf; pages: 35. Paper has been published
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  1. Claude Barfield, 2002. "WTO dispute settlement system in need of change," Intereconomics: Review of European Economic Policy, Springer;German National Library of Economics;Centre for European Policy Studies (CEPS), vol. 37(3), pages 131-135, May.
  2. Claude Barfield, 2001. "Free Trade, Sovereignty, Democracy," Books, American Enterprise Institute, number 52877.
  3. Anderson, Kym, 2002. "Peculiarities of retaliation in WTO dispute settlement," World Trade Review, Cambridge University Press, vol. 1(02), pages 123-134, July.
  4. Petersmann, Ernst-Ulrich, 1998. "How to Promote the International Rule of Law? Contributions by the World Trade Organization Appellate Review System," Journal of International Economic Law, Oxford University Press, vol. 1(1), pages 25-48, March.
  5. Jacques H.J. Bourgeois, 2003. "Comment on a WTO Permanent Panel Body," Journal of International Economic Law, Oxford University Press, vol. 6(1), pages 211-235, March.
  6. Thomas Cottier & Satoko Takenoshita, 2003. "The Balance of Power in WTO Decision-Making: Towards Weighted Voting in Legislative Response," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 58(02), pages 169-214, 06.
  7. repec:aei:rpbook:24252 is not listed on IDEAS
  8. Jackson, John H., 2002. "Perceptions about the WTO trade institutions," World Trade Review, Cambridge University Press, vol. 1(01), pages 101-114, March.
  9. William J. Davey, 2003. "The Case for a WTO Permanent Panel Body," Journal of International Economic Law, Oxford University Press, vol. 6(1), pages 177-186, March.
  10. Claus-Dieter Ehlermann, 2003. "Reflections on the Appellate Body of the WTO," Journal of International Economic Law, Oxford University Press, vol. 6(3), pages 695-708, September.
  11. Robert W. Staiger & Kyle Bagwell, 1999. "An Economic Theory of GATT," American Economic Review, American Economic Association, vol. 89(1), pages 215-248, March.
  12. S. K. Mitchell, 1997. "GATT, Dispute Settlement and Cooperation: A Note," Economics and Politics, Wiley Blackwell, vol. 9(1), pages 87-93, 03.
  13. Butler, Monika & Hauser, Heinz, 2000. "The WTO Dispute Settlement System: First Assessment from an Economic Perspective," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(2), pages 503-533, October.
  14. Jeffrey J. Schott & Jayashree Watal, 2000. "Decision-Making in the WTO," Policy Briefs PB00-2, Peterson Institute for International Economics.
  15. Guzman, Andrew & Simmons, Beth A, 2002. "To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organization," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 205-235, January.
  16. Hudec, R. E., 2002. "Free trade, sovereignty, democracy: the future of the World Trade Organization," World Trade Review, Cambridge University Press, vol. 1(02), pages 211-222, July.
  17. John Greenwald, 2003. "WTO Dispute Settlement: an Exercise in Trade Law Legislation?," Journal of International Economic Law, Oxford University Press, vol. 6(1), pages 113-124, March.
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