The World Trade Organization’s Dispute Settlement Body (DSB) handles disputes between members, with an emphasis on negotiation. If consultation fails, a panel is appointed to examine evidence and determine the outcome. The panel’s report becomes a DSB decision unless rejected by consensus. Appeals are heard by the Appeals Body based solely on points of law.
Dispute settlement of the World Trade Organization (WTO) is handled by its Dispute Settlement Body (DSB), which is made up of all WTO members. The DSB is empowered to form expert panels to consider the case. The DSB may reject the findings of the panels and also oversees the implementation of its rulings and orders in respect of the dispute and may authorize sanctions for non-compliance therewith.
There is a strong emphasis on negotiation between the parties in the dispute settlement procedure of the World Trade Organization. Before any other WTO action is taken, the parties must first consult and try to resolve the disagreement. If this fails, the parties can still ask the WTO director general to mediate the dispute or assist in other ways.
If the consultation does not result in the resolution of the dispute, the complaining country may request the DSB to appoint a panel. Panels consist of three to five experts from different countries chosen from a standing list with input from the disputing parties. Experts examine the evidence and determine which party is right. A panel report is delivered to the DSB, which can only reject the report by consensus of the members.
Pursuant to the World Trade Organization’s dispute settlement procedure, complaining and responding countries present their case at the first panel hearing. At a second panel hearing, the disputing countries may present written rebuttals and present oral arguments. The panel may consult its own experts or request an expert review group to prepare a technical evidence advisory report.
The panel writes a descriptive report of the facts and arguments presented in the case and gives a copy to the parties for comment. The panel draft is a summary of evidence and arguments and does not include any findings or conclusions. After the parties have time to comment on the draft, the panel issues an interim report containing the findings and conclusions on whether a WTO trade agreement was violated.
After a two-week review period, during which the panel may hold additional meetings with the parties, it issues a final report. The final report is circulated to WTO members for comments. The panel’s final report becomes a DSB decision after 60 days unless a DSB consensus rejects it. Either or both parties may appeal a panel’s decision.
Appeals are heard by three members of the permanent Appeals Body, which is made up of seven members who serve four-year terms. The World Trade Organization’s dispute settlement procedure requires that appeals be based solely on points of law. On appeal, the parties may not ask the Appellate Body to reconsider evidence or consider new issues.
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