Breaking down the Dispute Settlement Mechanism

Breaking it down to sections, it can be noted that there are stages to this process: the first is the consultation process, second the review and reporting of the panel body then the Appellate Body from which comes the recommendation and ways on the implementation of the ruling which may include sanctions, countermeasures, retaliatory measures or compensations. In some cases, Arbitrators are involved in the process to negotiate time period, the compliance and the level of retaliation.

First and foremost, consultations are arranged between the Parties who have a dispute, this may involve 1 country per side or more. Member countries are encouraged to meet and find a mutual way to settle the problem without having to go through the rest of the legal process. “As of 31 December 2021, WTO Members referred 607 disputes to the Dispute Settlement Body. Not all of these disputes required formal rulings to resolve them. A mutually agreed solution is always the preferred outcome, and consultations among disputing Members within the framework of WTO dispute settlement can often be sufficient to resolve the matter in dispute.” [2]

The following phases after the Panel Reports agreed or the Appellate Body report (which is final and does not allow for appeal) involves then procedures for implementation, suspension of concessions, retaliation or cross-retaliation, all within agreed reasonable periods of time. These processes may or may not be implemented immediately, or may or may not need to include an Arbitrator and/or a process to establish panels of compliance.

“As of 31 December 2020, a compliance panel had been established in 51 disputes (that is, in 19 per cent of the disputes that led to the circulation of a panel report). In 33 of these disputes (that is, in almost 65 per cent of cases in which a compliance panel has been established), the compliance panel’s report was appealed.” [5]

At the end though, since the Appellate Body report is deemed final and with no possibility of appeal, the Dispute Settlement Body authorizes the retaliation or cross retaliation until such time that a full implementation by the losing Party is fulfilled. This process may or may not warrant the need for an Arbitration process to negotiate the level of suspension, procedures and principles of retaliation.

[2] Dispute settlement activity — some figures


[3] Dispute settlement activity — some figures

[4] Dispute settlement activity — some figures


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