Abstract
The WTO is characterized by combining diplomatic control, which is exercised by the higher bodies, and legal control, which is undertaken by the dispute settlement system of the Dispute Settlement Body (DSB). However, legal control has prevailed in the decision-making process when compared to decision-making based only on political reasons. If historical circumstances have guided the action and discourse of the WTO, this chapter examines how the organizational structure of the WTO dispute settlement system and its procedural rules reveal the importance of WTO legal discourse, when compared with the strictly diplomatic discourse, reinforcing the authority of the WTO decision-making discourse.
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- 1.
T. Flory, L’Organisation mondiale du commerce, op. cit., at. 21.
- 2.
É. Canal-Forgues, Le règlement des différends à L’OMC, op. cit., at. 11. Pursuant to Article 3.7 of the DSU, priority shall be given to a solution mutually acceptable by the parties. It encourages the Members of the WTO to end conflicts on an amicable basis. However, even a mutually accepted solution must be in conformity with the WTO agreements. This reinforces the judicial nature of the new dispute settlement system. In other words, the proposed solutions for a litigant cannot be in violation of the rules of multilateral trade. See Article 3.5 of the DSU.
- 3.
C. Lafer, A OMC e a regulamentação of the comércio internacional, op. cit., at. 31–32.
- 4.
Article 1.1 of the DSU. The Members may, however, according to Article 25 of the DSU, resort to arbitration as an alternative means of dispute settlement in order to facilitate “the solution of certain disputes that concern issues that are clearly defined by both parties.”
- 5.
- 6.
Among DSU provisions that establish the automatic nature of the procedures for dispute resolution are the articles on the consultation phase (Articles 4.3, 4.7, 4.8, and 4.11), the establishment of panels (Articles 6.1), Duration for procedure in special group (Articles 12.8, 12.9, 12.10, 20 and, 21.4), adopting the panel report (Article 16.4), procedure for the Appellate Body (Articles 17.5, and 17.14), and the supervision for the enforcement of recommendations and decisions of the DSB (Article 21.3).
- 7.
E.-U. Petersmann, The GATT/WTO dispute settlement system, op. cit., at. 85.
- 8.
Article 3.8 of the DSU.
- 9.
E.-U. Petersmann. Loc. cit.
- 10.
Article 4 of the DSU. If the parties are not able to produce a satisfactory outcome within the pre-defined time periods, the complaining party may initate the next phase, that is, the panel phase of the DSB (see Article 4, paragraphs 5 and 7 of the DSU). The same applies to the lack of consultations when the respondent does not answer within the legal time period (Article 4, paragraph 3 of the DSU). This is a “sanction” against the respondent, in order to avoid the respondent blocking the conflict resolution procedure. There is no obligation to hold the consultation phase in order to move to the panel phase.
- 11.
This phase is established under Article 21 of the DSU.
- 12.
The panels and the Appellate Body differ, however, from the amicable means of non-jurisdictional solutions to international conflict, such as mediation and conciliation.
- 13.
Article 6 of the DSU.
- 14.
Article 2.1 of the DSU.
- 15.
See Article 8.1 of the DSU. Within 10 consecutive days after the establishment of the panel, the parties may request the panel be comprised of five individuals (Article 8.5 of the DSU). The Secretariat of the WTO will maintain a roster of qualified individuals, employees, government and non-government employees to be arbitrators (Article 8.4 of the DSU). According to 8.2 of the DSU, “panel members should be selected with a view to ensuring the independence of the members, a sufficiently diverse background and a wide spectrum of experience.”
- 16.
To ensure impartiality of panel decisions, nationals of Members whose governments are parties to the dispute or third parties shall not participate on the panel, unless the parties previously agree (Article 8.3 of the DSU). In the terms of footnote n. 6 of the DSU, if a customs union or common market is one of the parties, the aforementioned Article applies to nationals of all the Members – countries of the of the economic bloc in question.
- 17.
Article 8.9 of the DSU.
- 18.
Article 8.6 of the DSU. According to paragraph 7 of the Article 8 of the DSU, in the event there is no agreement among the Members as to the composition of the panel after 20 days after its establishment, the Director-General, at the request of the parties, after consulting the Chair of the DSB and the Chair of the relevant Council or Committee, shall determine the composition of the panel.
- 19.
V. Pace, L’Organisation mondiale du commerce et le renforcement de la réglementation juridique des échanges commerciaux internationaux, op. cit., at. 198.
- 20.
Article 6.1 of the DSU.
- 21.
Article 6.2 of the DSU. According to Pace, the terms of reference of the panel are better legally defined in the WTO than during the GATT, when the definition of the terms of reference was done by consulting the parties in controversy. In the framework of the WTO, the litigant states have no power to decide on the terms of reference – they is prescribed by the organization, thus strengthening the jurisdictional nature of the procedure (Op. cit., at. 199). This model for terms of reference is prescribed in Article 7.1 of the DSU: “to examine, in the light of the relevant provisions in (name of the covered agreement(s) cited by the parties to the dispute), the matter referred to the DSB by (name of party) in document … and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in that/those agreement(s).”
- 22.
A “claim” must state the alleged violations of an agreement. The claimant must present his arguments in the written submissions and on the occasion of the panel hearing.
- 23.
Article 11 of the DSU. The panel shall examine the evidence submitted by the parties.
- 24.
Article 15.2 of the DSU.
- 25.
Article 12.7 of the DSU.
- 26.
Article 19.1. of the DSU.
- 27.
According to Article 17.4 of the DSU, only the parties to the controversy may appeal the report of the panel. Third parties or interested parties do not have this capacity.
- 28.
Article 16.4 of the DSU.
- 29.
Article 17.6 of the DSU. Questions and factual conclusions not covered by the report cannot be appealed See European Communities – Measures affecting importation of certain poultry products, report of the Appellate Body, paragraph 107 (WT/DS69/AB/R).
- 30.
Article 17.13 of the DSU.
- 31.
Article 17.14 of the DSU.
- 32.
C. Lafer, A OMC e a regulamentação of the comércio international, op. cit., at. 125. Emphasis in the original.
- 33.
É. Canal-Forgues, Le règlement des différends à L’OMC, op. cit., at. 26–27.
- 34.
Some Members are concerned with the authority of this discourse insofar as the conclusions and recommendations of the panels and the Appellate Body could mean an increase or decrease of the rights and obligations resulting from the covered agreements. On the matter see Articles 3.2 and 19.2 of the DSU. The Appellate Body called attention to the fact that it is not within the scope of the DSB “to legislate” in order to clarify the provisions of the WTO Agreement in a context other than the resolution of a certain dispute (WT/DS33/AB/R. United States – Measure Affecting Imports of Woven Wool Shirts and Blouses from India, at. 22). See also United States – Import Measures on Certain Products from the European Communities, the Appellate Body report, paragraph 92 (WT/DS165/AB/R). This debate could have been avoided if the Ministerial Conference and the General Council, as the political entities, exerted their authority to adopt formal interpretations according to Articles X and IX.2 of the Marrakesh Agreement, and Article 3.9 of the DSU.
- 35.
The most recent version became effective on January 1, 2005. Working Procedures for Appellate Review are hereinafter called “Working Procedures”.
- 36.
Article 17.9 of the DSU.
- 37.
Rule 2, Paragraphs 2 and 3 of the Working Procedures of the Appellate Body. According to Article 17.3 of the DSU, all persons serving on the Appellate Body “shall not participate in the consideration of any disputes that would create a direct or indirect conflict of interest” and “shall be available at all times and on short notice”, implying a priority work relationship with the WTO.
- 38.
Rule 20 (1) of the Working Procedures.
- 39.
Rule 20 (2)(d) of the Working Procedures.
- 40.
Article 17.1 of the DSU. According to Ehlermann, there is a close connection between the decision to limit the number of members of a section assigned to a case and the short deadlines for the procedure to examine an appeal. In C.D. Ehlermann, “Six years on the bench of the ‘World Trade Court’”, op. cit., at. 611–612. The term “members” as used in the Working Procedures refers to the members of the Appellate Body. When referring to the signatories of the WTO, the expression “WTO Members” is used.
- 41.
Rule 6 (2) of the Working Procedures.
- 42.
C.-D. Ehlermann, “Six years on the bench of the ‘World Trade Court’”, op. cit., at. 614.
- 43.
Rule 3 (1) of the Working Procedures.
- 44.
Rule 4 (3) of the Working Procedures.
- 45.
See Article 3.2 of the DSU.
- 46.
Rule 5 paragraphs 1–3 of the Working Procedures.
- 47.
Rule 7, paragraphs 1 and 2 of the Working Procedures.
- 48.
Rule 3 (2) of the Working Procedures.
- 49.
Article 17, paragraphs 10 and 11, of the DSU.
- 50.
The Appellate Body should distribute the report within 60 consecutive days as of the date the interested party formally notified its desire to appeal. In the event this time limit is impossible to comply with, the Appellate Body should inform the DSB in writing as to the reasons why the AP cannot comply with the deadline and offer a new deadline to present the report. Under no circumstance shall the time limit exceed 90 days. (Article 17.5 of the DSU. See also Articles 4.9 and 20 of the DSU.)
- 51.
Palmeter and Mavroidis (1998), at. 400.
- 52.
Article 59 prescribes: “The decision of the Court has no binding force except between the parties and in respect of that particular case.”
- 53.
WT/DS8/R-WT/DS10/R-WT/DS11/R. Panel Report, Paragraph 6.10.
- 54.
WT/DS8/AB/R-WT/DS10/AB/R-WT/DS11/AB/R. Appellate Body Report, page 17. Adopted by the DSB on November 1, 1996.
- 55.
Ibid., footnote 30.
- 56.
D. Palmeter; P. Mavroidis, “The WTO Legal System”, op. cit., at. 401–402.
- 57.
Rule 4 of the Working Procedures.
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de Carvalho, E.M. (2011). The WTO Dispute Settlement System and the Influence of the Decision-Making Instances of the Dispute Settlement Body. In: Semiotics of International Law. Law and Philosophy Library, vol 91. Springer, Dordrecht. https://doi.org/10.1007/978-90-481-9011-9_8
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