DISPUTE SETTLEMENT BY WTO

    International trade is the key to increasing the world economy. Importing and exporting goods and services from foreign countries is the prominent way to increase a country’s economy. This international trade is like any other normal trade that depends on various aspects but the ultimate goal is to make profit and increase the economy.

    The main motive or intention behind every trade is to make profit to increase economic value. Due to this, the dispute between the parties is common and likely to occur. A dispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the WTO. This meaning of dispute is provided by WTO as it is one of the most prominent organizations which have a mechanism for International Dispute Settlement. The World Trade Organization provides a laid procedure for disputes arising between the Nations that signed the WTO agreement .India is also a signatory member of WTO since 1995.

    DISPUTES SETTLEMENT BODY 

    Settling disputes is the duty of the Dispute Settlement Body, which is composed of all WTO members. Only this body has the authority to establish “panels” of experts to take the case in its cognizance, and to accept or reject the panels’ decisions or the judgment of an appeal. It keeps a track on the implementation of the findings and recommendations, and has the power to authorize retaliation when a country does not comply with findings of its panel. 

    The Director-General of the WTO acting in ex-officio capacity assists the members to settle the dispute by offering his/her good offices , and requests the least developed country member to offer his/her office for mediation and negotiation in order to help pirates to resolve their dispute . It convenes the meetings of the DSB and appoints the panel members upon the request of either of the disputing party .

    Panel is a tribunal acting as a quasi judicial body, incharge of adjudicating the disputes between the members in the first instance. The panel has three or in some cases five experts selected by the General-Secretary on an ad-hoc basis so there is no permanent member of a panel and a new panel is created for every dispute. The penalist serves in their personal and individual capacity and not representing any organization or their respective government. The panel formed for a specific dispute has to review the factual and legal aspect of the case and make the report on it. The report then is to be submitted to DSB containing its conclusion and recommendations.

    DISPUTE SETTLEMENT BODY AND APPELLATE BODY

    Under Article 17 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) , the Appellate Body was established in 1995. It hears the dispute of WTO members on the basis of reports issued by the Panel. It can give its new findings or uphold the inference of the Panel. If the report of the Appellate Body is accepted by the Dispute Settlement Body (DSB), the parties to dispute must adhere to it. The Appellate Body sits in Geneva, Switzerland. It is composed of seven members, for the term of four years. The members are appointed by DSB. The Appellate Body Secretariat provides administrative and legal support to the Appellate Body. 

    SYSTEMATIC APPROACH TOWARDS THE DISPUTE

     CONSULTATION

     Before taking any other actions the countries in dispute have to set up a bilateral meeting to hear both sides’ arguments and statements  to see if they can settle their differences by themselves by arriving at a mutual conclusion. If that fails, they can also ask the WTO director-general to mediate or try to help in any other way. The Dispute Settlement Understanding by paragraph 4, Article 4,provides a procedure for  consultations.

    The request for consultation should be submitted in writing, it provides reasons for the request, all such consultations should be notified to the DBS and the relevant council, the consultations should remain covert as for the privacy of the parties till any further proceedings. Consultation provides a time of 60 days from the day of the request of consultation is approved. After the expiry of 60 days if the consultation is failed to resolve the dispute then the parties may ask for a panel. When there is a case related to perishable goods, the resolution should be done urgently, then it is required by the panel members and the Appellate body to accelerate the proceedings.  

    THE PANEL

    ESTABLISHING A PANEL

    If consultations fail to resolve the dispute between the parties then the complaining country can ask for a panel to be appointed under Article 6. Paragraph 2, Article XXIII of GATT also provides that if no satisfactory adjustment is effected through consultations between the contracting parties concerned, the dispute concerned may be referred to the DSB for considering the case through panel. A panel is made for pronouncing a legal judgment regarding the matter in the dispute.

    The panel is made for helping the Dispute Settlement Body to make rulings or recommendations. But because the panel’s report can only be rejected by consensus in the Dispute Settlement Body, its conclusions are difficult to overturn. The panel’s findings have to be based on the agreements cited.

    The final report of penal is submitted within 6 months of the proceeding whereas in the cases of perishable goods is in matter or where the matter requires urgency the report could be submitted within 3 months.

    COMPOSITION OF PANELS

    Once a panel is established, the next step is to select panelists. Selection of panelists is conducted through proposals by the WTO Secretariat on panelists provided under paragraph 6, Article 8 of DSU. The Secretariat summons the disputing parties and asks their opinions for selecting panelists, such as home country, work experience and expertise. Then, the Secretariat assembles a list of nominees of six persons providing their names and brief personal record, and shows the list to both parties. It is also provided that either disputing party “shall not oppose nominations except for compelling reasons” . However, since the definition of a compelling reason is not rigid, generally nominations made by the WTO Secretariat are not accepted by either party, and sometimes this happens several times. It is also provided that if there is no meeting of minds on the panelist under the span of 20 days from the date of establishment of a panel, the Director general shall form the composition of the panel after consulting the dispute parties as provided under paragraph , Article 8 of DSU.

    THE PROCEDURE OF DISPUTE SETTLEMENT THROUGH PANEL

    • Before the first hearing, both sides in the dispute present their case in writing to the panel.
    • In the first hearing, the complaining country (or countries), the responding country, and those that have announced they have an interest in the dispute, make their case at the panel’s first hearing.
    • The countries involved in the dispute have to submit their written rebuttals and present oral arguments at the panel’s second meeting.
    • Experts- if there is a technical or scientific problem issued by one of the parties, the panel may ask for a consultant or appoint an expert review group for an advisory report.
    • First draft- it contains the facts, sections and arguments of the other party to prepare their rebuttals on it providing them time of two weeks. This report does not contain any comments from the Panel on the arguments. 
    • Interim report contains the findings and conclusions of the Panel on the dispute .It is given to both the parties related to the dispute. Both parties have one week to review the report.
    • Review- The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides.
    • A final report is provided to both the sides and after three weeks it is circulated to all the members of WTO. If the Panel finds that a measure in the trade dispute infringes the trade agreement under WTO or its provisions then it recommends to make a rule so parties comply with the rules of WTO. The Panel provides their suggestions for the applicability of their measures.[1]

    https://legalreadings.com/biologicaldiversity-act-2002/

    INDIAN DISPUTES

    INDIA-PATENTS (U.S.) 

    • Parties: U.S. (Complainant) and India (Respondent) 
    • Issues: Patent protections for pharmaceuticals and agricultural chemical products
    • Panel Findings: There is no mechanism in India to grant the rights to products covered under article 70.8(a) of GATT and India’s filing system of “administrative patent” system is inconsistent with article 70.8.  [2]

    INDIA-QUANTITATIVE RESTRICTIONS

    • Parties: U.S. (Complainant) and India (Respondent)
    • Issues: India’s Import restrictions 
    • Panel Findings: India’s import measures were quantitative restrictions inconsistent to GATT Article XI :1.  [3]

    INDIA-AUTOS

    • Parties: U.S. , European Communities (Complainants) and India (Respondent)
    • Issues: India’s indigenization requirement and trade balancing requirement imposed on its automotive sector
    • Panel Findings: It was found that the measures violated Article III:4 of GATT in Indigenization requirement and limiting the quantity of imports regarded exports is taken as a restriction to importation  which comes under Art. XI:1, and thus violated Art. XI:1.  [4]

    CONCLUSION

    There were more than 500 disputes resolved by WTO among the countries, half of which were resolved through bilateral discussions and the other half through panel process. This shows the importance of the dispute dissolution system of WTO. Due to its fast mechanism the disputes are resolved within 6 months and in case of time being factor the report is completed in 3 months. It covers the vast area which is missed by GATT which makes it more suitable for current scenarios from intellectual property to information technology. The scope of WTO is covering every essential goods and subject which might come under a trade dispute. The transparency in the dispute resolution system of WTO makes it more vital and important to opt for it. The WTO dispute settlement mechanism is of the most relevant due to its procedures established under GATT and DSU.

    REFERENCES    

    [1] https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm.

    [2]WTO Dispute Settlement: One-Page Case Summaries page no. 24 ( 2012 edn).

    [3]WTO Dispute Settlement:  One-Page Case Summaries page no. 38 (2012 edn).

    [4]WTO Dispute Settlement:  One-Page Case Summaries page no. 60 (2012 edn).


    BY SURYANSH GAUR | LAW COLLEGE DEHRADUN, UTTARANCHAL UNIVERSITY

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