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MODULE III
DISPUTE SETTLEMENT PROCEDURE
• One of the unique features of the WTO is its
provision relating to dispute settlement
mechanism . In fact the power to settle trade
disputes is what is the difference between the
WTO and GATT .
• When a member files a complaint against
another , the dispute settlement body of the
WTO steps in immediately .
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• Decisions have to be taken in less than 1 year 9
months if the case is urgent , 15 months if the
case is appealed . The dispute settlement system
of WTO is faster and automatic and the decisions
cannot be ignored or blocked by members .
• Offending countries must realign their trade
policies according to the WTO guidelines or suffer
financial penalties and even trade sanctions .
• Because of its ability to penalize offending
member nations ,the WTO dispute settlement is
the backbone of the global trading system.
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• The costs of dispute settlement proceedings
are disproportionately heavy for developing
countries.
• In general , developing countries do not enjoy
a neutral playing field. Although the dispute
settlement procedure is not biased against
any party in a dispute , developing countries
are less well equipped to participate in the
process they have fewer people with
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• Necessary training , they are less experienced
and as noted above , they face resource
constraint.
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Overview
Overall aim:Overall aim:
• to secure complianceto secure compliance
with the Agreementswith the Agreements
Quasi-judicial NatureQuasi-judicial Nature
• Secured access
• Detailed procedures
• Automaticity in the
proceedings
• Deadlines
• Possible appeal
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Dispute Settlement in the WTODispute Settlement in the WTO
Scope
• An integratedAn integrated
systemsystem:
• Applies to all the
multilateral
agreements
• A single set of rules for
all disputes
– Only a few specific rules
in some agreements
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Dispute Settlement in the WTODispute Settlement in the WTO
Main players
• Dispute Settlement Body (DSB)Dispute Settlement Body (DSB)
• Panel and Appellate BodyPanel and Appellate Body
• Parties: WTO MembersParties: WTO Members
• WTO SecretariatWTO Secretariat
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Dispute Settlement in the WTODispute Settlement in the WTO:
Relationship of players
Panel
Appellate Body
Ministerial Conference
Dispute Settlement Body
(General Council)
Request for Panel
by WTO Member www.StudsPlanet.com
Dispute Settlement in the WTODispute Settlement in the WTO:
Main Procedures
I m p le m e n t a t io n
A p p e la t e B o d y
P a n e l
C o n s u lt a t io n s
60 days
9 months
90 days
15 months
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Dispute Settlement in the WTODispute Settlement in the WTO
Consultations: the request
• Indicates reasons for the
request: identification of
– the measures
– legal basis for complaint
• Notified to DSB and circulated to
all Members
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Dispute Settlement in the WTODispute Settlement in the WTO:
Consultations: function
• to “accord sympathetic consideration to and
accord adequate opportunity for
consultation…”
• confidential, only between the Members
concerned
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Dispute Settlement in the WTODispute Settlement in the WTO:
Consultations: third parties
• But, in some instances, other Members can requestBut, in some instances, other Members can request
to be joined in the consultationsto be joined in the consultations Article 4.11 DSU
– “substantial trade interest”
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Dispute Settlement in the WTODispute Settlement in the WTO:
Consultations: if not successful
• If consultations fail to resolve the matter within 60
days from receipt of request…..
• Or if no response or no entering into consultations
• …. A request for establishment of a panel can be madeA request for establishment of a panel can be made
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Establishment of panels
• Request for establishmentRequest for establishment:
– must “identify the specific measures at issue and provide a brief
summary of the legal basis of the problem sufficient to present
the problem clearly”
• EstablishmentEstablishment
– at the latest at the second DSB meeting at which the request is
made; decided by negative consensusnegative consensus
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Terms of reference and composition of panels
Terms of reference:Terms of reference:
(Article 7 DSU)
• Standard, orStandard, or
• Special terms ofSpecial terms of
referencereference
Panel Composition:Panel Composition:
(Article 8 DSU)
• “well-qualified government
and/or non-governmental
individuals”
• Secretariat proposals
• indicative list of panelists
• nomination by DG
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Panels: how they function
Functions of the PanelFunctions of the Panel
““…a panel should make an objective assessment of the
matter before it, including an objective assessment of the
facts of the case and the applicability of and conformity
with the relevant covered agreements…”
Functions of the dispute settlement systemFunctions of the dispute settlement system
“… to preserve the rights and obligations of Members under the
covered agreements, and to clarify the existing provisions of those
agreements in accordance with customary rules of interpretation of
public international law…” Art. 3.2 DSU
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Panel Procedures: main steps
• Oral hearings (usually 2), onOral hearings (usually 2), on basis of writtenbasis of written
submissionssubmissions
• Descriptive part of report issued to partiesDescriptive part of report issued to parties
• Interim review based on draft reportInterim review based on draft report
• Final report issued to partiesFinal report issued to parties
• Final report circulated to all MembersFinal report circulated to all Members
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Panel Procedures: other sources of input
– Third parties have make presentationsThird parties have make presentations
• need “substantial interest”need “substantial interest” (Article 10 DSU)
– Panels may seekPanels may seek
• factual information from any relevant sourcefactual information from any relevant source
(Article 13 DSU)
• scientific or technical advice from an Expertscientific or technical advice from an Expert
review groupreview group (Appendix 4 DSU)
– Requirement of confidentialityRequirement of confidentiality (Article 14 DSU)
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Dispute Settlement in the WTO:
Panel Procedures: duration
• As a general rule, 9 months from establishment of
panel to consideration of report for adoption (if no
appeal)
• 12 months where report is appealed
(Article 20 DSU)
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Panel procedures:: Adoption of Panel Reports
• Adoption within 60
days of circulation, by
negative consensus….
… ExceptExcept ifif appealedappealed
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Dispute Settlement in the WTO:
Appellate Review
• Appeals limited to “issuesAppeals limited to “issues
of law and legalof law and legal
interpretations developedinterpretations developed
by the panel”by the panel”
• Appeal only open toAppeal only open to
parties to the disputeparties to the dispute
Appellate BodyAppellate Body
• 7 members
• members to have
recognized authority and
expertise in international
trade law
• members unaffiliated with
any government
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Dispute Settlement in the WTO:
Appellate Review: report and adoption
Report of the Appellate BodyReport of the Appellate Body:
• “may uphold, modify or reverse the legal
findings and conclusions of the panel” (Art.
17.12 DSU)
• AdoptionAdoption of Appellate Body report: by
reverse consensus within 30 days of
circulation to Members
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Dispute Settlement in the WTODispute Settlement in the WTO:
Implementation
• Member must bring thebring the
measures into conformitymeasures into conformity
with its WTO obligationswith its WTO obligations
(Article 19 DSU)
• Member must inform DSB
of its intentions in for
implementation of the
recommendations
(Article 1 DSU)
If there is a finding
of violation:
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Implementation: reasonable period of time
Determination of “reasonable period ofreasonable period of
timetime” for implementation:
• proposed by Member, and approved by DSB, or
• mutually agreed by the parties, or
• determined through arbitrationarbitration:
– “guideline for the arbitrator”: 15 months from the date of
adoption (Article 21.3 DSU)
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Implementation: surveillance
• SurveillanceSurveillance by the DSBby the DSB
– Status reports on implementation
• Temporary measures
– If Member fails to bring measure into
conformity within reasonable period of
time, possibility
• compensation or
• suspension of concessionssuspension of concessions (retaliation)
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Dispute Settlement in the WTO:Dispute Settlement in the WTO:
Implementation
Compensation:Compensation:
(Article 22 DSU)
• Voluntary
• Negotiated
• Compatible with WTO Agreements
• If no compensation agreed within 20 days
after expiry of reasonable period of time….
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• The major provisions of the final act relate to
agriculture , sanitary measures , helping least
developed countries , clothing , TRIPS, GATS
and anti dumping measures .
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AGRICULTURE
• The agreement related to agriculture is made up
of several elements which seek to reform trade in
agriculture and provide the basis for market
oriented policies , thereby improving economic
cooperation for importing and exporting
countries alike. It establishes new rules and
commitments in market access, domestic
support and export competition and includes
provisions that encourage the use of less trade
distorting domestic policies to maintain the rural
economy.
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• It also allows action to be taken to ease
adjustment burdens and provides some
flexibility in the implementation of the
commitment. Specific concerns for developing
countries are addressed including those of net
food importing developing countries and less
developed economies.
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HEALTH AND SAFETY MEASURES
• The agreement on the application of sanitary
and Phytosanitary measures concerns the
application of food safety and animal and
plant health regulations. It recognizes
government rights to take sanitary and
phytosanitary measures but stipulates that
they must be based on science
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• should be applied only to extend necessary to
protect human , animal or plant life or health
and should not arbitrarily or unjustifiably
discriminate among members where identical
or similar conditions prevail.
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HELPING LEAST DEVELOPED AND
FOOD IMPORTING COUNTRIES
• It is recognized that during the reform
programme , least developed and net
importing developing countries may
experience negative effects with regard to
giving food supplies on reasonable terms and
conditions. Such countries need assistance .
Therefore a special ministerial decision calls
for appropriate mechanisms related to the
availability of food and the provision of basic
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• Foodstuffs in full grant form aid for
agricultural development . It also refers to the
possibility of assistance from the IMF and
world bank with respect to the short term
financing of commercial food imports . The
committee on agriculture holds responsibility
to monitor the follow up to the decision .
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TEXTILES AND CLOTHING
• The objective of this agreement is to secure
the integration of textiles and the clothing
sector where much of the trade is currently
subject to bilateral quota negotiations under
the multi - fibre agreement ( MFA ) into the
main stream of WTO . The integration ,
however , shall take place in stages .
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• All MFA restrictions in force on 31st
december1994 would be carried over into the
Final Act and maintained until such time as
the restrictions are removed or the products
integrated into WTO .
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TRIPS ( TRADE RELATED
INTELLECTUAL PROPERTY RIGHTS )
• The WTO Agreement on TRIPS recognizes that
widely varying standards in the protection and
enforcement of intellectual property rights
and the lack of multilateral disciplines dealing
with international trade in counterfeit goods
have been a growing source of tension in
international economic relations .
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• With this end in view , the agreement
addresses the applicability of basic GATT
principles and those of relevant intellectual
property agreements , the provision of
adequate intellectual property rights , the
provision of effective enforcement measures
for those rights , multilateral dispute
settlement and transitional implementation
arrangements.
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The TRIPS contain of three parts
1. Sets out the provisions and principles
2. Addresses different kinds of IPR
3. Concerns enforcement.
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TRIMS ( TRADE RELATED
INVESTMENT MEASURES )
• Multinational Firms are aware of the many
restrictions on their investments in foreign
countries . TRIMS are those restrictions a
country places on foreign investment that
adversely affect trade in goods and services ..
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• WTO members entered the agreement on
TRIMS as a part of the Uruguay Round
agreements.
• The agreement does not set broad rules for
investors in a member country . It simply
prohibits law or regulations that conditions a
country’s rights to import foreign goods on
the volume of goods exported .
• Also prohibited are laws that condition the
receipt of foreign exchange on the country’s
foreign exchange revenues .
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GATS ( GENERAL AGREEMENT ON
TRADE IN SERVICES )
The GATS , negotiated during the Uruguay
Round is the first step of multilaterally agreed
and legally enforceable rules and disciplines
ever negotiated to cover international trade in
services .
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The agreement contains three elements
1.A framework of general rules and disciplines
2.Annexes addressing special conditions relating
to individual sectors ( the sectors covered
are : movement of natural persons , financial
services , telecommunications and air
transport services )
3. and national schedules of market access
commitments .
A council for Trade in Services oversees the
operation of the agreement
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AGREEMENT ON SUBSIDIES AND
COUNTERVAILING MEASURES
( SCM )
• SCM is the outcome of negotiations during
Uruguay Round . Under the GATT agreement
subsidies may be dealt within two days .
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• Firstly , a WTO member country may appeal
to the WTO for dispute resolution . The WTO
may recommend that the subsidy may be
discontinued , its harmful effects be
eliminated or a countermeasure may be taken
by the importing country.
• Secondly , an importing country may initiate
its own administrative proceedings , similar to
anti dumping measures , to impose a
countervailing duty on the subsidized
products in order to eliminate their unfair
price advantage .
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• A countervailing duty is a special tariff , in
addition to the normal import tariff , levied on
imports of subsidized goods in an amount
equal to the amount of the counter viable
subsidy . A countervailing duty may be
brought at the same time as the WTO dispute
settlement action.
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DUMPING
• In Importing , Dumping is the unfair trade
practice of selling products in a foreign for less
than the price charged for the same or
comparable goods in the producers home
market . It is a form of price discrimination
that causes injury to domestic competitors
through artificially low prices against which
domestic producers cannot compete at
profitable level.
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• Anti dumping laws are used more frequently
than any other type of trade law in the US and
EU.
• Developing countries , such as Mexico,
Brazil ,Argentina , India and Korea , also have
antidumping codes .
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THE WTO ANTIDUMPING
AGREEMENT
• The GATT provisions on dumping are found in
GATT 1994 Article VI and in the 1994 WTO
antidumping Agreement . The 1994
agreement provides complex rules for
determining when dumping has occurred and
for resolving dumping disputes .
• Every WTO member country is expected to
see that its national anti dumping laws comply
with the WTO rules .
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• The WTO agreement provides that dumping
occurs when foreign goods are imported for
sale at a price less than that charged for
comparable goods in the exporting or
producing country . Anti dumping duties may
be imposed only when the dumping threatens
or causes “ material injury “ to domestic
industry producing “ like products “. The
agreement requires that an importing country
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• resort to anti dumping duties only after
conducting a formal investigation to
determine both the amount of the dumping
and the extend of material injury.
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What is Dumping
• A product is said to be dumped when its
export price is less than its normal value of a
like product in the domestic market in the
exporting country.
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NORMAL VALUE
 The price in the exporter’s domestic market,
or
 The price charged by the exporter in another
country, or
 Production costs plus other expenses and
normal profit margins.
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• Dumping must cause material injury in the
importing market .
• Types of Injury
Material injury to a domestic industry,
Threat of material injury to a domestic
industry,
Material retardation of the establishment
of a domestic industry
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Measures for Remedial Action
 Imposition of anti dumping duties
 Countervailing duties
 Safeguard measures
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Implications
Only an Industry or Country and not a
Company can call for an anti-dumping
investigation
Time consuming work to gather
information and prove dumping
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Costly as in most cases the matter will be
referred to Industrial courts
Difficult to recover losses during the
process of proving Dumping
Pre or Post introduction of dumping duties
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IMPORTS , CUSTOMS AND TARIFF
• The WTO agreements which are the outcome
of 1986-1994 Uruguay Round of multilateral
trade negotiations introduce disciplines of a
wider range of trade issues and testify to a
wider and deeper commitment to trade
liberlisation . The scope of these agreements
extends beyond the traditional trade issues ,
which primarily addressed the reduction of
tarrifs and quota as barriers against trade in
goods at country borders.www.StudsPlanet.com
• A wide range of non tariff barriers to trade is
now the subject of a number of multilateral
and legally binding WTO agreements . These
agreements deal with technical and
bureaucratic measures or legal issues that
could involve hindrances to trade be used as
instruments for restrictive and discriminatory
trade policies.
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• They include agreements on Technical Barriers
to Trade , Sanitary and phytosanitary
measures , Import Licensing Procedures ,
Rules of Origin , Customs Valuation , Pre
shipment Inspection , Anti Dumping , Subsides
and Countervailing Measures , Safeguards and
Trade related investment measures.
• These treaties after the Uruguay Round , they
have acquired Multilateral status i.e. they
became binding on all members .
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TECHNICAL BARRIER TO
TRADE
• Establishment of WTO - Dismantling of
barriers for free flow of trade
• Creation of global market with equal access to
all countries
• Quality, health & safety & environmental
issues gaining importance
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TBT Agreement - Objectives
•Allows members to apply standards, technical
regulations, conformity assessment
procedures for
 protection of human safety or health (sockets,
seat belts, labelling cigarettes)
Protection of animal & plant life or health
(pollution, extinct eg turtle extruder device)
Protection of environment (level of vehicle
emissions)
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Prevention of deceptive practices (labelling, size)
Other objectives (quality-size of fruits & vegs, tech
harmonization-telecom)
•However need to ensure that these do not
create obstacles to international trade
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•Scope
Applies to all products including industrial & agri
products, both voluntary standards & technical
regulations(standards to which compliance
mandatory)
•Covers
Product characteristics
Process & production methods(PPM) that have an
effect on product characteristics
Terminology & symbols
Packaging & labelling requirements
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• Avoidance of unnecessary obstacles to trade
• Non-discrimination & national treatment
• Harmonization
• Equivalence of technical regulations
• Mutual recognition & conformity assessment
procedures
• Transparency
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Non-discrimination & national
treatment
• Most Favoured Nation Basis – should apply
on a MFN basis to imports from all sources
• National Treatment Principle – shall not
extend to imported products treatment less
favourable than that extended to domestically
produced products
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Harmonization
• Why harmonize
Benefits to producer – can cater to needs of all countries
leading to productions of scale eg cars, mobiles, TV sets,
etc
Benefits to consumers – wide choice, spare parts, etc
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• Harmonization & TBT - standards/tech
regulations/CA procedures to be consistent
with or based on international standards
unless “their use ineffective or inappropriate”
to fulfill objective
• Technical regulations in accordance with
International standards are presumed not to
create unnecessary obstacles to trade
• participate actively in work of ISO/other
international bodies
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Mutual Recognition of Conformity
Assessment
• CA procedures are those used to determine
that requirements met. Include sampling,
inspection, testing, evaluation, verification of
conformity, accreditation, etc.
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Transparency
• Notifications
all proposed, new and changed measures are to be
notified by members to the TBT Committee of WTO
Secretariat,
to be provided to members, translated versions if
requested, & any deviations from international standards
give sufficient notice to allow for adapting to these reqts.
If technical regulation differs from international standards,
need to also take into account comments of exporter
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• Technical assistance
provided to developing countries in the area of
setting up NSBs, participation in int
standardization, preparing technical regulations,
setting up regulatory bodies for CA activities,
methods of CA, etc
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• Special & Differential Treatment
more favourable treatment to be provided to
developing countries
take into account their special developmental,
financial & trade needs when developing tech
regulations, standards and CA procedures so that
no unnecessary obstacles created to exports from
developing countries.
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Institutions, Consultations &
Dispute Settlement
• Committee on TBT established having
representatives from each members meet 2-3
times a year, for discussing operation of
Agreement or furtherance of objectives
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• Consultations & settlement of disputes shall
be under auspices of Dispute Settlement Body
of WTO. However a provision for technical
expert groups to assist in issues of technical
nature has been provided
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Key Features for Preparation,
adoption & Application of
Technical Regulations
• Most Favoured Nation Basis – should apply
on a MFN basis to imports from all sources
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• National Treatment Principle – shall not
extend to imported products treatment less
favourable than that extended to domestically
produced products
• Least Trade Restrictive – should not be
formulated & applied in a manner so as to
cause any unnecessary obstacle to trade – not
more trade restrictive than needed to fulfil
legitimate objectives (prevent deceptive
practices, protection of human, animal or
plant life or health, or environment).
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Other Key Features
• Information
 An enquiry point to be set up
answer all reasonable enquiries
provide documents on technical regulations,
standards & CA procedures;
 any agreements to be notified to secretariat
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• Technical assistance is provided to developing
countries in the area of setting up NSBs,
participation in international standardization,
preparing technical regulations, setting up
regulatory bodies for CA activities, methods of
CA, etc
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Amongst the agreements on non Tariff barriers ,
Technical Barriers to Trade , sanitary and
phytosanitary measures , Import licensing
procedures , Rules of origin , Valuation of
goods at customs , Pre Shipment Inspection
are related to harmonization of trade
regulations while the others , Anti Dumping ,
Subsidies and countervailing measures ,
Safeguards and trade related investment
measures are viewed as related to trade
competition policies ( market access) .
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• NTB may create problems that can be as
serious as the actual tariff and duty rates
charged at country borders . Thus, it is not
surprising that the overall objective of these
Agreements is to prevent obstacles and
reduce uncertainties facing the trading
community . They seek to ensure
transparency of laws , regulations and
practices regarding various rules of trade and
ultimately , to harmonise these rules to
facilitate international trade.
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• This would forcefully entail fundamental trade
reform measures to be taken by these
countries to accommodate and secure their
commitments to the new system . Perhaps the
most important outcome is that the range of
measures previously viewed as falling within
the scope of national policy has now been
brought under multilateral discipline and
linked to the rights and obligations governing
international trade and market access.
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CUSTOM VALUATION
• Customs duties can be either specific or ad
valorem. On the other hand , Ad valorem
duties are based on the value of goods . In this
system , determining the value of a good or, in
other words , customs valuation becomes
important .
• Customs valuation is a set of customs
procedures used to determine the customs
value of imported goods for the purpose
www.StudsPlanet.com
• Of determining the actual incidence of duty.
For importers , the process of estimating the
value of a product at customs may create
problems that can be as serious as the actual
duty rate charged .
• It should be noted that application of the
customs valuation Agreement should go hand
in hand with customs reform and
modernization . While the latter is not a
necessary condition for the former , it
certainly would contribute to more effective
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• Outcome. However , customs reform involves
considerable financial and human resources ,
which are often out of reach of many
developing member countries .
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WTO - World Trade Organization
• In the WTO there are three areas of work on
government procurement: the plurilateral
Agreement on Government Procurement, the
Working Group on Transparency in
Government Procurement, and the Working
Party on GATS Rules (services).
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Agreement on Government
Procurement
• The WTO Agreement on Government
Procurement (AGP) is the primary plurilateral
instrument guaranteeing access for Canadian
suppliers to the government procurement
markets in the United States, the European
Union, Japan, South Korea and other
important markets
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• While most WTO agreements are multilateral
and include all WTO members, the AGP is a
plurilateral agreement because not all WTO
members participate in the AGP. The current
list of AGP members is available here. In
addition, several WTO members, including
China and Jordan, are pursuing accession to
the Agreement
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Wto dispute settlement

  • 1. MODULE III DISPUTE SETTLEMENT PROCEDURE • One of the unique features of the WTO is its provision relating to dispute settlement mechanism . In fact the power to settle trade disputes is what is the difference between the WTO and GATT . • When a member files a complaint against another , the dispute settlement body of the WTO steps in immediately . www.StudsPlanet.com
  • 2. • Decisions have to be taken in less than 1 year 9 months if the case is urgent , 15 months if the case is appealed . The dispute settlement system of WTO is faster and automatic and the decisions cannot be ignored or blocked by members . • Offending countries must realign their trade policies according to the WTO guidelines or suffer financial penalties and even trade sanctions . • Because of its ability to penalize offending member nations ,the WTO dispute settlement is the backbone of the global trading system. www.StudsPlanet.com
  • 3. • The costs of dispute settlement proceedings are disproportionately heavy for developing countries. • In general , developing countries do not enjoy a neutral playing field. Although the dispute settlement procedure is not biased against any party in a dispute , developing countries are less well equipped to participate in the process they have fewer people with www.StudsPlanet.com
  • 4. • Necessary training , they are less experienced and as noted above , they face resource constraint. www.StudsPlanet.com
  • 5. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Overview Overall aim:Overall aim: • to secure complianceto secure compliance with the Agreementswith the Agreements Quasi-judicial NatureQuasi-judicial Nature • Secured access • Detailed procedures • Automaticity in the proceedings • Deadlines • Possible appeal www.StudsPlanet.com
  • 6. Dispute Settlement in the WTODispute Settlement in the WTO Scope • An integratedAn integrated systemsystem: • Applies to all the multilateral agreements • A single set of rules for all disputes – Only a few specific rules in some agreements www.StudsPlanet.com
  • 7. Dispute Settlement in the WTODispute Settlement in the WTO Main players • Dispute Settlement Body (DSB)Dispute Settlement Body (DSB) • Panel and Appellate BodyPanel and Appellate Body • Parties: WTO MembersParties: WTO Members • WTO SecretariatWTO Secretariat www.StudsPlanet.com
  • 8. Dispute Settlement in the WTODispute Settlement in the WTO: Relationship of players Panel Appellate Body Ministerial Conference Dispute Settlement Body (General Council) Request for Panel by WTO Member www.StudsPlanet.com
  • 9. Dispute Settlement in the WTODispute Settlement in the WTO: Main Procedures I m p le m e n t a t io n A p p e la t e B o d y P a n e l C o n s u lt a t io n s 60 days 9 months 90 days 15 months www.StudsPlanet.com
  • 10. Dispute Settlement in the WTODispute Settlement in the WTO Consultations: the request • Indicates reasons for the request: identification of – the measures – legal basis for complaint • Notified to DSB and circulated to all Members www.StudsPlanet.com
  • 11. Dispute Settlement in the WTODispute Settlement in the WTO: Consultations: function • to “accord sympathetic consideration to and accord adequate opportunity for consultation…” • confidential, only between the Members concerned www.StudsPlanet.com
  • 12. Dispute Settlement in the WTODispute Settlement in the WTO: Consultations: third parties • But, in some instances, other Members can requestBut, in some instances, other Members can request to be joined in the consultationsto be joined in the consultations Article 4.11 DSU – “substantial trade interest” www.StudsPlanet.com
  • 13. Dispute Settlement in the WTODispute Settlement in the WTO: Consultations: if not successful • If consultations fail to resolve the matter within 60 days from receipt of request….. • Or if no response or no entering into consultations • …. A request for establishment of a panel can be madeA request for establishment of a panel can be made www.StudsPlanet.com
  • 14. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Establishment of panels • Request for establishmentRequest for establishment: – must “identify the specific measures at issue and provide a brief summary of the legal basis of the problem sufficient to present the problem clearly” • EstablishmentEstablishment – at the latest at the second DSB meeting at which the request is made; decided by negative consensusnegative consensus www.StudsPlanet.com
  • 15. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Terms of reference and composition of panels Terms of reference:Terms of reference: (Article 7 DSU) • Standard, orStandard, or • Special terms ofSpecial terms of referencereference Panel Composition:Panel Composition: (Article 8 DSU) • “well-qualified government and/or non-governmental individuals” • Secretariat proposals • indicative list of panelists • nomination by DG www.StudsPlanet.com
  • 16. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Panels: how they function Functions of the PanelFunctions of the Panel ““…a panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements…” Functions of the dispute settlement systemFunctions of the dispute settlement system “… to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law…” Art. 3.2 DSU www.StudsPlanet.com
  • 17. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Panel Procedures: main steps • Oral hearings (usually 2), onOral hearings (usually 2), on basis of writtenbasis of written submissionssubmissions • Descriptive part of report issued to partiesDescriptive part of report issued to parties • Interim review based on draft reportInterim review based on draft report • Final report issued to partiesFinal report issued to parties • Final report circulated to all MembersFinal report circulated to all Members www.StudsPlanet.com
  • 18. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Panel Procedures: other sources of input – Third parties have make presentationsThird parties have make presentations • need “substantial interest”need “substantial interest” (Article 10 DSU) – Panels may seekPanels may seek • factual information from any relevant sourcefactual information from any relevant source (Article 13 DSU) • scientific or technical advice from an Expertscientific or technical advice from an Expert review groupreview group (Appendix 4 DSU) – Requirement of confidentialityRequirement of confidentiality (Article 14 DSU) www.StudsPlanet.com
  • 19. Dispute Settlement in the WTO: Panel Procedures: duration • As a general rule, 9 months from establishment of panel to consideration of report for adoption (if no appeal) • 12 months where report is appealed (Article 20 DSU) www.StudsPlanet.com
  • 20. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Panel procedures:: Adoption of Panel Reports • Adoption within 60 days of circulation, by negative consensus…. … ExceptExcept ifif appealedappealed www.StudsPlanet.com
  • 21. Dispute Settlement in the WTO: Appellate Review • Appeals limited to “issuesAppeals limited to “issues of law and legalof law and legal interpretations developedinterpretations developed by the panel”by the panel” • Appeal only open toAppeal only open to parties to the disputeparties to the dispute Appellate BodyAppellate Body • 7 members • members to have recognized authority and expertise in international trade law • members unaffiliated with any government www.StudsPlanet.com
  • 22. Dispute Settlement in the WTO: Appellate Review: report and adoption Report of the Appellate BodyReport of the Appellate Body: • “may uphold, modify or reverse the legal findings and conclusions of the panel” (Art. 17.12 DSU) • AdoptionAdoption of Appellate Body report: by reverse consensus within 30 days of circulation to Members www.StudsPlanet.com
  • 23. Dispute Settlement in the WTODispute Settlement in the WTO: Implementation • Member must bring thebring the measures into conformitymeasures into conformity with its WTO obligationswith its WTO obligations (Article 19 DSU) • Member must inform DSB of its intentions in for implementation of the recommendations (Article 1 DSU) If there is a finding of violation: www.StudsPlanet.com
  • 24. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Implementation: reasonable period of time Determination of “reasonable period ofreasonable period of timetime” for implementation: • proposed by Member, and approved by DSB, or • mutually agreed by the parties, or • determined through arbitrationarbitration: – “guideline for the arbitrator”: 15 months from the date of adoption (Article 21.3 DSU) www.StudsPlanet.com
  • 25. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Implementation: surveillance • SurveillanceSurveillance by the DSBby the DSB – Status reports on implementation • Temporary measures – If Member fails to bring measure into conformity within reasonable period of time, possibility • compensation or • suspension of concessionssuspension of concessions (retaliation) www.StudsPlanet.com
  • 26. Dispute Settlement in the WTO:Dispute Settlement in the WTO: Implementation Compensation:Compensation: (Article 22 DSU) • Voluntary • Negotiated • Compatible with WTO Agreements • If no compensation agreed within 20 days after expiry of reasonable period of time…. www.StudsPlanet.com
  • 27. • The major provisions of the final act relate to agriculture , sanitary measures , helping least developed countries , clothing , TRIPS, GATS and anti dumping measures . www.StudsPlanet.com
  • 28. AGRICULTURE • The agreement related to agriculture is made up of several elements which seek to reform trade in agriculture and provide the basis for market oriented policies , thereby improving economic cooperation for importing and exporting countries alike. It establishes new rules and commitments in market access, domestic support and export competition and includes provisions that encourage the use of less trade distorting domestic policies to maintain the rural economy. www.StudsPlanet.com
  • 29. • It also allows action to be taken to ease adjustment burdens and provides some flexibility in the implementation of the commitment. Specific concerns for developing countries are addressed including those of net food importing developing countries and less developed economies. www.StudsPlanet.com
  • 30. HEALTH AND SAFETY MEASURES • The agreement on the application of sanitary and Phytosanitary measures concerns the application of food safety and animal and plant health regulations. It recognizes government rights to take sanitary and phytosanitary measures but stipulates that they must be based on science www.StudsPlanet.com
  • 31. • should be applied only to extend necessary to protect human , animal or plant life or health and should not arbitrarily or unjustifiably discriminate among members where identical or similar conditions prevail. www.StudsPlanet.com
  • 32. HELPING LEAST DEVELOPED AND FOOD IMPORTING COUNTRIES • It is recognized that during the reform programme , least developed and net importing developing countries may experience negative effects with regard to giving food supplies on reasonable terms and conditions. Such countries need assistance . Therefore a special ministerial decision calls for appropriate mechanisms related to the availability of food and the provision of basic www.StudsPlanet.com
  • 33. • Foodstuffs in full grant form aid for agricultural development . It also refers to the possibility of assistance from the IMF and world bank with respect to the short term financing of commercial food imports . The committee on agriculture holds responsibility to monitor the follow up to the decision . www.StudsPlanet.com
  • 34. TEXTILES AND CLOTHING • The objective of this agreement is to secure the integration of textiles and the clothing sector where much of the trade is currently subject to bilateral quota negotiations under the multi - fibre agreement ( MFA ) into the main stream of WTO . The integration , however , shall take place in stages . www.StudsPlanet.com
  • 35. • All MFA restrictions in force on 31st december1994 would be carried over into the Final Act and maintained until such time as the restrictions are removed or the products integrated into WTO . www.StudsPlanet.com
  • 36. TRIPS ( TRADE RELATED INTELLECTUAL PROPERTY RIGHTS ) • The WTO Agreement on TRIPS recognizes that widely varying standards in the protection and enforcement of intellectual property rights and the lack of multilateral disciplines dealing with international trade in counterfeit goods have been a growing source of tension in international economic relations . www.StudsPlanet.com
  • 37. • With this end in view , the agreement addresses the applicability of basic GATT principles and those of relevant intellectual property agreements , the provision of adequate intellectual property rights , the provision of effective enforcement measures for those rights , multilateral dispute settlement and transitional implementation arrangements. www.StudsPlanet.com
  • 38. The TRIPS contain of three parts 1. Sets out the provisions and principles 2. Addresses different kinds of IPR 3. Concerns enforcement. www.StudsPlanet.com
  • 39. TRIMS ( TRADE RELATED INVESTMENT MEASURES ) • Multinational Firms are aware of the many restrictions on their investments in foreign countries . TRIMS are those restrictions a country places on foreign investment that adversely affect trade in goods and services .. www.StudsPlanet.com
  • 40. • WTO members entered the agreement on TRIMS as a part of the Uruguay Round agreements. • The agreement does not set broad rules for investors in a member country . It simply prohibits law or regulations that conditions a country’s rights to import foreign goods on the volume of goods exported . • Also prohibited are laws that condition the receipt of foreign exchange on the country’s foreign exchange revenues . www.StudsPlanet.com
  • 41. GATS ( GENERAL AGREEMENT ON TRADE IN SERVICES ) The GATS , negotiated during the Uruguay Round is the first step of multilaterally agreed and legally enforceable rules and disciplines ever negotiated to cover international trade in services . www.StudsPlanet.com
  • 42. The agreement contains three elements 1.A framework of general rules and disciplines 2.Annexes addressing special conditions relating to individual sectors ( the sectors covered are : movement of natural persons , financial services , telecommunications and air transport services ) 3. and national schedules of market access commitments . A council for Trade in Services oversees the operation of the agreement www.StudsPlanet.com
  • 43. AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES ( SCM ) • SCM is the outcome of negotiations during Uruguay Round . Under the GATT agreement subsidies may be dealt within two days . www.StudsPlanet.com
  • 44. • Firstly , a WTO member country may appeal to the WTO for dispute resolution . The WTO may recommend that the subsidy may be discontinued , its harmful effects be eliminated or a countermeasure may be taken by the importing country. • Secondly , an importing country may initiate its own administrative proceedings , similar to anti dumping measures , to impose a countervailing duty on the subsidized products in order to eliminate their unfair price advantage . www.StudsPlanet.com
  • 45. • A countervailing duty is a special tariff , in addition to the normal import tariff , levied on imports of subsidized goods in an amount equal to the amount of the counter viable subsidy . A countervailing duty may be brought at the same time as the WTO dispute settlement action. www.StudsPlanet.com
  • 46. DUMPING • In Importing , Dumping is the unfair trade practice of selling products in a foreign for less than the price charged for the same or comparable goods in the producers home market . It is a form of price discrimination that causes injury to domestic competitors through artificially low prices against which domestic producers cannot compete at profitable level. www.StudsPlanet.com
  • 47. • Anti dumping laws are used more frequently than any other type of trade law in the US and EU. • Developing countries , such as Mexico, Brazil ,Argentina , India and Korea , also have antidumping codes . www.StudsPlanet.com
  • 48. THE WTO ANTIDUMPING AGREEMENT • The GATT provisions on dumping are found in GATT 1994 Article VI and in the 1994 WTO antidumping Agreement . The 1994 agreement provides complex rules for determining when dumping has occurred and for resolving dumping disputes . • Every WTO member country is expected to see that its national anti dumping laws comply with the WTO rules . www.StudsPlanet.com
  • 49. • The WTO agreement provides that dumping occurs when foreign goods are imported for sale at a price less than that charged for comparable goods in the exporting or producing country . Anti dumping duties may be imposed only when the dumping threatens or causes “ material injury “ to domestic industry producing “ like products “. The agreement requires that an importing country www.StudsPlanet.com
  • 50. • resort to anti dumping duties only after conducting a formal investigation to determine both the amount of the dumping and the extend of material injury. www.StudsPlanet.com
  • 51. What is Dumping • A product is said to be dumped when its export price is less than its normal value of a like product in the domestic market in the exporting country. www.StudsPlanet.com
  • 52. NORMAL VALUE  The price in the exporter’s domestic market, or  The price charged by the exporter in another country, or  Production costs plus other expenses and normal profit margins. www.StudsPlanet.com
  • 53. • Dumping must cause material injury in the importing market . • Types of Injury Material injury to a domestic industry, Threat of material injury to a domestic industry, Material retardation of the establishment of a domestic industry www.StudsPlanet.com
  • 54. Measures for Remedial Action  Imposition of anti dumping duties  Countervailing duties  Safeguard measures www.StudsPlanet.com
  • 55. Implications Only an Industry or Country and not a Company can call for an anti-dumping investigation Time consuming work to gather information and prove dumping www.StudsPlanet.com
  • 56. Costly as in most cases the matter will be referred to Industrial courts Difficult to recover losses during the process of proving Dumping Pre or Post introduction of dumping duties www.StudsPlanet.com
  • 57. IMPORTS , CUSTOMS AND TARIFF • The WTO agreements which are the outcome of 1986-1994 Uruguay Round of multilateral trade negotiations introduce disciplines of a wider range of trade issues and testify to a wider and deeper commitment to trade liberlisation . The scope of these agreements extends beyond the traditional trade issues , which primarily addressed the reduction of tarrifs and quota as barriers against trade in goods at country borders.www.StudsPlanet.com
  • 58. • A wide range of non tariff barriers to trade is now the subject of a number of multilateral and legally binding WTO agreements . These agreements deal with technical and bureaucratic measures or legal issues that could involve hindrances to trade be used as instruments for restrictive and discriminatory trade policies. www.StudsPlanet.com
  • 59. • They include agreements on Technical Barriers to Trade , Sanitary and phytosanitary measures , Import Licensing Procedures , Rules of Origin , Customs Valuation , Pre shipment Inspection , Anti Dumping , Subsides and Countervailing Measures , Safeguards and Trade related investment measures. • These treaties after the Uruguay Round , they have acquired Multilateral status i.e. they became binding on all members . www.StudsPlanet.com
  • 60. TECHNICAL BARRIER TO TRADE • Establishment of WTO - Dismantling of barriers for free flow of trade • Creation of global market with equal access to all countries • Quality, health & safety & environmental issues gaining importance www.StudsPlanet.com
  • 61. TBT Agreement - Objectives •Allows members to apply standards, technical regulations, conformity assessment procedures for  protection of human safety or health (sockets, seat belts, labelling cigarettes) Protection of animal & plant life or health (pollution, extinct eg turtle extruder device) Protection of environment (level of vehicle emissions) www.StudsPlanet.com
  • 62. Prevention of deceptive practices (labelling, size) Other objectives (quality-size of fruits & vegs, tech harmonization-telecom) •However need to ensure that these do not create obstacles to international trade www.StudsPlanet.com
  • 63. •Scope Applies to all products including industrial & agri products, both voluntary standards & technical regulations(standards to which compliance mandatory) •Covers Product characteristics Process & production methods(PPM) that have an effect on product characteristics Terminology & symbols Packaging & labelling requirements www.StudsPlanet.com
  • 64. • Avoidance of unnecessary obstacles to trade • Non-discrimination & national treatment • Harmonization • Equivalence of technical regulations • Mutual recognition & conformity assessment procedures • Transparency www.StudsPlanet.com
  • 65. Non-discrimination & national treatment • Most Favoured Nation Basis – should apply on a MFN basis to imports from all sources • National Treatment Principle – shall not extend to imported products treatment less favourable than that extended to domestically produced products www.StudsPlanet.com
  • 66. Harmonization • Why harmonize Benefits to producer – can cater to needs of all countries leading to productions of scale eg cars, mobiles, TV sets, etc Benefits to consumers – wide choice, spare parts, etc www.StudsPlanet.com
  • 67. • Harmonization & TBT - standards/tech regulations/CA procedures to be consistent with or based on international standards unless “their use ineffective or inappropriate” to fulfill objective • Technical regulations in accordance with International standards are presumed not to create unnecessary obstacles to trade • participate actively in work of ISO/other international bodies www.StudsPlanet.com
  • 68. Mutual Recognition of Conformity Assessment • CA procedures are those used to determine that requirements met. Include sampling, inspection, testing, evaluation, verification of conformity, accreditation, etc. www.StudsPlanet.com
  • 69. Transparency • Notifications all proposed, new and changed measures are to be notified by members to the TBT Committee of WTO Secretariat, to be provided to members, translated versions if requested, & any deviations from international standards give sufficient notice to allow for adapting to these reqts. If technical regulation differs from international standards, need to also take into account comments of exporter www.StudsPlanet.com
  • 70. • Technical assistance provided to developing countries in the area of setting up NSBs, participation in int standardization, preparing technical regulations, setting up regulatory bodies for CA activities, methods of CA, etc www.StudsPlanet.com
  • 71. • Special & Differential Treatment more favourable treatment to be provided to developing countries take into account their special developmental, financial & trade needs when developing tech regulations, standards and CA procedures so that no unnecessary obstacles created to exports from developing countries. www.StudsPlanet.com
  • 72. Institutions, Consultations & Dispute Settlement • Committee on TBT established having representatives from each members meet 2-3 times a year, for discussing operation of Agreement or furtherance of objectives www.StudsPlanet.com
  • 73. • Consultations & settlement of disputes shall be under auspices of Dispute Settlement Body of WTO. However a provision for technical expert groups to assist in issues of technical nature has been provided www.StudsPlanet.com
  • 74. Key Features for Preparation, adoption & Application of Technical Regulations • Most Favoured Nation Basis – should apply on a MFN basis to imports from all sources www.StudsPlanet.com
  • 75. • National Treatment Principle – shall not extend to imported products treatment less favourable than that extended to domestically produced products • Least Trade Restrictive – should not be formulated & applied in a manner so as to cause any unnecessary obstacle to trade – not more trade restrictive than needed to fulfil legitimate objectives (prevent deceptive practices, protection of human, animal or plant life or health, or environment). www.StudsPlanet.com
  • 76. Other Key Features • Information  An enquiry point to be set up answer all reasonable enquiries provide documents on technical regulations, standards & CA procedures;  any agreements to be notified to secretariat www.StudsPlanet.com
  • 77. • Technical assistance is provided to developing countries in the area of setting up NSBs, participation in international standardization, preparing technical regulations, setting up regulatory bodies for CA activities, methods of CA, etc www.StudsPlanet.com
  • 78. Amongst the agreements on non Tariff barriers , Technical Barriers to Trade , sanitary and phytosanitary measures , Import licensing procedures , Rules of origin , Valuation of goods at customs , Pre Shipment Inspection are related to harmonization of trade regulations while the others , Anti Dumping , Subsidies and countervailing measures , Safeguards and trade related investment measures are viewed as related to trade competition policies ( market access) . www.StudsPlanet.com
  • 79. • NTB may create problems that can be as serious as the actual tariff and duty rates charged at country borders . Thus, it is not surprising that the overall objective of these Agreements is to prevent obstacles and reduce uncertainties facing the trading community . They seek to ensure transparency of laws , regulations and practices regarding various rules of trade and ultimately , to harmonise these rules to facilitate international trade. www.StudsPlanet.com
  • 80. • This would forcefully entail fundamental trade reform measures to be taken by these countries to accommodate and secure their commitments to the new system . Perhaps the most important outcome is that the range of measures previously viewed as falling within the scope of national policy has now been brought under multilateral discipline and linked to the rights and obligations governing international trade and market access. www.StudsPlanet.com
  • 81. CUSTOM VALUATION • Customs duties can be either specific or ad valorem. On the other hand , Ad valorem duties are based on the value of goods . In this system , determining the value of a good or, in other words , customs valuation becomes important . • Customs valuation is a set of customs procedures used to determine the customs value of imported goods for the purpose www.StudsPlanet.com
  • 82. • Of determining the actual incidence of duty. For importers , the process of estimating the value of a product at customs may create problems that can be as serious as the actual duty rate charged . • It should be noted that application of the customs valuation Agreement should go hand in hand with customs reform and modernization . While the latter is not a necessary condition for the former , it certainly would contribute to more effective www.StudsPlanet.com
  • 83. • Outcome. However , customs reform involves considerable financial and human resources , which are often out of reach of many developing member countries . www.StudsPlanet.com
  • 84. WTO - World Trade Organization • In the WTO there are three areas of work on government procurement: the plurilateral Agreement on Government Procurement, the Working Group on Transparency in Government Procurement, and the Working Party on GATS Rules (services). www.StudsPlanet.com
  • 85. Agreement on Government Procurement • The WTO Agreement on Government Procurement (AGP) is the primary plurilateral instrument guaranteeing access for Canadian suppliers to the government procurement markets in the United States, the European Union, Japan, South Korea and other important markets www.StudsPlanet.com
  • 86. • While most WTO agreements are multilateral and include all WTO members, the AGP is a plurilateral agreement because not all WTO members participate in the AGP. The current list of AGP members is available here. In addition, several WTO members, including China and Jordan, are pursuing accession to the Agreement www.StudsPlanet.com