2_The WTO/GATT System

o Increase of living standards

o Attain full employment

o Growth of income and demand

o Expansion of production of (and trade in) goods and service

• Improve living standards and full employment

• Support sustainable development and environment

• Help developing and least developed countries benefit from trade

• Reduce tariffs and trade barriers

• End discrimination in international trade

• Build a strong, fair, multilateral trading system based on past agreements and the Uruguay Round

• no definition in WTO

• self-selection of status

• technical assistance

• other members can challenge developing country status claims

• provisions that allow developed countries to treat developing countries more favourably than other WTO members

• Examples: Afghanistan, Angola, Bangladesh (most populated among these), Combodia, Democratic Republic of Congo, Gambia, Sierra Leone, Uganda, Yemen, etc.

• Ministerial Conference

• General Council / Dispute Settlement Body / Trade Policy Review Body

• Councils for areas of trade

  • The Council for Trade in Goods (Goods Council)

  • Council for Trade in Services (Services Council)

  • The Council for Trade-Related Aspects of Intellectual Property Rights (TRIPS Council)

• Subsidiary bodies

• DSU as the “crown jewel”

= WTO Dispute Settlement is the official system the World Trade Organization (WTO) uses to resolve trade disputes between member countries

If a country believes another WTO member is violating trade rules (e.g., using unfair tariffs or subsidies), it can file a complaint. The WTO has a structured process to handle the case, including:

• Panels (independent experts who review the case = Gutachtergruppen) 3 judges

• An Appellate Body = Berufungsinstanz (for appeals)

• Clear timelines and legal procedures

Dispute Settlement Body (DSB)

• General Council discharges its responsibilities under the DSU through the DSB -> composed of all WTO members (usually through diplomatic delegates)

• DSB responsible for administering DSU -> oversees dispute settlement process

• authority to establish panels

• Quasi-judicial bodies of first instance

• Normally composed of three (exceptionally five) members

• ad hoc -> No institutional continuity

• WTO Secretariat maintains indicative list of names of governmental and non-governmental individuals

• Members serve as individuals (not as governmental representatives)

• Permanent

  • Seven members (University professors, practising lawyers, past government officials, or senior judges)

  • part-time (in theory; in reality full-time)

• Must be broadly representative of WTO membership

• Appointed by DSB by consensus for four year terms

• Reviews legal aspects of the panel reports (not facts!)

• May reverse or modify the panel’s findings

• Compensation

  • not monetary payment but benefit (e.g. tariff reduction) equivalent to the benefit which the respondent has nullified or impaired by applying its measur

  • problem: MFN (all WTO members benefit from tariff reduction)

• Suspension of WTO obligations

  • (20 days) after no agreement on compensation is reached

  • This means temporary actions like new tariffs, even if they break WTO rules.

  • Retaliation must be approved and fair.

  • Can be in the same or a different sector (like IP rights).