WTO registers the 500th trade dispute case for settlement
In its 20th anniversary year, the WTO has reached a significant milestone with the receipt of its 500th trade dispute for settlement. “This shows that the WTO’s dispute settlement system enjoys tremendous confidence among the membership, who value it as a fair, effective and efficient mechanism to solve trade problems,” said Director-General Roberto Azevêdo
Since the WTO establishment on January 1, 1995, its members have initiated disputes covering a variety of trade concerns, and developing and developed members have brought complaints in about equal numbers. While the majority of complaints have focused on WTO rules regarding subsidies and anti-dumping, members have also challenged various tariff regimes, food safety measures, commitments in services schedules, labelling and packaging rules, animal welfare measures, and environmental schemes. Of the 500 cases filed, just over half have reached the litigation stage, suggesting that the system’s requirement for the members concerned to try to find a solution by consulting with each other helps to avoid many cases entering the litigation phase.
The 500th dispute was submitted on November 10, when Pakistan filed a request for consultations with South Africa regarding South Africa’s provisional anti-dumping duty on cement from Pakistan. The two sides will now consult with the aim of arriving at a mutually agreed solution.
300 disputes were brought under the dispute settlement system of the General Agreement on Tariffs and Trade (GATT) — the predecessor to the WTO — over a period of 47 years. Although the GATT system worked reasonably well, the dispute settlement system, introduced with the establishment of the WTO in 1995 was designed to ensure a more effective and reliable dispute settlement mechanism, including by requiring the automatic establishment of dispute panels following the second request by a WTO member and the adoption of dispute settlement reports unless all members decide otherwise. The WTO mechanism also introduced the possibility to appeal panel reports, a rare feature in international dispute settlement at the time.
“There is no doubt that the WTO dispute settlement system has served the membership extremely well,” said DG Azevêdo. “It is a system recognized the world over for providing fair, high quality results that respond to both developing and developed members.”
DG Azevêdo acknowledged “the success has brought challenges and while the system is still faster than most if not all international dispute settlement systems operating today, we are clearly in a situation where the high demand is testing our capacity”.
Disputes are generally much more complex and voluminous now than they were in the first decade of the WTO. As the jurisprudence has grown, so have the size and nature of parties’ submissions and the length of panel and Appellate Body reports. The disputes of today are very different from those in the minds of the drafters of the dispute settlement rules, and appeals are not the rare occurrences members thought they would be. As a result, members and the WTO Secretariat will have to adjust to the new world of WTO dispute settlement.
“We are allocating more resources to dispute settlement and are working with members to find solutions. I am confident that we can work together to ensure that the dispute settlement system continues to provide members with the highest possible level of service,” said the Director-General.
In the latest dispute, Pakistan filed a request for consultations with South Africa regarding South Africa’s imposition of a provisional anti-dumping duty on Portland cement from Pakistan. This request was presented to the WTO Secretariat on 10 November 10, 2015.
The request for consultations formally initiates a dispute in the WTO. Consultations give the parties an opportunity to discuss the matter and to find a satisfactory solution without proceeding further with litigation. After 60 days, if consultations have failed to resolve the dispute, the complainant may request adjudication by a panel.
Some figures about the how often WTO members have used the dispute settlement system:
To date, 500 disputes have been brought to the WTO, of which: 110 disputes have been resolved bilaterally or withdrawn; 282 disputes have proceeded to the litigation phase. For the remainder, no outcome has been notified to the WTO.
102 members have participated in a dispute either as a complainant or a respondent or as a third party. That means 63 % of the membership has used the system.
The authorisation for a member to retaliate once another member has been found to be in violation of its WTO obligations has been given 18 times, which means only 10% of the disputes have reached this outcome of last resort.
The compliance rate with dispute settlement rulings is very high, at around 90%.