Table of Contents

Handbook on International Trade Policy

Handbook on International Trade Policy

Elgar original reference

Edited by William A. Kerr and James D. Gaisford

The Handbook on International Trade Policy is an insightful and comprehensive reference tool focusing on trade policy issues in the era of globalization. Each specially commissioned chapter deals with important international trade issues, discusses the current literature on the subject, and explores major controversies. The Handbook also directs the interested reader to further sources of information.

Chapter 46: Dispute Settlement, Compensation and Retaliation under the WTO

Robert Read

Subjects: economics and finance, international economics

Extract

Robert Read One of the key outcomes of the General Agreement on Tariffs and Trade (GATT) Uruguay Round negotiations was the creation of more effective system for dealing with international trade disputes, the World Trade Organization’s (WTO) Dispute Settlement Understanding (DSU). This entered into force on 1 January 1995. The DSU succeeded the original GATT system for dispute settlement which had become increasingly unable to resolve major trade conflicts between its Member countries. This chapter outlines the structure and operation of the WTO trade dispute settlement system, particularly with respect to the implementation of dispute panel findings and the issues of compensation and retaliation. The first section provides an overview of the objectives of the DSU in the context of the shortcomings of the previous GATT dispute settlement system. The next section summarizes the key articles and procedures of the DSU. This is followed by a discussion of the DSU framework for the suspension of concessions, compensation and retaliation supported by illustrative examples from recent cases. The final section offers a brief critique of the key issues that have arisen in the first decade or so of the operation of the DSU. The origins of the WTO dispute settlement system Prior to the introduction of the DSU, the GATT system of dispute settlement had been functioning more or less successfully for almost 50 years in spite of its evident shortcomings. The new WTO DSU was the outcome of a thorough overhaul of the GATT system although...

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