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Trade Disputes at WTO

Apr 8, 2016 | 0 comments

Apr 8, 2016 | Essays | 0 comments

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Trade Disputes at WTO

 

In a multilateral agreement like trade unions disputes are likely to arise due to incompliance with the rules and regulation of the union. World Trade Organization has set aside a body known as Dispute Settlement Body that tackles all disputes among the member states, or that involve violation of the binding agreement by any member. All member states are represented in the Dispute Settlement body for transparency and fairness. The aim of establishing the body was to assist maintaining peace as well as good business relations among countries that would ensure that they all benefit economically from the union as it is intended.

Dispute Settlement Body of World Trade Organization entails compulsory jurisdiction that contains a single set of rules for all disputes that is referred to during conflict resolution and act as guidelines to avoid deviation from the matter at hand and specialized privileges for developing countries that takes into consideration their specific situation. It also contains panel and appellant review that is made up of mediators, arbitrators and a representative of each member state. In addition, Dispute Settlement Body has detailed procedures and deadline. The action conflict resolution follows a detailed process that occurs within specified deadline and the whole process takes one year starting from consultation to implementation. Moreover, it entails quasi-automaticity in the proceedings as explained by Brown (2004).

The operation of conflict resolution by the Dispute Settlement Body follows detailed predetermined stages that include consultation stage, formal litigation stage and implementation stage and are designed in such a way that at either point the conflict could be resolved since it only proceeds to the next stage when the problem is unsolved. The procedure also takes roughly a year without appeal as each stage has a predetermined deadline that has to be observed. In consultation stage, which is the first face, a member that feels that deprived off its rights in acquiring privileges covered under the agreement by another country requests for consultation with that nation which does entail negations preceded by representative of both nations as explained by Cameron (2001).

In case an agreement is not reached within sixty days after consultation requests, the pursuer proceeds to formal litigation stage where the matter is presented to a panel composed of three members appointed by the secretariat. The panel receives written and oral sublimations of the parties involved evaluates them and present their finds and conclusions to the Dispute Settlement Body. There is also an appellant body that handles the appeal of either party challenging the panel’s report. The Appellant body may decide to uphold the findings and conclusion or reverse or modify the panel’s report. The last stage is the implementation stage where the perpetrator is given a period to comply with the panel’s report if not in a position to comply immediately which is a maximum of fifteen months by the compliance and arbitrary panel after which there is retaliation where necessary actions are taken against them according to the requirements of the body which may include increasing custom duty as describe by Cameron (2001).

World Trade Organization in attempt to maintain peace, good business relation and suitable business environment that would ensure all member states benefit from the union established the Dispute Settlement Body and served it with the responsibility of ensuring that every member state complies with the rules and regulation of the WTO. The body identifies any breach in the agreement by any nation as they are all aware of the WTO requirement and takes necessary actions outlined in the body’s jurisdiction if other form of conflict resolution like negotiations fails as explicated by Brown (2004).

Brown (2004) states, that Dispute Settlement Body’s role also entails solving trade conflicts arising between or among member states’ nations. They aim in such a situation is to secure a positive solution to conflict that has been mutually agreed if possible in order to preserve good relationship among nations and prevent anything that would jeopardize business and weaken the economy of member state nations. Most of the time, like in European nations the body intervenes if other methods of conflict resolution like negotiation and arbitrary fail.

In addition, Dispute Settlement Body is responsible for making sure that the rights and obligation of members of World Trade Organization covered under the agreement is preserved. The body ensures that every action taken by WTO does respect the rights of members and meet their obligation in order to maintain trust so that all the members can enjoy the fruits of the organization which is to improve their economy by expanding the markets as implied by Cameron (2001).

In summary, World Trade Organization has a unique and suitable way of solving trade disputes that may arise among its members concerning the compliance of the WTO agreement through it Dispute Settlement Body. The process of conflict resolution follows different stages from consultation, formal litigation and implementation stage.

 

 

References

Cameron, J. (2001). Principles of international law in WTO dispute settlement body. International and Comparative Law Quarterly. doi: 10.1093/iclq/50.2.248

Guzman, A., & Simmons, B. A. (2002). To Settle or Empanel? An Empirical Analysis of Litigation and Settlement at the World Trade Organization. Journal of Legal Studies.

Brown, C. P. (2004). Participation in WTO Dispute Settlement: Complainants, Interested Parties and Free Riders. SSRN Electronic Journal. doi: 10.2139/ssrn.546442

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