14 - Dispute settlement

Summary

I. Introduction

As international trade disputes have shifted over the years from diplomatic exercises to more legalistic contests, the dispute settlement procedures set out in trade agreements have taken on a more important role. The dispute provisions of the GATT 1947 were a mere two paragraphs. Over the years, these provisions were supplemented with additional rules, eventually developing into the detailed procedures of the WTO's Dispute Settlement Understanding. And in the 350-plus WTO disputes that have been brought since the WTO's inception, these rules have been elaborated by panels and the Appellate Body. The result is that today the WTO's dispute procedures are well-developed, widely studied, and generally considered reliable and credible by governments and other actors.

Not surprisingly, then, in drafting the preferential trade agreements (PTAs) discussed in this book, the state parties to these agreements came up with dispute provisions that are similar in many ways to the WTO rules. As a result, for many of the topics discussed in this chapter, we note the related WTO provisions and offer comparisons. However, there are differences as well. These differences may reflect the various opinions among WTO Members as to what the rules should be, as well as new thinking about the best approach to certain issues based on the experience at the WTO.

In this chapter, we examine the following aspects of the dispute procedures in recent bilateral and regional PTAs. First, we look at the administration of dispute settlement procedures. At the WTO, administration of the DSU is carried out by the Dispute Settlement Body, which is made up of all the WTO Members. In addition, the WTO has a Secretariat that provides various services in support of this administration. In this section, we examine whether and to what extent PTAs have similar bodies and support.

Second, we address the relationship of PTA dispute settlement to other dispute settlement, such as the DSU. A key aspect of this issue is the recent talk about the ‘spaghetti bowl’ or ‘noodle bowl’ of trade agreements that now exist, with a great deal of overlap among the countries who have signed agreements with each other. In this context, we examine the rules these PTAs establish for addressing the options for bringing disputes in different fora.