Saturday, April 7, 2012

Dispute Settlement at the WTO

The Dispute Settlement mechanism at the WTO has been considered as one of  the cornerstones of the multilateral trading system due to it's rule based approach, predictability and effective way of handling complex, trade issues between countries. It's effectiveness has been recognised across the board and the increasing use of the forum for dispute settlement is evidence of its success.

Deputy Director General of the WTO Alejandro Jara while addressing ways to improve the Dispute settlement process suggested a number of steps namely double-briefing, early questions for the panel briefing, time limits on oral submissions, agenda for the pane meetings, page limits for executive summaries, reduction on annexures and electronic filing of submissions to improve the DSM process. The aim is to reduce delays in the system in order to ensure timely settlement of disputes. National judicial systems across the world are normally plagued by inordinate delays in settlement of disputes due to a variety of reasons. That would be disastrous for the WTO since the effectiveness of the dispute settlement mechanism would be severely affected. Some disputes at the DSM are showing signs of prolonging beyond a reasonable time - the Airbus Boeing case is a classic example.This does not augur well for the DSM process.

I found this interesting statistic from Jara's address on the costs of litigation at the WTO:
" Dispute settlement currently costs an estimated $30 million annually.  Let me provide just a few examples:
  • The cost of engaging experts in a single dispute has ranged from CHF 3,000 to CHF 88,800;
  • The average annual cost of shipping printed documents to panelists, parties and experts is CHF 60,000;
  • The cost of translation is estimated at CHF 300 per page;
  • Five Appellate Body proceedings conducted in 2011 (excluding the two large civil aircraft disputes), resulted in the production of 8,244 pages.  Just work out the numbers!"

The costs and complexity of dispute settlement at the WTO is one of the inhibiting factors for developing and least developing countries to engage as actively as the developed world in the forum. While steps to improve the process must be immediately undertaken, countries should build internal capacity as well as competence to use the DSM to protect one's legitimate rights in the context of international obligations. As a country gets integrated into the world economy and its percentage of trade with the outside world increases, the possibility of being either dragged into a dispute or the need to use the dispute settlement mechanism to protect one's interests will rise. There would be a need to consciously devise a strategy to utilise this mechanism in a way permitted by the international obligations.

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