Annual Report 2013

The Annual Report 2013 of the WTO is out.

The chapter on dispute settlement brought out an interesting aspect of "consultations" which is an obligatory process before a formal panel is established to hear a WTO dispute.The number of disputes filed in 2012 were the largest in the past decade.

"Sharp increase in “requests for consultations” 

The number of “requests for consultations” – the first stage in dispute settlement proceedings and an obligatory step before the establishment of a panel to adjudicate a complaint – increased more than threefold in 2012 to 27, compared with eight in 2011 (see Figure 1).

However, this does not mean that 27 new disputes will necessarily be working their way through the dispute settlement system in 2013, as about half of disputes overall do not proceed beyond the consultations stage. Often, the parties reach a satisfactory settlement, or a complainant decides for other reasons not to pursue the matter. This shows that consultations are often an effective means of dispute resolution in the WTO.

Consultations are one of the key diplomatic features of the WTO dispute settlement system. They allow parties to clarify the facts involved and the claims of the complainant, possibly dispelling misunderstandings as to the true nature of the measure(s) at issue. In this sense, consultations serve either to lay the foundation for a settlement or for further proceedings under the DSU. For those disputes that are not settled at the consultations stage, which may last up to 60 days, the next step is the establishment of a panel by the DSB."

A safety valve, perhaps?