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Dispute Settlement in the World Trade Organization: An Overview

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Abstract:

Dispute resolution in the World Trade Organization (WTO) is carried out under the WTO Dispute Settlement Understanding (DSU), whose rules and procedures apply to virtually all WTO agreements. The DSU provides for consultations between disputing parties, panels and appeals, and possible compensation or retaliation if a defending party does not comply with an adverse WTO decision by a given date. Automatic establishment of panels, adoption of reports, and authorization of requests to retaliate, along with deadlines and improved multilateral surveillance and enforcement of WTO obligations, are aimed at producing a more expeditious and effective system than had existed under the GATT. To date, 357 WTO complaints have been filed, slightly more than half involving the United States as a complaining party or defendant.

Expressing dissatisfaction with WTO dispute settlement results in the trade remedy area, Congress directed the executive branch to address dispute settlement issues in WTO negotiations in P.L. 107-210, its grant of trade promotion authority to the President; the authority expires June 30, 2007, and may thus be reconsidered in the 110th Congress. Although WTO Members have been negotiating DSU revisions in the WTO Doha Round, a draft agreement has not yet resulted. S. 364 (Rockefeller), introduced January 23, 2007, would provide for private party participation in WTO disputes, establish a process for domestic review of WTO decisions, require congressional approval of administrative actions proposed to comply with adverse WTO reports, and rescind certain administrative actions that have already gone into effect. This report will be updated.