Dispute Settlement Understanding. The term ‘‘Dispute Settlement Understand- ing’’ means the Understanding on Rules and Procedures Governing the Settlement of Dis- putes referred to in section 3511(d)(16) of this title.
Dispute Settlement Understanding. The WTO’s dispute settlement system is currently under attack. Nonetheless, for the past several decades, it has been the international trade dis- pute mechanism of choice for resolving trade conflict. As of this writing, in the years since the establishment of the WTO in 1995, under the Dispute Settlement Understanding (DSU), 586 complaints have been filed, in addition to which there have been 242 panel rulings, 141 appellate rulings, and 51 arbitration rulings. By contrast, the hundreds of FTAs in existence have led to only a handful of complaints. The most active non-WTO dispute mechanism has been the NAFTA’s, but in 2000, the United States blocked the appointment of a panel, and no panels have been set up since then.2 When countries have complaints about trade barriers, they generally go to the WTO for resolution. One of the key reasons for the WTO dispute settlement system’s continued success is the existence of an independent Secretariat to manage the process. Two divisions of the WTO Secretariat provide primary assistance to the panels, and a separate Secretariat assists the Appellate Body, the standing group of seven appellate “judges” who hear appeals of panel reports. The role of the WTO staff is crucial in making sure panels are appointed when needed, as well as providing administrative and legal support in handling complex litigation. For FTA disputes, parties have to figure out the process from scratch each time. At the WTO, by contrast, an efficient and effective system is al- ready in place for every dispute that might arise. The DSU has been successful in part because it strikes a good balance between enforcement and flexibility. It strongly encourages compli- ance with panel and Appellate Body rulings, but it does not force governments to take actions that are politically infeasible. If a government is found to have violated WTO obligations, it can choose not to change its policies and instead accept retaliation from the complainant. In this way, the balance of commitments is maintained. Disguised Protectionism Jurispru- dence. The DSU has dealt with a wide range of issues, but there is one in particular where clarifications by panels and the Appellate Body have been helpful: the rules on disguised protectionism, such as those in GATT Article III, paragraphs 2 and 4, or the agreements on Technical Barriers to Trade and on Sanitary and Phytosanitary Measures. These provi- sions explain in broad terms that domestic regulations and taxes are ...
