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Business Environment

Notes 2. Disputes are handled constructively
3. Rules make life easier for all
4. Freer trade cuts the costs of living
5. It provides more choice of products and qualities
6. Trade raises incomes and stimulates economic growth
7. Free trade reduces the manufacturing cost

8. Governments are shielded from lobbying
9. The system encourages good government

13.7 Dispute Settlement

There is no use having rules and procedures and multilateral agreement unless and until there
is a proper body to resolve disputes. The objective of WTO is to harmonize international trade,
and it is not possible without having a proper dispute settlement process.
In WTO, the Dispute Settlement Body consists of all its members. This body appoints a panel of
experts to consider the case. It has the authority to accept or reject the findings of the panel. It
monitors the implementation of the rulings and recommendations, and has the power to authorize
retaliation when a country does not comply with a ruling. The dispute settlement process has
the following stages:

First Stage: Consultation (up to 60 days)

In the first stage countries in dispute talk with each other and try to solve the issue mutually and
if they fail to do so they can seek the mediation of WTO director-general to get help in resolving
issue.

Second Stage

The panel (up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude). In
case consultation fails, the complaining countries can ask for appointment of the Panel.
If the panel decides that the disputed trade measure does break a WTO agreement or an obligation,
it recommends that the measure be made to conform with WTO rules. The panel may suggest
how this could be done.
The report becomes the Dispute Settlement Body's ruling or recommendation within 60 days
unless a consensus rejects it. Both sides can appeal against the report.
The report of the panel can be rejected by consensus in the Dispute Settlement Body, so its
conclusions are difficult to overturn. The panel's findings should be based on the agreements
cited.
The panel's final report should normally be given to the parties to the dispute within six months.
In cases of urgency, including those concerning perishable goods, the deadline is shortened to
three months.

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