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Unit 2: World Trade Organization

governance model provides law-based initial bargaining, trading rounds close through power- Notes
based bargaining favouring Europe and the United States, and may not lead to Pareto
improvement.

Self Assessment

Fill in the blanks:
1. The ....................... operates on a one country, one vote system, but actual votes have never
been taken.

2. The Councils for ....................... under the General Council.
3. The WTO system tries also to improve ....................... and stability, discouraging the use of
quotas and other measures used to set limits on quantities of imports.

4. The World Trade Organization deals with the rules of trade between ................................. at
a near-global level.
5. The WTO’s stated goal is to improve the ....................... of the peoples of its member countries,
specifically by lowering trade barriers and providing a platform for negotiation of trade.

2.1.3 Dispute Settlement

Prompt compliance with recommendations or rulings of the DSB is essential in order to ensure
effective resolution of disputes to the benefit of all Members.
— World Trade Organization, Article 21.1 of the DSU
In 1994, the WTO members agreed on the Understanding on Rules and Procedures Governing
the Settlement of Disputes (DSU) annexed to the “Final Act” signed in Marrakesh in 1994.
Dispute settlement is regarded by the WTO as the central pillar of the multilateral trading
system, and as a “unique contribution to the stability of the global economy”. WTO members
have agreed that, if they believe fellow-members are violating trade rules, they will use the
multilateral system of settling disputes instead of taking action unilaterally.

Duration of a Dispute Settlement Procedure

These approximate periods for each stage of a dispute settlement procedure are target figures.
The agreement is flexible. In addition, the countries can settle their dispute themselves at any
stage.
Totals are also approximate.
60 days Consultations, mediation, etc.
45 days Panel set up and panelists appointed
6 months Final panel report to parties
3 weeks Final panel report to WTO members
60 days Dispute Settlement Body adopts report (if no appeal)
Total = 1 year (without appeal)
60-90 days Appeals report
30 days Dispute Settlement Body adopts appeals report
Total = 1 year 3 months (with appeal)

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