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International Marketing

Notes The operation of the WTO dispute settlement process involves the DSB panels, the Appellate
Body, the WTO Secretariat, arbitrators, independent experts and several specialized institutions.
The General Council discharges its responsibilities under the DSU through the Dispute Settlement
Body (DSB). Like the General Council, the DSB is composed of representatives of all WTO
Members. The DSB is responsible for administering the DSU, i.e. for overseeing the entire
dispute settlement process. If a member state considers that a measure adopted by another
member state has deprived it of a benefit accruing to it under one of the covered agreements, it
may call for consultations with the other member state. If consultations fail to resolve the
dispute within 60 days after receipt of the request for consultations, the complainant state may
request the establishment of a panel. It is not possible for the respondent state to prevent or
delay the establishment of a panel, unless the DSB by consensus decides otherwise. The panel,
normally consisting of three members appointed ad hoc by the Secretariat, sits to receive written
and oral submissions of the parties, on the basis of which it is expected to make findings and
conclusions for presentation to the DSB. The proceedings are confidential, and even when private
parties are directly concerned, they are not permitted to attend or make submissions separate
from those of the state in question.

The final version of the panel’s report is distributed first to the parties, and two weeks later it is
circulated to all the members of the WTO. The report must be adopted at a meeting of the DSB
within 60 days of its circulation, unless the DSB by consensus decides not to adopt the report or
a party to the dispute gives notice of its intention to appeal. A party may appeal a panel report
to a standing Appellate Body, but only on issues of law, and legal interpretations developed by
the panel. Members may express their views on the report of the Appellate Body, but they
cannot derail it: an Appellate Body report shall be adopted by the DSB and unconditionally
accepted by the parties, unless the DSB decides by consensus within thirty days of its circulation
not to adopt the report.
Within thirty days of the adoption of the report, the member concerned is to inform the DSB of
its intentions; if the member explains that it is impracticable to comply immediately with the
recommendations and rulings, it is to have a “reasonable period of time” in which to comply.
If no agreement is reached about the reasonable period for compliance, that issue is to be the
subject of binding arbitration. If there is a disagreement as to the satisfactory nature of the
measures adopted by the respondent state to comply with the report that disagreement is to be
decided by a panel, if possible the same panel that heard the original dispute, but apparently
without the possibility of appeal from its decision.
If all else fails, two more possibilities are set out in the DSU:

If a member fails within the “reasonable period” to carry out the recommendations and
rulings, it may negotiate with the complaining state for a mutually acceptable
compensation.
If no agreement on compensation is reached within twenty days of the expiry of the
“reasonable period”, the prevailing state may request authorization from the DSB to
suspend application to the member concerned of concessions or other obligations under
the covered agreements. In contrast to prior GATT practice, authorization to suspend
concessions in this context is semi-automatic, in that the DSB “shall grant the authorization
[...] within thirty days of the expiry of the reasonable period”, unless it decides by consensus
to reject the request.
The DSU states that fellow members should give “special attention” to the problems and interest
of the developing countries. If one party to a dispute is a developing country, that party is
entitled to have at least one panelist who comes from a developing country. Further, if a complaint
is brought against a developing country, the time for consultations (before a panel is convened)

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