World Trade Organization (WTO) dispute settlement is handled by its Dispute Settlement Body (DSB), which is comprised of all the WTO members. The DSB is empowered to form panels of experts to consider the case. The DSB may reject the panels’ findings, and it also oversees the implementation of its rulings and orders regarding the dispute and can authorize sanctions for non-compliance with them.
There is heavy emphasis on negotiation between the parties in World Trade Organization dispute settlement procedure. Before other WTO actions are taken, the parties must first engage in consultation and try to settle the disagreement themselves. If this fails, the parties may still ask the WTO director-general to mediate the dispute or assist in other ways.
If consultation does not result in resolution of the dispute, the complaining country can request the DSB to appoint a panel. Panels consist of three to five experts from different countries chosen from a permanent list with input from the disputing parties. The experts examine the evidence and determine which party is in the right. A panel report is given to the DSB, which can only reject the report by member consensus.
Under World Trade Organization dispute settlement procedure, the complaining and responding countries make their case at the first panel hearing. At a second panel hearing, the disputing countries may present written rebuttals and make oral arguments. The panel may consult its own experts or request an expert review group to prepare an advisory report regarding technical evidence.
The panel drafts a descriptive report of the facts and arguments presented in the case and gives a copy to the parties for comment. The panel draft is a summary of evidence and arguments and does not include findings or conclusions. After the parties have time to comment on the draft, the panel issues an interim report containing its finding of facts and conclusions regarding whether a WTO trade agreement was violated.
After a two-week period of review, during which the panel may hold additional meetings with the parties, it issues a final report. The final report is circulated to WTO members for comment. The panel’s final report becomes a DSB ruling after 60 days unless a DSB consensus rejects it. Either or both parties may appeal a panel’s ruling.
Appeals are heard by three members of the permanent Appellate Body, which is comprised of seven members who serve four-year terms. World Trade Organization dispute settlement procedure requires that appeals be based solely on points of law. On appeal, the parties cannot ask the Appellate Body to re-examine evidence or consider new issues.