Resolution of international trade
disputes in the WTO and
Department of Law, University of Bocconi, Milan, Italy
Purpose – The purpose of this paper is to assess the success of the world trade organisation (WTO)
dispute settlement system and its transferability to other fora.
Design/methodology/approach – The paper compares the design and case law of trade and
investment law, and seeks lessons for the settlement of trade and investment disputes in other fora.
Findings – It concludes that despite its shortcomings, the WTO Appellate Body provides vital
stability regarding legal interpretations, something notably absent from other fora.
Originality/value – The paper offers the perspective of a former Member and Chairman of the WTO
Appellate Body on the success of the dispute settlement system.
Keywords WTO, Appellate body, Dispute settlement, Investment law, Trade law
Paper type Research paper
The world trade organisation (WTO) dispute settlement system (DSS) is considered a
success story from several points of view as a functioning system to settle international
economic disputes between States by third-party impartial and law-based adjudication.
This success is evidenced rst of all by the great number of disputes that are brought to
the system, an evidence of the condence that members of the WTO have in the
usefulness and the efciency of the system: both as to process and outcomes to redress
breaches to the rules and reinstate the mutual balance of expected trade benets.
This includes the capability of the system to manage these disputes in the reasonable
rather short time frames, that has been set in the interest of the security of trade ows
unimpeded by illegal and unexpected obstacles. More specically, a noteworthy
feature of the system’s operation is that both large trading nations and small economies,
as well as industrialised and developing countries have had recourse to it; and that by
and large, the rule of law has prevailed irrespective of the imbalance in economic power
of the actors, justifying the dictum that the multi-lateral trading system has evolved
from a “power-oriented” system (the GATT) to a rule-based system (the WTO).
In this respect, the two-stage mechanism, ad hoc panels and appellate review by a
permanent body [the Appellate Body (AB)], formally “quasi-judicial” but in substance
having the features of an international court, has ensured well-reasoned interpretation
(leading to general acceptance of the outcomes), consistency in application,
predictability of the operation of the system and of the import of its rules for the benet
of all WTO members (and behind them for the business and trading community) well
beyond the solution of specic disputes (Sacerdoti et al., 2006).
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Journalof International Trade Law
Vol.14 No. 3, 2015
©Emerald Group Publishing Limited