Consultations Under the WTO\u27s Dispute Settlement System

The aim of this paper is to demonstrate that consultations remain a vital element of the World Trade Organization’s dispute settlement process. The study begins with a brief look at consultations under the General Agreement on Tariffs and Trade and the procedural difficulties which were inherent in its dispute resolution system. In order to discern how the system currently operates, it is important to understand how conflicts were resolved where no binding panel system loomed to threaten reprisals should talks fail. Next, the paper discusses the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) rules detailing the procedures and the scope of consultations, as well as the rights and duties of the complainant and respondent. Examination of the rules will reveal that the framers of the DSU never intended that the panels and the Appellate Body would be the sole mechanisms for dispute resolution within the WTO. The purpose of the DSU was to achieve the expeditious resolution of a dispute, agreeable to all parties. To that extent, diverse forms of alternative dispute resolution were not only provided for, but also encouraged as possibly being a more effective means of dispute settlement. An examination of the cases which have been brought before the WTO, both settled and adjudicated, offers general observations regarding the WTO negotiations. In particular, three issues must be addressed. The first asks what role consultations play within the WTO dispute settlement system. The second issue examines why some disputes are resolved in consultation, while others proceed to the panel level. What factors, situations or political motivations allow some discussions to proceed smoothly, while other disputes create such an impasse that belligerents refuse to even attempt negotiations? The final section contrasts the effectiveness of consultations under the GATT and the WTO and, in particular, considers how the binding nature of impending panel decisions influences the parties during the consultation phase