Arbitration in WTO disputes : the forgotten alternative

The creation of a binding adjudication system under the Dispute Settlement Understanding ("DSU") is one of the major successes of the WTO. However, while the Dispute Settlement Body ("DSB") has experienced a high level of compliance with its rulings, there have been enough failures to raise concerns about compliance with WTO rulings. This in turn endangers the long term viability and legitimacy of the WTO as a decision-making body. This thesis explores the possibility of more effective integration of arbitration as a means of dealing with a small number of problematic cases where compliance with a ruling is doubtful. It considers arbitration as an alternative to what has effectively become an institutionalized litigation system involving panels and the Appellate Body, and as an adjunct to the diplomatic resolution of disputes, particularly for policy driven cases where compliance with WTO rulings is more doubtful. While proposals for the use of arbitration made during the Uruguay Round of negotiations leading to the creation o f the WTO have been realized in the provisions of the DSU, arbitration has never been effectively tested as a true alternative. Further, arbitration as an alternative to the litigation system has been almost entirely ignored in the context of the current debate over reform of the WTO dispute settlement system. After over a decade of WTO decision making, it is now an opportune point to consider meaningful institutional reform that more fully incorporates arbitration as an alternative form of dispute settlement at the WTO in politically difficult cases, and that builds on the existing but underused arbitration provision in Article 25 of the DSU. This thesis challenges the predominant bias towards the litigation system involving panels and the Appellate Body as a one-size-fits-all solution. It explores the potential role of arbitration, in the context of compliance theories, a historical review of the negotiations during the Uruguay Round, and an analysis of the shortcomings of the current DSU that contribute to the problems of non-compliance.Law, Peter A. Allard School ofGraduat