The Dispute Settlement Understanding of the WTO Agreement: An Inadequate Mechanism for the Resolution of International Trade Disputes

The 1994 signing of the World Trade Organization (WTO) Agreement marked the initiation of the most far-reaching and comprehensive international agreement on trade in the history of the modern world. The creation of an actual trade organization was a marked improvement over the WTO\u27s predecessor, the 1944 GATT, which never formed an organization per se. Among the many improvements to the GATT, the WTO Agreement substantially changed the mechanism for dispute settlement whenever conflict arose between member states. This change, codified as the Dispute Settlement Understanding ( DSU ), was initially hailed as a great improvement over the GATT dispute settlement provisions. Unfortunately, the DSU has not been the comprehensive dispute settlement mechanism its framers had hoped to create. Myriad problems exist with the DSU in its current state, and the remedies to these problems will not come easily. After explaining the history of the GATT, this paper will discuss the current aspects and procedures of the DSU, examine the problems with these procedures, and suggest how the dispute settlement system under the WTO can operate in a more effective and efficient manner