In practice, in the event of a dispute that is taken to the Dispute Settlement Body, three phases can be identified. First, consultations must be held among parties to the dispute. Where negotiations do not resolve the matter, the complaining party can request the establishment of a Panel. This Panel is normally mandated to examine the matter referred in the light of the relevant provisions of the agreements indicated by the parties and to make findings that assist the Dispute Settlement Body in making recommendations and rulings¹¹. The Panel drafts a report on the basis of briefs submitted by the parties to the dispute and oral arguments. The report is circulated to the parties before being submitted to the Dispute Settlement Body. The dispute settlement system authorises parties to file an appeal to the Appellate Body, a standing panel of seven senior international trade lawyers, three of whom serve on a given case. Appeals are limited to points of law covered in the report by the Panel¹². The report of the Appellate Body is submitted to the Dispute Settlement Body and is adopted, unless there is a consensus against the report.

Another feature of the Dispute Settlement Body is that compliance is not left, as is often the case in international law, to the goodwill of member states. The dispute settlement system specifically provides a system through which lack of compliance can lead to compensation and the suspension of concessions¹³. As a result of this strong system making rulings subject to monitoring and effective enforcement, compliance with the Dispute Settlement Body rulings has been high. The dispute settlement mechanism has proved to be an important tool for the major trading nations of the world but has been used relatively infrequently by smaller trading nations and has, for instance, not been used at all by sub-Saharan African countries. The US has, in particular, been involved either as a complainant, defendant or third party in virtually all proceedings that led to the adoption of a report, that is, the Agreement on Trade-Related Aspects of Intellectual Property Rights (Shaffer 2004).

Notes and References

¹¹ Article 7, Dispute Settlement Understanding.

¹² Article 17(6), Dispute Settlement Understanding.

¹³ Article 22, Dispute Settlement Understanding.