The first years of WTO dispute settlement: Dealing with controversy and building confidence

The creation of the WTO was accompanied by the establishment of a robust dispute settlement system by the Dispute Settlement Understanding (DSU). The system was built upon the General Agreement on Tariffs and Trade (GATT) dispute settlement system and the panel practices that had developed over some forty years. The key new elements of the WTO system were: (1) it had compulsory and exclusive jurisdiction over WTO-related disputes between WTO members; (2) it incorporated automatic processes that could not be blocked at any stage by the respondent; (3) it established rather tight time limits for each stage of the process; and (4) it established appellate review. For the Legal Affairs Division (LAD), the basic challenge was to implement the new system operationally in a way that inspired sufficient confidence in the WTO membership, so that members could and would use the system to settle their disputes. In particular, at the beginning there were concerns that the system might be swamped by controversial cases that would lead to a meltdown if the major players – in particular, the United States and the European Union – refused to accept the results. In this chapter, I comment on four aspects of the years from 1995 to 1999 when I was Director of LAD. First, I examine the extensive use made of the system. Second, I recall some of the various decisions that were made in respect of how to implement the new panel-related provisions of the DSU. Third, I review how the more controversial cases were handled. Fourth, I comment on panel and LAD relations with the Appellate Body. Extensive usage and positive reviews demonstrate member confidence From 1995 to 1999, the WTO dispute settlement system was characterised by extensive use of the system, initially by the United States, and later by the European Union.