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WTO Dispute Settlement: a Check-up


Edited By Jacques H.J. Bourgeois, Marco Bronckers and Reinhard Quick

The dispute settlement system of the World Trade Organisation has been referred to as the jewel in the crown of the WTO. Reviewing more than
twenty years of the system’s operation, this volume takes stock by providing an in-depth analysis of key issues that have emerged. The book collects and updates papers by a group of eminent experts that were presented at an international conference at the College of Europe in Bruges. The fundamental question of whether the system is in good shape or whether changes are necessary is addressed through five themes.

Firstly, the book looks at the interpretive function of the dispute settlement system and questions whether rulings are capable of "gap-filling". Secondly, under the heading ‘Jurisdiction and Applicable Law’ we cover the thorny issue of how public international law can be integrated into the dispute resolution system. Thirdly, regarding problems associated with implementation, we ask whether the system ensures satisfactory compliance with its rules and rulings or whether financial remedies need to be added. Furthermore, through themes four and five we compare the WTO dispute settlement system with the dispute settlement system contained in the Free Trade Agreements, as well as the investor-state arbitration system (ISDS). We investigate how these two different systems can influence each other and learn from one another. With respect to the reform debate on ISDS, for example, the question was raised whether the WTO dispute settlement system could be considered as a model for such a reform.

This review comes to the conclusion that the system is functioning, if not perfectly, at least reasonably well. Where problems are identified, solutions are suggested to improve the system.

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A Comment (Bernard Hoekman)


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A Comment

Bernard HOEKMAN1

A central feature of the dispute settlement system of the WTO is that the remedies that are available are limited. Adjudicating bodies will generally rule that a State that is not in compliance with its obligations take measures to do so. If the WTO member concerned does not do so the affected government will be authorized to take retaliatory measures. The WTO does not call on its members to take collective action nor is there any scope to exclude a country from any or all benefits that accrue as a result of membership. Thus, as has often been observed in the literature on the WTO, ultimately the WTO is (has to be) a self-enforcing agreement, with (the threat of) retaliation as the only mechanism available to respond to actions by a member that violates its commitments. Bronckers and Baetens argue that it is possible and desirable to change the menu of options to ensure compliance with negotiated WTO obligations. Based on a discussion of prevailing remedy systems under general public international law and those available in the EU, they argue in favor of introducing the possibility of financial payments as a remedy into WTO dispute settlement and outline how this might be done in practice.

From an economic perspective there is much to be said for the approach that is proposed by the authors. Economists have long recognized that there are major downsides associated with retaliation as...

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