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A STUDY ON STRUCTURE AND WORKING OFDISPUTE SETTLEMENT MECHANI SAM UNDER

WTO

CHAPTER NO: - 1. INTRODUCTION

1.1

Back-Ground

GATT Born in 1995, but not so young The WTO began life on 1

January 1995, but its trading system is half a century older. Since

1948, the General Agreement on Tariffs and Trade (GATT) had

provided the rules for the system. (The second WTO ministerial

meeting, held in Geneva in May 1998, included a celebration of

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the 50th anniversary of the system.) It did not take long for the

General Agreement to give birth to an unofficial, de facto

international organization, also known informally as GATT. Over

the years GATT evolved through several rounds of negotiations.

The last and largest GATT round, was the Uruguay Round which

lasted from 1986 to 1994 and led to the WTOs creation. Whereas

GATT had mainly dealt with trade in goods, the WTO and its

agreements now cover trade in services, and in traded inventions,

creations and designs (intellectual property).

The General Agreement on Tariffs and Trade (GATT) was an

international organization created in 1947 to reduce trade barriers

through multilateral negotiations. In January 1995, the GATT was

replaced by a stronger World Trade Organization (WTO), the

result of eight years of GATT negotiations. Rules apply to over 90

percent of international trade.

The WTO has become increasingly controversial as it has

expanded the scope of its work from its original narrow GATT

focus on reducing tariffs on manufactured goods to agriculture and

services. The WTO now also works to eliminate non-tariff barriers,

and can be used to challenge environmental, health and other

regulations that may serve legitimate social goals but may be

regarded as impediments to international trade. The 1995replacement of GATT by the WTO heightened concern among

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critics because its stronger enforcement powers represent a further

shift in power from citizens and national governments to a global

authority.

The GATTSs (and now the WTOs) approach to reducing trade

barriers was based on the most-favored nation principle, which

requires that when a nation grants a trade privilege to one country,

it must grant the same privilege to all GATT members. Another

guiding principle is that of national treatment, which requires

that of naton treatment, which requires nations to domestic

goods or services.

The distinctive features of WTOWorld Trade

Organization are :

1. Unlike the GATT, it is a legal entity.

2. Unlike International Monetary Fund (IMF) and World Bank

it is not an agent of the United Nations.

3. Unlike the IMF and the World Bank there is no weighted

voting, but all the WTO members have equal rights.

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4. Unlike the GATT, the agreements under the WTO are

permanent and binding to the member countries.

5. Unlike the GATT, the WTO dispute settlement system is

based on dilatory but automatic mechanism it is also quicker

and biding on the members. As such the WTO is a powerful

body. Unlike the GATT, the WTOs approach is rule based

and time bound.

6. Unlike the GATT, the WTO has a wider coverage. It covers

trade in goods as well as services.

7. Unlike the GATT, the WTO has a focus on trade related

aspects of intellectual property rights and several other issues

of agreements.

8. Above all the WTO is huge organizational body with a large

secretariat.

The WTO is a body designed to promote free trade through

organizing trade negotiations and act as an independent arbiter in

settling trade disputes. To some extent the WTO has been

successful in promoting greater free trade.

Free trade has many advantages:

1. Lower prices for consumers. Removing tariffs

enables us to buy cheaper imports

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industry, they may be unable to do it without some tariff

protection.

1.2

Objective Of The Study

To Get A Knowledge

To Increase a Knowledge

The help full to the economy

And also profitable to indian country

.

1.3

Signif icant Of the Study

. To increase my Knowledge

. To know the Indian people about wto

. And Indian country political are also know about WTO

. Thats after economic are know about WTO

. And this is very profitable to economic.

1.4 Problem of Study

. This is secundary data

. This very difficult to put right information

. And this information are ready but very difficult to find out

.And this not sutable to studies

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1.5Research of Desire

The study of secondary data

Book, News Paper, Articles, etc, are referred to get the relevant

information.

Data obtain to various sources observation are made andaccordingly conclusion is derived

This study is base on the information available for the time period

etc.

1.6 Chapter Schemes

Chapter No 1.In this chapter full information about WTO

Chapter No 2.In this chapter efforts are made to review

various research articles of research on WTO.

Chapter No 3.Function and Objective of WTO & Its

various members.

Chapter No 4.Dispute settlement under WTO & Procedure

steps of solve the WTO disputes.

Chapter No 5.Real Dispute Case Study Chapter No 6.Finding, Conclusion, Suggestion .

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CHAPTER NO:- 2.ARTICLES ON WTO

This Articles are take from Economics Times News paper 8-

articles I noted In this project , this are related to WTO .

India to seek support for food security proposal

at WTO

Dilasha Seth, ET BureauSep 25, 2013, 02.00AM ISTIndia has objected to some of the clauses in the trade facilitation

agreement and sought support for the developing countries'food

securityproposal at theWorld Trade Organization (WTO).

Senior officials fromWTO member countries are in Geneva to

prepare the ground for the forthcoming Bali ministerial meeting.

"There are certain things that we cannot do and even the developed

world knows we cannot concede on those," said acommerce

department official.

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Trade facilitation measures require countries to improve

infrastructure at borders, standardise procedures and rules and cut

red tape to allow seamless trade.

New Delhi is averse to some provisions due to the high cost of

compliance and requirement of additional infrastructure and

investment obligations that some countries may not have the

capacity to meet.

India has also opposed the condition of keeping adequate time gap

between the publication of new or amended tariffs and their

coming into effect. Decisions on tariffs are part of theFinance

Bill and announced in the budget for immediate implementation.

The country, however, has extended support proposals on customs

cooperation and mandatory return of the rejected consignment to

the exporter, instead of the current practice of destroying goods

atEUports.

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In the latest rounds of talks, India has also made it amply clear that

if there is no forward movement onG-33nations food security

proposal, trade facilitation would also not move.

The G-33 proposal wants subsidies, which are a part of the

procurement for public stockholding for poor and marginal

farmers, to not be regarded as a prohibited subsidy by the WTO.

Towards a tariff-free world

GUEST COLUMN / ROBERT R BLACKWILL, Dec 4, 2002, 12.40am IST

On November 26, the United States proposed a bold plan, in the

context of ongoing negotiations in the World Trade Organisation,

to eliminate all tariffs on manufactured products by the year 2015.

US trade representatives formally began discussing this proposal

with our trading partners, including India, in the WTO this week.

In making this proposal, the American goal is to stimulate

economic growth, raise incomes and lower taxes, generate jobs,

reduce poverty aThis effort fits in very well with the similarly

ambitious US propositions for market access liberalisation in the

agriculture and services sectors. In fact, the Bush administration's

goal for all trade in goods is the same: the complete elimination of

tariffs.

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Removing tariffs would result in nearly $6 trillion of duty free

global trade. The World Bank estimates that removing all barriers

to goods trade would expand the international economy by $830

billion by 2015, resulting in a 2.5% annual in That is about $136

dollars more earnings each year for every person in the world. The

US proposal will also significantly contribute to worldwide

economic development.

Increasingly, WTO members are coming to accept that the path to

higher standards of living and eradicating poverty lies not in

continuing protectionist trade policies, but rather in multilateral

trade liberalisation.

The evidence shows that those countries that are willing to actively

seek a better future through freer trade are the ones that prosper

while those that cling to insular and outdated economic policies

continue to fall behind.

Developing countries, on the whole, maintain high tariff levels,

and eliminating these will provide considerable benefits for the

world's poor. For example, nearly half of all developing country

trade is with other developing countries.

The result is that about 70% of the duties paid by these nations are

paid to each other. Furthermore, as the WTO recently reported,

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high tariffs hamper a country's ability to grow through exports.

High tariffs are, therefore, most harmful to developing economies.

WTO meet: India needs to pitch for tradefacilitation for export diversification

ET BureauAug 10, 2013, 04.01AM IST

The commerce ministry is reportedly seeking inputs from industry

as it firms up strategy for the forthcoming ministerial planned by

theWorld Trade Organization (WTO) in Bali, Indonesia. India

needs a proactive stance to purposefully advance world trade talks,

taking into account the interests of developing economies and the

least developed countries (LDCs).

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US steel protection tariffs illegal: WTOPTIMay 3, 2003, 09.10pm IST

The World Trade Organisation has ruled that US tariffs to protect

the American steel industry are illegal.

The ruling, which has been made available to governments but has

not been publicly released, was confirmed by a US trade

official, The Washington Timesreports.

The official, who asked not to be named, said the US plans to

appeal the decision, leaving the tariffs in place in the meantime.

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A final ruling by an appeals panel would not be expected until late

November, the official said. By that time, the temporary

protections would be past their halfway mark.

President Bush slapped tariffs as high as 30 per cent in March 2002

on foreign steel products to protect the ailing and uncompetitive

US steel companies. The tariffs are set for three years, with less

protection each year.

The 15-nation European Union and other major steel-producing

nations complained to the WTO that the US tariffs broke

international trade rules.

The ruling on steel tariffs, The Washington Times notes, is the

latest in a string of high-profile losses for the US.

US trade officials say that the dispute-panel rulings overall have

been balanced, with the US winning several important cases.

However, lawmakers are increasingly annoyed with rulings against

the United States.

Brazil's Roberto Azevedo to head World Trade

Organization

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Dilasha Seth, ET BureauMay 9, 2013, 04.00AM IST

NEW DELHI: Brazil'sRoberto Azevedo was named head of

theWorld Trade Organization at a time it struggles to find ways to

revive stalled talks on freeing global commerce and to help

develop poorer nations. He will replacePascal Lamyat the helm of

the Geneva-based body in September.

The 55-year-old has been thePermanent Representative of

Brazil to theWTO and otherInternational Economic

Organisations inGeneva since 2008. His backers, including India,

believe that as an insider, he will be able to forge a consensus

between conflicting members before the 9th ministerial in Bali,

seen as key to the future of the multilateral trade talk started way

back in 2001 inDoha.

Azevedo has said that he believes in ensuring that developing

countries must secure a share ofinternational trade commensurate

with their needs, referring to the preamble of theMarrakesh

Agreement that was signed in 1994, thereby establishing WTO.

Welcoming the appointment, commerce and industry

ministerAnand Sharma said, "It is significant that this apex trade

body is being headed by an able nominee from the developing

world. He is assuming office at a crucial juncture as there is

considerable expectations from theDecember Bali Ministerial

Conference."

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Differences between the developed and the developing nations

have prevented a successful conclusion of the multilateral trade

talks asIndia and other developing nations defend their

agricultural markets to protect millions of subsistence farmers from

easy imports that may result from the multilateral agreement.

"Reduction in the agriculture subsidies by the developed nations

will definitely see a breakthrough," saidManoj Pant,

professor,JNU.

Azevedo has on several occasions challenged Europeans and the

US against the farm-subsidy policies. "Since India and Brazil are

working together as BRICS, having a Brazilian as the director

general of WTO is a good sign", saidAnwarul Hoda, former,

deputy director general, WTO and presently chair professor

atICRIER. How far this will help the developing economies and

India will depend on his leadership qualities, he felt. "Azevedo has

never been the minister, which may be an initial hurdle in terms of

clout in dealing with ministers. But then a DG can only go to an

extent of moderating or give a direction to the talks," he said.

China's trade still smaller than that of US:

China Commerce Ministry

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PTIFeb 13, 2013, 09.56PM IST

BEIJING: TheChinese Commerce Ministry today contradicted

reports that China has overtaken the US to emerge as the world's

biggest trading country.

China's combined export and import volume in 2012 still ranked

behind that of the US when using the same method to measure, the

Ministry said today.

The Ministry expects the country's total international goods trading

to be USD 15.64 billion less than that of the US according to the

measurement adopted by the World Trade Organization (WTO),

state runXinhua news agencyreported.

The announcement is in response to a previous report by the state

run CCTV that China, with its foreign trade amounting to USD

3.867 trillion in 2012, has overtaken the US as the world's biggest

goods trading nation.

TheUS Commerce Department has released two sets of figures for

its international goods trading USD 3.82 trillion (based on

internationalbalance of payments)and USD 3.882 trillion (based

on the measurement which is similar to the WTO's measurement),

anMOC official said.

The WTO usually adopted the latter figure in its annual

international trading report that is due to be released late February

or early March, the official added.

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China's export and import volume increased 6.2 per cent year on

year to USD 3.867 trillion in 2012, according to the data issued last

month by theGeneral Administration of Customs.This was higher

than the USD 3.82 trillion in goods registered by the US

Commerce Department.

Visa, MasterCard and American Express

demand action against China

BloombergMar 28, 2010, 07.52am IST

BRUSSELS/WASHINGTON/NEW YORK: VISA, American

Express and MasterCard have talked with US trade officials about

taking action against China for shutting the companies out of its

$723 billion payment-processing market, people briefed on the

issue said.

The US Trade Representative's Office has discussed a possible

complaint at the World Trade Organization with lawyers for the

three companies, as well as Discover Financial Services and First

Data, said the people, who declined to be identified because the US

hasn't announced a complaint.

The case highlights rising tensions between the world's largest and

third-biggest economies, adding to disputes ranging from currencypolicy to import duties to Internet censorship. US trade

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associations, including the Business Software Alliance, in January

accused China of developing policies that favour local companies.

"If the government was looking to get tough on China, this is a

solid case to take on," David Hartridge, a senior trade policy

adviser for the law firm White & Case in Geneva and a former

WTO official, said in an interview.

At stake is a market in which payment-card purchases surged morethan 26-fold since 2002, according to Terry Xie, an analyst at

Mercator Advisory Group, a research firm in Maynard,

Massachusetts. Card spending, excluding ATM transactions,

jumped to 4.93 trillion yuan ($722.7 billion) in China last year and

may reach 8.4 trillion yuan by 2012, Xie said. That would be

almost half the payments Visa processed worldwide in 2009.

"China is still very much a cash-based society," Adam Frisch, an

analyst with Morgan Stanley in New York, said in an interview.

"You have a market that over the long term could be an immense

opportunity."

US lawmakers such as Senator Charles Schumer, a New

York Democrat, have called for moves to counteract China's

economic policies. The two countries are in a running debate over

the value of China's currency, the US has imposed duties that

China has called protectionist and President Barack Obama's

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administration has sided with Google in its decision to stop abiding

by China's rules for censorship of the Internet.

A complaint with WTO, the Geneva-based trade arbiter, would be

the second by the Obama administration against China. A US

filing last year said limits on exporting raw materials such as

magnesium, coke and zinc give an unfair advantage to Chinese

manufacturers.

"This is a very important issue for each of the companies affected,"

John Frisbie, president of the US-China Business Council, a trade

group in Washington, said in an interview. "If there are WTO

violations and we have winnable cases, then we should bring

them."

China doesn't let foreign companies issue their own bank cards

denominated in its currency, build networks to support such cards

or process interbank point-of-sale transactions. Foreign banks must

"co-brand" with Chinese operators to supply these services and

execute payments through Shanghai-based China UnionPay Data,

the country's only national electronic-payment network.

India, WTO call for restart of stalled tradetalks

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AGENCIESAug 12, 2008, 03.52pm IST

NEW DELHI: The head of the World Trade Organization and

India's commerce minister called Tuesday for the resumption of

global trade talks that stalled last month in Geneva.

"India is committed to the multilateral system but when we

resume, I urge you to come to the table looking not for what you

can get, but what you can give,'' said Commerce Minister Kamal

Nath, singling out foreign diplomats who had gathered to hear him

speak at a trade conference in New Delhi.WTO Director General

Pascal Lamy said that after trade talks stalled July 29, WTO

member states had urged him to push ahead. ``Don't throw in the

towel. Please reserve what's on the table. We have never been

so close,'' they said, he recalled.``Two days after a failure such

unanimous view was and remains surprising,'' he added. Lamy and

Nath were speaking at a trade conference organized by theFederation of Indian Chambers of Commerce and Industry, or

FICCI, a business group, and the Consumer Unity & Trust Society

International, or CUTS, a non-governmental consumer advocacy

group.

They did not lay out any time frame for kick-starting the so-called

Doha round, which began in 2001 with the goal of helping

emerging economies benefit from freer trade. Talks foundered last

month because India and China failed to reach an accord with the

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US on emergency agricultural tariffs, which would protect

developing markets from sudden surges of imported farm products.

Lamy said that if the talks had been successful, the sum of global

import tariffs would have been slashed by half, a savings of

US$150 bn a year. Developing countries would have contributed

one-third of that savings and reaped two-thirds of the rewards, he

said. The US would have been required to cap trade-distorting

subsidies, which could surge to US$48 bn a year, at US$14.5 bn a

year, he said. US Trade Representative Susan Schwab will also

meet with Lamy, her spokeswoman Gretchen Hamel said by e-mail

fromWashington.

CHAPTER NO:- 3.FUNCTION & OBJECTIVE OF

WTO

Functions of WTO

The former GATT was not really an organisation; it was merely a

legal arrangement. On the other hand, the WTO is a new

international organisation set up as a permanent body. It is

designed to play the role of a watchdog in the spheres of trade in

goods, trade in services, foreign investment, intellectual property

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rights, etc. Article III has set out the following five functions of

WTO;

(i) The WTO shall facilitate the implementation, administration

and operation and further the objectives of this Agreement and of

the Multilateral Trade Agreements, and shall also provide the

frame work for the implementation, administration and operation

of the plurilateral Trade Agreements.

(ii) The WTO shall provide the forum for negotiations among its

members concerning their multilateral trade relations in matters

dealt with under the Agreement in the Annexes to this Agreement.

(iii) The WTO shall administer the Understanding on Rules and

Procedures Governing the Settlement of Disputes.

(iv) The WTO shall administer Trade Policy Review Mechanism.

(v) With a view to achieving greater coherence in global economic

policy making, the WTO shall cooperate, as appropriate, with the

international Monetary Fund (IMF) and with the International

Bank for Reconstruction and Development (IBRD) and its

affiliated agencies.

Decisionmaking

Most decisionmaking in the WTO follows GATT practices and is

based on consultation and consensus. The consensus practice is of

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value to smaller countries, as it enhances their negotiating leverage

in the informal consultations and bargaining that precede

decisionmaking, especially if they are able to form coalitions.

Although recourse to voting may be had if a consensus cannot be

reached, in practice voting occurs only very rarely. If a vote is

needed, it is based on the principle of one member, one vote.

Unanimity is required for amendments relating

to general principles such as MFN or national treatment.

Interpretation of the provisions of the WTO agreements and

decisions on waivers of a members obligations require approval

by a threequarters majority vote A two-thirds majority vote is

sufficient for amendments relating to issues other than the general

principles mentioned above. Where not otherwise specified, and

where consensus cannot be reached, a simple majority vote is, in

principle, sufficient. In practice, voting does not occur. Indeed, in

1995 WTO members decided not to apply provisions allowing for

a vote in the case of accessions and requests for waivers but to

continue to proceed on the basis of consensus (WT/L/93).

Legislative amendments are also likely to be quite rare, as, in

practice, changes to the various agreements occur as part of

broader multilateral rounds.

Management of the Secretariat and Daily Operations

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Unlike the World Bank and the IMF, the WTO does not have an

executive body or a board comprising a subset of members some

of whom represent a number of countries. Such executive boards

facilitate decisionmaking by concentrating discussions within a

smaller but representative group of members.

The closest the GATT ever came to such a forum was the

Consultative Group of Eighteen (CG18), established in 1975. It

ceased meeting in 1985 and never substituted for the GATT

Council of Representatives (Blackhurst 1998). As of January 1,

2002, the WTO had a membership of 144. Achieving consensus

among such a large number of members is not a simple matter, and

mechanisms have therefore been developed over the years to

reduce the number of members that are active participants in WTO

deliberations. The first and most important device is to involve

only principals, at least initially. To some extent

this is a natural process; a country that has no agricultural sector is

unlikely to be interested in discussions

centering on the reduction of agricultural trade barriers. In general

the Quad economiesCanada, the European Union, Japan, and

the United Statesare part of any group that forms to discuss any

topic. They are supplemented by countries that have a principal

supplying interest in a product and by the major (potential)

importers whose policies are the subject of interest. Finally, anumber of countries that have established a reputation as

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spokespersons tend to be involved in most major meetings.

Historically, such countries have included Egypt, India, and

Yugoslavia.

Objectives of WTO

Important objectives of WTO are mentioned below:

(i) to implement the new world trade system as visualised in theAgreement;

(ii) to promote World Trade in a manner that benefits every

country;

(iii) to ensure that developing countries secure a better balance in

the sharing of the advantages resulting from the expansion of

international trade corresponding to their developmental needs;

(iv) to demolish all hurdles to an open world trading system and

usher in international economic renaissance because the world

trade is an effective instrument to foster economic growth;

(v) to enhance competitiveness among all trading partners so as to

benefit consumers and help in global integration;

(vi) to increase the level of production and productivity with aview to ensuring level of employment in the world;

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(vii) to expand and utilize world resources to the best;

(viii) to improve the level of living for the global population and

speed up economic development of the member nations.

CHAPTER NO:- 4.DI SPUTE SETTELMENT

UNDER WTO AND ITS STEPS SETTLE THE

DISPUTE.

The WTO Dispute Settlement Mechanism and

Developing Countries

Developing countries need access to foreign markets if they are to

reap the benefits of globalization. Multilateral negotiations under

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the World Trade Organization (WTO) play a pivotal role in

facilitating market access. 2 Yet, throughout the global economy,

pressures for protectionism abound, threatening to roll back these

gains.

As a result,the WTOs dispute settlementmechanism is widely

seen as one of the most critical and successful features of the

trade regime. Using this mechanism, WTO member-states can

shine thespotlight of international legal scrutiny on the

protectionist practices of their trading partners. This rule-of-law

system is especially important for developing countries, which

typically lack the market size to exert much influence through

more power-oriented trade diplomacy. Indeed, some poorer

countries have used the WTO dispute settlement system to great

effect, proving the systems worth from a development

perspective.3 Nonetheless, the technical and legal complexity of

this regime makes it difficult for other developing countries to

effectively use the system, many of which have never filed a WTO

dispute, despite having repeated grounds to do so. In this issues

brief, we elaborate this point by describing: (a) how WTO dispute

settlement works; (b) the prospective benefits and hurdles to

effective use of the regime by developing countries; and (c) some

potential directions for technical assistance and capacity-building,focusing on WTO dispute settlement, in particular

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1. How WTO Dispute Settlement Works

A WTO dispute proceeds through three main stages:

consultation; formal litigation; and, if necessary,

implementation (figure 1). All disputes start with a request for

consultations, in which the member government bringing the

case to the WTO (the complainant) sets out its objections to the

trade measure(s) of another member government (the

defendant). The two sides are then required to consult for 60

days with the goal of negotiating a mutually satisfactory

solution to the dispute. Interestingly, a large proportion of

cases are successfully resolved during consultations; 46% of all

disputes brought to the WTO end at this stage, and three-

quarters of those yield at least partial concessions from the

defendant. 4 If consultations do not result in a mutually

satisfactory solution, the complainant can request a panel

proceeding, marking the start of the formal litigation stage.

Panels are comprised of three to five persons with a

background in trade law, agreed to by the parties on a case-by-

case basis. There are typically two rounds of testimony,

including from other countries (third parties) that notify the

WTO of a substantial interest in the case. The panel then

circulates an interim report, offering both sides an

opportunity to comment and seek clarification. The

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complainant and defendant can still negotiate a settlement at

this point. In fact, another 13% of all cases end at this stage

before a ruling is rendered. If not, the panel issues its final

report, which is then adopted by the WTO, unless one of two

things happens. First, the two sides can agree not to adopt the

panel report for whatever reason, although to date this has not

happened. Second, one or both sides (but not third parties) can

appeal the panels report, which happens frequently (i.e., in

73% of panel rulings).

2 WTO Dispute Settlement from a Development

Perspective

Trade liberalization promises considerable returns, but comes with

risks. One such risk is the possibility that a foreign government

will succumb to lobbying by its own domestic producers and grant

them protection. This can undermine a developing countrys

interest in reallocating resources to the affected export sector, since

poor countries tend to have fewer alternative export markets, and

fewer export goods. As a result, the mere anticipation of such

protectionism can deter or dilute muchneeded trade reform in

developing countries. The WTO dispute settlement system can

help insure against this risk by maintaining market access once it is

won, thereby encouraging developing countries to embark on an

opentrade growth strategy.

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STEPS IN DISPUTE SETTLEMENT PROCESS

Dispute settlement is the central pillar of the multilateral trading

system, and the WTOs unique contribution to the stability of the

global economy. Without a means of settling disputes, the rules-

based system would be less effective because the rules could not

be enforced. The WTOs procedure underscores the rule of law,

and it makes the trading system more secure and predictable. The

system is based on clearly-defined rules, with timetables for

completing a case. First rulings are made by a panel and endorsed

(or rejected) by the WTOs full membership. Appeals based on

points of law are possible. However, the point is not to pass

judgement. The priority is to settle disputes, through consultations

if possible. By January 2008, only about 136 of the 369 cases had

reached the full panel process. Most of the rest have either been

notified as settled out of court or remain in a prolonged

consultation phasesome since 1995.

Principles:

Equitable, fast, effective, mutually acceptable

Disputes in the WTO are essentially about broken promises. WTO

members have agreed that if they believe fellow-members are

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violating trade rules, they will use the multilateral system of

settling disputes instead of taking action unilaterally. That means

abiding by the agreed procedures, and respecting judgements. A

dispute arises when one country adopts a trade policy measure or

takes some action that one or more fellow-WTO members

considers to be breaking the WTO agreements, or to be a failure to

live up to obligations. A third group of countries can declare that

they have an interest in the case and enjoy some rights.

A procedure for settling disputes existed under the old GATT, but

it had no fixed timetables, rulings were easier to block, and many

cases dragged on for a long time process with more clearly defined

stages in the procedure. It introduced greater discipline for the

length of time a case should take to be settled, with flexible

deadlines set in various stages of the procedure. The agreement

emphasizes that prompt settlement is essential if the WTO is to

function effectively. It sets out in considerable detail the

procedures and the timetable to be followed in resolving disputes.

If a case runs its full course to a first ruling, it should not normally

take more than about one year 15 months if the case is

appealed. The agreed time limits are flexible, and if the case is

considered urgent (e.g. if perishable goods are involved), it is

accelerated as much as possible.

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The Uruguay Round agreement also made it impossible for the

country losing a case to block the adoption of the ruling. Under the

previous GATT procedure, rulings could only be adopted by

consensus, meaning that a single objection could block the ruling.

Now, rulings are automatically adopted unless there is a consensus

to reject a ruling any country wanting to block a ruling has to

persuade all other WTO members (including its adversary in the

case) to share its view.Although much of the procedure does

resemble a court or tribunal, the preferred

solution is for the countries concerned to discuss their problems

and settle the dispute by themselves. The first stage is therefore

consultations between the governments concerned, and even when

the case has progressed

These approximate periods for each stage of a dispute settlement

procedure are target figures the agreement is flexible. In

addition, the countries can settle their dispute themselves at any

stage. Totals are also approximate.

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60 day

Consultations,

mediation, etc

45 day

Panel set up and

panellists appointed

6 month

Final panel report

to parties

3 week

Final panel report

to WTO members

60 day

Dispute Settlement

Body adopts report

(if no appeal)

Total = 1 year

(without appeal)

6090 day

Appeals report

30 day

Dispute Settlement

Body adopts appeals

Report

Total = 1y 3 (with appeal)

1. CONSULTATION (UP TO 60 DAYS)

Before taking any other actions, the countries in a dispute have to

talk to each other to see if they can settle their differences by

themselves. If that fails, they can also ask the WTO director-

general to mediate or try to help in any other way (so called good

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offices). The consultations also offer a country an opportunity to

assess the merits of the other countrys case and sometimes submit

written questions that it wants the defending country to answer

during the consultation if they find the process informative or if

they think they may be able to reach a settlement.

Consultations are not always followed by a request for a panel.

Since sometimes the threat of action is more potent than the action

itself, consultations may provide information and leverage for

negotiations that to a successful resolution of the dispute. On

occasion, a complaining party may learn from the consultation

process about weaknesses in its arguments or damaging facts;

either situation could lead to a decision not to press the matter.

To complaining party may request the formation of panel, if the

parties to the dispute jointly consider that the good offices,

conciliation or mediation process has failed to settle the dispute.

2.The panel (up to 45 days for a panel to be

appointed, plus 6 months for the panel to conclude)

If consultations fail, the complaining country can ask for a panel

to be appointed. The country in the dock can block the creation

of a panel once, but when the Dispute Settlement Body meets for a

second time, the appointment can no longer be blocked (unless

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there is a consensus against appointing the panel). Officially, the

panel is helping the Dispute Settlement Body make rulings or

recommendations. But because the panels report can only be

rejected by consensus in the Dispute Settlement Body, its

conclusions are difficult to overturn. The panels findings have to

be based on the agreements cited.

The panels final report should normally be given to the parties to

the dispute within six months. In cases of urgency, including those

concerning perishable goods, the deadline is shortened to three

months.o other stages, consultation and mediation are still always

possible.

The main stages are in Panel:

Before the first hearing: each side in the dispute presents its case

in writing to the panel.

First hearing: the case for the complaining country and defence:

the complaining country (or countries), the responding country,

and those that have announced they have an interest in the dispute,

make their case at the panels first hearing.

Rebuttals: the countries involved submit written rebuttals and

present oral arguments at the panels second meeting.

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Experts: if one side raises scientific or other technical matters, the

panel may consult experts or appoint an expert review group to

prepare an advisory report.

First draft: the panel submits the descriptive (factual and

argument) sections of its report to the two sides, giving them two

weeks to comment. This report does not include findings and

conclusions.

Interim report: The panel then submits an interim report,

including its findings and conclusions, to the two sides, giving

them one week to ask for a review.

Review: The period of review must not exceed two weeks.

During that time, the panel may hold additional meetings with the

two sides.

Final report: A final report is submitted to the two sides and three

weeks later, it is circulated to all WTO members. If the panel

decides that the disputed trade measure does break a WTO

agreement or an obligation, it recommends that the measure be

made to conform with WTO rules. The panel may suggest how this

could be done.

The report becomes a ruling: The report becomes the Dispute

Settlement Bodys ruling or recommendation within 60 days unless

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a consensus rejects it. Both sides can appeal the report (and in

some cases both sides do).

3.Appealing

Either side can appeal a panels ruling . Sometimes both sides do

so. Appeals have to be based on points of law such as legal

interpretation they cannot request reexamination of existing

evidence or examination of new evidence . Each appeal is heard by

three members of a permanent seven-member Appellate Body set

up by the DSB. Members of the Appellate Body have four-year

terms. They have to be individuals with recognized standing in the

field of law and international trade, not affiliated with any

government.

The appeal can uphold, modify or reverse any of the panels legal

findings and conclusions. Normally appeals should not last more

than 60 days, with an absolute maximum of 90 days. In other

words, the Appellate Body should normally issue a report within

60 days from the date the notice of appeal is field.

The DSB has to accept (i.e., adopt) the report, as modified by the

ruling of the Appellate Bodys report unless there is a consensus to

reject it.

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4.COMPLIANCE :-

After DSB adoption of a report in which a countrys trade measure

has been found to violate its WTO obligation, the country is

required to act on the recommendations in the report and bring the

measure into compliance with its obligations. The country must

state its intention to comply at a DSB meeting held within 30 days

of the reports adoption to. If complying with the recommendations

immediately proves impractical, the member will be given a

reasonable period of time to do so. To date in most WTO

disputes the losing party has brought its measure into compliance.

If a losing party fails to act within a reasonable period of time, it

has to enter into negotiations with the complaining country (or

countries) in order to determine mutually acceptable complaining

country

5.ARBITRATION

Members may seek arbitration within the WTO as an alternative

means of dispute settlement to facilitate the solution of certain

disputes that concern issues that are clearly defined by both parties.

Those parties must reach mutual agreement to arbitration and the

procedures to be followed. Agreed arbitration must be notified to

all members prior to the beginning of the arbitration process. Third

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parties may become party to the arbitration only upon the

agreement of the parties that have agreed to have agreed to have

recourse to arbitraton.

CHAPTER NO:-5.CASE STUDY ON DISPUTE IN

WTO

INDIAPATENTS (US) 1 (DS50)

PARTIESAGREEMENTS

TIMELINEOF THEDISPUT

Complainan

UnitedState

TRIPS Art.70.8 and 70.

Establishment of Pane

20November 199

RespondenIndia

Circulationof PanelReport

Circulationof AB Repor

Adoptio

5September 199

19December199

16January199

1. MEASURE AND INTELLECTUAL PROPERTY AT

ISSUE

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Measure at issue: (i) India's "mailbox rule" under which patent

applications for pharmaceutical and agricultural chemical products

could be filed; and

(ii) the mechanism for granting exclusive marketing rights to such

products.

Intellectual property at issue: Patent protection for

pharmaceutical and agricultural chemical products, as provided

under TRIPS Art. 27.

2. SUMMARY OF KEY PANEL/AB FINDINGS

TRIPS Art. 70.8: The Appellate Body upheld the Panel's finding

that India's filing system based on "administrative practice" for

patent applications for pharmaceutical and agricultural chemical

products was inconsistent with Art. 70.8. The Appellate Body

found that the system did not provide the "means" by which

applications for patents for such inventions could be securely filed

within the meaning of Art. 70.8(a), because, in theory, a patent

application filed under the administrative instructions could be

rejected by the court under the contradictory mandatory provisions

of the existing Indian laws: the Patents Act of 1970.

TRIPS Art. 70.9: The Appellate Body agreed with the Panel that

there was no mechanism in place in India for the grant of exclusive

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marketing rights for the products covered by Art. 70.8(a) and thus

Art. 70.9 was violated.

2. OTHER ISSUES

Interpretation of the TRIPS Agreement: The Appellate

Body rejected the Panel's use of a "legitimate expectations"

(of Members and private right holders) standard, which

derives from the non-violation concept, as a principle of

interpretation for the TRIPS Agreement. The Appellate

Body based its conclusion on the following:

(i).the protection of "legitimate expectations" is not something that

was used in GATT practice as a principle of interpretation; and

(ii) the Panel's reliance on the VCLT Art. 31 for its "legitimate

expectations" interpretation was not correct because the

"legitimate expectations of the parties to a treaty are reflected inthe language of the treaty itself." Pointing to DSU Arts. 3.2 and

19.2

3, the Appellate Body clarified that the process of treaty

interpretation should not include the "imputation into a treaty

words that are not there or the importation into a treaty of concepts

that were not intended."

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CHAPTER NO.6 .CONLCUSION , SUGGESTION,

FINDING.

Suggestion

The Uruguay Round and the establishment of the WTO changed

the character of the trading system. The GATT was very much a

market accessoriented institution: its function was to harness the

dynamics of reciprocity for the global good.Negotiators could be

left to follow mercantilist logic, and the end result would be

beneficial to all contracting parties. This dynamic worked less wellfor developing countries, where the burden of liberalization rested

much more heavily on the shoulders of governments. Even if they

wanted to, their scope to use the GATT was often limited because

exporters had fewer incentives and were less powerful than in

industrial countries. The reciprocal, negotiationdriven dynamic

also worked much less well for issues that were lumpy and

where the terms of the debate revolved around what rules to adopt,

not around how much of a marginal change was appropriate.

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Once discussions center on rules, especially on disciplines for

domestic policy and regulations, it is more difficult to define

intraissue compromises that make economic sense. Cross-issue

linkage becomes necessary. Disengagement was not an option

during the Uruguay Round (because of the single undertaking),

so the task was to come up with a balanced package that ensured

gains for all players. One can argue whether the package that

emerged from the round was a balanced one; views on this point

differ widely. Whatever the conclusion, it is clear that the approach

taken toward ensuring and supporting implementation of WTO

agreements by developing countries was not an effective one.

CONCLUSION:-

Limiting recognition of this problem to the setting of uniform

transition periods was clearly inadequate. The case for uniform

application of agreements that involve reducing trade barriers

tariffs and nontariff barriers is very strong. But in other areas

requiring minimum levels of institutional capacity, such as

customs valuation, a good case can be made that implementation

should be linked to national capacity and international assistance

(Hoekman 2002).

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