Significant contributions of the gatt and the world trade organization to the settlement of international economic disputes

Author:Andrei Grimberg
Position:Assistant Lecturer, PhD, Faculty of Law, 'Nicolae Titulescu' University of Bucharest (e-mail: avocatgrimberg@yahoo.com).
Pages:149-154
SUMMARY

This study examines the role of the degree of legal controversy with respect to a panel ruling in determining the countries’ tendency to block/appeal a panel report. It shows that, under both the GATT and WTO regimes, there is an asymmetric advantage between the plaintiff and the defendant. The plaintiff’s potential benefit of blocking/appealing an adverse panel ruling is smaller than the that of ... (see full summary)

 
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LESIJ NO. XXIII, VOL. 2/2016
SIGNIFICANT CONTRIBUTIONS OF THE GATT AND THE
WORLD TRADE ORGANIZATION TO THE SETTLEMENT OF
INTERNATIONAL ECONOMIC DISPUTES
Andrei GRIMBERG*
Abstract
This study examines the role of the degree of legal contr oversy with respect to a panel ruling in
determining the countries’ tendency to block/appeal a panel report. It shows that, under both the GATT
and WTO regimes, there is an asymmetric a dvantage between the plaintiff and the defendant. The
plaintiff’s potential benefit of blocking/appealing an adverse panel ruling is smaller than the that of
the defendant, but it bear s the same cost structure a s the la tter. This disadvanta ge to the p laintiff is
diminished under the WTO procedure compar ed to the GATT, though it is not completely eliminated.
The study also shows that the level of legal controversy over panel rulings increases, in genera l,
proportiona te to the increase in the frequency at which panel reports are blocked under the GATT
regime. However, the tendency to a ppeal a panel report under the new WTO procedure is, ba sically,
higher tha n the tendency to block a panel report under the GATT, when such reviews in appea l were
not available.
Keywords: GATT, WTO, dispute settlement, mechanism, developing county, trade
1. Introduction
Since its inception in 1947, the
General Agreement on Tariffs and Trade
(GATT) has evolved into a global
framework of international trade laws,
which is still in effect today under the World
Trade Organization (WTO). The relative
effectiveness of the GAT T legal system has
to a large extent depended on its dispute
settlement mechanism.
1
This procedure
allows member states to challenge other
memberă countries’ă “questionableă tradeă
measures with reference to the GATT/WTO
agreements.”ă Hence,ă ită hasă servedă asă aă
* Assistant Lecturer, PhD, Faculty of Law, "Nicolae Titulescu" University of Buch arest (e-mail:
avocatgrimberg@yahoo.com).
1
Layla Hughes, Limiting the Jurisdiction of Dispute Settlement Panels The Appellate Body Beef Hormone
Decision ină“The Georgetown InternationalăEnvironmentalăLawăReview”, vol. 10, 1998, pp. 915-942.
2
Jacques H. J. Bourgeois, Comment on a WTO Permanent Panel Body,ăinăă“JournalăofăInternationalăEconomică
Law”,ăvol.ă6,ănr.ă1,ă2003,ăăpp.ă211-214.
mechanism of mutual surveillance and
enforcement of the GATT/WTO.
A general problem tha t overshadowed
the dispute procedure under the GATT
regime was the common practice to require
that all decisions be made by consensus.
2
The defending party objecting to the
consensus could delay or block the
procedure. Therefore, the most serious
problem posed by this procedure is the
potential of the defending country to block
an adverse panel report. The practice
establishedăunderătheăGATTăisăthată “aăpanelă
of experts would be established to hear and
rule on a dispute, if a bilateral agreement
could not be reached between the disputing
parties”.ă However,ă becauseă onlyă theă

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