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

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