Chapter 15 WTO DSU-Enforcement Issues

Abstract

The WTO dispute settlement process is an improvement to the original GATT dispute settlement mechanism. However, it fails to assure a timely implementation and enforcement of the dispute settlement body (DSB) recommendations. To this date, the issue of mandatory enforcement is still open to interpretation. The number of ‘matters’ that have been subject to WTO dispute settlement stands at 266 over the 1995–2006 period. The number of implementation disputes has increased since 1998 and stand at 34 as of January 1, 2007. This chapter reviews the process of dispute settlements and enforcements since 1995 and to argue for the interpretation of ‘WTO agreements’ as ‘binding contracts’ whose breach must be evaluated as either ‘efficient’ or ‘non-efficient’ when discussing enforcement. In this context the non-compliance issue may be viewed as an ‘efficient breach’ where the only efficient remedy is a ‘fine’ rather than the usual practice of ‘suspension of concessions or other obligations’ to the Respondent. What sets our approach apart from earlier discussion is that it does not view ‘suspension of concessions’ as a sufficiently burdensome and efficient sanction. A ‘fine’ on the other hand may serve as a ‘buy out’ of a Respondents WTO obligations, and can be transferred to the negatively affected domestic producers in the Complainant's market as compensation for losses.

Citation

Pelzman, J. and Shoham, A. (2009), "Chapter 15 WTO DSU-Enforcement Issues", Hartigan, J.C. (Ed.) Trade Disputes and the Dispute Settlement Understanding of the WTO: An Interdisciplinary Assessment (Frontiers of Economics and Globalization, Vol. 6), Emerald Group Publishing Limited, Leeds, pp. 369-395. https://doi.org/10.1108/S1574-8715(2009)0000006018