MJIEL Vol 1 Issue 1 2004 - A1

The Doha declaration (para. 30) indicated that a review of the operational procedures of the Dispute Settlement Understanding (DSU) was necessary to put in place “improvements and clarifications” by May 2003. The General Council has extended this timeframe by one year, so as to give the Dispute Settlement Body special session enough time to successfully complete its work in this respect. Many WTO members have submitted proposals to tackle these issues. Proposals deal with most aspects of the DSU and vary from issues as simple as strengthening the rules for notification of mutually agreed solutions, to creating a fundamentally different approach to the functioning of panels and the Appellate Body. On the ambitious side of proposals, we can find ideas on ways to address the structural deficiencies of the DSU and to improve its principles and procedures.

In this perspective, Mexico proposed to address what they believe is the fundamental problem of the dispute settlement system, i.e. the period of time during which a WTO-inconsistent-measure can be kept in place by Members without consequences, i.e. before a complaining Member can obtain compensation or suspend concessions, the so-called problem of “de facto waiver” of WTO obligations. To that end, it contemplates the application of:

  • early determination and application of nullification and impairment
  • retroactive determination and application of nullification or impairment
  • preventive measures
  • negotiable remedies

The vast majority of Members who have expressed a view have agreed with Mexico that the problem addressed by Mexico is one of the most important shortcomings of the dispute settlement system. As for the proposal itself, both words of encouragement and words of caution have been mentioned. It is interesting to note that among the words of caution, common views have been expressed as to the fact that these proposals might dramatically change the functioning of the dispute settlement system, as well as to the fact that no consensus might have been reached on those proposals by May 2003 (Dispute sttlement body minutes TN/DS/6, of November 13-15, 2002,p.8-23).

This paper intends to share some considerations as to the environment surrounding the Mexican proposal, as well as to describe it and discuss its potential benefits to the dispute settlement mechanism. The paper does not cover the whole spectrum of incentives that Members have vis-� -vis compliance or lack thereof which is identified below.

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