The WTO Dispute Settlement System

Analysis of its success compared to other international tribunals and reform proposals

Essay, 2011
5 Pages, Grade: A


Performance Assessment

Comparing the performance of international dispute settlement systems (DSS) requires caution and sophistication. According to John H. Jackson, the outcome depends very much on the question one is asking. He distinguishes four questions: 1) Is the DSS promoting settlement? 2) Does it enhance certainty and stability? 3) Are the results implemented; and 4) Are the results politically and publicly accepted?1 Based on these questions, this paper examines the performance of the WTO DSS and compares it with other international state-to-state DSS.

1) Powerful governments prefer flexible diplomatic consultations, whereas businesses appreciate decisive rule-based systems and the opportunity to press their governments to activate procedures.2 The remarkable number of complaints filed and disputes solved in the WTO is a result of the incorporation of both interests into the procedure. Another reason is the fact that WTO jurisdiction is compulsory and exclusive, whereas, for instance, the International Court of Justice’s (ICJ) jurisdiction is voluntary. While the ICJ receives on average less than three new cases per year and the International Tribunal for the Law of the Sea has solved only 18 cases since its establishment, on average 26 new cases are brought to the WTO every year.3 Approximately the same amount of disputes is settled through consultations prior to the establishment of a panel. Although the volume of cases is no exclusive indication of success, it suggests confidence in the system, as well as accessibility to it. Developing countries are relatively active in the WTO DSS and the well- received Advisory Center facilitates access for the poorest members. The WTO’s volume of cases is only matched by some specialized tribunals, e.g. the IRAN-US Claims Tribunal. Moreover, the WTO has depoliticized state-to-state dispute settlement due to its informal proceedings (especially in contrast to the ICJ). Bringing a WTO claim is no longer seen as an “unfriendly act” but has become an accepted method of resolving trade issues.4

2) The active use of the WTO DSS has rapidly built up an acquis of mostly high quality5 case law. Predictability and stability is ensured as previous reports usually influence later panels.6 The Appellate Body (not available at the ICJ) further contributes to the consolidation of the trading rules7 and prevents unfavorable fragmentation of the law (e.g. compared to arbitration under the ICSID Convention).

3) Regarding implementation, the WTO stands out among other DSS as it provides for binding timeframes for implementation. Moreover, it allows for the quasi-automatic establishment of a compliance panel pursuant to Art 21.5 DSU if a member fails to carry out the recommendations of a report. Altough the prevailing party of an ICJ dispute may take recourse to the Security Council in such a case, this is often not feasible due to political blockage.8 In reality, except in border cases, the ICJ has a weak compliance record.9 In the WTO, however, more than 80% of the disputes were successfully implemented. This is an impressive performance for a compulsory state-to-state DSS.10 Nevertheless, some controversial cases were not implemented.

4) With a few exceptions (e.g. EC- Hormones and some TRIPS cases), the WTO DSS survived controversial cases reasonably well.11 Eventually, most of these disputes were settled politically or retaliatory measures were initiated.


1 John H. Jackson, “The Role and Effectiveness of the WTO Dispute Settlement Mechanism” in Brookings Trade Forum (Brookings Institution Press, 2000), p. 208.

2 John Collier and Vaughan Lowe, The Settlement of Disputes in International Law (Oxford 1999), p. 8, 104.

3 Kara Leitner and Simon Lester, “WTO Dispute Settlement 1995-2008 - a Statistical Analysis”, Journal of International Economic Law, 2009, p. 195; recent data available at:

4 Donald McRae, “Measuring the Effectiveness of the WTO Dispute Settlement System”, A sian Journal of WTO & International Health Law and Policy, Vol. 3, No. 1, p. 13, March 2008

5 Ibid. fn. 1.

6 Ibid. fn. 2, p. 101.

7 Peter Van den Bossche, “Appellate Review in the WTO Dispute Settlement” in Improving WTO Dispute Settlement Procedures (Cameron May, 2001), p. 319.

8 Ibid. fn. 2, p. 178.

9 Aloysius P. Llamzon, “Jurisdiction and Compliance in Recent Decisions of the ICJ”, The European Journal of International Law, Vol. 18 No. 5, 2008, p. 852.

10 William J. Davey in: Legal Problems of International Economic Relations (Thomson West, 2008), 5th Edition, p. 284.

11 Ibid. fn. 10, p. 280.

Excerpt out of 5 pages


The WTO Dispute Settlement System
Analysis of its success compared to other international tribunals and reform proposals
University of Barcelona  (IELPO LL.M Master Program (William Davey))
WTO Dispute Settlement - The Panel Stage
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ISBN (eBook)
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Essay written in February 2011 for the course “WTO Dispute Settlement” held by William Davey from University of Illinois. Essay was graded among top 5% of class. The essay explains why the WTO dispute settlement system has been more successful than other principal international state-to-state dispute settlement systems (such as the International Court of Justice, for example). It further discusses the most beneficial reform proposals that would improve the functioning and results of the system. Contact the Author at:
WTO, International Economic Law, Dispute Settlement, World Trade, ICJ, International Court of Justice
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MMMag. Thomas Obersteiner (Author), 2011, The WTO Dispute Settlement System, Munich, GRIN Verlag,


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