Preferential trade agreements and the World Trade Organization: developments to the dispute settlement understanding

Abstract:

On 21 March 2016, at the 9th Annual Update on World Trade Organization (WTO) Dispute Settlement, former Chairman of the Special Session of the Dispute Settlement Body (DSB), Ambassador Ronald Saborío Soto, spoke on the Dispute Settlement Understanding (DSU) negotiations in light of recent dispute settlement experience. He expressed that changes to the DSU ought to promote the future efficiency and effectiveness of the WTO as a dispute settlement system.

The proliferation of Preferential Trade Agreements (PTAs) has been a recurrent curiosity for the WTO, with provisions often competing and overlapping. Earlier work studying these interactions emphasizes uncertainty in the application of non-WTO law, including PTAs, to WTO disputes and highlights the WTO’s implicit claim to supremacy.

The purpose of this article is to critically analyse the state-of-play of negotiations on improvements and clarifications of the DSU in addressing PTAs. It examines whether current DSU proposals meet the DSB’s intended objectives and suggests solutions where problematic uncertainties remain. The article concludes that PTAs have not been sufficiently regarded by negotiators and that more express measures are required in the DSU to clarify such uncertainties and harmonize with PTAs in order to preserve the WTO’s future legitimacy.