Dispute Settlement Understanding

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The World Trade Organisation or WTO has over 140 members including all of the major trading countries and trade disputes are likely among these members as WTO agreements may be interpreted or applied differently by different WTO members1 . Considering the possibilities and of trade disputes, the Dispute Settlement Understanding has been used by the WTO as a legal and administrative tool to settle disputes between trading members.


The members of the WTO are aware of the clear and well established legal procedures available for smooth trading and enforce the relevant rules to settle disputes among themselves. These rules are contained in the understanding on Rules and Procedures Governing the Settlement of Disputes (through Dispute Settlement Understanding or DSU)2 .
The strict legal and policy framework of the DSU helps in promoting adherence to rules which are negotiated by WTO Members and since the rule of law rather than the rule of power is applicable and important, the DSU rules are beneficial for small and medium sized countries engage in worldwide trade so that there is very little scope for unilateral trade actions by large countries3. There are automatic establishments of panels to review complaints and disputes by WTO members and specific timelines are also established throughout the process so that all disputes are resolved quickly and efficiently. If the disputes are addressed in favour of a particular member, there are also provisions for a right to appeal against panel decision to a permanent Appellate Body on issues of law and automatic adoption of panel reports4. ...
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