The FINANCIAL -- On the eve of its 15th “birthday”, the WTO earlier this month reached the milestone of having the 400th trade dispute brought to the body’s dispute settlement mechanism.

“This is surely a vote of confidence in a system which many consider to be a role model for the peaceful resolution of disputes in other areas of international political or economic relations,” said Director-General Pascal Lamy to mark the occasion.

On the eve of its 15th “birthday”, the World Trade Organization (WTO) earlier this month reached the milestone of having the 400th trade dispute brought to the body's dispute settlement mechanism. Since coming into existence in January 1995, the WTO's 153 members initiated an average of approximately 27 disputes per year under the provisions of the Dispute Settlement Understanding, the WTO treaty governing the settlement of all disputes among the organization's members.

“This is surely a vote of confidence in a system which many consider to be a role model for the peaceful resolution of disputes in other areas of international political or economic relations,” said WTO Director-General Pascal Lamy to mark the occasion. “All the political muscle-flexing and grandiloquence is discarded at the door once the case enters the WTO.”

Of the 400 cases filed so far, approximately half have eventually been settled directly between the parties, under the system's mandatory consultation requirements, without going to litigation. Of the remainder, 169 have been the subject of panel and, where appealed, Appellate Body proceedings, 17 are currently in adjudication, and 12 are still the subject of active consultation between the parties.

“The dispute settlement system is widely considered to be the jewel in the crown of the WTO,” said DG Lamy. “Some critics claim that the system is monopolized by the developed countries, especially the US and EC. Certainly, these two trading giants are the most frequent users of the system. This is not surprising since they are the world's biggest traders, as is increasingly the case with China. But the figures also show that developing countries do not play coy hand-maidens to their richer trading partners. During the period 1995-2009, developing countries have been complainants in more than 45 per cent of all cases, and have been respondents in more than 42 per cent of the cases.

“No trade negotiator enters a negotiation without some assurance that the agreements he negotiates will be underpinned by a credible dispute settlement system. The ongoing review of the functioning of the WTO's dispute settlement system has given rise to many proposals for clarification and improvement. But WTO Members agree that, as the bedrock of the multilateral trading system, the dispute settlement system will not be subject to any seismic shift in its fundamental structure as a result of the Members' deliberations,” said DG Lamy.

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