Activities of the WTO disputes settlement body: overcoming disparities

Abstract

Background. The crisis of WTO Dispute resolution body, that escalated at the end of 2019, is not only a reflection of the need to reform the WTO’s trade and economic dispute settlement mechanism, but also a reflection of the leading powers of the world tending for towards bilateral trade and economic settlement relations. It can also be assumed that the trade war between the United States of America and the People’s Republic of China, which began in 2018, was, among other things, the result of an inability to effectively and quickly resolve trade and economic disputes based on the provisions of the Understanding on Rules and Procedures Governing the Settlement of Disputes. While avoiding and resolving trade and economic disputes, preventing trade wars are defining functions of the WTO, that is why the efficiency and demand of the WTO dispute settlement mechanism is the key to the functioning of this international organization and the provision of multilateral regulation of world trade and economic relations.
Analysis of recent research and publications. One of the most thorough domestic investigations into the WTO dispute settlement mechanism is considered to be S. Osyka’s scientific work. The specific scientific attention has been given in the context of our study, which directly related to the functioning of the WTO Dispute Settlement Body during 2018-2020, by R. Brewster, T. Adekola etc. Despite the significant amount of research onthe subject, there is room for justification for amending the provisions of the Understanding on Rules and Procedures Governing the Settlement of Disputes.
The aim of the article is to determine the essence of the negative aspects of the functioning of the WTO Dispute Settlement Body in the current geo-economic conditions and to argue the feasibility of amending the provisions of the WTO Dispute Settlement Rules and Procedures.
Materials and methods. The normative basis of the study is the Agreement on Establishing the WTO, the Understanding on Rules and Procedures Governing the Settlement of Disputes, panel reports. The methodological basis of the research was the general scientific and special legal methods of cognition.
Results. The crisis of the WTO Dispute resolution body has been caused by a number of reasons: lengthy dispute resolution procedures low effectiveness of the measures envisaged by the Understanding, in particular, such as temporary suspension of concessions and other obligations under covered agreements, theoretical and unproductive nature of the measures applied to the offenders, since the possibility of  avoiding compensation weakens the position of the WTO member concerned in negotiating the amount of compensation, perspective rather than retrospective nature of the measures, which makes it possible to avoid liability for damages, limited scope for applying such a measure as compensation. Another major component of the WTO Dispute Settlement Crisis was the United States’ dissatisfaction with the work of the Appellate Body due to the considerable time spent reviewing the disputes and standards of the body’s decision making.
Conclusion. The events of 2018–2020 call into question the continued decisive role of the WTO in resolving interstate trade and economic disputes and, to a certain extent, the stability of world trade. The negative aspects of WTO dispute settlement outlined in the study, on the one hand, are conditioned by the nature of the organization itself, the need to adhere to the principles of international law, and at the same time a significant factor in reducing the effectiveness of the dispute settlement mechanism. Webelieve that introducing retrospective countervailing measures can indeed deter States from trade wars and balance their position in interstate trade relations.