NATIONAL LAW UNIVERSITY ODISHA, CUTTACK

COURSE OUTLINE

Law on Dispute Resolution in International Trade

B.A. /B.B.A. LL.B

X SEMESTER

COURSE TEACHER

Kapil Sharma
 Course Description

The dispute settlement system of the WTO is the central pillar of the multilateral trading system
and is very significant for the stability of the global trade. With the establishment of the WTO, a
rule-based dispute settlement system was established and without a robust dispute settlement
body, these rules will be less effective as the same cannot be enforced. When the WTO
underscores the importance of a rule-based system unlike the power-based system of the GATT
era, it contributes to the stability and predictability of the trading system. The Dispute Settlement
Understanding (DSU), the WTO agreement which contains the procedural framework for the
settlement of disputes has established clear timelines for the prompt resolution of the dispute.
This course examines the DSU in detail to understand the implementation of this agreement.
After analysing the different cases, it is examined if the dispute settlement system clearly
establishes a rule-based system which resolves the disputes of developed countries, developing
countries and least developed countries in a fair manner. With a defunct Appellate Body, one of
the two bodies established by the DSU for resolving trade disputes, being defunct, the focus of
the WTO Membership has shifted to reforming the current dispute settlement system. Thus, this
course will also examine the shortcomings of the current dispute settlement system and the ways
to overcome these shortcomings. This course is offered to Xth Semester students as optional
paper.

Course Objectives

Since the students have already studied International Trade Law and this course will built up on
their existing knowledge and will introduced the nuanced debates on the effectiveness of the
dispute settlement system of the WTO. The following are the course objectives:

● To understand the effective mechanism of resolving disputes under WTO

● To familiarize with various modes of resolving disputes and their importance
● To know about the participants of Dispute Resolution Process and importance and role of
some members in Dispute Resolution Process
● To know about scope and importance of procedural agreements used by the members at
different stages of Dispute Resolution Process
● To learn the latest development and ongoing reforms on Dispute Resolution Process
under WTO

Learning Outcomes

● The students will acquire theoretical and practical understanding of Dispute Resolution
Mechanism of the WTO
● The students will develop the ability to examine and draft various procedural agreements
at different stages of Dispute Resolution Process
● The students will develop the ability to examine the working and effectiveness of the
Dispute Resolution Process of the WTO
● The students will be able to propose solutions to overcome the challenges of the Dispute
Settlement System

Pedagogy

The existing DSS of the WTO will be introduced to the students through lecture-based
method. This course excessively relies on case analysis and thus students will be asked to
read the reports of the panels and AB prior to the class and engage in class discussion.

Lecture Plan

Module I: Conceptualizing Dispute Settlement Process of WTO 12

Module II: Historical development of Dispute Settlement Process of 8
WTO
Module III: Different Stages and Entities involved in Dispute 14
Settlement Process of WTO
Module IV: Nature of Interpretive Function used by Panel and AB 14
Module V: Shortcoming in the functioning of the DSU 8
Module VI: Reforming DSU 8
Total hours 64
 Course Structure

Module I: Conceptualizing Dispute Settlement Process of WTO

⮚ How to Resolve Disputes: Diplomacy vs. Adjudication

⮚ What Disputes Need to be Resolved: Good Cases vs. Bad Cases
⮚ Who take recourse to WTO DSS Disputes: Participation of Developed Country
Members vs. Developing and LDCs Member (North-South Politics)
⮚ Whether DSU is armoured to resolve challenges of New Era: Trade Wars, IPR
Infringement, Subsidies

Readings:

⮚ Joseph A. Conti, Between Law and Diplomacy: The Social Contexts of Disputing
at the WTO (Stanford University Press, 2011) pp. 68-98
⮚ Christina L. Davis, Why Adjudicate Enforcing Trade Rules in the WTO (Princeton
University Press, 2012) pp. 1-20, 62-100, 258-297
⮚ Navneet Sandhu, Member Participation in the WTO Dispute Settlement System:
Can Developing Countries Afford Not to Participate, 5 UCLJLJ 146 (2016)
⮚ Gregory Shaffer, How to Make the WTO Dispute Settlement System Work for
Developing Countries, ICTSD Resource Paper No. 5 (2003)
⮚ T. Adekola, US–China trade war and the WTO dispute settlement mechanism,
Journal of International Trade Law and Policy, Vol. 18 No. (2019
⮚ Antonina Bakardjieva Engelbrekt, The WTO Dispute Settlement System and the
Evolution of International IP Law: An Institutional Perspective, Chapter in
 Intellectual Property Rights in a Fair World Trade System (Edward Elgar, 2011)
⮚ Jefrey Walter, Power in WTO Dispute Settlement, Journal of Third World Studies,
Vol.28. Issue 1, pp. 169-183
Module II: Historical development of Dispute Settlement Process of WTO

⮚ How the Negotiation Started for Resolving Disputes: Negotiated for Breton
Woods and the Havana Charter, GATT, The Protocol and Provisional Application
(PPA)
⮚ How successful the GATT Dispute Settlement system was in resolving the
disputes: Introspection on Working of GATT Dispute Settlement
⮚ What were the shortcoming of GATT Dispute Settlement and How the members
decided to reform it: Tokyo and Uruguay Round of Negotiations

Readings:

⮚ Michael J. Trebilcock, Advance Introduction To International Trade Law’, pp.

24-26
⮚ John H. Jackson, The Jurisprudence of GATT & the WTO, pp. 119-123
⮚ Eric Canal Forgues and Rudolf Ostrihansky, New Development in the GATT
Dispute Settlement Procedure, pp. 67-69.
⮚ Raj Bhala, Modern GATT Law (2nd Ed. Vol.1), pp. 98-119
⮚ Steven P. Croley and J. Jackson, WTO Dispute Procedure Standard of Review and
Deference to National Governments, pp. I93-195

Module III: Different Stages and Entities involved in Dispute Settlement Process of WTO

⮚ What are the different entities involved in DSS of WTO and their appointments:
DSB, The Director-General and the WTO Secretariat, Panels, Appellate Body
and Arbitrators
⮚ What are different stages of resolving disputes: Consultation, good offices,
conciliation and mediation, Panel Stage, Appellate Review Stage
⮚ What are the different remedies available to Members in case Member concerned
fail to implement Panel, AB or Arbitrators Decisions: Compensation and
Suspension of compensation and other obligations (Retaliation)

Readings:
 ⮚ Peter Van Den, The law and policy of the world trade organization; text cases and
materials, pp. 218-230, 235-242,257-259, 298-307
⮚ Daniel Bethlehem, Oxford Handbook of International Trade Law, pp.353-357,
365-368
⮚ Mitsuo Matsushita, The World Trade Organization; Law Practice And Policy, pp.
115-117, 121, 160-168
⮚ Yang Guohua, WTO Dispute Settlement Understanding; A Detailed Interpretation,
pp.255-257,273-278
⮚ Patricio Grane, Remedies Under WTO Law, pp.755-772
⮚ Marco Bronckers Naboth & Van den Broek, Financial Compensation in the WTO:
Improving the Remedies of WTO Dispute Settlement, pp. 101-126

Cases:

⮚ US — FSC (Article 21.5 — EC, WT/DS108/AB/RW)

⮚ US — 1916 Act (WT/DS136/AB/R, WT/DS162/AB/R)
⮚ EC — Hormones, (WT/DS26/AB/R, WT/DS48/AB/R)
⮚ US – Wool Shirts and Blouses (WT/DS33/AB/R)
⮚ Argentina – Footwear (EC) (WT/DS121/AB/R)
⮚ US – Gasoline (WT/DS2/AB/R)
⮚ Canada – Periodicals
⮚ US- Offset Act (recourse to arbitration under Art. 21.3C, WT/DS 217/14)
⮚ Chile –Price Brand System Act (recourse to arbitration under Art. 21.3C,
WT/DS207/13)
⮚ EC- Bananas III (WT/DS27/R & WT/DS27/AB/R, WT/DS27/ARB, WT/DS/27/RW)
⮚ United States – Measures Affecting the Cross-Border Supply of Gambling and
Betting Services (Recourse to Arbitration by the United States under Article 22.6 of
the DSU, WT/DS285/ARB, 21 December 2007)

Module IV: Nature of Interpretive Function used by Panel and AB

⮚ While interpreting the WTO Agreements, do Panel and AB go beyond their term
of reference: Judicial Activism vs. Judicial Overreach vs. Judicial Overreacting
 ⮚ What are the major reason behind Panel and AB engaging in Judicial Activism,
Judicial Overreach or judicial Overreacting: The WTO Agreements as an
incomplete contract, non-functioning of political branch of WTO responsible for
making amendments, authoritative interpretation and negotiations.

Readings:

⮚ Amrita Bahri, Appellate Body Held Hostage: Is Judicial Activism at Fair Trial?,
Journal of World Trade 53 (2) 2019
⮚ Weihuan Zhou And Henry Gao, ‘Overreaching’ or ‘Overreacting’? Reflections
on the Judicial Function And Approaches of WTO Appellate Body, Journal of
World Trade 53 (6) (2019)
⮚ Henrik Horn, Et al, The GATT/WTO as an Incomplete Contract (2006)
⮚ Tetyana Payosova, Et al, The Dispute Settlement Crisis in the World Trade
Organization: Causes and Cures, Policy Brief, Peterson Institute for International
Economics (2018)

Cases:

⮚ India – Measures Concerning the Importation of Certain Agricultural Products

⮚ Argentina – Measures Relating to Trade in Goods and Services
⮚ United States – Countervailing Duty Measures on Certain Products from China
⮚ United States – Countervailing and Anti-Dumping Measures on Certain Products
from China

Module V: Shortcoming in the functioning of the DSU

⮚ What type of shortcomings are present in the DSU: Systematic vs. Procedural
Issues
⮚ What are the major reasons behind these shortcomings: Constructive Ambiguity
vs. Incomplete Contract

Readings:
 ⮚ Peter Van Den, “The law and policy of the world trade organization; text cases
and materials”, Pg. 191-196, 279,295
⮚ Mitsuo Matsushita, The World Trade Organization; Law Practice And Policy,
pp. 124-125
⮚ Daniel Bethlehem, ‘Oxford Handbook of International Trade Law’, pp
294-296, 363-364
⮚ Mervyn Martin, ‘WTO Dispute Settlement Understanding and Development’,
pp. 169-176
⮚ Antonis Antoniadis, ‘Enhanced Third Party Rights in the WTO Dispute
Settlement Understanding’ pp. 285–304
⮚ Marco Bronckers, ‘Reconsidering financial remedies in WTO dispute
settlement’ pp. 281–311
⮚ Jaemin Lee, A More Widely Available Public Good: Proposed DSU Reform
and Its Implication for Developing Members, 51, Journal of World Trade 51
(6) (2017)

Module VI. Reforming DSU

⮚ How DSU can be reformed: Short Term vs. Mid Term Options
⮚ Whether Members are willing to reform the DSU: US vs. Entire WTO
Membership
⮚ DSU Practices in COVID 19: A New Reform Model

Readings:

⮚ Peter Draper, Et al, Reforming the WTO AB: Short-term and Mid-term Options for DSU
Reform, and Alternative Approaches in a Worst Case Scenario, available at
https://www.g20-insights.org/policy_briefs/reforming-the-wto-ab-short-term-and-mid-ter
m-options-for-dsu-reform-and-alternative-approaches-in-a-worst-case-scenario/.
⮚ The European Multi-Party Interim Appeal Arbitration Arrangement: A Convincing
Solution to the Multilateralism Crisis at the WTO? available at
http://cilj.co.uk/2020/09/06/the-european-multi-party-interim-appeal-arbitration-arrange
ment-a-convincing-solution-to-the-multilateralism-crisis-at-the-wto/
⮚ The New "Multi-Party Interim Appeal Arbitration Arrangement Pursuant To Article

25 of the DSU, available at

https://ielp.worldtradelaw.net/2020/03/the-new-multi-party-interim-appeal-arbitration
-arrangement-pursuant-to-article-25-of-the-dsu.html

⮚ Jennifer A. Hillman, The United States Needs a Reformed WTO Now, available at

https://www.cfr.org/sites/default/files/pdf/j.-hillman_sfc-testimony_july-2020.pdf

Additional Readings

⮚ Lothar Ehring, ‘Public Access to Dispute Settlement Hearings in the World Trade
Organization’ (2008) 11 JIEL 1021
⮚ Peter Van den Bossche, ‘NGO Involvement in the WTO: A Comparative Perspective’
(2008) 11 JIEL 717
⮚ Appellate Body Secretariat, ‘The WTO Appellate Body’s Activities in 2007’ (2008)
11 JIEL 193
⮚ Kara Leitner and Simon Lester, ‘WTO Dispute Settlement 1995-2007: A Statistical
Analysis’ (2008) 11 JIEL 179
⮚ Andrew D. Mitchell, ‘The Legal Basis for Using Principles in WTO Disputes’ (2007)
10 JIEL 795
⮚ Bruce Wilson, ‘Compliance by WTO Members with Adverse WTO Dispute
Settlement Rulings: The Record to Date’ (2007) 10 JIEL 397
⮚ Alan Yanovich and Tania Voon, ‘Completing the Analysis in WTO Appeals: The
Practice and its Limitations’ (2006) 9 JIEL 933
⮚ Michelle T. Grando, ‘Allocating the Burden of Proof in WTO Disputes: a Critical
Analysis’ (2006) 9 JIEL 615
⮚ Ross Becroft, ‘The Standard of Review Strikes Back: The US – Korea DRAMS
Appeal’ (2006) 9 JIEL 207
⮚ Holger Spamann, ‘The Myth of ‘‘Rebalancing’’ Retaliation in WTO Dispute
Settlement Practice’ (2006) 9 JIEL 31
⮚ Bernard O’Connor and Margareta Djordjevic, ‘Practical Aspects of Monetary
Compensation: The US – Copyright Case’ (2005) 8 JIEL 127