Impact of WTO Dispute Settlement Mechanism

RESEARCH REPORT
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
INTRODUCTION OF WTO.......................................................................................................3
Origin of WTO............................................................................................................................4
History of establishment..............................................................................................................4
WTO Decision-Making Methods................................................................................................5
Dispute settlement mechanism and its impact.............................................................................5
Effectiveness of WTO Dispute Settlement..................................................................................7
CONCLUSION................................................................................................................................8
REFRENCES.................................................................................................................................10

INTRODUCTION
WTO is an international organization which handles all kind of trade related activities
between the countries and has set certain rule and regulation that has been set-up in order to
make flow of trade smooth between countries. This organization has been established to help in
growing of trade and removing barriers within it. It has a very wider scope because it deals with
trading and rule regarding it at global level. Nature is also very dynamic because it help in
sustaining of trade within global level. This report is going to be based upon World Trade
Organization and the main topic that is going to be covered is dispute settlement mechanism
impact and is it useful in settling of dispute within an organization.
MAIN BODY
INTRODUCTION OF WTO
WTO stands for world Trade Organization which is considered to be dealing with trade
taking place between nations or countries. This organization was established on 1st January 1995
under Marrakesh agreement. One hundred and twenty three countries signed this agreement on
15th April 1994. WTO has been formed to replace General Agreement on Tariffs and Trade
(GATT) and it was formed in the year 1948. It is one of the largest international economic
organizations in the world. WTO deals with regulation of trade in goods, services and intellectual
property between participating countries by providing a framework for negotiation trade
agreements and a dispute resolution process aimed at enforcing the participants to follow WTO
agreements that have been signed by both the parties. The WTO prohibits discrimination
between the trading parties, provides exception from environmental protection, national security
and other important goal. WTO’ s current director is Robert Azevedo and is leading staff of 600
people. Its head quarters is in Geneva Switzerland. Trade facilitation agreement that is part of
Bali Package was agreed by the members on 7th December 2013. It was the first comprehensive
agreement in history of organizations. On 23rd January 2017 another amendment was done in
trade related aspects of WTO and that was Intellectual Property Rights agreement. It was one of
the major agreement since organizations formation. WTO has boosted trade and has successfully
reduced lot of trade barriers (Thomas, 2017).

Origin of WTO
World Trade Organization was created on 1 January 1995 to replace the General
Agreement on Tariffs and Trade (GATT – General Agreement on Tariffs and Trade) which
included a series of commercial treaties concluded at the end of World War II, in order to
facilitate free trade. GATT principles and agreements were adopted by the WTO which was
charged with administering and extending them. Unlike GATT, the WTO has a substantial
institutional structure (Mertens and et. al., 2016).
Effectively, the WTO is long overdue successor to the International Trade Organization which
was originally planned to be successor of GATT. International Charter of the International Trade
Organization was established in the United Nations conference on trade and occupation, held in
Havana in March 1948 but was blocked by the U.S. Senate. Some historians have assumed that
the failure may have resulted from fears coming from within the American business community,
those that the World Trade Organization (WTO) could be used to regulate rather than to
liberalize big business.
History of establishment
The WTO was officially established on January 1, 1995 but the trading system itself has been
developed half a century ago. Since 1948, the General Agreement on Tariffs and Trade (GATT)
the General Agreement on Tariffs and Trade has made the rules for this system. Since the year
1948-1994 the GATT system includes regulations concerning world trade and generates the
highest growth in international trade. At first the GATT aimed to establish the International
Trade Organization (ITO), a UN specialized agency which is part of the system of Breton Woods
(IMF and World Bank). Although the ITO Charter was finally approved in the UN Conference
on Trade and Development in Havana in March 1948, the process of ratification by the
legislative institutions of the state does not run smoothly. The most serious challenge came from
the United States Congress, that although as a trigger, the U.S. did not ratify. Havana ITO
Charter that cannot be implemented effectively. Nevertheless, the GATT remains a multilateral
instrument governing international trade. Nearly half a century of GATT legal text remained the
same as in 1948 with several additions including consent forms (agreed upon by some countries
only) and tariff reduction efforts. Trade problems resolved through a series of multilateral