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GATS TRAINING MODULE: CHAPTER 4

How the GATS is Administered

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4.4 Dispute Settlement Procedures

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Introduction

Basic Purpose and Concepts

Main Building Blocks: Agreement, Annexes, and Schedules

A Closer Look at Domestic Regulation

How the GATS is Administered

Role and Responsibilities of Member Governments

The Challenges Ahead

Preparing Requests and Offers

Misconceptions about the GATS

Effective dispute resolution — from the stage of friction to consultation, complaint, adjudication and implementation — is critical to the effective functioning of the WTO Agreements. In the event of problems related to the operation of the GATS, Articles XXII and XXIII provide the framework for consultations and, if need be, dispute settlement and enforcement among Members. The relevant provisions of the Dispute Settlement Understanding (DSU) apply.

The preferred outcome of the DSU process is resolution through consultation, rather than through panel rulings. If these are needed, nevertheless, the initial ruling by an independent panel is endorsed (unless there is a full consensus that it be rejected) by the WTO’s General Council which in this case meets as the Dispute Settlement Body. Appeals based on points of law are possible. Box D outlines the dispute settlement process.

Box D: Dispute Settlement within the WTO

Step 1: A Member requests consultations with another Member which it considers to have breached its obligations or otherwise impaired benefits under the GATS.

Step 2: Consultations between the two Members are held to reach a mutually satisfactory solution.

Step 3: If the consultations fail to resolve the issue, the complaining Member may request the establishment of a panel of three independent experts. These are generally chosen from an existing roster of qualified panellists.

Step 4: The panel examines the complaint in the light of the relevant legal obligations, and has six months to issue a report with binding recommendations for adoption by the dispute-settlement body (DSB).

Step 5: Any party to the dispute may appeal the panel ruling before the WTO Appellate Body.

Step 6: The Appellate Body examines the appeal, and has up to 90 days to deliver its report.

Step 7: The panel ruling is adopted by the DSB (including any modifications decided by the Appellate Body), unless there is consensus not to adopt.

Step 8: The Member concerned has time for implementation.

Step 9: In the absence of full implementation within the specified period, a party to the dispute may request permission from the DSB to suspend equivalent commitments with respect to this Member.

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