Introduction to the WTO dispute settlement system

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1.3 Functions, objectives and key features of the dispute settlement system

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Clarification of rights and obligations through interpretation

The precise scope of the rights and obligations contained in the WTO Agreement is not always evident from a mere reading of the legal texts. Legal provisions are often drafted in general terms so as to be of general applicability and to cover a multitude of individual cases, not all of which can be specifically regulated. Whether the existence of a certain set of facts gives rise to a violation of a legal requirement contained in a particular provision is, therefore, a question that is not always easy to answer. In most cases, the answer can be found only after interpreting the legal terms contained in the provision at issue.

In addition, legal provisions in international agreements often lack clarity because they are compromise formulations resulting from multilateral negotiations. The various participants in a negotiating process often reconcile their diverging positions by agreeing to a text that can be understood in more than one way so as to satisfy the demands of different domestic constituents. The negotiators may thus understand a particular provision in different and opposing ways.

For those reasons, as in any legal setting, individual cases often require an interpretation of the pertinent provisions. One might think that such an interpretation cannot occur in (WTO) dispute settlement proceedings because Article IX:2 of the WTO Agreement provides that the Ministerial Conference and the General Council of the WTO have the “exclusive authority to adopt interpretations” of the WTO Agreement. However, the DSU expressly states that the dispute settlement system is intended to clarify the provisions of the WTO Agreement “in accordance with customary rules of interpretation of public international law” (Article 3.2 of the DSU).

The DSU, therefore, recognizes the need to clarify WTO rules and mandates that this clarification take place pursuant to customary rules of interpretation. In addition, Article 17.6 of the DSU implicitly recognizes that panels may develop legal interpretations. The “exclusive authority” of Article IX:2 of the WTO Agreement must therefore be understood as the possibility to adopt “authoritative” interpretations that are of general validity for all WTO Members — unlike interpretations by panels and the Appellate Body, which are applicable only to the parties and to the subject matter of a specific dispute. Accordingly, the DSU mandate to clarify WTO rules is without prejudice to the rights of Members to seek authoritative interpretations under Article IX:2 of the WTO Agreement (Article 3.9 of the DSU).

As regards the methods of interpretation, the DSU refers to the “customary rules of interpretation of public international law” (Article 3.2 of the DSU). While customary international law is normally unwritten, there is an international convention that has codified some of these customary rules of treaty interpretation. Notably, Articles 31, 32 and 33 of the Vienna Convention on the Law of Treaties embody many of the customary rules of interpretation of public international law. While the reference in Article 3.2 of the DSU does not refer directly to these Articles, the Appellate Body has ruled that they can serve as a point of reference for discerning the applicable customary rules1.The three Articles read as follows:

Article 31
General rule of interpretation  back to top
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
    1. any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;
    2. any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
    1. any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
    2. any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
    3. any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
Article 32
Supplementary means of interpretation  back to top
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of Article 31, or to determine the meaning when the interpretation according to Article 31:
    1. leaves the meaning ambiguous or obscure; or
    2. leads to a result which is manifestly absurd or unreasonable.
Article 33
Interpretation of treaties authenticated in two or more languages  back to top
1. When a treaty has been authenticated in two or more languages, the text is equally authoritative in each language, unless the treaty provides or the parties agree that, in case of divergence, a particular text shall prevail.
2. A version of the treaty in a language other than one of those in which the text was authenticated shall be considered an authentic text only if the treaty so provides or the parties so agree.
3. The terms of the treaty are presumed to have the same meaning in each authentic text.
4. Except where a particular text prevails in accordance with paragraph 1, when a comparison of the authentic texts discloses a difference of meaning which the application of articles 31 and 32 does not remove, the meaning which best reconciles the texts, having regard to the object and purpose of the treaty, shall be adopted.

As can be seen from these articles on treaty interpretation, the WTO Agreement is to be interpreted according to the ordinary meaning of the words in the relevant provision, viewed in their context and in the light of the object and purpose of the agreement. The ordinary meaning of a term in a provision is to be discerned on the basis of the plain text. The definitions given to this term in a dictionary can be of assistance in that purpose. “Context” refers to the kinds of conclusions that can be drawn on the basis of, for example, the structure, content or terminology in other provisions belonging to the same agreement, particularly the ones preceding and following the rule subject to interpretation. The “object and purpose” refers to the explicit or implicit objective of the rule in question or the agreement as a whole.

In practice, panels and the Appellate Body seem to rely more on the ordinary meaning and on the context than on the object and purpose of the provisions to be interpreted. The negotiating history of the agreement is merely a subsidiary tool of interpretation (Article 32 of the Vienna Convention). This tool is to be used only as confirmation of the interpretation according to the ordinary meaning, context and object and purpose or if that interpretative result is ambiguous, obscure, manifestly absurd or unreasonable. One of the corollaries of the rules on interpretation is that meaning and effect must be given to all terms of an agreement, rather than reducing whole parts of an agreement to redundancy or inutility2 Conversely, the process of interpretation does not permit reading words into an agreement that are not there3. With respect to Article 33 of the Vienna Convention, the WTO Agreement is authentic in English, French and Spanish.



1. Appellate Body Report, US Gasoline DSR 1996:I, 3 at p23, Appellate Body Report, Japan — Alcoholic Beverages II DSR 1996:I, 97 at p104  back to text

2. Appellate Body Report, US Gasoline DSR 1996:I, 3 at p23  back to text

3. Appellate Body Report, Computer Equipment para. 83  back to text



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This interactive training module is based on the “Handbook on the WTO Dispute Settlement System” published in 2004. The second edition of this handbook published in 2017 can be found at here.


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