DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6
The process — Stages in a typical WTO dispute settlement case
The parties to the dispute must agree upon the compensation, which must also be consistent with the covered agreements (Article 22.1 of the DSU). This latter requirement is probably one of the reasons why (WTO) Members have hardly ever been able to work out compensation in cases reaching this stage. Conformity with the covered agreements implies, notably, consistency with the most-favoured-nation obligations (Article I of GATT 1994, among others). Therefore, WTO Members other than the complainant(s) would also benefit, if compensation is offered e.g. in the form of a tariff reduction. This makes compensation less attractive to both the respondent, for whom this raises the “price”, and the complainant, who does not get an exclusive benefit. These obstacles could to some extent be overcome, however, if the parties were to select a trade benefit (e.g. tariff reduction) in a sector of particular export interest to the complainant and other Members had little export interest in that sector or product.