How the GATS is Administered

4.4 Dispute Settlement Procedures

The DSU provides a timeframe for each of the dispute settlement stages:
  

If a case runs its full course to a first ruling, it should not normally take more than one year — 15 months if the case is appealed. The agreed time limits are flexible and, if the case is considered urgent, it could take as little as nine months. Since a ruling is automatically adopted unless there is a consensus to reject it, any dissatisfied Member would need to persuade all other WTO Members (including all parties to the case) of its view.

The DSB has the sole authority to establish “panels” to consider the case, and to accept or reject the findings. If the respondent Member loses, it must abide by the Panel’s or the Appellate Body’s recommendations and state its intention to do so at a DSB meeting held within 30 days of the report’s adoption. If immediate compliance proves impractical, the Member will be afforded a “reasonable period of time”.

If the Member feels unable to act in time, it has to enter into negotiations with the complaining Member(s) in order to agree on mutually-acceptable compensation. If this proves impossible within 20 days, the complaining Member may ask the DSB for permission to impose limited trade sanctions (“suspend concessions or obligations”) against the other Member. The DSB is to grant authorisation unless there is a consensus against this request.

In principle, sanctions should be imposed within the sector concerned. If this is not practical or not effective, a different sector under the same agreement may be chosen. As a last resort, action may also be taken under another Agreement. The objective is to minimize the risk of unrelated sectors and legal frameworks being drawn into the matter, while at the same time ensuring effectiveness.