CHAPTER ONE
GENERAL INTRODUCTION
1.1 Introduction/Background to the Study
The World Trade Organisation [hereinafter called “WTO”] is the organisation which was set up out of the Uruguay Round of General Agreement on Tariffs and Trade negotiations in 1953 and which became the successor to and replacement of the General Agreement on Tariffs and Trade [GATT] and it inter alia regulates trade and tariffs worldwide and settles trade disputes amongst members . The “Dunkle Text’ contained a charter for a Multilateral Trade Organisation [MTO] aimed at providing an institutional framework within which the results of the Uruguay Round could operate. Within the MTO was established a new dispute settlement mechanism and a Trade Policy Review Mechanism [TPRM]. There was a framework which, provided annexes of the more important areas such as the General Agreement on Trade in Services [GATS] and The Agreement on Trade Related Intellectual Property [TRIPS] which were a part of the Text
.International trade may be defined as a contract of buying and selling goods and services entered into between parties whose places of business are in different countries or trade in goods and services that cut across international borders or boundaries or between nationals of different countries .
This involves imports from one country to another and or exports to one country from another country or trans-boundary trade. An international sale or export trade contract can also be described as an agreement for the sale and delivery of goods across international borders or boundaries and for all other things incidental to it .
The role of WTO in international trade is as stipulated in the Agreement establishing it and includes:
i. facilitating the implementation, administration and operation and furthering the objectives of the agreement establishing it and other Multilateral Trade Agreements and providing the framework for the implementation, administration and operation of the Plurality Trade Agreements,
ii. providing the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to the Agreement setting it up and for the results of such negotiations as may be decided by the Ministerial Conference
iii. administering the Understanding on Rules and Procedures Governing the Settlement of Disputes or the Dispute Settlement Understanding which is Annex 2 to the agreement setting it up,
iv. administering the Trade Policy Review Mechanism in Annex 3 of the agreement setting it up, and
v. cooperating as appropriate with the International Monetary Fund and the International Bank for Reconstruction and Development [the World Bank] with a view to achieving greater coherence in global economic policy making. This is aimed at building better understanding and coordination between a trade organisation like WTO and monetary institutions like IMF and World Bank. It may be said in passing that these are two financial institutions without good reputation with developing countries and that are seen by them to have been recommending economic reforms and structural adjustment programmes that destroy, rather than rebuild, their economies.
The dispute settlement system of the World Trade Organization (WTO) is widely considered the “Jewel in the Crown” of the WTO . According to Petersmann , it is one of the rare areas in public international law with a mechanism that provides binding third-party adjudication of disputes between sovereign states. With over six hundred cases in its decades of existence, World Trade Organization (WTO) probably the busiest international dispute settlement system in the world. Hence, on the one hand, the wide use of the WTO dispute settlement system no doubt reflects its success and the fact that the member states have confidence in it to resolve their trade disputes .
1.2 Statement of the Problem
As mentioned earlier, the World Trade Organization (WTO) is an international body set up in 1995 with the principal aim of liberalizing trade by reducing imminent trade obstacles and ensuring that a level playing field is obtained. It provides a legal and institutional framework for the implementation and monitoring of agreements, as well as for settling disputes arising from their interpretation and application . The WTO Dispute Settlement Understanding (DSU), a purposeful system of dealing with international trade disputes, came into being as a result of the General Agreement on Tariffs and Trade (GATT), Uruguay round of negotiations.
Many countries both developed and developing are members of the WTO and the DSS is said to promote justice and equality among the developing and developed countries when settling trade disputes.
Nearly 400 disputes had been brought before the dispute settlement system and almost 300 rulings (including panel and Appellate Body reports and arbitration awards) had been issued. In 2012, the number had increased from 400 to 452 dispute cases. In the quarter of a century since the WTO was established, its system for settling disputes has been one of its main functions.
However, the biggest problem is that the World Trade Organization (WTO) dispute system of judicial is overreaching, fundamentally that it interprets the WTO rules in a way that creates new obligations for WTO members . One area that particularly grates is dumping, when a foreign supplier sells goods abroad more cheaply than at home. The US and others have used a disputed method for assessing whether goods have been dumped and how much the price is below what it should be. It is known as "zeroing". It's not explicitly prohibited by the WTO rules, but the Appellate Body took the view that it was in effect against the spirit. In addition, there have been concerns about procedural issues, such as the Appellate Body not issuing its rulings as quickly as it is supposed to, and judges continuing to hear cases they have already started even after their terms have ended .
According to Kuijper , the WTO disputes are often too complex to expect that a system of provisional remedies could make much difference. Because these measures often stop trade-resulting in no collection of duties-a rule on refund of duties would also not address the problem in general. Providing for reparations for damages to trade flows might work. However, although reparations are the standard remedy in international law for violations of a state's obligations, importing such a concept into the WTO would probably be viewed by WTO members as a more drastic and less acceptable change and it is against this background that this
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