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The long and winding road of WTO dispute settlement reform
Dispute settlement reform has become more important for Indonesia, particularly amid Indonesia’s ongoing fight against discriminatory trade measures toward Indonesia’s export commodities.
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Trading words: Director general of the World Trade Organization (WTO) Ngozi Okonjo-Iweala (left), WTO Ministerial Conference chair Timur Suleimenov (center) and Switzerland's permanent representative to the WTO Didier Chambovey speak at the opening of the event in Geneva on June 12, 2022. (Reuters/Martial Trezzini/Pool)
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s World Trade Organization (WTO) members gear up for the 13th Ministerial Conference in Abu Dhabi, the United Arab Emirates, next year, the issue of internal reform remains high on the agenda.
Over the past years, many reform proposals have been tabled to ensure the WTO can address many unprecedented challenges facing the multilateral trading system.
Such efforts gained further steam following the 12th WTO Ministerial Conference, where members committed to work toward necessary reform, and for the work to be carried out through the WTO’s General Council and its subsidiary bodies.
For Indonesia, one of the most sought-after outcomes from this process is to have a fully and well-functioning dispute settlement system in place by 2024, in particular the re-functioning of the Appellate Body.
Since its establishment in 1995, the Dispute Settlement System (DSS) has played an important role in resolving trade-related disputes between WTO members. Until October 2023, more than 600 complaints had been filed with the system, the majority of these complaints have been successfully resolved through the DSS mechanism.
A unique feature of WTO DSS is the use of a two-tiered system. The WTO DSS will start with a consultation process between the two members who are in dispute. When such a consultation process fails to reach an agreement, a litigation process involving a panel will follow. If unsatisfied with the final ruling of the panel, the parties have the option to appeal to the Appellate Body. To this end, the Appellate Body is endowed with the power to endorse, revise or reverse the legal findings and conclusions of a panel.
Despite its touted success, the current DSS arguably still has some weaknesses that affect the interest of WTO members. Developing and least-developed countries (LDCs) still face difficulties in accessing and utilizing the DSS. High legal and administrative costs, limited knowledge of WTO rules and agreements, as well as less knowledge and experience in the use of litigation strategies, are examples of these common challenges.
