Volume 49
Issue
2
Date
2018

Compliance Problems Under WTO Disputes Settled By Mutually Agreed Solution

by Di Hao

Mutually Agreed Solution (MAS) is a common tool used by World Trade Organization (WTO) members to settle disputes. Regulations of MAS in Articles 3.5 and 3.6 of the Dispute Settlement Understanding (DSU), though implying a rule-oriented evolution from the General Agreement on Tariffs and Trade era, are still ambiguous because parties to a dispute may contract out of their WTO obligations in the MAS. The ambiguity of the regulations gives WTO members excessive “scope for maneuver.”1 Dispute parties, when terminating disputes, sometimes improperly use their powers and autonomy to achieve MASs inconsistent with their WTO obligations. Moreover, interim settlements are increasingly used by member states to avoid MAS notification, which is required under WTO rules. Substituting interim settlements for MAS resulted in disputes pending indefinitely. To solve such compliance problems under the disputes settled by MAS, as well as to make sure that the parties to the dispute are not entitled to contract out of their obligations, this paper argues that the ambiguity in Article 3.5 of the DSU should be clarified by analyzing the nature of WTO obligations. The notification obligation in Article 3.6 should be elaborated on and given further specificity. Finally, a “special panel” functioning under the authority of the WTO Secretariat should also be established by the WTO Secretariat to assist in the monitoring and managing the enforcement of WTO rules in disputes resolved by MAS.

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