7.4 The WTO Dispute Settlement Process

Exporting countries that are assessed anti-dumping and countervailing duties can appeal the decisions of importing countries under WTO rules. The WTO’s procedure for settling trade disputes between countries involves four steps, namely, consultation, adjudication, implementation of the ruling, and (optional) appeal. The consultation stage involves discussions between the countries involved in the dispute with the objective of settling the dispute through mediation by the WTO. If a resolution is not achieved as a result of discussions between the two countries, the process moves to adjudication. At this stage, an independent panel of experts is set up to examine the case and recommend a solution for consideration by the countries. If the countries accept the decision of the panel, the process moves to implementation. If the country that is found to be in violation fails to change its policy in keeping with the decision or to provide appropriate compensation, the WTO may allow the country bringing the complaint to retaliate. Actual retaliation may involve high tariffs against a range of the offending country’s products, although its occurrence is rare. Some observers contend that allowing countries to retaliate runs counter to the WTO’s objective of reducing trade barriers.