Ulhasnagar 421001

Name: - PRIYA RAMRAKHYANI Class:- M.com-IRoll No:-Subject:- Economics Topic:- Dispute settlement mechanism of world trade organization(WTO)Semester:- 1stGuidance:- sharmila karveAcademic Year:- 2015-16

Index:-Sr No.Title

1Objective of project

2Introduction

3Disputes settlement in nutshell

4Settlement system 1950-2010

5Origin & operation

6How are dispute settled

7Development perspective

8Importance of WTO in dispute settlement system

9Agreements & provision

10Winners & losers

11The Penalties

12Eu trade policy & dispute settlement

13Methodology

14Case study

15Principles: Equitable, Fast, Effective, Mutually Acceptable

16Conclusion

17Consultation

18Bibliography

J.WATUMALL. SADHUBELLA GIRLS COLLEGE UNIVERSITY OF MUMBAI CERTIFICATEThis is to certify that PINAAZ MULRAJANIMaster of commerce (semester I) for the academin year 2015-16 has completed the project on Dispute settlement mechanism of world trade organization (WTO)under the guidance of PROF. SHARMILA KARVE

Prof. sharmila karve Prof.Rajesh Singh (Project Guide) (Co-ordinator)

DR.M.M.HOSALKAR (Principal)

External examiner

CERTIFICATEI,PROF, SHARMILA KARVE hereby certify that PINAAZ MULRAJANI of M.COM PART I Master of commerce of J.W.SADHUBELLA GIRLS COLLEGE Ulhasnagar 421001 has completed the project entitled DISPUTE SETTLEMENT MECHANISM OF WORLD TRADE ORGANISATION (WTO)in this academic year 2015-16 under my guidance.

The information submitted is true and original to the best of my knowledge

PROF.SHARMILA KARVE Signature

OBJECTIVES OF THE PROJECT To study about the dispute settlements mechanism of WTO.

To increase my knowledge on the innovative ideas made by WTO on dispute settlements.

To understand the future growth of the settlements.

To study about the different situations and settlements.

INTRODUCTION TO WTO

The world trade organisation (WTO) came into existence on January 1, 1995 replacing GATT, with a membership of 81countries. The membership has increased to 146 countries as on April 4, 2003. It was born out of uruguau round of negotiations. WTO is an organization for liberalizing trade .It is a forum for governments to negotiate trade agreements and also to settle trade disputes. It operates a system of trade rules. At its heart are the WTO agreements, negotiated and signed by the back of the worlds trading nations. These documents provide the legal ground rules for international commerce. They are essentially contracts, binding governments to keep their trade policies within agreed limits..Although negotiated and signed by governments, the goal is to help procedures of goods and services, exported, and importers conduct their business, while allowing governments to meet social and environmental objectives. Since its inception in 1995, the world trade organization (WTO) has regularly been in the news. There have been optimistic stories of expanding WTO membership that emphasize that freer trade generates numerous benefits for consumers. Newspapers report on the details of WTO entry negotiates for important countries like china and remind us of the gains from trade. At other times media report might lead us to believe that disputes among WTO members are about to tear the organisaton apart. Disagreements between the U.S and the European union (EU) over everything from U.S corporate taxation, to genetically modified organism, to special steel tariff make headlines worldwide. Finally ,some groups seem unconvinced by and resentful of claims that free trade makes the entire world better off. Huge numbers of people from environmental and labor group gater at various international meetings of heads of state and governments ministers to protest globalization in general and the WTO in particular. Some representatives of developing countries are concerned that they have liberalized their trade and agreed to intellectual property protection for developed country product but have received almost no additional access to agricultural markets in the industrialized world. What are we to make of all this? What is the WTO? What is it trying to accomplish and why? How does the world trading system function? Why are these so many disputes among countries that belong to the WTO? This article provides an overview of the general agreements on tariff and Trade, better known as GATT, and the WTO system. In the first section, I present a brief history of GATT and the WTO system. In the following section, I discuss the fundamental principles that underlie the post-WWII world trading system and explain how these principles work to increases welfare. In the third section, I describe the numerous exceptions to GATTs requirements of non discrimination, or equal treatment, and review the economics literature that seeks to explain the rationale for and consequences of these exceptions. Then, short summary of dispute resolution within the WTO.

DISPUTE SETTLEMENT IN A NUTSHELL

Provides a rapid and effective means of settling disagreements on whether a country has acted in confirm with its international obligations.

Applies the agreements, and develops the interpretative understanding of the agreement.

By preventing before a dispute settlement procedure has been complete, trade damaging unilateral action is avoided.

The European union has included dispute settlement mechanism based on the WTO dispute settlement mechanism in all of its Free Trade Agreement since 2000.

Since 2009 the European Union also includes investor-to-state dispute settlement mechanism in trade and investment agreement.

WTO DISPUTES SETTLEMENT SYSTEM FROM 1905-2010

This paper reports description statistic based on the WTO Dispute Settlement Data Set (Ver. 3.0). The data set contains approximately 67,000 observations on a wide range of aspect of the Dispute Settlement (DS) system, and is exclusively based on official WTO documents. It covers all 426 WTO dispute initiated through the official filling of a Request for Consultation from January 1, 1995, until August 11, 2011, and for these dispute it includes events occurring until July 28, 2011. In this paper however, we will omit data pertaining to 2011 and only consider the full years 1995-2010. In order to shed some light on difference across WTO Members in participation in the DS system, we will divide members into five group, as specified in details in Table 1, Broadly speaking these group are: Q2 : The European Union (EU), and the United States (US) IND : Other industrialized countries DEV: Developing countries other than LDC LDC: Least developed countries BIC: Brazil, India and China

The EU is taken to be EU-15, since the enlargement came relatively late during the period we cover, For the most part, the choice in this regard makes little difference quantitatively, since most of the 12 countries acceding to the EU in 2004 and 2007 have been relatively inactive in the WTO. The LDC group corresponds to the list of LDCs prepared by the United Nations. A more discretionary line is drawn between IND and DEV. We have classified under IND, OECD members, the non-OECD Members among the 12 countries that most recently became members of the EU, those that are currently at an advanced stage of their accession negotiation, as income, such as Singapore. The DEV group consists of all countries which do not fit into either of the above 1. These correspond to dispute DS1-DS426 in terms of the dispute number assigned by the WTO Secretariat when a Request for Consultation is field mentioned categories, and are not BIC countries either, BIC refers to Brazil, India and China the sheer number of cases in which Brazil, India and China have participated, as well as their overall participation in WTO, let us to these three countries as a separate group. The paper is structured as follows: Section 2 highlights the evolution of the total uses of the DS system, Section 3 discusses some aspects of participation of the group defined above when acting as complainants or respondents, Section 4 deals with the subject-matter of dispute section 5 highlights a few aspect of countries success with regard to the legal claims they made before panels; Section 6 provides information as to the nationality and the appointment process of WTO panelists; Section 7 focuses on the duration of dispute settlement procedure at different stages of the adjudication process, Section 8 concludes.

ORIGIN & OPERATION

In 1994, the WTO members agreed on the understanding on Rules and Procedures Governing the Settlement of Dispute Settlement Understanding (DSU) (annexed to the final act signed in Marrakesh in 1994) Pursuant to the rules detailed in the DSU, member stages can engage in consultations to resolve trade dispute pertaining to a covered agreement or, if unsuccessful, have a WTO panel hear the case. The priority, however, is to settle dispute, through consultation if possible. By January 2008, only about 136 of the nearly 369 cases had reached the full panel process

The operation of the WTO dispute settlement process involves the parties involves the parties and third parties to a case and may also involve the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts, and several specialized institutions. The General Council discharges its responsibilities under the DSU through the Dispute Settlement Body (DSB) like the General Council, the DSB is composed of representatives of all WTO Member. The DSB is responsible for administering the DSU, i.e. for overseeing the entire dispute settlement process. It also has the authority to established panels, adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings and recommendation, and authorize the suspension of obligation under the covered agreements. The DSB meets as often as necessary to adhere to the timeframes provided for in the DSU.

HOW TO DISPUTE SETTLED Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in another guise), which consists of all WTO members. The Dispute Settlement Body has the sole authority to establish panels of experts to consider the case, and to accept or reject the panels findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling.First stage: consultation (up to 60 days). Before taking any other actions the countries in dispute have to talk to each other to see if they can settle their differences by themselves. If that fails, they can also ask the WTO director-general to mediate or try to help in any other way.Second stage: the panel (up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude). If consultations fail, the complaining country can ask for a panel to be appointed. The country in the dock can block the creation of a panel once, but when the Dispute Settlement Body meets for a second time, the appointment can no longer be blocked (unless there is a consensus against appointing the panel).Before the first hearing: each side in the dispute presents its case in writing to the panel.First hearing: the case for the complaining country and defence: the complaining country (or countries), the responding country, and those that have announced they have an interest in the dispute, make their case at the panels first hearing.Rebuttals: the countries involved submit written rebuttals and present oral arguments at the panels second meeting.Experts: if one side raises scientific or other technical matters, the panel may consult experts or appoint an expert review group to prepare an advisory report.First draft: the panel submits the descriptive (factual and argument) sections of its report to the two sides, giving them two weeks to comment. This report does not include findings and conclusions.Interim report: The panel then submits an interim report, including its findings and conclusions, to the two sides, giving them one week to ask for a review.Review: The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides.Final report: A final report is submitted to the two sides and three weeks later, it is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement or an obligation, it recommends that the measure be made to conform with WTO rules. The panel may suggest how this could be done.The report becomes a ruling: The report becomes the Dispute Settlement Bodys ruling or recommendation within 60 days unless a consensus rejects it. Both sides can appeal the report (and in some cases both sides do).

DEVELOPMENT POSPECTIVEThe poorest WTO member countries almost universally fail to engage as either complainants or interested third parties in formal dispute settlement activity related to their market access interests. This paper focuses on costs of the WTOs extended litigation process as an explanation for the potential but missing developing country engagement. We provide a positive examination of the current system, and we catalogue and analyze a set of proposals encouraging the private sector to provide DSU-specific legal assistance to poor countries. We investigate the role of legal service centers, non-governmental organizations, development organizations, international trade litigators, economists, consumer organization schools to provide poor countries with the services needed at critical stages of the WTOs extended litigation process. In the absence of systemic rules reform, the public-private partnership model imposes a substantial cooperation burden on such groups as they organize export interests, estimate the size of improved market access payoffs, prioritize across potential cases, engage domestic governments, prepare legal briefs, assist in evidentiary discovery, and pursue the public relations effort required to induce foreign political compliance.

IMPORTANCE OF WTO IN DISPUTE SETTLEMENT SYSTEM

The best international agreement is not worth very much if its obligations cannot be enforced when one of the signatories fails to comply with such obligations. An effective mechanism to settle disputes thus increases the practical value of the commitments the signatories undertake in an international agreement. The fact that the Members of the (WTO) established the current dispute settlement system during the Uruguay Round of Multilateral Trade Negotiations underscores the high importance they attach to compliance by all Members with their obligations under the WTO Agreement. Settling disputes in a timely and structured manner is important. It helps to prevent the detrimental effects of unresolved international trade conflicts and to mitigate the imbalances between stronger and weaker players by having their disputes settled on the basis of rules rather than having power determine the outcome. Most people consider the WTO dispute settlement system to be one of the major results of the Uruguay Round. After the entry into force of the WTO Agreement in 1995, the dispute settlement system soon gained practical importance as Members frequently resorted to using this system.

WINNERS AND LOSERS OF LEGAL CLAIMS The date set contains information on the legal claims made by the parties and on whether adjudicating bodies have accepted these claims or not. In this Section, we will take a brief look at some of these data. 3 A few preliminary comments are required. The unit of accounts in the analysis is legal claims, as defined in the WTO case law on Art. 6.2 DSU: a legal claims comprises a factual matter and the legal provision that it allegedly violates. We are only concerned with the panel stage and whether claims are won or not. We follow the evolution of the EU membership in the sense that up to January 1, 2004 EU is EU-15 after that date EU-25. In 2007, Bulgaria and Romania 3 Hoekman (2007) provides a more detailed account, but based on older data. Joined, further expanding EU to EU-27. Both have previously been active in the WTO dispute settlement, Bulgaria as third party during consultation and Romania as defendant. There are in total 176 bilateral disputes with the definition just mentioned, involving a total of 2,979 legal claims. Table 15shows how these are distributed across pairs of complaining and responding members, grouped by their country status. The IND group has raised almost half (42%) of all the claims but only been the target of 15% of all claims. G2 seems to have been the most targeted country group where 75% of all claims raised have been against G2. However, G2is only second to IND in raising claims where one third (27%) of all claims has been raised by G2. BIC and DEV have almost equal share in raising claim with around 15% of all claims. Though DEV have been more targeted, this is to be expected since there are more countries belonging to the DEV group than BIC. There is significant variation, both for each complaints group across respondents, and for each respondent group across complainants. At the lower end a G2 complaint against a DEV country on average involve around 4 claim, which an IND complaints against a G2 country on average comprises almost 29 claims Note however, that the average number of claims between DEV complainant and IND respondent is 52 claims but comprise of only two cases and BIC complaints against DEV country is 31 claims but this reflects only one case. So care should be taken with these averages.

A brief history of the WTO and GATT. The World Trade Organization (WTO) and its predecessor, the General Agreement on tariff and trade (GATT) have been enormously successful over the last 50 years at reducing tariff and other trade barriers among an ever increasing number of countries. The predecessor to the WTO began in 1947 with only 23 members, today it has 146 members, comprising approximately 97 percentage of world trade, for a timeline of GATT and the WTO.2 Although the WTO, established in 1995, is relatively young for an international institution, it has its origin in the Bretton Woods Conference at the end of world war II. At this conference, finance ministers from the allied nations gathered to discuss the failing of World War Is Versailles Treaty and the creation of a new international monetary system that would support postwar reconstruction, economics stability, and peace. The Bretton Woods Conference produced two of the most important international economics institution of the postwar period: the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (the World Bank). Recognizing that led beggar-thy-neighbor tariff policies of the 1930s had contributed to the environment that led to war, ministers discussed the need for a third postwar institution, the International Trade Organization (ITO), but left the problem of designing it to their colleagues in government ministries with responsibility for trade.

THE PANELISTS

Trade 19 provides data on the nationality of individuals that have served as panelists (chair + non chair) in the 199 Panels in the data set since each panel is composed by three panelists- the data set contains a total of 597 panelist. A striking feature in the context is that individuals originating in IND and DEV have appeared as panelists (chair, non-chair) in 489597 times, that is in almost 80% of all the times 51 different nationalities have been represented, which means that more than two-thirds of all WTO Members have never had a panelist. On 59 occasions a G2 citizen has acted as panelist (chairman- non chairman). This is less than 10% of all panelists used. The US tops the list in this category with 14 times (9 of which chairs). US citizens account for 14/59 panelists come from IND, the largest representation in this context. New Zealand tops the list with 57 (21 chairs), 27% of all panelists come from DEV. Chile tops the list with 25 (of which 3 chairs) followed by South Africa with 22 (6 chairs) and Venezuela with 18 (4 chairs). 9% of all panelists come from India or Brazil (BIC) where India has been most frequent as panelist with 30 (of which 10 chairs) closely followed by Brazil with 22 (5 as chairs). The composition of panels has been decides exclusively by agreement between the parties to the dispute on 73(of a total of 199) occasions. Much more common has been for the DG to appoint the panel as per Art 8.7 DSU; this has occurred on 126 occasions. This does not mean however, that on each of these occasions the DG has appointed all three panelists; they could will be the case that the DG appointed only two or even one panelist.

EU TRADE POLICY AND DISPUTE SETTLEMENTThere are three types of dispute settlement used in EU trade policy: Dispute settlement at the World Trade OrganisationThe Understanding on Dispute Settlement at the WTO provides WTO Members with a set legal framework for resolving disputes that arise in implementing WTO agreements. Ideally disputes are resolved through negotiations. If this is not possible, WTO Members can request a Panel to settle the dispute. The Panels report can also be appealed before the WTO Appellate Body on questions of law. If a Member does not comply with the recommendations from dispute settlement, than trade compensation or sanctions, for example in the form of increases in customs duties, may follow.Many WTO members, including the EU, make active use of this system so that violations of trade rules are corrected. However, the EU only initiates a dispute settlement case where other ways of finding a solution have not been productive. Resolving differences between States under international trade agreements Often known as bilateral dispute settlement, the EU includes a mechanism in all its trade agreements concluded after 2000 so that the countries concerned can resolve their differences on the basis of this mechanism. This mechanism allows these countries to use a dispute settlement mechanism specifically designed to deal with disputes arising under the agreement. The system allows for the rapid settlement of disputes and is modelled on the WTO dispute settlement system. Investor-to-State dispute settlement within international trade agreements The Treaty of Lisbon included foreign direct investment as part of the EU common commercial policy. As a consequence, the European Commission now negotiates on behalf of the EU on both the liberalisation and protection of investment. The EU is gradually negotiating investment provisions in certain Free Trade Agreements or in self-standing investment agreements. These new provisions on investment will set up a legally binding level of protection for investment. They will be accompanied by investor-to-state dispute settlement mechanisms, which permit investors to bring claims alleging that one of the investment protection obligations has been breached. These provisions create a specific procedure for an investor to bring a case before an international tribunal. The EU is currently preparing legislation dealing with the potential financial consequences flowing from investor-to-state dispute settlement.In June 2012 the Commission proposed a regulation to establish a legal and financial framework for investor to state dispute settlement, which was adopted by the European Parliament and the Council on 23 July 2014. It managesany possible financial responsibility deriving from investor-to-state dispute settlement by allocating between the EU and the Member States the financial responsibility on the basis of who adopted the treatment responsible for a breach of the agreement. It also deals with who would defend a particular case.

METHODOLOGY This project is mixture of theoretical as well as practical knowledge. Also it contains ideas and information imparted by the project guide.

Secondary data:- The secondary data requires for the project was collected from various kinds of websites the name of which are mentioned in bibliography.

CASE STUDY

Kodak-Fuji Case

The Kodak-Fuji film dispute centers on the distribution system in Japan. In May 1995, Eastman Kodak, Co. asked the U.S. Trade Representative (USTR) to investigate the Japanese photographic film and paper market. Kodak charged that Fuji Photo Film, Co., Japan's biggest photographic film and paper producer, was involved in "anti-competitive trade practices" in Japan. Kodak asserted that Fuji, with the support of the Japanese government, tacitly dominated the consumer film market in Japan using unfair practices. According to Kodak, Japanese regulations implicitly favored Fuji by making it difficult for imported consumer photographic film and paper to be marketed in Japanese shops. Kodak also said that some shops in Japan were not allowed to carry Kodak's products because of back room deals with Fuji. According to Kodak, this explained why Fuji had a 75 percent market share in Japan while Kodak had only a 7 percent share in 1996. Kodak estimated its losses since the 1970s due to the unfair practices at $5.6 billion. Accordingly, Kodak requested that Japanese regulations be changed in order to break up Fuji's exclusive distribution system. In the Kodak-Fuji case, the panel ruled that Japanese regulations predated the reductions in tariffs that had been negotiated on photographic film. Consequently, those regulations could not have negated the benefits accruing to the United States in the trade agreement. This technical ruling allowed the WTO to avoid a far-reaching decision that could have found Japanese vertical integration of business in conflict with the intent of the WTO regime. Currently, there is no international standard for anti-trust regulation. If the WTO dispute settlement panel had found in favor of the United States, it would have been involved in creating new international obligations, an act not sanctioned by the WTO Agreement. The ruling suggests that the United States and other nations need not be overly concerned that the WTO's dispute settlement mechanism will overtly threaten national sovereignty. In June of 1995, the United States began to investigate Japanese market barriers for photographic films and papers, and found that three "liberalization countermeasures" discriminated against imported goods. The first measure was exclusive wholesaling arrangements currently dominated by Fuji; the second was the large-stores law enacted in 1974. According to the United States, this law discouraged large stores from carrying film other than Fuji's. The third discriminatory measure cited involved controls on price competition and promotion as supervised by the Japanese Fair Trade Commission. After eleven months of investigation, the United States filed a complaint in the WTO on June 13, 1996, requesting consultations with Japan. The United States argued that the import-resistant market structure created by the Japanese government violated the national treatment principle of the GATT Article III. The United States also asserted that Japan's restrictions on retail operations and promotional activities ran counter to the transparency standard set out in the GATT Article X, even if Japan appears to offer neutral treatment of imported goods. The United States also made a "non-violation" claim that these measures nullify or impair benefits accruing to the United States. A "non-violation" claim is specifically authorized in the GATT Agreements if the actions of another nation reduce the value of negotiated trade concessions, even if the specific measure taken by the other country does not directly violate any of the Articles of the trade agreements. The types of redress available under such complaints, however, are limited. Fuji denied Kodak's assertion. Fuji asserted that it had never conspired with the Japanese government to discriminate against imported goods. Furthermore, Fuji claimed that Kodak's loss of market share in Japan could be attributed to Kodak for a number of reasons. First, Kodak failed to introduce innovative products to compete with Fuji's new products. Second, Kodak's marketing strategy was not superior to that of Fuji's. Third, there was no bottleneck to block Kodak from the market since it had the same access to consumers as Fuji. These market channels included selling directly to retailers, selling to secondary dealers, and selling to smaller retailers through photo finishing labs. Fourth, Fuji stated that its market share in the United States is only 11 percent while Kodak dominates the market with a 75 percent share. Thus, the proportion is exactly the reverse of the situation in Japan suggesting that both Kodak and Fuji have difficulty penetrating the domestic market of its rival. Therefore, consumers' loyalty to the domestic brand, and not formal restrictions on trade, can explain low market penetration by foreign competition. There is also a claim that, although Kodak is cheaper in Japan, customers buy Fuji because of its investment in innovative products and its creative marketing skills and services.The United States, failing to reach an agreement with Japan, requested a dispute settlement panel on September 20, 1996. The panel was tasked to investigate Kodak's allegations that Japanese regulations had the effect of supporting anti-competitive practices by Fuji film. After more than a year's investigation, the WTO interim report was submitted on December 5, 1997. The report rejected the U.S. complaint against Fuji. The tribunal arbitration panelists were from Brazil, Switzerland, and New Zealand. They determined that the United States had not demonstrated that its WTO rights had been impaired. Even though the panel did not rule as Kodak would have liked, there is evidence that Fuji's market share in Japan has diminished from 74 percent in the early 1990s to 67 percent at the end of 1997, though Fuji denies this. The profit margin of the color film industry in Japan used to be close to 12 percent, compared to 6 percent on overseas sales, but this has also fallen. Current retail prices for photographic film and paper in Japan reflect this, with prices about 30 to 40 percent below comparable prices in the United States. Kodak's market share in Japan now accounts for about 11 percent since it won the Nagano Olympic Games sponsorship by paying $44 million in 1996. In the Nagano area where the Games were held, Kodak has doubled its market share to 20 percent. In the U.S. market, however, Kodak's profits decreased by 25 percent in 1997 from the year before. Fuji's business in the U.S. market is also improving. Fuji increased its market share to 14 percent while Kodak had 76 percent of the market. Kodak announced plans to cut costs by a billion dollars and lay off 10,000 jobs over next two years in order to remain competitive.

Principles: equitable, fast, effective, mutually acceptable Dispute in the WTO are essentially about broken promises. WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling dispute instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgements. A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligation. A third group of countries can declare that they have an interest in the case and enjoy some rights. A procedure for settling dispute existed under the old GATT, but it had no fixed timetables, rulings were easier to block, and many cases dragged on for a long time inconclusively. The Uruguay Round agreement introduction a more structured process with more clearly defined stages in the procedure. It introduced greater discipline for the length of time a case should take to be settled, with flexible deadlines set in various stages of the procedure. The agreement emphasizes that prompt settlement is essential if the WTO is to function effectively. It sets out in considerable details the procedure and the timetable to be followed in resolving dispute. If a case runs its full course to a first ruling, it should not normally take more than about one year-15 months if the case is appealed. The agreed time limits are flexible, and if the case is considered urgent (e.g. if perishable goods are involved), it is accelerated as much as possible. The Uruguay Round agreement also made it impossible for the country losing a case to block the adoption of the ruling. Under the previous GATT procedure, ruling could only be adopted by consensus, meaning that a single objection could block the ruling. Now, ruling are automatically adopted unless there is a consensus to reject a ruling-any country wanting to block a ruling has to persuade all other WTO members (including its adversary in the case) to share its view. Although much of the procedure does resemble a court of tribunal, the preferred solution is for the countries concerned to discuss their problems and settle the dispute by themselves. The first stage is therefore consultation between the governments concerned, and even when the case has progressed to other stages, consultation and mediation are still always possible.

CONCLUSION This paper has mostly sought to provide a comparative analysis of those mechanisms for the settlement of international economic disputes which have been set up and operate in the context of international treaties and/or organizations, and which accord access to private parties. In the above discussion, the relevant international economic disputes have been those arising out of international economic activities and transactions which oppose the economic interests and rights of individuals (mostly corporations) to those of states. State-private party dispute settlement mechanisms are, together with the developments in the field of the international enforcement of human rights, the other major area of interest of this paper, an evident, if not the most evident, sign of how much progress the status of individuals as subjects of substantive and procedural rights and obligations under international law has made. The view embraced in this paper is that substantive and procedural rights of international law are two sides of the same coin. Thus, even if the individual is accorded substantive rights, the risk is that the lack of access to international dispute settlement mechanisms may reduce the significance and effectiveness of those rights, because there would be a serious limitation of their enforceability. Moreover, the traditional mechanism of diplomatic protection, whereby a state takes up the claim of its injured national against another state and brings it on the international law level is outdated because it does not correspond to the reality and dynamics of international economic activities. Its rationale is much less strong today due to the globalization of the world economy in the second half of this century and related phenomena such as the growth of multinationals, which have made private parties the real players on the international level and have weakened the traditional notions of national sovereignty and nationality links. Private parties' s access to international dispute settlement is therefore essential for their full recognition as subjects of international law.

CONSULTATIONS1. Members affirm their resolve to strengthen and improve the effectiveness of the consultation procedures employed by Members.2. Each Member undertakes to accord sympathetic consideration to and afford adequate opportunity for consultation regarding any representations made by another Member concerning measures affecting the operation of any covered agreement taken within the territory of the former.3. If a request for consultations is made pursuant to a covered agreement, the Member to which the request is made shall, unless otherwise mutually agreed, reply to the request within 10 days after the date of its receipt and shall enter into consultations in good faith within a period of no more than 30 days after the date of receipt of the request, with a view to reaching a mutually satisfactory solution. If the Member does not respond within 10 days after the date of receipt of the request, or does not enter into consultations within a period of no more than 30 days, or a period otherwise mutually agreed, after the date of receipt of the request, then the Member that requested the holding of consultations may proceed directly to request the establishment of a panel.4. All such requests for consultations shall be notified to the DSB and the relevant Councils and Committees by the Member which requests consultations. Any request for consultations shall be submitted in writing and shall give the reasons for the request, including identification of the measures at issue and an indication of the legal basis for the complaint.5. In the course of consultations in accordance with the provisions of a covered agreement, before resorting to further action under this Understanding, Members should attempt to obtain satisfactory adjustment of the matter.6. Consultations shall be confidential, and without prejudice to the rights of any Member in any further proceedings.7. If the consultations fail to settle a dispute within 60 days after the date of receipt of the request for consultations, the complaining party may request the establishment of a panel. The complaining party may request a panel during the 60-day period if the consulting parties jointly consider that consultations have failed to settle the dispute. 8. In cases of urgency, including those which concern perishable goods, Members shall enter into consultations within a period of no more than 10 days after the date of receipt of the request. If the consultations have failed to settle the dispute within a period of 20 days after the date of receipt of the request, the complaining party may request the establishment of a panel. 9. In cases of urgency, including those which concern perishable goods, the parties to the dispute, panels and the Appellate Body shall make every effort to accelerate the proceedings to the greatest extent possible.10. During consultations Members should give special attention to the particular problems and interests of developing country Members.

BIBLOGRAPHY

BOOKS REFERED1. Economics of global trade and finance written by JOHNSON & MASCARENHAS published by MANAN PRAKASHAN.2. Economics of global trade and finance published by Himalayan publication.3. Department for infrastructure and economics Co-operation published by sida 2004 written by Marc L. Busch and Eric reinherdt.

Other Authors:-

Meredith A. Crowley Marc L. Busch and Eric Reinhardt Henrik Horn, Louise johannesson and petros C. Mavroidis.

WEBLOGRAPHY

www.economictimes.com www.financialexpress.com www.moneycontrol.com www.business.standard.com