World Trade Organization (WTO)
Canada and the WTO
Dispute Settlement at the World Trade Organization (WTO)
Given that there are over 140 Members of the World Trade Organization
(WTO), including nearly all of the major trading countries, it should
not be surprising that trade disputes arise from time to time concerning
the interpretation of the rules contained in the WTO Agreements
and how they are being applied by WTO Members. What is surprising,
however, is how relatively few disputes there are given that the
value of goods and services exports worldwide exceeds US$6 trillion.
One element that sets the WTO apart from most other international
organizations is the fact that its Members have given themselves
clear and well established procedures to enforce the rules they
have negotiated and to settle disputes among themselves. These are
contained in the Understanding on Rules and Procedures Governing
the Settlement of Disputes (Dispute Settlement Understanding or
DSU). The text of the DSU is available on the WTO
website
By establishing detailed rules and procedures available to all
Members, the DSU contributes directly to the stability and predictability
of the international trading system. It promotes adherence to the
rules negotiated by WTO Members and, because it is based on the
rule of law, not power, it especially benefits small and medium
sized countries like Canada by reducing the scope for unilateral
trade actions by large countries.
Some of the most important features of the DSU are the automatic
establishment of panels to review complaints by WTO Members, specific
timelines throughout the process to ensure that disputes are adjudicated
in a timely fashion, the right to appeal panel decisions to a permanent
Appellate Body on issues of law and the automatic adoption of panel
reports. More importantly, however, the WTO encourages Members to
resolve disputes through consultations and indeed many of them never
reach the panel stage.
Once a panel report (and the Appellate Body report, if the case
has been appealed) is adopted by all WTO Members at a meeting of
the Dispute Settlement Body, it becomes a "WTO ruling".
The Member found to be in violation of its obligations is given
a reasonable period of time to comply with the ruling. How it does
that is left to the Member to decide. If the Member does not comply
within the prescribed time period, it can offer compensation to
the complaining Member pending compliance with the ruling. If there
is no agreement on compensation, the complaining Member may be authorized
to retaliate until the other party has complied with the ruling.
Canada is firmly committed to a rules-based system that provides
a framework in which to manage international trade relations and
the trade disputes that arise. Canada believes that the best way
to resolve these disputes is first and foremost through consultation
and negotiation and only when these fail, through the use of the
dispute settlement provisions of the WTO. Over the years, Canada
has made use of these provisions both to challenge trade measures
maintained by other countries in order to improve access for Canadian
exporters of goods and services and to defend Canadian measures
challenged by our trading partners. For more details on WTO disputes
involving Canada, either as a claimant or a respondent, please see
our Dispute Settlement section.
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