MULTILATERAL SYSTEM OF SETTLEMENT OF INTERSTATE TRADE DISPUTES FROM GATT 1947 TO THE FOUNDING OF WORLD TRADE ORGANIZATION

Abstract

Dispute settlement system under the World Trade Organization (WTO) was developed from the concept envisaged by GATT 1947. The system under GATT 1947 was initially diplomatic oriented. Its basic mechanisms were consultations with diplomatic character and political negotiations („power oriented approach“). At the end of the Uruguay Round of negotiations (1986-1994), it comes to the establishment of the WTO, and result was also the agreement which regulates subject of dispute settlement - Dispute Settlement Understanding – DSU. DSU introduces huge reforms in previous method of disputes settlement, and represents one of the most important agreements under the WTO. Dispute settlement system becomes exclusively based on WTO legal provisions („rule oriented approach“), and in that regard, it was granted by epithet „legalistic“. Legality of the system is largely secured by the people who settle disputes. Dispute settlement authorities (panels and Appelate Body) are composed by independent experts, and not by representatives of states, with main goal to ascertain whether some internal measure complies with WTO law.