A Study Of Dispute Prevention System In The WTO Framework

A preliminary legal system of prevention of disputes has been constructed in the framework of WTO. The system consists of three parts, i.e. the subsystem of policy coordination, the subsystem of multilateral regulation, and the subsystem of compulsory rectification. The dissertation discusses issues of prevention of disputes on the basis of DPS from the perspective of interest analysis.Chapter One “The Views of Dispute Prevention in International Trade” gives an interpretation on the theory of trade dispute prevention. In the light of interest analysis, international trade disputes reflect interest conflicts in the international trade relation in the legal form. Interest conflicts between countries are the fundamental causes of trade disputes. WTO disputes prevention mechanism may aid in eliminating the potential hazard, protecting each member’s interest, improving the international trade environment, and maintaining the international trade order. Reliving or removing interest conflicts is foundation of dispute prevention.Chapter Two “DPS Based on the Rule of Coordination of Trade Policy” expounds the relation between policy coordination mechanism and dispute prevention. Interest coordination is considered as the essence of trade policy coordination. The interest coordination in the framework of WTO is realized through the policy coordination mechanism. The interdependence makes it necessary to have coordination in international economy and trade. The coordination is implemented in the form of multilateral negotiation. The coordination plays an important role in balancing interests, avoiding damages to members’ interests, and reaching the common goal. Cooperation of trade policy is of help to eliminate or attenuate conflicts in national interests. The coordination mechanism has made significant contribution to improving the international trade environment and setting up international trade order, but the internal defaults of the coordination mechanism have a negative effect on disputes prevention.Chapter Three “DPS Based on the Rule of Multilateral Regulation” analyzes the function and mechanism of the system of multilateral regulation in regard to prevention of trade disputes. The object of regulation of WTO Law is the trade policy of each member. The regulation of WTO Law is performed on the basis of multilateralism. The essence of the regulation is to regulate the exercise of rights, give a correct guidance to members on their policy behavior, and to ensure to prevent the damage to a member’s rights owing to the abuse of power by another member. It is considered as a fundamental method of prevention of conflicts to make members faithfully observe the rules and promises in the agreements, and to protect the interests of members. On the whole, the system of regulation is rather effective in preventing trade conflicts.Chapter Four “DPS Based on the Rule of Compulsory Rectification” discusses the function of compulsory rectification in prevention of trade conflicts. The objective of compulsory rectification is to protect the rights of members and maintain the reciprocal relationship in the multilateral trade regime. The essence of compulsory rectification in the framework of DSM is to prevent the loss of a member’s legal interests through the correction of improper policy. On the whole, the system of rectification is effective to the adjustment of improper policy, the maintenance of international trade order, and the prevention of conflicts in trade. DPS based on the rule of compulsory rectification plays a great role in the avoidance of trade conflicts.Chapter Five “The System Defects of the DPS” analyzes the system defects of the WTO legal system in preventing trade disputes. Some regulations of WTO law are subjective, unreasonable, and not clearly defined. Legal liability is not rigorous, with a low cost of violation of WTO laws and few methods of bearing legal liabilities. Supervision by TPRM doesn’t function systematically, and the mechanism of pre-review of trade policy by WTO has not been established. Members take anti-trade measures out of DSM, and as a result, anti-dumping and countervailing measures drifting outside DSM becomes the main risks that may cause trade conflicts. Defaults listed above impede the function of prevention of trade disputes and even make disputes out of control.To solve the problems of system defects of DPS, the author in Chapter Six “Proposals of the Improvement of DPS” puts forward some proposals related to the improvement of the DPS. Firstly, legal justice should be realized on the basis of balancing rights and obligations so that the WTO law can meet the requirement of economic rationality and legal rationality. Secondly, legality and efficiency of the policy coordination mechanism should be promoted so as to construct a “doubled” mechanism of coordination and decision-making in the multilateral legal framework. Thirdly, it is essential to reinforce the legal accountability of the the multilateral trading system, and raise the cost of illegality. Fourthly, trade remedies need to be implemented in the control of DSM, and no remedy measures can be taken without the warrant of DSB. Fifthly, pre-review system may be considered, ‘trinity’ review system should be established, and specialized institutes need to be granted the capability of providing independent, neutral, and binding review and supervision of trade policies of members.