On The Compensation Measure Of Wto Dispute Settlement Mechanism

As the largest multilateral economic organization nowadays, WTO takes apivotal role in the international economic affairs. What is more, as a new anddeveloping international organization, the establishment of its legal system not onlydraws on the experience of many other international organizations, but makes anagreement with long-term negotiations and compromise among the Members. In aword, the legal system of WTO is so special that its procedures are worth a theoreticalresearch."Understanding on Rules and Procedures Governing the Settlement ofDisputes"(DSU) is the most direct and effective legal basis for the WTO disputesettlement mechanism, which includes complete procedures of dispute settlement.Compensation measure serves a temporary remedy as the WTO dispute settlementmechanism, which should have been applied by the Members, for it reflects thepeaceful trends of international dispute settlement. However, it has become more andmore useless because of itself flaws, and it is these flaws that cause the function of theDSU's fast-solving-conflict to sell at a discount greatly. The author carries outsystematical study on the compensation system by employing some historicalcomparativeand practical methods.In this essay, the author makes clear the compensation measure's location amongDSU procedures, and concludes three fundamental philosophy (implementation of theaim is to secure a positive solution to a dispute, basic principle is a kind of temporarypolicy option, legal basis is fair and mutually beneficial values) and four basiccharacteristics (temporary, voluntary, practical, negotiable), then compares with thecompensation measure in traditional international law which reachs a conclusion thatDSU compensation measure is different in nature, mode, retroactivity and scope. Theauthor also lists three cases (divided to tariff concessions and monetary compensation)related to DSU compensation measure in terms of the rationality of practice and thedeficiencies of effectiveness (economic analysis), function (systematical analysis),provision (empirical analysis), and analyzes its historical origins with some typical"compensatory"cases of GATT1947, then infers the existence of a number of subtlenon-legal factors behind this system, demonstrates the author's creative thinkingfinally that deep significance of DSU compensation measure is just part of ongoingobligations among the Members which was set by the rule-designers and the consideration of whom was to take it as the continuation of the consultation process.Last but not least, the author clarifies three quite controversial questions of DSUcompensation measure (the sequence between compensation and suspension ofconcessions, the voluntariness of compensation, the retroactivity of compensation),and proposes that DSU compensation measure have three preferential choices——mandatory monetary compensation is just a kind of exception of compensationmeasure, compensation measure will be included in"reverse consensus"indecision-making mechanism, compensation and the suspension of concessions will beincluded in a broader sense of the"Compensation Measures". In particular, the authortends to choose the final one, and believes that WTO dispute settlement mechanismshould be stable in a period now and future, and it is a fair-reasonable-harmoniousinternational political and economic order that can establish one rule-oriented WTO.