Chapter 6. Dispute Settlement in the WTO : Mind Over Matter

The basic point I advocate in this chapter is that the WTO dispute settlement system aims to curb unilateral punishment. Sanctions can be imposed only in accordance with the outcome of a multilateral process that has been established in order to decide on the (il)legality of actions by WTO members, and the legal consequences thereof. The purpose of this process is to ensure that reciprocal commitments entered should not be unilaterally undone through the commission of illegal acts. There are good reasons though, to doubt whether reciprocity, its statutory underpinnings notwithstanding has also been observed in practice. The insistence on calculating remedies prospectively, and not as of the date when an illegality has been committed, and the ensuing losses for everybody that could or could not be symmetric lend support to the claim that the WTO regime serves “diffuse” as opposed to “specific” reciprocity. Still, WTO members continue to routinely submit their disputes to the WTO adjudicating fora, showing through their behavior that, if necessary, they would rather live in a world where punishment is curbed, than in a world where punishment acts as deterrent.