Question

What is the difference between the dispute resolution under GATT and under the WTO? Which one do you favor and why? a) GATT focuses on resolving disputes through negotiation, while the WTO relies on a dispute settlement mechanism with a more structured and binding process.

b) GATT and WTO have similar dispute resolution methods, with minor procedural differences.
c) GATT and WTO both prioritize arbitration as the primary means of dispute resolution.
d) GATT and WTO exclusively rely on litigation for resolving disputes.

Answer 1

The dispute resolution under GATT was negotiation-based with less formality, while the WTO employs a formal, legally binding dispute settlement mechanism aimed at ensuring predictability and rule of law in international trade.

Step-by-step explanation:

The difference between the dispute resolution under GATT and under the WTO primarily lies in the structure and formality of the processes each employs. The General Agreement on Tariffs and Trade (GATT) focused on the negotiation and signing of agreements with pauses in between to handle conflicts that arose, whereas the World Trade Organization (WTO) has established a more formal and legally binding dispute settlement mechanism.

The early rounds of GATT talks involved a shorter timeline with fewer countries largely concentrating on the reduction of tariffs. However, as GATT evolved and eventually became the WTO in 1995, the scope expanded to include a larger number of countries and a broader array of trade issues, such as trade in services and intellectual property.

Under the WTO's process, there is an emphasis on the rule of law, aiming to make the global trading system more secure and predictable. Dispute settlement is a critical pillar within the WTO framework, and the organization's structure reflects a distinct shift towards formalized legal resolution of trade conflicts, including binding arbitration and rulings that have the potential to override national judgments.