WTO Agreements: GATS, TRIPS, and Dispute Settlement
The General Agreement on Trade in Services (GATS)
The General Agreement on Trade in Services (GATS) applies, in principle, to all service sectors, with two exceptions:
- Services supplied in the exercise of governmental authority (e.g., social security schemes and any other public service, such as health or education, that is provided at non-market conditions).
- Measures affecting air traffic rights and services directly related to the exercise of such rights.
The Most-Favored Nation (MFN) rule applies to trade in services. However, national treatment is not extended by all countries to all other members and is negotiable.
Trade-Related Aspects of Intellectual Property Rights (TRIPS)
TRIPS covers:
- Copyright and related rights (i.e., the rights of performers, producers of sound recordings, and broadcasting organizations)
- Trademarks, including service marks
- Geographical indications, including appellations of origin
- Industrial designs
- Patents, including the protection of new varieties of plants
- The layout-designs of integrated circuits
- Undisclosed information, including trade secrets and test data
WTO Dispute Settlement Mechanism
A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow WTO members consider to be breaking the WTO agreements or to be a failure to live up to obligations.
Settling disputes is the responsibility of the Dispute Settlement Body (DSB), which consists of all WTO members and performs the following functions:
- Has the sole authority to establish “panels” of experts to consider the case.
- Accepts or rejects the panels’ findings or the results of an appeal.
- Monitors the implementation of the rulings and recommendations.
- Has the power to authorize retaliation when a country does not comply with a ruling.
Stages of WTO Dispute Settlement
Consultation
(Up to 60 days)
The Panel
(Up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude).
- Before the first hearing: Each side in the dispute presents its case in writing to the panel.
- First hearing: The complaining country (or countries), the responding country, and those that have announced they have an interest in the dispute, make their case at the panel’s first hearing.
- Rebuttals: The countries involved submit written rebuttals and present oral arguments at the panel’s second meeting.
- Experts: If one side raises scientific or other technical matters, the panel may consult experts or appoint an expert review group to prepare an advisory report.
- First draft: The panel submits the descriptive (factual and argument) sections of its report to the two sides, giving them two weeks to comment. This report does not include findings and conclusions.
- Interim report: The panel then submits an interim report, including its findings and conclusions, to the two sides, giving them one week to ask for a review.
- Review: The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides.
- Final report: A final report is submitted to the two sides and, three weeks later, it is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement or an obligation, it recommends that the measure be made to conform with WTO rules. The panel may suggest how this could be done.
- The report becomes a ruling: The report becomes the Dispute Settlement Body’s ruling or recommendation within 60 days unless a consensus rejects it. Both sides can appeal the report (and in some cases, both sides do).