WTO Ministerial Section • Volume 7 • Number 20 • 4th June 2003

WTO Members Miss DSU Negotiating Deadline

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The WTO special session of the Dispute Settlement Body (BSD) missed its end-May deadline for reforming the Dispute Settlement Understanding (DSU). Members instead agreed on 28 May to continue negotiations, based on a new draft prepared by Chair Péter Balás (Hungary). However, they did not agree on a new schedule for negotiations, nor on their scope, or on whether a new negotiating mandate was required. Delegates have been reviewing the DSU, following a mandate from the Doha Ministerial meeting in 2001 (see BRIDGES Weekly, 16 April 2003), and Chair Balás convened a number of informal meetings over the last few weeks in addition to the formal negotiating session on 20, 21, 23 and 28 May. Some Members had hoped that the group could have agreed on at least a limited number of provisions, providing an early harvest for the fifth WTO Ministerial in Cancun in September.New Chair’s draft

Chair Balás circulated a first streamlined Chair’s draft on 16 May, providing a basis for compromise. After intensive consultations, he issued a revised version on 28 May, containing amendment proposals relating to, inter alia, consultation proceedings, sequencing, third party rights, panel and appellate body proceedings, transparency, and specific provisions for developing countries. In response to the new draft, the EU said it would like to see the draft expanded to include its proposal for a body of permanent panellists. The US said the draft was an improvement over the first negotiating draft, however it still contained "problematic elements," and needed to be expanded. The US had, inter alia, been pushing for more transparency, and flexibility with regard to negotiated settlements, and said the draft only partially addressed these concerns. A developing country delegate commented that his, and other developing country governments, considered the new text a working paper rather than the basis for further negotiations.

A new negotiating mandate?

Members disagreed on whether they would need a new negotiating mandate for the clarification of the DSU, given that the timeframe provided in paragraph 30 of the Doha Declaration had lapsed. The US, EU and Canada argued that no new mandate was needed, since that Doha Declaration said that Members should "aim" to strike a deal by the end of May 2003, and the date therefore can be seen as indicative, allowing negotiations to continue beyond the end of May. Other delegates disagreed. According to a trade source, the debate had became more muted toward the end of the session, and many delegates felt that they could not spend much time on the DSU negotiations within the next two months leading up to Cancun. Some delegates speculated that a new deadline may be set for the end of 2003 or for April 2004. However, they said their focus now would be on other, more pressing negotiating issues.

Chair Balás is expected to report on the status of DSU negotiations to the WTO Trade Negotiations Committee on 10 June, and the issue may be addressed at the General Council meeting in late July, following informal consultations on the way forward.

ICTSD reporting; "WTO Dispute Reform Talks Miss Deadline; Parties Plan to Keep Trying, but Set No Date," WTO REPORTER, 29 May 2003.