Analysis on Alternative Dispute Resolution in the World Trading System

Abstract

Even though dispute settlement system is one of the highly praised achievements of current world trading system, the current surge in the number of proceedings and increased complexity of disputes have significantly increased the burden of WTO dispute settlement body. Alternative Dispute Resolution (ADR) is frequently and effectively used in many areas especially to reduce the burden of judicial caseload. Although WTO dispute settlement system includes some ADR provisions, many of them are infrequently used. Especially, arbitration under article 25, mediation, conciliation and good offices are rarely used. This paper aims to analyze the reasons of the infrequent use and present measures for improving ADR provisions in WTO dispute settlement system by 1) reviewing historical development of ADR provisions in WTO

2) analyzing the texts and legal issues of ADR provisions in WTO

and 3) comparing rarely used ADR provisions in WTO dispute settlement system with more often used ADR provisions and the ones in the FTA. Two types of FTAs, WTO type and NAFTA type are compared with the WTO provisions. The thesis points out three problems of Article 5: 1) procedural uncertainty

2) lack of understanding and precedents

and 3) the excessive emphasis on the Director-Generals role. In addition, the paper specifies 1) procedural uncertainty and 2) lack of understanding and precedents as the main reasons for less use of Article 25. Supported by analytic implications of Articles 5 and 25, the paper suggests followings for the reform of Article 5: elaboration of the text, provision of detailed guideline, more use of professional facilitators and implementation of mediation mechanism for non-tariff measures. Moreover, the thesis proposes provision of comprehensive guideline and promotion of voluntary arbitration for the reform of Article 25.