THE APPLICATION OF GOOD FAITH PRINCIPLE IN WORLD TRADE ORGANIZATION’S (WTO) DISPUTE SETTLEMENT

Abstract

The World Trade Organization (WTO) is the only international organization with a global vocation that deals with the rules governing trade between countries. At the heart of the Organization are the WTO Agreements negotiated and ratified by members. The main aim is to promote predictability in free flow of goods and services with legal guarantees in disputes settlement between member countries through the principle of "good faith".The current WTO dispute settlement mechanism, characterized by the considerable and automation of procedures as compared to its pre-inception or the era of the General Agreement on Tariffs and Trade (GATT) has proven at least effective and efficient. It is fair to say that the WTO Dispute Settlement System as it stands today remains ipso facto a well-respected international regime and has over the past two decades remarkably active. For instance, more than 551 disputes have been initiated by WTO Members, resulting in more than 230 circulated panel reports and 136 circulated AB reports. More than 65% of WTO Members have engaged in dispute settlement as complainant, respondent, or third party. However, as any other human endeavor, the DSB is confronted with certain deficiencies or conflicts as far as the respect of “good faith principle” in dispensing WTO Rule of Law is concerned starting from its interpretation; some provisions are not clear as to what they mean in practice. Secondly, DSB encounters new issues during proceedings that were not foreseen at the time the rules were drafted and this has been a major cause hindering DSB many times to completely exhaust a case despite the well-structured stages (Panel and Appellate). There is also an overriding force of “political will” propelled by some stronger economies through the “Green Room Theory” that under minds the smooth application of “Good faith principle” during dispute proceedings. This has caused some members to rather seek solutions to their differences in other regional courts or trade disputes centers.