Regional Trade Agreement Dispute Settlement Mechanisms: Modes, Challenges and Options for Effective Dispute Resolution

Research
Date period
19 April 2018

The importance of regional trade agreements (RTAs) and their dispute settlement mechanisms (DSMs) will likely continue to grow considering the dynamics of the multilateral trade negotiations and the challenges faced by the World Trade Organization dispute settlement system. This paper examines the evolution RTA-DSMs and their common features. It looks at six aspects in particular: initiation, method of settlement, procedures for adjudication, enforcement, openness, and institutional arrangements. It argues that the evolution is a reflection of a continuous effort to improve the avenues available for resolving disputes, while calibrating a careful balance between retaining state flexibility and control, on the one hand, and the degree of delegation of resolution to neutral third parties, on the other hand. The author also puts forward policy options for those mechanisms to be more accessible and effective.

The paper is part of the RTA Exchange on Dispute Settlement project. It is aimed at analysing experiences and best practices, with a view to cultivating creative ideas for global trade policymaking and facilitating the enforcement of RTAs, taking into account their practical feasibility and the political realities.

The RTA Exchange, jointly implemented by the International Centre for Trade and Sustainable Development (ICTSD) and the Inter-American Development Bank (IDB), is a platform that convenes purposeful multi-stakeholder dialogues that work in the interest of constructing better trade and investment agreements for sustainable development at the regional and multilateral levels.