ABSTRACT
As explained in Chapter 1, the General Agreement on Tariffs and Trade (GATT) was originally intended as only one element of what was supposed to be a much more ambitious institutional structure. By 1950, it was clear that the US Congress would not accept the International Trade Organization (ITO), with the result that the only international organization left for the regulation of world trade was a provisional agreement never intended as a framework for such an organization. 1
From the beginning, then, the GATT was characterized by temporary measures and ad hoc solutions to emerging problems. Administrative services for the GATT were provided by the Interim Commission of the ITO and responsibility for oversight and direction was taken on by regular meetings of the Contracting Parties, with Geneva as the de facto site. 2
In contradistinction to the ITO draft charter, the 1947 GATT made no provision for formal, juridical dispute settlement, nor was there any explicit provision for recourse to the International Court of Justice in resolving disputes. 3 The emphasis was on diplomatic methods of consultation and consensus. Article XXII provided for consultations where representations were made by one Contracting Party to another ‘with respect to any matter affecting the operation of this Agreement’. Article XXIII provided for the possibility of an investigation, recommendations, and rulings by the Contracting Parties (in effect, the GATT Council consisting of all Member states) in the case where a Contracting Party considered that a benefi t under the GATT was nullifi ed and impaired. This applied not only in the case where the nullifi cation and impairment fl owed from a violation of a provision of the GATT, but in other circumstances as well (which gave rise to what are referred to as nonviolation nullifi cation and impairment complaints, discussed later in this chapter). Article XXIII also permitted the Contracting Parties to authorize a Contracting Party to suspend concessions under the GATT with respect to another Contracting Party, where it considered that ‘the circumstances are serious enough to justify such action’. It is on the legal foundation of these provisions that dispute settlement practice in the GATT was built throughout its history, and they remain in the 1994 GATT as a basis for the WTO Dispute Settlement Understanding (hereinafter DSU), which, however (along with various agreement-specifi c provisions, discussed below), govern
dispute settlement practice with respect to not only the 1994 GATT but all the ‘covered agreements’ under the WTO umbrella.
