WORLD TRADE
ORGANIZATIONWT/DSB/25
17 July 2001
(01-3515)
ARTICLE 5 OF THE DISPUTE SETTLEMENT UNDERSTANDING
Communication from the Director-General
The following communication from the Director-General, dated 13 July 2001 has been
addressed to the Chairman of the DSB with the request that it be circulated for the information of
Members.
_______________
The Dispute Settlement Understanding is rightly considered a critical aspect of the
international trading system.  It provides an avenue for the Members to settle their disputes in a
multilateral forum.  Fortunately, many disputes brought to the WTO have been settled through
negotiated mutually acceptable solutions.  However, many have also required panel and AppellateBody proceedings.
I am of the view that Members should be affo rded every opportunity to settle their disputes
through negotiations whenever possible.  Article 5 of the DSU provides for the use of good offices,
conciliation and mediation, but this Article has not been used since the inception of the WTO.  In light
of that, I would like to call Members attention to the fact that I am ready and willing to assist them as
is contemplated in Article 5.6.  It is time to make this provision operational.
There are two attachments to this letter which will assist Members in this regard.  Attachment
A is a short background note and Attachment B provides some simple procedures for Members to use
to request assistance.
I would like to emphasize that these procedures are purely to help Members resolve their
differences and do not limit their treaty rights in any manner.  I would also like to assure Members
that these procedures do not in any way limit my availability to assist delegations more generally
whenever they request my help.
I look forward to working with delegations and hope the note will prove useful to Members
that might wish to avail themselves of the provisions of Article 5.WT/DSB/25
Page 2
ATTACHMENT A
Background Note Regarding Requests for Good Offices, Conciliation and Mediation
Pursuant to Article 5 of the DSU
Article 5 of the DSU, Good Offices, Conciliation and Mediation , has never been utilised.  The
predecessor procedures under the GATT were only rarely used.1  Specifically, Article 5.6 provides
that the Director-General may, acting in his ex officio  capacity, offer good offices, conciliation or
mediation to the parties to a dispute.  This authority is considered inherent in the post even though not
further detailed in law.2  Thus, no new powers are being provided to the Director-General by this
provision; rather, he may exercise his normal powers to assist Members in negotiating and resolvingdisagreements.
3
Historical Background
The 1979 Understanding on dispute settlement provided for the use of good offices to settle
disputes.  Paragraph 8 of the Understanding stated as follows:
If a dispute is not resolved through consultations the contracting parties concerned
may request an appropriate body or individual to use their good offices with a view to
the conciliation of the outstanding differences between the parties.  If the dispute isone in which a less-developed contracting party has brought a complaint against a
developed contracting party, the less developed contracting party may request the
good offices of the Director-General who, in carrying out his tasks, may consult with
the Chairman of the CONTRACTING PARTIES and the Chairman of the Council.
4
This provision was resorted to unsuccessfully by the United States and the European
Communities in 1982 regarding their dispute over EC tariff treatment of citrus products.  Also in
1982, the Ministerial Declaration stated as follows:
With reference to paragraph 8 of the Understanding, if a dispute is not resolved
through consultations, any party to a disput e may, with the agreement of the other
party, seek the good offices of the Director-General or of an individual or group of
persons nominated by the Director-General.  This conciliatory process would becarried out expeditiously, and the Director-General would inform the Council of the
outcome of the conciliatory process. . . .
5
In 1987-1988 this procedure was used by Japan and the European Communities to
assist in the resolution of their dispute concerning pricing and trading practices for copper in
Japan.  The Director-General nominated a personal representative to submit a report on the
                                                     
1 We do not include actions taken pursuant to the provisions of the Decision of 5 April 1966 (BISD
14S/18).  These are now covered by Article 3.12 of the DSU and are taken in lieu of action under Articles 4, 5,6, and 12 of the DSU.  The 1966 Decision provides some specific procedural rules.
2 Black's Law Dictionary  provides the following definition of ex officio :  "From office; by virtue of the
office; without any other warrant or appointment than that resulting from the holding of a particular office.
Powers may be exercised by an officer which are no t specifically conferred upon him, but are necessarily
implied in his office; these are ex officio .  Thus, a judge has ex officio  the powers of a conservator of the peace."
3 This should be distinguished from the provision for formal arbitration provided for in Article 25 as an
alternative to dispute settlement procedures.
4 Understanding on Notification, Consultation, Dispute Settlement and Surveillance of 28 November
1979 (26S/210).
5 Ministerial Declaration of 29 November 1982,  Decision on Dispute Settlement (29S/13).WT/DSB/25
Page 3
dispute.  In addition, another outside expert was retained to assist in developing the factual
basis for the report.  The Director-General communicated to the Contracting Parties a report
which included a short factual finding as well an "advisory opinion" to the effect that the
European Communities and Japan should enter into mutually advantageous and reciprocal
negotiations regarding certain Japanese tariffs as part of the Uruguay Round.6
In 1988 The Director-General reported that he had been requested to provide good
offices by Canada and the European Communities.  As requested by the parties, he provided
an advisory opinion on a question that arose during Article XXIV negotiations regarding
whether a tariff concession granted by Portugal to Canada included wet salted cod.7
Paragraph D of the Decision of 12 April 1989 on Improvements to the GATT Dispute
Settlement Rules and Procedures (36S/61), provided further rules for requesting good offices.
These new rules are quite similar to the current Article V of the DSU.  Also, the reference toappointing a personal representative of the Director-General contained in the 1982 Decision
was dropped.  There is no record that this provision was utilized.
Current Proposal
The Director-General is of the view that Members should attempt to settle disputes as often as
possible without resort to panel and Appellate Body procedures.  In this regard, he wishes Members tobe aware of his willingness to actively support attempts to settle their disputes through use of good
offices, conciliation and mediation.  Unlike the situation under the 1982 Decision, there is no explicit
authorization for appointment of another person to conduct the proceeding.  Instead the DSU provides
that this is to be considered part of the Director-General's ex officio  powers.
8  Thus, it is appropriate
that there be closer involvement of the Director-General as these are the powers specifically derivedfrom his office.  Therefore, it is contemplated that the proceedings will be handled directly by the
Director-General or, with the concurrence of the parties, a designated Deputy Director-General.
There will, necessarily, need to be provision for assistance from the Secretariat or, following
consultation with the parties, other consultants retained for these purposes.
Another distinction arises in light of the considerably different situations existing with respect
to dispute settlement under the GATT and the WTO.  The negative consensus rule which provides
certainty in access to the dispute settlement system as well as the introduction of an appellate process
to ensure greater consistency have significantly changed the nature of the dispute settlement system.
In light of these changes, the Director-General does not expect to provide "advisory opinions", strictly
speaking, although informal non-legal advice regarding the best path to finding a solution may be
appropriate.  Legal conclusions regarding a particular dispute are best left to the formal disputesettlement process.  Rather, Article 5 proceedings should be seen more as efforts to assist in reaching
a mutually agreed solution.  It should also be recalled that Article 25 provides for Arbitration and the
Director-General does not wish to encroach upon this provision of the DSU.
In light of the above, the Director-General proposes to provide some procedural steps for
parties to take when requesting Article 5 proceedings and such steps would be based on the following
considerations:
                                                     
6 Measures Affecting the World Market for Copper Ores and Concentrates, Note by the Director
General (36S/199).
7 C/M/225, p.2.
8 Obviously, as these are ex officio  powers to be used in this specific setting, it follows that the
Director-General could offer his services to assist in settling disagreements between Members in other settings.
The language of Article 5 should not be seen as limiting his role elsewhere.WT/DSB/25
Page 4
1. Requests under Article 5 may only be made after commencement of a formal dispute pursuant
to a request for consultations in accordance with Ar ticle 4 of the DSU.  The nature of the Article 5
request should be specified.9
2. The Director-General should meet with the parties as soon as possible after a request to: (a)
listen to their views of the dispute; (b) assess the res ources that he should devote to the process to help
reach a settlement;10 and (c) provide any preliminary assessments as might seem appropriate.
3. The Director-General may designate a Deputy Director-General to assist and/or act in his
stead.  Except for the limited case of good offi ces, the Director-General or designated Deputy
Director-General shall be present at meetings held pursuant to the process.  As this is an exercise of ex
officio  powers, further delegation beyond the Deputy Director-General level should be avoided.
4. The Director-General may provide Secretariat staff to support the process as he deems
appropriate.  Care will be taken to insulate such staff from involvement in formal dispute settlementprocedures in order to ensure the objectivity of the Secretariat.
11  To the extent necessary, outside
consultants could be retained to assist in the process.
5. The Director-General and the Deputy Directors-General are not directly involved in on-going
panel and Appellate Bodies cases so no further "firewalls" should be necessary in this regard.12  With
respect to other staff and consultants it would be necessary to require that they have no directinvolvement in the dispute in question either before or after the Article 5 procedures.  This should
already be covered by the Rules of Conduct and no further action would be required.
                                                     
9 Good offices, conciliation and mediation are seen as  three different levels of involvement of the
Director-General with good offices being overseeing of logistical and Secretariat support, conciliation involving
direct participation in negotiations and mediation including the possibility of actually proposing solutions, if
appropriate.  Flexibility is to be maintained with regard to changing the role.
10 This will, in any event, vary depending on the type of assistance requested.
11 As a general matter, staff from Divisions primarily responsible for dispute settlement will not be
involved in Article 5 proceedings.
12 Article 8.7 of the DSU provides that the Director-General shall determine the composition of the
panel if requested by one of the parties.  As a general matter, this role would not seem to involve a substantive
conflict of interest and, in any event, is specifically contemplated by Articles 5.6 and 8.7 taken together.WT/DSB/25
Page 5
ATTACHMENT B
Procedures for Requesting Action Pursuant to Article 5 of the DSU
1. Any time after a request for consultations is made pursuant to Article 4 of the DSU, any party
to the dispute13 may submit a request to the Director-General14 for provision of good offices,
conciliation or mediation.15
2. Such request shall identify whether the request is for good offices, conciliation and/or
mediation.  It is recognized that the Director-G eneral's role may change during the process if the
parties agree.  Such a request shall include any proposed issues for such proceedings, which mayinclude any or all of the issues included in the request for consultations.
3. The Director-General shall meet with the parties within 5 days to discuss the issues raised.  If
all parties to the dispute agree, the Director-General shall proceed forward with an offer of good
offices, conciliation and/or mediation.  The Direct or-General shall arrange further meetings with the
parties as appropriate.
4. As soon as possible, the Director-General shall identify to the parties any Secretariat staff or,
after consultation with the parties, consultants that will assist him in carrying out the procedures.
5. The process shall be terminated upon the request of any party to the dispute, except in a
circumstance where there are two or more complainants and at least one complainant and the
respondent wish to continue in the process.  In such situations, the Director-General shall continue his
efforts with respect to the remaining parties.
6. A process which has been terminated may be re-started at any time by the request of the
parties.  The considerations of the previous para graph regarding multiple party situations shall apply
mutatis mutandis .
7. Ex parte  communications are permitted.  All communications made during the process shall
remain confidential and shall not be revealed at any time, including during any other procedures
undertaken pursuant to the DSU.
8. There shall be no third party participation in the process unless the parties to the dispute
mutually agree.
9. If a mutually agreed solution to a dispute is reached pursuant to an Article 5 process, the
notification to the DSB and relevant Councils and Committees pursuant to Article 3.6 shall so
indicate.
__________
                                                     
13 Article 1.1 of the DSU indicates that a "dispute" in this context arises upon initiation of consultations
pursuant to Article 4.
14 References to the Director-General may, upon concurrence of the parties, include a designated
Deputy Director-General.
15 Good offices shall consist primarily of providing physical support and Secretariat assistance to the
parties.  Conciliation shall consist of good offices plus  the further involvement of the Director-General in
promoting discussions and negotiations between the parties.  Mediation shall consist of conciliation plus the
possibility of the Director-General to propose solutions to the parties.