WORLD TRADE  
ORGANIZATION  TN/DS/W/82 
24 October 2005 
 
 (05-4891) 
Dispute Settlement Body 
Special Session Original:   English 
 
 
 
NEGOTIATIONS ON IMPROVEMENTS AND CLARIFICATIONS OF 
THE DISPUTE SETTLEMENT UNDERSTANDING 
 
Further Contribution of the United States on Improving Flexibility  
and Member Control in WTO Dispute Settlement  
 
Communication from the United States  
  
 The following communication, dated 21 October 2005, is being circulated at the request of 
the delegation of the United States.  
_______________ 
 
 
This further contribution of the United States is di vided into three parts:  Part I introduces this 
contribution; part II recalls textual proposals that  the United States is making in these negotiations; 
and part III sets out a suggestion for additi onal guidance for WTO adjudicative bodies. 
 I. I
NTRODUCTION  
 
In DSB discussions to date on the DSU, Members have  re-emphasized that the central objective of the 
dispute settlement system should be the prompt re solution of disputes between parties.  For that 
reason, Members have emphasized both the importan ce of ensuring that dispute settlement procedures 
facilitate resolution of a dispute and, as part of this  approach, the need for fl exibility in the system to 
allow parties to resolve disputes in a prompt manner.  Members have indicated that it is important to 
retain the flexibility that already exists in the system.  Members ha ve also identified that there are 
areas that could benefit from additional flexibility.  At the same time, while Members have acknowledge d the general effectiveness of the DSU, there 
have been concerns that some limitations in the cu rrent procedures may have resulted, in some cases, 
in an interpretative approach or legal reasoning a pplied by WTO adjudicative bodies (i.e., panels, the 
Appellate Body and arbitrators) that could have benefitted from additional Member review.  Members 
have not always, during proceedings or in the a doption process for reports, had a full opportunity to 
ensure that the findings of the adjudicative bodies will contribute to resolving the disputes.    
Under the WTO dispute settlement system, adop tion of panel and Appellate Body reports is 
quasi-automatic under the reverse consensus rule.  However, the reasoning and findings of reports 
may at times go beyond what the parties consider to be necessary to resolve the dispute, or, in some 
circumstances, may even be counte r-productive to resolution of the dispute.  It is proposed that there 
should be mechanisms that would enhance the parti es’ flexibility to resolve the dispute and Members’ 
control over the adoption process. 
 TN/DS/W/82 
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 Accordingly, panel and Appellate Body reasoning an d findings should not go beyond those aspects of 
the dispute that the complainant and respondent par ties consider necessary to resolve the dispute.   
Some Members have indicated that sensitive ar eas that could have benefitted from additional 
opportunity for Member discussion and review include, for example:  
(a) situations where the relevant WTO text does not address an issue, leading to concerns over 
whether an adjudicative body might "fill the gap" and consequently add to or diminish rights and obligations under the relevant agreemen t instead of clarifying those rights and 
obligations; 
 
– Gaps may reflect a situation where there was a limit upon what negotiators were able 
to agree.  Alternatively, gaps may re flect an absence of any consideration by 
negotiators of the particular detail at issue. 
 (b) situations in which legal concepts outside th e WTO texts have been a pplied in a WTO dispute 
settlement proceeding, including asserted principles of international law other than customary 
international law rules of interpretation. 
 Members may wish to consider ways they can provide additional guidance to adjudicative bodies, 
both in the context of the current negotiations and during individual disputes, including through procedures which strengthen Member control and flex ibility.  At the same time, Members may wish 
to consider whether the current DSU provides suffi cient assurance that the members of panels have 
the appropriate expertise to appreciate the issues presented.  In doing so, Members can also enhance their ability to resolve disputes at  any time in the process.   
 II. P
ROPOSED TEXTUAL LANGUAGE  
 
In these negotiations (see TN/DS/W/52) the United States proposes a number of textual amendments 
to provide additional flexibility and Member c ontrol in WTO dispute settlement.  These are: 
 
(a) making provision for interim reports at  the Appellate Body stage, thus allowing 
parties to comment to strengthen the final report.  
 Proposed text
: 
 Paragraph 5 of Article 17 is amended as follows: 
 
"5. (a) As a general rule, the proceedings shall not exceed 60
 90 days from the date a 
party to the dispute formally notifies its d ecision to appeal to the date the Appellate 
Body circulates its report.  In fixing its tim etable the Appellate Body shall take into 
account the provisions of paragraph 9 of Artic le 4, if relevant.  When the Appellate 
Body considers that it cannot provide its report within 60  90 days, it shall inform the 
DSB in writing of the reasons for the delay together with an estimate of the period 
within which it will submit its report.  In no case shall the proceedings exceed 90  120 
days.   
   (b) Following the consideration of submissions and oral arguments, the 
Appellate Body shall issue an interim re port to the parties, including both the 
descriptive sections and the Appellate Body 's findings and conclusions.  Within a 
period of time set by the Appellate Body, a party may submit a written request for the 
Appellate Body to review precise aspects of the interim report prior to circulation of 
the final report to the Members.  At the request of a party, the Appellate Body shall 
hold a further meeting with the parti es on the issues identified in the written   TN/DS/W/82 
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 comments.  If no comments are received from any party within the comment period, 
the interim report shall be considered the fi nal report and circulated promptly to the 
Members.  The final Appellate Body report shall include a discussion of the 
arguments made at the interim review stage."1 
 
[NOTE: to ensure that the overall time frame for th e dispute settlement process remains the same, 30 
days could be reallocated to the Appellate B ody’s review from other phases of the process, for 
example by providing that a panel will be established at the first DSB meeting at which the request is 
considered.]  
(b) providing a mechanism for parties, after review  of the interim report, to delete by mutual 
agreement findings in the report that are not necessary or helpful to resolving the dispute, 
thus continuing to allow the parties to retain control over the terms of reference 
 
Proposed text
: 
 Paragraph 7 of Article 12 is amended by inserting after the second sentence the following new 
sentence: 
 
"The panel shall not include in the final panel report any finding, or basic rationale behind a 
finding, that the parties have agreed is not to be included."    
 Paragraph 13 of Article 17 is amended to read as follows: 
 
"Where the parties to the dispute have failed to  develop a mutually satisfactory solution, the 
Appellate Body shall submit its findings in the fo rm of a written report to the DSB.  In such 
cases, the report of the Appellate Body shall set out the applicability of relevant provisions 
and the basic rationale behind any findi ngs and recommendations that it makes.2  T h e  
Appellate Body may uphold, modify or rever se the legal findings and conclusions of the 
panel.  The Appellate Body shall not include in the final report any finding, or basic rationale 
behind a finding, that the parties have agreed is not to be included. "   
 
(c) making provision for some form of "par tial adoption" procedure, where the DSB would 
decline to adopt certain parts of reports wh ile still allowing the parties to secure the DSB 
recommendations and rulings necessary  to help resolve the dispute 
 
Paragraph 4 of Article 16 is amended to read as follows: 
 
"4. Within 60 days after the date of circulation of a panel report to the Members, the 
report shall be adopted at a DSB meeting3 unless a party to the dispute formally notifies the 
DSB of its decision to appeal or the DSB deci des by consensus not to  adopt the report.  
However, the DSB may by consensus decide not to adopt a finding in the report or the basic 
rationale behind a finding .  If a party has notified its decision to appeal, the report by the 
panel shall not be considered for adoption by the DSB until after completion of the appeal.  
This adoption procedure is without prejudice to the right of Members to express their views 
on a panel report." 
 
                                                      
1 [NOTE TO READERS:  this proposed language re plicates the language in DSU Article 15.2.] 
2 [NOTE TO READERS:  the proposed new sentences replicate the language in the first two sentences 
of DSU Article 12.7.] 
3 [No change proposed to footnote in current DSU.] TN/DS/W/82 
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 Paragraph 14 of Article 17 is amended as follows: 
 
"14. An Appellate Body report shall be adopted by the DSB and unconditionally accepted 
by the parties to the dispute unless the DSB deci des by consensus not to adopt the Appellate 
Body report within 30 days following its circulation to the Members.
4  However, the DSB 
may by consensus decide not to adopt a finding in the report or the basic rationale behind a 
finding.  A party to the dispute does not need to  accept any finding or basic rationale that the 
DSB has not adopted.   This adoption procedure is without prejudice to the right of Members 
to express their views on an Appellate Body report." 
 
DSB decision on the procedure for partial adoption: 
 
"A Member proposing that a finding, or basic rationale behind a finding, in a panel or Appellate Body report should not be adopted by  the Dispute Settlement Body shall submit the 
proposal in writing to the Dispute Settlement Body no later than 3 days (or the WTO working 
day following the 3
rd day if the 3rd day is a non-working day for the WTO) after the issuance 
of the airgram convening the meeting at which the report is proposed to be considered.5  The 
Member shall specify in the proposal the finding , or the basic rationale, behind a finding at 
issue and give a brief description of the reason not to adopt." 
 
(d) providing the parties a right, by mutual ag reement, to suspend panel and Appellate Body 
procedures to allow time to conti nue to work on resolving the dispute 
 
Paragraph 12 of Article 12 is amended as follows: 
 
"12. The panel may suspend its work at any time at the request of the complaining party 
for a period not to exceed 12 months.  The panel shall suspend its work where the parties so 
agree.  In the event of such a suspen sion, the time-frames set out in paragraphs 8 and 9 of this 
Article,  paragraph 1 of6Article 20, and paragraph 4 of Ar ticle 21 shall be extended by the 
amount of time that the work was suspended.  If the work of the panel has been suspended for 
more than 12 months, the authority for es tablishment of the panel shall lapse." 
 
In addition to the amendment under item (a) above, pa ragraph 5 of Article 17 is  amended by adding at 
the end:  
"(c) The Appellate Body shall suspend its work where the parties so agr ee.  In the event of 
such a suspension, the time -frames set out in this paragraph, Article 20, and 
paragraph 4 of Article 21 sha ll be extended by the amount of time that the work was 
suspended." 
 
                                                     
 
4 [No change proposed to footnote in current DSU.] 
5 In the case of a panel report, the Member shall subm it the proposal no later than 3 days (or the WTO 
working day following the 3rd day if the 3rd day is a non-working day for the WTO) after the issuance of the 
airgram convening either: (1) the meeting at which the panel report is proposed to be considered if no party has 
filed a notice of appeal; or (2) the meeting at which the panel report together with the Appellate Body report is 
proposed to be considered if a party has filed a notice of appeal. 
6 [NOTE TO READERS:  proposed deletion of "paragraph 1 of" is to correct an error in the current 
DSU since Article 20 only has one paragraph.]  TN/DS/W/82 
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 (e) ensuring that the members of panels have appropriate expertise to appreciate the issues 
presented in a dispute 
 
Paragraph 2 of Article 8 is amended as follows: 
 
"2. Panel members should be selected with a view to ensuring the independence of the 
members, expertise to examine the matter at issue in the dispute, a sufficiently diverse 
background and a wide spectrum of experience." 
 
(f) providing some form of additional guidance to WTO adjudicative bodies concerning i) the 
nature and scope of the task presented to them (for example when the exercise of judicial 
economy is most useful) and ii) rules of  interpretation of the WTO agreements. 
 
[To be supplied after further discussions with Members.] 
 
Members have been engaged in the further discu ssions envisioned in item (f) of the proposal. Based 
on those discussions, it is proposed to provide additional guidance to WTO adjudicative bodies in some areas.  In this further contribution, the following draft parameters are proposed.  III. D
RAFT PARAMETERS CONCERNING THE USE OF PUBLIC INTERNATIONAL LAW IN WTO  
DISPUTE SETTLEMENT  
 
In light of the questions posed in TN/DS/W/74 and the useful and enlightening discussion with other Members to date, it is suggested that the followi ng parameters reflect the proper role of public 
international law in WTO dispute settlement:  Areas in which public international la w plays a role in WTO dispute settlement
 
 
Members recognize that public international law play s an important role in WTO dispute settlement.  
In particular, there are three important means th rough which public international law plays a role. 
 First, the Marrakesh Agreement Establishing  the World Trade Organization  is itself public 
international law.   
 Second, in Article 3.2 of the Understanding on Rules and Procedures Governing the Settlement of 
Disputes   ("DSU") Members recognize with respect to the covered agreements that the WTO dispute 
settlement system serves "to clarify the existing pr ovisions of those agreem ents in accordance with 
customary rules of interpretation of public intern ational law."  The WTO Appellate Body recognized 
that this description in Article 3.2 of the role of the WTO dispute settlement system "reflects a 
measure of recognition that the Gene ral Agreement is not to be read in clinical isolation from public 
international law."
7 
 Those customary rules of interpretation of public in ternational law are reflected in Articles 31 through 
33 of the Vienna Convention on the Law of Treati es, including as stated in Article 31(3)(c) any 
relevant rules of international law (i.e., rules rele vant to treaty interpretation) applicable in the 
relations between the parties.   (c) It is useful to note that in the commentar y of the International Law Commission concerning 
Articles 31 and 32 of the Vienna Convention, th e Commission observed that it is not possible 
to identify principles of international law that apply in all instances.  Rather, this must be 
examined on a case-by-case basis.  The Commission stated: 
                                                     
 
7 United States - Standards for Conventional and Reformulated Gasoline  (WT/DS2/AB/R), page 17. TN/DS/W/82 
Page 6  
 
  
"Most cases submitted to international adj udication involve the interpretation of 
treaties, and the jurisprudence of interna tional tribunals is rich in reference to 
principles and maxims of interpretation.  In fact, statements can be found in the 
decisions of international tribunals to s upport the use of almost every principle or 
maxim of which use is made in national systems of law in the interpretation of 
statutes and contracts....  Thus it would be possible to find sufficient evidence of recourse to principles and maxims  in international practice to justify their inclusion in 
a codification of the law of treaties, if the question were simply one of their relevance 
on the international plane.  But the question raised by jurists is rather as to the 
non-obligatory character of many of these principles and maxims.  They are, for the 
most part, principles of logic and good sense valuable only as guides to assist in 
appreciating the meaning which the parti es may have intended to attach to the 
expressions that they employed in a documen t.  Their suitability for use in any given 
case hinges on a variety of considerations which have first to be appreciated by the 
interpreter of the document; the particular  arrangement of the words and sentences, 
their relation to each other and to other part s of the document, the general nature and 
subject-matter of the document, the circumstances in which it was drawn up, etc.  Even when a possible occasion for their a pplication may appear to exist, their 
application is not automatic but depends on th e conviction of the interpreter that it is 
appropriate in the particular circumstances of  the case.  In other words, recourse to 
many of these principles is discretionary ra ther than obligatory and the interpretation 
of documents is to some extent an art, not an exact science. "
8 
 
(d) It is also important to identify the sour ces from which the rules relevant to treaty 
interpretation are obtained.  An international inst rument that is not in force embodies relevant 
international rules only to the extent that it refl ects principles of customary international law.  
An international instrument that is in force,  in addition to possibly reflecting principles of 
customary international law, may also embody relevant international rules as between the 
parties to that instrument, but not to non-parties. 
 Third, the covered agreements include numerous refe rences to other public international law.  Some 
examples include Article XV:4 of the General Agreement on Tariffs and Trade 1994  (referring to the 
Articles of Agreement of the Internationa l Monetary Fund) and Article 2 of the Agreement on 
Trade-Related Aspects of Intellectual Property Rights  (referring to the Paris Convention, Berne 
Convention, Rome Convention and Treaty on Intellectua l Property in Respect of Integrated Circuits). 
 
Limitations on the use of public int ernational law in WTO dispute settlement
 
 
Recognizing that international dispute settlement fora  vary regarding the breadth of their adjudicatory 
authority, WTO dispute settlement under the DSU is focused on the adjudication of rights and obligations under specified agreements.  These "cove red agreements" are listed in Appendix 1 of the 
DSU.   While other international law might properly  play a role in WTO dispute settlement fora, it is 
not the function of WTO dispute settlement to adj udicate rights and obligations beyond those in the 
covered agreements. 
 
Consideration of procedural approaches of other adjudicative bodies
 
 
In addition, Members recognize that each WTO adj udicative body is tasked with managing its own 
proceedings, including developing its own working pr ocedures.  It is natural that in managing its 
                                                      
8 Report of the International Law Commission on its eighteenth session, 4 May to 19 July 1966 
(A/6309/Rev.1).  Articles 31 and 32 were at that time Articles 27 and 28.  TN/DS/W/82 
 Page 7 
 
 
 proceedings, a body may wish to consider how ot her adjudicative bodies have approached similar 
procedural issues, including other international ad judicative bodies as well as those in an individual 
Member.  Ultimately, however, such consideration is  a question of the body exercising its discretion 
as to how to manage its proceedings; such consider ation is not a question of  interpreting a covered 
agreement in accordance with public international law. 
 
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