The World Trade Organization (WTO) was established with the primary function of ensuring the smooth and free flow of trade and services. At the heart of the WTO, is the Dispute Settlement System that ensures that disputes are resolved as soon as possible. This research aims at analyzing the role of the WTO and its Dispute Settlement body in settling trade disputes. This research specifically examines the WTO Dispute Settlement System; identities the objectives of the system and whether or not the system allows for the actualization of these objectives. The research also evaluates its performance and makes recommendations based on research findings.The essence of the research is how the system can be made more effective and accessible to developing and least developed member nations especially Africa. In undertaking this task, the research employs the doctrinal research method. Trade disputes in the WTO usually arisewhen a member state or states take a measure or measures that the WTO considers to be inconsistent with the obligations set out in the WTO agreements. Settling trade disputes in a timely and structured manner is important in order to realize the practical value of the commitments of the member states. The central objective of the WTO Dispute Settlement System is to provide quick and accessible dispute resolution to the multilateral trade system. In addition, the system is to preserve and clarify the rights and obligations of the members under the WTO Agreements, as well as ensure that disputes are settled promptly. In carrying out its mandate, the WTO Dispute Settlement System has decided several disputes among member nations of the WTO, covering diverse areas of the WTO agreements. In fact, the performance of the WTO Dispute Settlement System has been generally described as an ongoing institution that needs a lot of reforms. The Dispute Settlement System has many challenges, obstacles and problems, which make it impossible for it to achieve its set out goal perfectly. Thus, the objectives of the system have not been satisfactorily met due to implementation problems, inadequate funding, lack of transparency and access to the system, ad hoc nature of panels, as well as lacuna in the DSB. Considering the importance of the WTO’s role of settling trade disputes to the stability of the global economy, adequate attention ought to have given to the system. Accordingly, the DSB should be adequately funded that would meet the increased workload of the DSB. The lacuna in the DSU should be corrected and the system made more transparent and accessible to the public. Furthermore, the system aught adopt adequate panelist that can meet the increased complexity of the substance of cases presented before panels. The Research will explore how the DSB can better serve the interest of third world countries and Africa.

CHAPTER ONE: INTRODUCTION

CHAPTER ONE
INTRODUCTION

1.1       Background to the Study
International Trade has been of immense importance in the existence of the nations of the world and its economy because no nation is completely self-reliant or sufficient. Also, the needs and wants of people in all parts of the world are better served by exchanging goods and services.1 Trade increases the standard of living for all modern countries. For some, foreign market takes a third to a half of the total output and the standard of living depends crucially on the international division of labour that foreign trade permits.2 However, there are opinions to the effect that international trade has negative effects on the standard of living of the nations of the world and consequently, trade barriers are necessary to protect the earth‘s natural environment, reduce domestic unemployment and also prevent the exploitation of the world‘s impoverished workers.3
International trade has played and continues to play critical role in the ability of countries to grow, develop and be economically powerful throughout history. International transactions are becoming increasingly important in recent years as countries seek to obtain the more benefits that accompany increased exchange of goods, services and factors. It is worthy to note that little is known about the earliest trade. However, English flint used to make primitive tools, which was widely traded in Europe thousands of years before Christ, and so was the salt from the mines in Central Europe. Moreover, the Egyptians as far back as 3000 B.C. ranked far in Africa in search of gold, antimony and slaves. By 1700 B.C., the Cretans traded extensively by sea.4
Every sovereign nation is free to establish laws, taxes and regulations governing its foreign trade. Initially, these nations used certain policy instruments to protect their country and citizens that are players at the international market against certain consequences that might arise as a result of unrestricted trade practices and thereby interfere with free trade. Some of these instruments include: import tariffs, export taxes, and subsidies, import quotas, voluntary export restraint, government procurement provisions, domestic content provisions, trade related investment measures, etc.5 These measures to a great extent interfere with free trade.
However, in the 19th century, there was an important change in government6 policies towards trade, away from mercantile protectionism, all brands freer trade – fewer prohibitions and lower duties on foreign trade. Furthermore, after World War II, various circumstances combined to obstruct world trade. The nations found it convenient to agree to rules that limit their own freedom of action in trade matters, and generally to work towards removal of artificial and often arbitrary barriers to trade. Thus, in 1947, the major trading countries, initiated comprehensive multilateral negotiations in an effort to prevent a post war contraction of world trade similar to the tariff war of the 1930‘s.7 The negotiations resolved in the formation of the General Agreement on Tariff and Trade (GATT).
The agreement (GATT) incorporated a code of international trade rules, made provisions for multilateral trade negotiations, established a procedure for adjudicating trade grievances among member states and provided for the continuing review of actions by member countries. The implementation of GATT resulted in the reductions in tariffs, coupled with improvements in transportation and communication at the time, foreign trade for instance grew and by the dawn of 1970 and early 1980‘s the value of total world goods and trade reached an almost $300 billion a year and $56 billion to $60 billion for annual services.8
It should be noted that such increase indicated a greater international interdependence and a more complex international trade network encompassing not only final consumable goods but also capital good, intermediate goods, primary goods and also commercial services. Thus, not only did individual nations experience the economic benefits that accompany international trade but also realized that her economic prosperity depends on economic prosperity in the world as a whole. It is also a well-known fact that while increased interdependence has many inherent benefits, it also brings with it a greater adjustment requirements and greater needs for policy coordination among trading partners.
Consequent on the above, in September, 1986, new round of negotiation – the Uruguay Round began. Member states who participated in the round established groups to work on the different areas of the negotiation, including the four areas dealing with GATT itself (example – dispute settlement procedure and the complementation of the Non-Tariff Barriers Codes (NTB) of the Tokyo Round)9. The round recorded certain achievements, some of which included the adoption of new procedure for the settlement of disputes and the creation of the World Trade Organisation (WTO).
It is further important to note that since the Marrakesh Agreement of 1994 entered into force on 1st January, 1995, the World Trade Organisation now provides the principal forum for negotiations on multilateral trading relations among member states, and for the binding settlement of disputes arising under WTO agreements10. At the centre of the multilateral trading system are the WTO agreements which are the legal ground rules for international commerce. Essentially, they are contract guaranteeing member countries important trade rights. They also bind governments to keep their trade within agreed limits to everybody‘s benefits.
Also, member nations, upon convinced of the need to provide security and predictability to the multilateral trading system, preserves the rights and obligations of the member states under the agreements and to be able to clarify the rights and obligations of the member states through interpretation, created a dispute settlement system, which is continued in the understanding on Rules and Procedure governing the settlement of Disputes (DSU).
Generally, a policy of free trade will inevitably involve some conflict with international environmental agreement or an environmental protection requirement in national law, which has the effect of restricting trade in certain commodities. Although some environmentalists condemn free trade as bad generally for the environment,11 most focus their critique on specific issues, arguing that; the role of multilateral trading system may pose difficulties for the implementation of unilateral environmental agreements that use free trade restrictions to protect the environment.

1.2       Statement of the Problem
A greater percentage of the disputes arising in the World Trade Organisation are essentially about unkept promises. It arises often when one country adopts a trade policy measure or takes some actions that one or more members consider to be inconsistent with the obligations set out in the WTO agreement. Thus, a member-state believing that free trade has been undermined or blocked by another state or group of states can seek to have such barriers declared a violation of WTO principles and objectives.
The importance of the WTO‘s role of settling trade disputes to the multilateral trading system and consequently, to international trade relations generally, cannot be over-emphasized. Settlement of trade disputes is very important and a central pillar to the multilateral trading system for there to be stability of the global economy. There is no doubt that settling trade disputes in a timely and structured manner plays an important role in the economic life of every nation of the world. Consequently, it is expected that the WTO would provide a fast, efficient, dependable and rule oriented system to resolve trade related disputes.
In addition to the above, as a result of the importance of a prompt settlement of trade disputes to the stability of the global economy, the role of the WTO in resolving trade disputes must receive adequate attention if the goals of the WTO Dispute Settlement System are to be attained. The quick resolution of trade disputes by the WTO Dispute settlement Body would add credibility and predictability to the world trading system and prevent member countries from taking unilateral preemptive action. This therefore raises the question of the effectiveness and efficiency of the WTO‘s Dispute Settlement System. Despite the fact that the Dispute settlement System of the WTO is very important in providing security and predictability in international trade and consequently, to the promotion of the global economy, developing and least developed member states especially Africa despite her trade endeavor is bereft of activities before the WTO, Africa as a continent trades and will continue to trade. The DSB remains one of the most unexplored subjects among developing and undeveloped states of the World Trade Organisation.
Furthermore, the new dispute settlement system can only meet all the expectations if its provisions and its importance to the promotion of the global economy are fully understood by those who must use it. Thus, the choice of this work is therefore, imperative to further explore present developments in the WTO Dispute Settlement Body, particularly, the none active participation of third world and developing Countries especially Africa in the activities of the WTO. Obviously, this work will serve as a significant contribution to knowledge.

1.3        Aim and Objectives of the Research
The aim of this research is to analyze the Dispute Settlement Body of the World Trade Organisation in resolving trade dispute under International Law, with a view to offering recommendations for the effective and efficient resolving of trade disputes among member states.
The objective of this research includes;

1. To examine the Dispute Settlement System under WTO.
2. To evaluate WTO‘s performance in settling disputes.

1.4       Research Methodology
This study employs doctrinal research method. Doctrinal research method means theorizing without considering the practical consequences, it is a conceptual research. Accordingly, the primary source of data shall include the Marrakesh Agreement establishing the WTO, the WTO Agreements, especially the Dispute Settlement Understanding (DSU) and Reports of cases handled by the WTO.
Also, law text and materials on the WTO and its dispute settlement system, WTO‘s Annual Reports documentations and other publications, articles and journals (published and unpublished) and official reports in this area shall be the secondary sources of data.

1.5       Scope of the Research
The scope of this research covers the role of the WTO in resolving trade disputes under international law. However, for a better understanding of this role of the WTO, the aims and objectives of the WTO‘s Dispute Settlement System, the trade disputes within the jurisdiction of the WTO, as well as the procedures involved in settling dispute in the WTO shall be discussed. Furthermore, the activities of the WTO Dispute Settlement System as it relates to the settlement of violation and non-violation complaints under GATT 1994, Agreement on Subsidies and Countervailing Measures, Agreements on Agriculture and the Antidumping Agreement as well as compliance disputes under DSU between 1995 and 2007 shall be highlighted.

1.6       Literature Review
The WTO was established on the 1st January, 1995 when the Marrakesh Agreement of 1994 entered into force. The present Dispute Settlement System was created as part of WTO Agreement during the Uruguay Round. It is embodied in the understanding on Rules and Procedure governing the settlement of disputes commonly referred to as DSU.
They are books published by Oceana Publishing Company which are primarily a selective collection of the principal primary documents and summaries: GATT/WTO ?Marrakesh? Agreements, Understanding and Ministerial Decisions. These books provides an excellent access to primary WTO documents, the introduction and the commentary are, on the other hand, of little help.
However, in recent times, several notable authors have specifically dealt with the Dispute Settlement Body of the World Trade Organisation. Some of these authors include; Ernst-Ulrich Petersmann 12, Chengwi, Liu 13, Palmeter and Mavroidis 14. Changwei, Liu’s work is asystematically elected compilation of Reports issued by various panels and the standing Appellate Body, then adopted by the DSB under the WTO jurisdiction by the end of May, 2002, in category of subjects such as causes of action, initiation of panel proceedings, functions of panels, rates of evidence and special rules governing anti-dumping disputes, and so on which are in most cases ruled as preliminary issues, or procedural objections. However, the text is not exclusive, and dealt with only the issues in dispute settlement proceedings relating to Article XXIII of the GATT 1994, Articles 3, 4, 6, 7, 10, 11, 13, 21, 23 and 26 of the DSU; Articles 17.4, 17.5, 17.6, of the AD Agreements and Arts. 31, 32 of the Vienna Convention and so on. The book did not discuss the WTO system of settling disputes. This dissertation aims at analyzing the role of the Dispute Settlement Body of the WTO in settling trade disputes. It will also examine the Dispute Settlement System; identify the objectives of the system and whether or not the system allows for the actualization of these objectives.
The text by Ernst-Ulrich Petersmann on the other hand is primarily an academic and conceptual analysis. It traces the history of the much more political and diplomatic dispute settlement practice up to 1994 and presents the injection of much greater legal elements by the 1994 modernization of the panel/appeal method. The book also discusses some current issues of interest notably the relation of GATT/WTO law to conflicting multilateral trade agreements and the complex role of ?non-violation? complaints in GATT/WTO law. The book concludes with new challenges to the dispute settlement mechanism, in particular to trade in services, to intellectual property rights and restrictive business practices. The author, a committed anti-protectionist argues against the inter-state tendency in international trade law restricting trade law to diplomats and the favour of giving private companies judicial remedies. Helpful annexes include a list of panel reports, of disputes initiated already under the 1994 dispute settlement mechanism and relevant rules for dispute settlement and the WTO appellate body. However, the book dealt largely with the old GATT system, case law and policy questions. Consequently, this research will analyze the Dispute Settlement Body, its organs, agencies and further discuss the Dispute Settlement System.
Palmetre David and Petros C. Mavroidis‘15book which appears to be the most currentand detailed work on the Dispute Settlement Mechanism of the WTO, in its first chapter, provides a historical introduction, starting with the failed attempt to create an International Trade Organisation (ITO), moving on to negotiations of GATT and finally, to the WTO. The authors examined in detail the jurisdiction of the Dispute Settlement Body under the DSU. In chapter three, the sources of law relevant to the settlement of disputes are analysed, following the order established in Article 38 (1) of the Statute of the International Court of Justice. On this basis the authors go on to explain each stage of the panel process in one chapter. Chapter four thus examines the panel process itself and addresses the legal problems that have been raised, such as burden of proof and standard of review issues. Chapter five is devoted to special rules and procedures for developing countries and under each of the Multilateral and Plulateral Trade Agreements covered by the DSU. The appellate process is set out in chapter six, followed by a chapter on adoption and implementation of reports and another on remedies. Chapter nine of this text sums up some of the findings in a short conclusion.
Palmetre and Mavroid have achieved firstly, the complete and systematic introduction tothe WTO dispute settlement system. Although this is by no means the first book on the subject, earlier publications have dealt largely with the old GATT system, case law and policy questions or international dispute settlement in general. Palmetre and Mavroid focus exclusively on the new system, without discussing in depth academic questions and policy issues related to international dispute settlement and the way these questions were solved (or not solved) in the DSU. This lack of indepth discussions can be regarded as a shortcoming of the work. Issues like the appropriate standard of review in panel proceedings, which are the subject of dozens of articles in all relevant periodicals, are tested in two paragraphs without quoting any literature for further reading. The work is not very comprehensive and conclusive commentary on the law of the DSU. It falls short of adequately identifying and evaluating how effective the WTO dispute settlement system is.Thus, the choice of this study is to further explore present developments in the trade Dispute Settlement System of the WTO and find out how well the WTO has lived up to its mandate of settling trade dispute as well as make number of recommendations to strengthen the WTO Trade Dispute System.

1.7       Organisational layout
This work has been conveniently broken down into 6 (Six) chapters. Chapter one contains the general introduction on which the thesis is predicated. It deals with the preliminary issues that will ensure the understanding of the entire work. These among others include; the background to the study, statement of the research problem, aim and objectives of the research, scope of the research, literature review and organisational layout.
Chapter two covers international trade, international trade law, the establishment of World Trade Organisation, objectives, functions, scope and status of the WTO.
Chapter three discusses the legal framework for trade disputes, domestic legislation as an object of a dispute, possible objects of complaint to the WTO Dispute Settlement System.
Chapter four reveals the stages for settling dispute in the WTO Dispute Settlement System, it also focuses on the legal effects of Dispute Settlement Body‘s Recommendation/Ruling, and it reviews participation in the proceedings, legal issues arising therefrom and developing countries in the proceedings.
Chapter five discusses the dispute settlement body of the WTO, the scope and importance of the system, reviews applicable laws to legal interpretation of WTO Agreements within the system, WTO Agencies within the system is also highlighted. It concludes with a discussion on composition and functions of the WTO Dispute Settlement Body.
Chapter six is the last and the concluding chapter. It summarizes the entire discussion made in the work and brings out recommendation for reforms and improvement.