Special session of the Dispute settlement body

Report by the Chairman, Ambassador Ronald Saborío Soto

1.1.  This report is presented under my own responsibility and reflects my understanding and assessment of the current state-of-play and possible way forward in the negotiations.

1.2.  As reflected in my report of August 2015^[1], the work in the DSU negotiations has advanced significantly over the past two years. Over this period, building on earlier work^[2], participants engaged in an in-depth consideration of all areas under negotiation at the conceptual level, with the goal of building convergence around approaches that would have the broadest possible base of support.^[3]

1.3.  This "horizontal process" led to the presentation of potential elements of solutions in respect of all areas under negotiation. In areas where competing approaches previously existed, the main focus has been on seeking convergence around a single approach. In other areas, participants sought to explore flexibilities on the means to address each other's needs, and to develop on that basis elements of solutions that could command greater convergence. In this phase of the work, the focus on concepts and a horizontal perspective allowed flexibilities to be tested across, and not just within, each area under discussion, making it easier to identify potential linkages and start exploring overall balances.

1.4.  As a result of this work, in combination with earlier text-based work, convergence of principle has been achieved in certain areas and is already reflected in mature draft legal text. In a number of other areas, significant progress has been made in clarifying the elements that could form the basis of further text-based work. In some areas, further work at the conceptual level would be needed to clarify the basis on which convergence might be found.^[4] 

1.5.  In light of this state-of-play, recent discussions addressed the possibility of reaching agreement on a limited number of mature areas to capitalize on the progress made to date, without prejudice to continuing to seek further progress in areas where full convergence is not yet apparent. While participants were supportive of the goal of achieving agreement where possible - and implementing resulting  improvements - as early as possible, concerns remained that any agreed outcomes should reflect a suitable balance of interests and should not prejudice the opportunity for an ambitious outcome in line with the effort that has been invested in this negotiation over the years. A number of participants therefore saw merit in continuing to seek agreement on a set of outcomes as meaningful and ambitious as possible.

1.6.   Although it has therefore not been possible to reach agreement on specific outcomes in time for the Nairobi Ministerial Conference, participants remain strongly committed to continuing to work towards agreement on improvements and clarifications of the DSU, as mandated by Ministers.^[5] Participants recognize the systemic importance of this negotiation, the value of the work accomplished to date, and its potential to lead to practical and meaningful outcomes for the benefit of all Members.

1.7.  As dispute settlement activity increases^[6], the urgency and relevance of this work is ever more evident.  The intensity of dispute settlement activity is a testament to Members' trust and reliance in the system. However, as reflected in recent discussions in the DSB and in the Director-General's recent statement to the DSB, it has also given rise to new challenges that require Members' attention.^[7] This negotiation and the work conducted to date in this framework provide an important avenue for Members to address such challenges and improve the overall efficiency and effectiveness of the dispute settlement system, in the shared interests of the entire Membership.  

1.8.  There should be flexibility and pragmatism going forward as to how this might be accomplished.  It has been suggested for example that certain solutions could be pursued by adopting guidelines, testing the application of certain practices and improvements or developing certain approaches on a flexible basis. Incremental improvements in certain areas may also present a path to finding solutions that take into account the concerns expressed by all participants and an opportunity to build on existing experience.

1.9.  Over the years, including the many years of this negotiation, use of the system has evolved in ways that have generated new approaches to meet new realities. Some of the proposals under consideration would in effect confirm or consolidate some of these approaches.^[8] Others would provide durable solutions to procedural issues that have not been resolved, or have been only partially resolved, through the use of the system to date.^[9] In some other areas, solutions developed through specific disputes may not reflect an agreed position of the entire Membership.^[10]

1.10.  Finding more permanent multilateral solutions to such issues – including where relevant by recording or confirming existing practice – could contribute to a more efficient use of resources for all actors involved in WTO dispute settlement. This would also have the benefit of greater inclusiveness for Members who are not frequent users of the system and who have different constraints in benefitting from practices developed on an ad hoc basis.

1.11.  An incremental approach may also enable Members to find the right balance in addressing long-standing areas of uncertainty while adapting to the continuing evolution of the system. Reflecting on avenues for incremental progress should, however, not come at the expense of the opportunity to make meaningful and ambitious improvements as necessary, or of the need to address the needs of all participants.

1.12.  It is the responsibility of Members to determine how to address current and future challenges of WTO dispute settlement, while capitalizing on its proven strengths. WTO dispute settlement is an important systemic element of the multilateral trading system, and all Members
are the stakeholders of this process. As such, they will be the beneficiaries of its results. It is therefore important, and all the more timely in light of present challenges, that Members continue to devote the effort necessary to bring about improvements and clarifications to the DSU, as mandated by Ministers.^[11]

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