Disputes under the WTO are basically about broken promises which were earlier promised to be performed. WTO members have mutually agreed that if they believe that fellow-members are violating trade rules, in such a case they will use the multilateral system of settling disputes instead of taking action unilaterally. Which simply means abiding by the agreed procedures, and respecting judgements and precedents.
A dispute arises between the countries when one country adopts a trade policy measure or takes some action that one or more fellow WTO members opined to be breaking the WTO agreements or to be a failure to the mentioned obligations. And further, the third group of countries can declare that they have an interest in the case and may enjoy some rights.
The procedure for settling disputes existed under the earlier GATT Agreement, but it had no fixed procedures, rulings were easier to be blocked, and many cases were pending for a long time inconclusively. The Uruguay Round agreement introduced a more structured procedure which clearly defined stages in the procedure. It introduced wider discipline for the length of time a case in dispute should take to be settled, with flexible deadlines fixed in numerous stages of the proceedings. The agreement focuses that prompt settlement is necessarily required if the WTO has to function effectively. It laid down considerable detail regarding the procedures and the fixtures to be followed for resolving disputes. If a case in dispute runs its full course to a first ruling, normally it shouldn’t take more than about one year maximum 15 months if the case is appealed. The agreed time limits were flexible, and if the case is considered to be urgent (for example, if perishable goods are involved), it is accelerated as much as possible.
The Uruguay Round agreement also provided that it is impossible for the country losing a case to block the adoption of the ruling. Under the previous GATT Agreement procedure, rulings could only be adopted by consensus, such as that only a single objection could block the ruling. But now, rulings are automatically adopted unless there is any consensus to reject a ruling if any country wanting to block a ruling has to induce all other WTO members to share their opinions.
As much of the procedure does resemble as of a court or tribunal, the best solution for the countries concerned to dispute is to discuss their problems themselves and try to settle the dispute by themselves. The very first stage is that of consultations between the governments concerned, and even after when the case has progressed to other stages, consultation and mediation options are still always present for the concerned parties.
