Dispute settlement process:

Enforcement  of the rules in the WTO is  through  the dispute settlement process contained  in  the Dispute Settlement Understanding (DSU). The cause of action normally arises when a country perceives that any benefit accruing to it under an agreement is being nullified or impaired by an action of  another country  or  by  its failure to carry out  its obligation under  the WTO.  The settlement  of  disputes  is  handled by  a WTO body,  called the Dispute Settlement Body (DSB). All countries of the WTO are members of the DSB.

Once the process starts, it moves efficiently. There are fixed time  limits for various steps.

The very first step is  to give notice to the other country and seek consultation with it. The objective is to find solution to the problem without entering into formal dispute  process.  If  no agreement is arrived at within 60 days, the country moves the Dispute Settlement Body @SB)  to  form a panel  for the settlement of dispute. The DSB must decide on it immediately;  it cannot delay the formation of the panel beyond two meetings.

The panel is normally composed of  three independent experts. It considers'the case of both sides and gives  its  report within 6 months. If a party decides  to go in appeal against the report, a bench of three of the standing Appellate Body(AB) considers the report of the panel and gives its own report within 60 days. 

The  report of  the paneVAT3 is considered  by the DSB. The report is adopted by the DSB unless there is consensus  that it should not be adopted. This  "negative consensus" provision assures  its acceptance, as  it  is not likely that there will be a consensus not to adopt it. At least one country, the one in whose favour the report goes, is bound to oppose rejection of the report, hence  there cannot be a consensus not to adopt the report.If  the  report  of  the panelIAB has  found the complaint substantiated, it generally  recbmmends  that  the  defendant country should take corrective action. That  country  then gives  its time frame for implementation of the recommendation  of  the panel/AB. This gets discussed between  the two parties. In case of disagreement on the time frame, there is a provision for arbitration within 90 days. Generally the arbitrator has the guideline in the DSU  that a reasonable time for full implementation  should not exceed 15 months.

In case the defendant country does not implement the recommendation of the paneVAB or if the implementation is found to be deficient, the complainant country  is allowed  to  take retaliatory  measures against  it. Usually the retaliatory measure is in the form of increased tariffs on some products from that country.