From "See You in Court!" to "See You in Geneva!": An Empirical Study of the Role of Social Norms in International Trade Dispute Resolution

When the World Trade Organization (WTO) replaced the General Agreement on Tariffs and Trade (GATT) in 1995, it also created an innovative dispute resolution mechanism. In contrast to the old consensusbased institution under the GATT, the WTO dispute settlement mechanism (DSM) aims at providing a mandatory legal framework under which countries resolve their trade quarrels according to the law. Under this framework, the power of adjudication belongs to the Dispute Settlement Body (DSB) that consists of all WTO members. The DSB, however, delegates its power to Panels and the Appellate Body.

The DSB has the formal authority to nullify a finding or a judgment made by a Panel or the Appellate Body. However, since such nullification requires unanimity, the Appellate Body basically has the final say in adjudicating trade disputes.