(art. XXIII, para. 2)

1. Any dispute that has not been resolved bilaterally in accordance with the applicable provisions of the General Agreement may be brought before the Contracting Parties ¹ Which are held, in accordance with paragraph (a). 2 of the art. XXIII to conduct an inquiry into the matters before them and, as the case may be, to make appropriate recommendations or to rule on the matter. The s. 2 of the art. XXIII does not specify whether disputes should be dealt with by a working group or a panel. ²

2. The Contracting Parties Adopted, in 1966, a decision establishing the procedure to be followed in consultations under Art. XXIII between developed contracting parties and underdeveloped contracting parties (IBDD, Suppl. N ^O 14, page 19). This procedure provides, inter alia, for the Director-General to prepare his good offices with a view to facilitating a solution, for the establishment of a special panel to examine the problem with a view to recommending appropriate solutions, and Time limits for the completion of the various parts of this procedure.

3. The function of panels is normally to examine the facts of the case and the applicability of the provisions of the General Agreement, and to arrive at an objective assessment of those elements. In this respect, they have had regular consultations with the parties to the dispute and have given them adequate opportunities to develop a mutually satisfactory solution. The special groups have taken appropriate account of the particular interests of developing countries. Where the parties have not reached a mutually satisfactory settlement, the panels have, as a general rule, assisted the Contracting Parties To make recommendations or to act in accordance with the provisions of s. 2 of the art. XXIII.

4. Before entering Contracting Parties, The Contracting Parties have exercised their judgment as to whether an action taken in accordance with the provisions of par. 2 of the art. XXIII would be fruitful. The cases brought before the Contracting Parties In accordance with these provisions have, with few exceptions, been satisfactorily resolved. The aim of the Contracting Parties has always been to arrive at a positive solution to the disputes. A mutually acceptable solution for the parties is clearly preferable. In the absence of an agreed solution between the parties, the Contracting Parties Generally have the primary objective of obtaining the removal of the measures concerned, if it is found that they are incompatible with the General Agreement. The granting of compensation should only be resorted to if the immediate lifting of the measure in question was impossible in practice and, on a temporary basis, pending the lifting of measures incompatible with the General Agreement. The last resort is s. XXIII opens the possibility of suspending the application of concessions or the performance of other obligations on a discriminatory basis in respect of the other Contracting Party, provided that the Contracting Parties Allow it. Such measures have rarely been considered and, among cases heard in accordance with s. 2 of the art. XXIII, only one gave rise to it.

5. In practice, the Contracting Parties did not invoke the provisions of Art. XXIII, if, in their opinion, a benefit accruing to them from the General Agreement was cancelled or compromised. In cases where there is an infringement of the obligations undertaken in accordance with the General Agreement, the measure in question is presumed to nulliate or compromise an advantage. Any presumption that an advantage has been cancelled or compromised would require Ipso facto, The examination of whether the circumstances are sufficiently serious to justify the authorisation to suspend concessions or obligations, if the Contracting Party which introduces the application requests it. In other words, there is normally a presumption that an infringement of the rules has an adverse effect on other contracting parties, and it is then up to the other contracting parties to refute the accusation. L' al. (b) from s. 1 makes it possible to use the provisions of Article XXIII if the fact that an advantage is cancelled or compromised results from measures taken by other Contracting Parties, even if those measures do not contravene the provisions of the General Agreement; para. (c) also permits if there is another situation. If a Contracting Party which brings an instance under Art. XXIII, argued that measures that do not contravene the provisions of the General Agreement have nullied or compromised the benefits resulting from the General Agreement, and would be called upon to provide a detailed justification.

6. With regard to the usual elements of the working group and ad hoc group procedures, it should be noted that:

(i)

Working groups shall be established by the Council at the request of one or more Contracting Parties. They generally have a mandate to "examine the matter in the light of the provisions of the General Agreement applicable in this case and to submit a report to the Council". They establish their own working methods. Their practice is to hold one or two meetings to discuss the matter, and then a final meeting to discuss their findings. They shall be open to the participation of any Contracting Party interested in the case. In general, they consist of approximately five to twenty delegations, depending on the importance of the issue and the interests at stake. The countries party to the dispute are still members of the Working Group and have the same status as other delegations. The report of the Working Group outlines the

Views of all its members and, therefore, reproduced, if necessary, the dissenting opinions. As the trend is to seek consensus, the drafting of the report of the Working Group generally makes room for negotiation and compromise. The Council adopted the report. The reports of the working groups constitute advisory opinions on the basis of which the Contracting Parties May make a final decision.

(ii)

In the event of disputes, Contracting Parties Created special groups (under various names) or working groups to assist them in the examination of the issues before them under subs. 2 of the art. XXIII. Since 1952, panels have become the standard procedure. However, the Council has taken such decisions only after leaving the possibility for the party concerned to consider the appeal and prepare the reply which it would present to the Council. The terms of reference of the groups are discussed and approved by the Council. Normally, the groups have a mandate to " examine the issue and make the findings specific to the Contracting Parties To make recommendations or to rule on the matter as provided for in s. 2 of the art. XXIII ". Where a Contracting Party which has availed itself of the provisions of s. 2 of the art. XXIII, raised questions concerning the suspension of concessions or other obligations, the groups were mandated to consider the matter in accordance with the provisions of s. 2 of the art. XXIII. Members of panels are usually selected in permanent delegations or, less frequently, in the national capitals of capitals, among the delegates who regularly participate in GATT activities. The practice is to appoint a member or members who are nationals of developing countries in the case of a dispute between a developing country and a developed country.

(iii)

Panel members are expected to act impartially and without instructions from their governments. In a small number of. Due to the nature and complexity of the issue, the parties concerned have agreed to appoint non-governmental experts. The designations are proposed to the parties concerned by the GATT secretariat. The composition (three or five members, depending on the species) is approved by the parties concerned and approved by the Council of Representatives. It is recognized that a wide variety of opinions have proved useful in difficult cases, but that the number of members has sometimes delayed the establishment of panels and, therefore, the dispute settlement process.

(iv)

The panels establish their own working methods. In practice, they hold two or three formal meetings with the parties concerned. They invite the parties to present their views in writing and/or to present them in a meeting. They may put questions to both parties on any matter they consider relevant to the dispute. Special groups also had the views of the Contracting Parties having a substantial interest in the case and who were not directly parties to the dispute but had done so. Know to the Council that they wished to present their views. Written submissions to panels are treated as confidential, but are made available to the parties to the dispute. It is common for panels to consult the sources they consider appropriate and ask for information; they sometimes consult with experts to obtain their technical advice on certain aspects of the issue. Special groups may seek advice or assistance from the secretariat, in its capacity as guardian of the General Agreement, in particular on points of history or procedure. The secretariat provides secretariat services and the technical service of panels.

(v)

Where the parties fail to reach a mutually satisfactory solution, the panel shall present its findings in writing. The reports of panels, normally, set out their findings of fact, the applicability of the provisions in this regard, and the fundamental rationales for the findings and recommendations they have established. When a bilateral settlement has been reached, the panel in its report confines itself to a brief description of the case and the finding that a solution has been found.

(vi)

Panel reports are written in the absence of the parties, in the light of the information collected and the statements made.

(vii)

In order to encourage the development, between the parties, of mutually satisfactory solutions and to obtain their observations, each panel, normally, shall first submit to the parties concerned the descriptive part of its report, as well as its Conclusions, or a summary of its findings, with a reasonable period of time before they are communicated to the Contra Parties C Aunt.

(viii)

In accordance with their mandates Contracting Parties, The panels decide whether the measure under review contravenes certain rules of the General Agreement. When the Parties co N Tractants They request, they also make draft recommendations to the parties. In other cases, they were asked to give technical advice on a specific aspect of the issue (for example, on the modalities of withdrawal or suspension, having regard to the volume of trade involved). The opinions expressed by the members of the panels are anonymous, and the deliberations of the groups are secret.

(ix)

The Contracting Parties Have never set specific time limits for the different stages of the procedure, probably because the issues submitted to panels differ as to their complexity and urgency, but in most cases the work of the groups Have been completed within a reasonable period of time ranging from three to nine months.

The decision adopted by the Contracting Parties In 1966, mentioned in para. 2 above, at its disposal, at para. 7, that the panel must submit its report within 60 days of the date on which the matter was submitted to the panel.