Dispute settlement under free trade agreements: an alternative to the mechanism of the World Trade Organization?

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In January 2019, the European Union initiated a procedure of settlement of an inter-state trade dispute within the framework of a bilateral agreement between the European Union and Ukraine – the Deep and Comprehensive Free Trade Agreement (DCFTA). This is one of the few examples of recourse to a dispute settlement mechanism provided by a free trade agreement: most international trade disputes between the parties to such agreements, upon the initiative of the claimant, are resolved within the WTO, despite the fact that the mechanisms of free trade agreements provide for shorter procedural terms than the WTO system and contain a number of other provisions that aim at optimizing dispute resolution mechanisms.  The article analyzes the examples of the disputes, which were resolved within the framework of the regional mechanisms, and attemts to explain why the parties to these disputes made recourse to the dispute settlement mechanisms contained in these agreements. Special attention is paid to the practice of the European Union, which has begun to use the free trade agreement dispute settlement mechanisms, which might become an effcient alternative to the WTO dispute settlement mechanism. The article also touches upon the question of how the current situation around the WTO Appellate Body, which threatens the further existence of the WTO dispute settlement mechanism in its current form, influences the practice of the states. In the concluding part, the problem of the parallel proceedings in different systems of dispute settlement is analyzed, conclusions are drawn and recommendations are made on the possibility of avoiding the parallel procedures in different dispute settlement systems, inter alia, by consistently including provisions on the exclusiveness of the selected forum into the free trade agreements.

About the author: Marina Trunk-Fedorova – Candidate of Sciences (Ph.D.) in Law, Associate Professor, Saint Petersburg State University; Associate Professor, Ural State Law University, Ekaterinburg, Russia.

Citation: Trunk-Fedorova M. (2019) Razreshenie sporov v ramkakh soglasheniy o svobodnoy torgovle: al'ternativa mekhanizmu Vsemirnoy torgovoy organizatsii? [Dispute settlement under free trade agreements: an alternative to the mechanism of the World Trade Organization?]. Mezhdunarodnoe pravosudie, vol.9, no.3, pp.102–113. (In Russian).

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