ACCA Applied Skills · Corporate and Business Law (Global) · International trade, international legal regulation and conflict of laws
Country X, a WTO member, suffers harm because Country Y, another member, imposes a tariff that X says breaches WTO rules. Consultations fail. Which statement best describes what happens next in WTO dispute settlement?
Country X may ask for a panel to examine the complaint, with appeal available on legal points. If Y does not comply with the adopted ruling, X may be authorised to retaliate. The process is between states, and the WTO does not impose fines.
- ACountry X may request a panel, whose report can be appealed on legal issues, and approved rulings may lead to authorised retaliation if Y does not complyCorrect
- BCountry X's exporters must sue Country Y's government directly in the courts of Country Y under WTO rules
- CThe WTO itself fines Country Y and collects the money for its own budget
Explanation
After failed consultations, a complaining member can request a panel, and the process allows for appeal on points of law. If the losing state does not comply, the complainant may be authorised to retaliate, for example by suspending concessions. Disputes are between states, and the WTO does not fine.
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