The development of special arrangements to deal with disputes involving international trade began in the middle of the last century and has now produced one of the most effective, as well as one of the most important, systems of international dispute settlement. Thus, in contrast to law of the sea disputes, which we have seen are subject to a system which came into force in 1994, trade disputes can be dealt with through arrangements which have been progressively refined, based on regional as well as general agreements. Since limitations of space preclude examining this complex network in detail, this chapter focuses on the central element and outlines the dispute settlement system of the World Trade Organization (WTO).

From GATT (1947) to the World Trade Organization

As the Second World War drew to a close, governments were forced to consider the shape of the post-war world. First among their considerations was the issue of international peace and security which led to the creation of the United Nations Organization. However, not far behind, came financial and economic issues, including international trade, which also had institutional implications. The 1930s had been an anarchic period in every sense and to avoid repeating the experience the leaders of the post-war era resolved to establish arrangements which would reflect the realities of economic interdependence. The institutions created in this period, which include the International Monetary Fund, the World Bank and the General Agreement on Tariffs and Trade (GATT), have provided the framework for international economic relations ever since, supplemented, of course, by numerous subsequent instruments and organisations, including regional arrangements, set up for particular purposes.