SPS Agreement Principles

Dispute Settlement

At the WTO, a Dispute Settlement Body (DSB) was established to administer the dispute settlement system. Dispute settlement procedures begin with bilateral consultations. If these discussions fail to resolve the issue, a complaining party may request formation of a panel.

Panels -- consisting of individuals agreed upon by the parties and drawn from an established list of recognized experts in the field and international law professionals -- may seek recommendations and advice from the relevant international standard setting organizations (i.e., OIE, Codex, IPPC, or their regional subsidiary organizations), individual experts, or appoint a board of experts to evaluate the technical aspects of a given issue.

A key question panels will ask when reviewing a phytosanitary measure which may be subject to dispute is whether that measure is based on a relevant international standard. If not, the next test is whether the measure was based on a risk assessment. Recent panel reviews, such as the one formed to evaluate the U.S.-EU hormone dispute, highlight the important role international standards and risk assessment play in justifying and defending an SPS measure.

If a panel issues an opinion that a measure is in violation of the SPS Agreement, the offending government has the option of either changing the WTO-inconsistent measure or keeping it and compensating the complaining party for the value of impaired trade. If compensation is not provided, the complaining party would be permitted to suspend some trade concession of equivalent value to lost trade.