Describe the procedures for dispute settlement under the GATT and the shortcomings of the dispute settlement mechanism in practice.

Answer: Procedures for Dispute Settlement:

(1) Disputes are to be settled by consultations between the countries in dispute themselves.

(2) If the consultations fail to reach a consensus, a party may submit the dispute to the GATT for the establishment of a panel of experts to investigate and deal with the dispute.

(3) The panel of experts should generally investigate both parties to the dispute separately within three months, and then write an investigation report.

(4) The panel of experts shall submit its report to the relevant commission or council, which shall examine the report and decide whether to accept, modify or return the panel's report.

(5) If the Panel's report is adopted, the Commission persuades the violating GATT member to change its trade measures or legal provisions to bring them into conformity with the requirements of the GATT.

Disadvantages of the dispute settlement mechanism in practice:

(1) The time required to settle a dispute is too long, generally more than one year.

(2) When the panel report is considered by the GATT Commission or Council, the respondent party can often block the adoption of the panel report.

(3) Even if the Panel's report is adopted, it is not enforceable, and the Commission can only persuade the country concerned to rectify its non-compliance with the GATT, or, if it refuses, the worst that can happen is that the offending country withdraws from the GATT, and the resolution remains unenforceable.