World Trade Organization member countries are subject to trade regulations that ensure open markets for goods bought and sold between nations. When a member country accuses another of violating a rule, the dispute is resolved through the WTO's multi-step resolution process.

When a country is admitted to the WTO, it agrees to abide by that process, rather than taking action on their own. As of August 2003, almost 300 disputes had been brought before the WTO since the resolution system's inception eight years ago.

The WTO handles trade disputes differently from the trade body's previous incarnation, the General Agreement on Tariffs and Trade. Under GATT, all members -- including those involved in the dispute -- had to agree on how to resolve a dispute, which meant that a country involved in the dispute could block a ruling against it.

The new system, established in 1995, makes it impossible for a country to block a ruling against it.

The WTO's dispute resolution process aims to prevent cases from dragging on indeterminately as they did under GATT, which had no fixed timetable. Under the WTO, the process leading up to an initial ruling takes one year. An appeal of the first ruling adds three months to the process.

The Dispute Resolution Process
When a country files a complaint against another, the two WTO members must try to work out their differences through negotiation before taking their dispute to the trade body. Countries can ask the WTO's director-general to facilitate this negotiation, known as the consultation phase of the dispute resolution process.

If the two countries are unable to settle their differences, the country that brought the complaint can ask the Dispute Settlement Body to establish a panel that will help the WTO issue a final ruling. The Dispute Settlement Body is made up of all the members of the WTO General Council, but it meets under different rules. The panels usually have three members, chosen from both the public and private sector. Developing countries involved in a dispute with a developed country can request that one of the panelists be from another developing country.

After hearing from the countries involved in the dispute and possibly consulting with expert witnesses, the panel issues a report assessing the case. If the panel concluded that a country's trade policy did violate a WTO agreement, the report recommends ways to change the policy so it conforms to trade rules. The report then becomes the Dispute Settlement Body's ruling unless all WTO members -- including all the countries involved in the suit -- agree to block it.

Panel deliberations are confidential and opinions that the individual panelists express in their reports remain anonymous. However, panel reports are made public and are available on the WTO's Web site.

When countries disagree with the panel's ruling and are unable to persuade the rest of the WTO to reject it, they can appeal the ruling. Between 1995 and 2000, countries appealed almost 80 percent of the 46 cases, according to a University of Michigan report.

Three members of a permanent seven-member group hear each appeal. The international trade experts composing that group serve four-year terms and are not affiliated with any government. The appeal can keep, change or reverse the original decision. The appeal is binding unless there is a consensus among WTO members to reject it.

After the Ruling: Implementing Changes or Dealing with Sanctions
Trade sanctions are not imposed immediately after a panel decides that a member country was violating a WTO rule. Instead, within 30 days of the ruling, the country that was in violation meets with the WTO and explains how it will change its policies to comply with the rules. If the country cannot comply immediately, the trade body allows the country to ask for a "reasonable period of time" in which to make the necessary changes. According to a report from Australia's Adelaide University, that "reasonable period" usually ranges from three to 15 months.

When a country doesn't change its policies after a ruling against it, it must enter into discussions with the country that brought the complaint. If the two countries cannot agree on a tariff reduction or another way to compensate the country that brought the suit, that country can ask the dispute settlement body to impose trade sanctions against the country found to be in violation.

-- By Karyn Schwartz, Online NewsHour