Comparing EU free trade agreements – Dispute settlement

The aim of this InBrief series is to provide a synthesis of various chapters of the ten free trade agreements (FTAs) recently concluded by the European Union with developing countries, as well as other relevant trade agreements when appropriate. Each InBrief offers a detailed and schematic overview of a specific set of trade and trade-related provisions in these agreements.

The arrangements for settling disputes between partners are among the elements that determine the overall credibility of any international agreement as an instrument that can be effectively enforced. In trade agreements, an effective dispute settlement mechanism can help to demonstrate that the parties are committed to the agreed elimination of trade barriers, and that they will not resort to any unilateral action in violation of the agreement. Moreover, should the parties to an agreement be unequal partners in terms of political or economic power, a good dispute settlement mechanism can prevent disputes from being resolved along political or economic lines. An effectively enforced and recognised dispute settlement mechanism may also help to clarify the interpretation and scope of certain terms and conditions of an agreement, leading to a more coherent implementation, as is illustrated by the development of the multilateral trading system.