ializing” or codifying former GATT practice, the DSU has an institutional dimension. The Agreement establishes a Dispute Settlement Body (‘DSB’) to administer the rules and procedures for panel proceedings, for appeal against panel decisions to the standing Appellate Body and for adopting panel and Appellate Body reports. Art. 2 of the DSU provides that the DSB has the “authority to establish panels, adopt panel and Appellate Body Reports, maintain surveillance and implementation of rulings and recommendations, and authorize suspension of concessions and other obligations under the covered agreements”. More importantly, the DSU provides an integrated dispute settlement mechanism applicable to disputes arising under any of the “covered agreements” (including the WTO Agreement, the Agreements in Annexes 1 and 2, as well as any Plurilateral Trade Agreement in Annex 4 where its Committee of signatories has taken a decision to apply the DSU).
Furthermore, the rule-oriented function and legal primacy of the WTO dispute settlement system are emphasized in Art. 3 of the DSU:

“2.The dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. The Members recognize that it serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public internat

ional law. Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.
…
5.All solutions to matters formally raised under the consultation and dispute settlement provisions of the covered agreements, including arbitration awards, shall be consistent with those agreements and shall not nullify or impair benefits accruing to any Member under those agreements, nor impede the attainment of any objective of those agreements.
6.Mutually agreed solutions to matters formally raised under the consultation and dispute settlement provisions of the covered agreements shall be notified to the DSB and the relevant Councils and Committees, where any Member may raise any point relating thereto.
…”
Hence, even dispute settlements through bilateral arbitration and mutually agreed arrangements must be transparent and consistent with WTO law. The DSU provisions on mutually agreed arbitration “as an alternative means of dispute settlement” (Art. 25), and on compulsory arbitration on the “reasonable period of time” for the implementation of dispute settlement rulings (Art. 21.3) and on disputes over the suspension of concessions (Arts. 22.6-7), reflect a further shift towards judicial methods of dispute settlement in the WTO.
Significantly, the quasi-automatic adoption of dispute settlement reports is a new crucial feature of the WTO dispute settlement mechanism, another contribution to the “judicialization” of this mechanism. Under the WTO jurisprudence, reports issued by various panels and the Appellate Body shall be adopted by the DSB and “unconditionally accepted” by the parties to a dispute unless “the DSB decides by consensus not to adopt the report” (Art. 16.4; Art. 17.14). Both panel reports and Appellate Body reports are thus deemed to be adopted unless there is a “negative consensus” not to adopt these reports or the panel report is appealed.
Co

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