Which WTO agreement created the multilateral system for settling trade disputes between member governments?

The Dispute Settlement Understanding created the WTO’s multilateral system for settling trade disputes between member governments.

Formally called the Understanding on Rules and Procedures Governing the Settlement of Disputes, it was adopted as part of the Uruguay Round agreements in 1994. It established procedures for consultations, panels, appeals and implementation of rulings.

The system was designed to make trade law more predictable than the earlier GATT process. Under the WTO framework, a complaining member cannot simply impose unilateral retaliation without following the agreed procedures and receiving authorization where required.

The Appellate Body later became unable to hear new appeals because of vacancies, beginning in December 2019. That institutional problem does not change the agreement’s identity or its original role in creating the WTO dispute-settlement system.