Article 4 DSU

Consultations are an instrument for obtaining satisfactory adjustment of a disputed matter between the Members on a bilateral level (Art. 4.5), before further formalized action under the DSU is taken. “[ They] are a crucial and integral part of the DSU and are intended to facilitate a mutually satisfactory settlement of the dispute, consistent with Article 3.7 of the DSU”.2 From the perspective of the WTO dispute settlement system, consultations are a prerequisite to panel proceedings. Through consultations, parties exchange information, assess the strengths and weaknesses of their respective cases, narrow the scope of the differences between them, may reach a mutually agreed solution and provide the parties with an opportunity to define and delimit the scope of the dispute between them. Furthermore, as stated by the Appellate Body, consultations not only “afford many benefits to complaining and responding parties” but also “to third parties and to the dispute settlement system as a whole”. Consultations should not only be perceived as the first formal step in a legal procedure. They are also a diplomatic method of prevention or resolution. The Comment on Article 4 of the DSU is devoted to the role of consultations and mutually agreed solutions in the WTO dispute settlement mechanism