WTO Sequencing

WTO sequencing refers to a long-standing procedural ambiguity in the World Trade Organization's Dispute Settlement Understanding (DSU) regarding the relationship between two post-ruling steps: a compliance review under Article 21.5 (which determines whether a losing member has actually brought its measures into conformity) and a request for authorization to suspend concessions — i.e., retaliation — under Article 22.

The textual problem is that Article 22.6 sets a tight 30-day deadline (from expiry of the "reasonable period of time") for a complaining party to request retaliation authorization, while Article 21.5 compliance panel proceedings typically take far longer. Read literally, a complainant must request retaliation before knowing whether the respondent has complied. Read purposively, retaliation should follow a finding of non-compliance.

The issue first erupted in the EC – Bananas III dispute in 1998–1999, when the United States sought retaliation against the EU without a prior Article 21.5 finding. Since then, parties have routinely concluded bilateral "sequencing agreements" (sometimes called ad hoc procedural arrangements) in which the complainant agrees not to request Article 22 authorization until after the Article 21.5 panel reports, and the respondent agrees not to object to a late Article 22 request. Such agreements have been used in disputes including US – FSC, US – Byrd Amendment, and EC – Hormones.

Reform of sequencing has been on the DSU review agenda since the Doha Round negotiations launched in 2001, but members have not adopted binding text. The dysfunction of the Appellate Body since December 2019, when it lost its quorum, has further complicated sequencing because Article 21.5 reports can now be appealed "into the void," delaying any move to retaliation indefinitely.

Sequencing is therefore both a technical drafting problem and a broader symbol of the DSU's enforcement gaps.