Today, as fragmentation of international law has become a reality, the Dispute Settlement Body of the WTO, being one the most essential adjudicatory bodies, has often been criticized for its overly-textualist approach to interpretation and use of the Vienna Convention on the Law of Treaties (VCLT). This commentary analyses the decision rendered by the Dispute Settlement Body in the China-Rare Earths Case. It explains how the textualist reading given by the Appellate Body could not look into the corresponding GATT regulation, while interpreting the Accession Protocol of China. It argues that this erroneous decision is a result of the DSB’s reliance on textualism through the use of Article 31 of the VCLT. It looks into the travaux préparatoires of Article 31 of the VCLT to argue that the concerns raised during the Vienna Conference are still relevant and get reflected even today in the decisionmaking in the China-Rare Earths case.

The implementation system of the recommendations and rulings of the Dispute Settlement Body is an important component of the WTO dispute settlement procedure. Where there is any disagreement between disputing parties as to the existence or consistency with a covered agreement of measures taken to comply with the recommendations and rulings, a winning party may refer the matter to a compliance panel and the Appellate Body. If a losing party is found to have failed to comply with the recommendations and rulings, DSB may authorize the winning party to retaliate. This article analyzes the implementation system of the WTO dispute settlement procedure in comparison with other systems of ‘second-order’ compliance in international law. Also, attention will be directed to the relationship between the WTO retaliation and countermeasures in general international law. Countermeasures under the Agreement on Subsidies and Countervailing Measures, in particular, have a legal nature akin to that of countermeasures under the law of State responsibility.