At a summit held in Brunei this month, China came another step closer to joining the World Trade Organisation (WTO) through successful talks with the US.

It has been a long drawn-out process that could have an enormous impact.Sean Leonard, professor of law at Hong Kong University, says China's eventual entry to the global trade club will 'change global capitalism tumultuously'.

It will, he maintains, be 'as disruptive as the 20th century economic rises of Japan, Germany and the US'.China's entry to the WTO will slot the missing piece into the organisation's jigsaw, perfecting its authority as an arbiter of world trade, and giving its dispute resolution procedure new significance.

But lawyers across the world are positioning themselves for an increase in WTO dispute handling.The WTO was formed in 1995 at the Uruguay round, a series of talks that saw the WTO take over from the old GATT (General Agreement on Tariffs and Trade) discussions as the vehicle for global trade agreements.

The formation of the dispute panel gave the WTO judicial teeth, which had been lacking in all its predecessors.

Only WTO member states are permitted to bring disputes before the Geneva-based disputes panels, so one might think that there could only be a limited role for private practice and in-house lawyers.However, since the WTO was formed, the EU has had a procedure, available through t he trade barriers regulations, to bring disputes directly to the panel on behalf of any member state or trade within that state, thus avoiding the traditional direct involvement of each state's competition authority.According to Lode Van Den Hende, a WTO assistant based at City firm Herbert Smith's Brussels office, the regulations are still under-used by companies who fail to appreciate the impact their trade strategies and aims can have on the course of world trade.

A recent survey by Herbert Smith of 60 FTSE 350 companies found widespread ignorance of the WTO's rules (see [2000] Gazette, 2 November, 8).But Philip Ruttley, a former barrister and United Nations counsel who now leads WTO work at City firm Rowe & Maw, says there has been an explosion of interest in the WTO in the past couple of years.

Mr Ruttley, who set up the World Trade Law Association, says that European companies have now learnt their lesson from the hands-on role played by US companies in influencing the Uruguay round, and the GATT agreements before that.Mr Van Den Hende says that, while a surprising number of companies are interested in WTO matters, 'once China joins the WTO, it will become a larger beast, and companies will be more aware that they need to consider it carefully'.Mark Clough QC, who heads City firm Ashurst Morris Crisp's WTO group, says that although the panel's decision-making speed is not too bad - it is meant to take six months - implementation can take a lot longer.

He thinks the WTO procedure would benefit from speeding up.Law firms can play many roles relating to the WTO, such as: representing companies' concerns to the European Commission to influence negotiating positions; drafting reports for submission to the UK government and European Commission for consideration as disputes for bringing before the Geneva-based dispute panel; and representing countries before the dispute resolution panel.It was only in 1997 that private practice lawyers were allowed to appear before WTO panels, rather than just government lawyers.

But despite the growing opportunities, few City firms have targeted this work.

Aside from Rowe & Maw and Herbert Smith, Clifford Chance is perhaps the best known.

All three sent representatives to last year's high-profile Seattle talks to get closer to what was happening and also, if possible, pick up work.

Clifford Chance's senior partner, Keith Clarke, is the only lawyer on the high-level European services leaders group, part of the European Services Forum set up by Andrew Buxton, chairman of Barclays Bank.

The forum has been advising the European Commission on its priorities for GATS 2000.The WTO is also important to law firms in another way: opening up markets for them to practise in.

As part of its schedule of commitments to join the WTO, China has had to agree to end a string of restrictions on foreign lawyers.The Law Society is lobbying the Commission with a 'wish list' of countries it would like to see open up to foreign lawyers.

It has called for countries to commit to allowing foreign firms to practise international and third country law, use their name, and go into partnership with and employ local lawyers.

This reflects the myriad of problems solicitors have faced across the world.Meanwhile, the Council of Bars and Law Societies of Europe and International Bar Association are concerned that the WTO is seeking to set rules to allow cross-border practice.

The WTO is not about what countries should do, but rather what they should not do.

So a ban on a particular practice - whether it be on importin g a particular product or multi-disciplinary partnerships (MDPs) between lawyers and non-lawyers - is questioned on the basis of whether it is the minimum regulation required to meet justified policy objectives.

In the case of MDPs, justified policy objectives could be avoiding conflict of interest and retaining client confidentiality.It is hoped that the latest round of WTO talks will break further boundaries in global trade agreements.

Two live issues, according to Mr Ruttley, are geographical limitations and e-commerce.Mr Ruttley acts for Scotch whisky producers, for whom limitation of produce by geographical region is crucial.

Their future success is dependent on the security that whisky produced outside Scotland and using different techniques cannot be marketed as Scotch.The WTO also needs to decide whether e-commerce should be defined as a good or a service.

If defined as a service, once recipients have downloaded e-commerce data, does it then translate into a good? These issues will have a great impact on taxation for companies, and is therefore an area where companies should be making representations to government or the EU.The WTO panel's findings are unique among other judicial bodies in sanctioning breach of its recommendations.

Countries found to be in breach of trade agreements by the panel broadly have three options.

They can remedy the breach, pay compensation, or do nothing and accept retaliatory policies from the victor.

This allows the WTO the flexibility to act effectively as a referee over trade disputes.

As the retaliations become more complex, so too the lawyers involved in an action may find that their expertise is required.Examples of this can be seen in the bananas dispute between the EU on one side, and the US and various Latin American countries on the other.

The dispute has been long and complex, originating in the complaint that the EU was skewing its tariffs and import licences in favour of the former colonies of member states.Lode Van Den Hende acted for Ecuador's banana producers in the dispute.

The EU's refusal to budge has led to cross-retaliation by Ecuador.

So long as the EU preserves its bananas policy, Ecuador has been given the authority by the WTO to disregard EU intellectual property rights.The US has now employed another novel form of trade defence - known as carousel retaliation - in response to the same bananas dispute.

This involves the random suspension of different imports from the EU at monthly periods.

The US has suspended cheese, textiles and paper on a monthly basis, and meat is threatened next.Ten years ago, negotiation of trade agreements and the resolution of disputes was conducted almost exclusively by government and its lawyers.

The power of the WTO has given companies and their lawyers more potential involvement, and some commentators suggest that this represents a rumbling of the tectonic plates supporting nations.

Companies, after all, have less incentive to consider macroeconomics when resolving their disputes.But Mr Van Den Hende says these changes have only come about through the will of signature states.

He says the new order makes trade and disputes more transparent, and Whitehall officials do not have the legal capacity to deal with some of the more complex issues.Mr Clough says: 'The WTO has brought about a shift from a diplomatic to a legal approach.

It is undoubtedly clear that big business can influence trade policy - and it looks to lawyers to provide the brains needed to encourage governments to use their rights.'One thing is sure, an office i n Brussels - and the invaluable contact that gives to the DG4 office of the Commission, which receives requests for disputes from companies - will give English law firms first place on the starting lines of WTO dispute resolution.

Especially when the starting pistol is fired on China's great leap forward into the WTO.