The WTO and Developing Countries

Abstract

Developed countries have more ability to deal with lengthy processes with high direct costs and coordination costs than most developing countries, but that is not the entire story. Developing countries are also prejudiced by the lack of capacity to enforce WTO rulings and high indirect costs of initiating WTO disputes. CAUSES OF IMBALANCE Lack of Resources Money alone is not the sole explanation for the current disparity. The two entities with the most total wealth, the European Union and the United States, by virtue of having the largest economies also tend to have the largest number of WTO interests and disputes. Because both the United States and the EU can foresee that each will have a large and continuing number of WTO disputes, each is in a position to hire specialized personnel in relatively large numbers on an ongoing basis. Depending on counting methodology, the United States has between 20 and 30 WTO specialist lawyers, and the EU nearly as many (although through more complex bureaucratic arrangements). In addition, both the United States and the European Union have a large number of other in-house WTO specialists. By contrast, St. Lucia, which can reasonably foresee only one WTO case every few years (in the event, Bananas (1)), does not even have a mission in Geneva and could not reasonably hire as permanent staff a large core of WTO specialists. Although this effective discrimination is one of the largest problems for the functioning of the WTO as a whole, it has particular salience in dispute resolution because the short deadlines in the dispute settlement mechanism--which are necessary to maintain confidence in the system, and which, indeed, are being ignored to a point where the system is losing its credibility (2)--mean that doing the best work on a WTO case requires a very high degree of dedication to that case. Once the first submission is filed with the panel by the Complainant (which, at least in theory, has had unlimited time to prepare that submission, since the Complainant chooses when to start the case), the rhythm of work is far more intense than in normal court litigation or the predecessor GATT dispute settlement system. In the author's experience with one of the first WTO disputes, we prepared drafts for a government based on the government's instructions, sent them off to Geneva around midnight for the government to revise and file, got back in the morning and started working on our replies to the arguments, which we expected the other government to make in reply to the submission, which was filed later that day. Developed countries, however, do not always have an advantage in terms of resources. This advantage disappears when the domestic industry of a developing country is strong and active enough in defending its interest before the WTO by hiring an external legal counsel. That makes domestic affected industry a major source of funding for the WTO litigation. Among the prominent examples of such funding are Ecuador's complaint in Bananas, Guatemala's defense in Cement, (3) Antigua and Barbuda's representation in Online Gambling, (4) as well as the case brought by Brazil against U.S. Cotton Subsidies. (5) However, reliance by the government on industry's resources carries its own complications. The ability to bring cases in such situations, or defend them well, becomes more a function of local particular interest in a case, rather than a national interest. In addition, of course, it is highly unlikely that industries in developing countries will provide the resources for the day-to-day work of a WTO mission, which far overshadows the more visible disputes. The imbalance in terms of resources also can be corrected through the services of the Advisory Center on WTO Law. The Advisory Center is an international organization independent of the WTO that provides legal advice and litigation support in the context of the WTO Dispute Settlement. …