Compliance Proceedings Research Articles

A Proposal to Address Problem of Non-Compliance With The World Trade Organization Dispute Settlement Body Rulings

Objective: This study aims to analyze the problems of non-compliance with several of the rulings of the Dispute Settlement Body of the World Trade Organization and how to overcome the problem to increase the effectiveness of the WTO Law. Methods: This research is normative legal research. The study uses secondary data consisting of primary and secondary legal materials. The data were analyzed by using qualitative method, and conclusions are drawn by deductive method. Result: Some of the WTO DSB rulings have status the compliance proceedings is completed with findings of non-compliance. It meant that some of the WTO DSB rulings were not implemented. This could result in decreased the compliance with the WTO Law and further to hamper the achievement of the WTO objectives. Conclusion: The weakness of the enforcement measures led to non-compliance with some of the DSB WTO rulings. This paper proposes to strengthen the enforcement mechanism to overcome the problem of non-compliance with the WTO DSB rulings through the application of monetary compensation sanctions, temporary prohibition to make complaints and the establishment of WTO DSB rulings enforcement body. An effective WTO law enforcement mechanism was needed to increase international trade and World economic growth, so it was important in achieving the development program goals, including the Sustainable Development Goals.

Systemic Issues in the Panel Report in Indonesia – Chicken (Article 21.5: Brazil)

The Panel Report in the compliance proceedings under Article 21.5 of the Understanding on Rules and Procedures Governing the Settlement of Dispute (DSU) in the case Indonesia – Measures Concerning the Importation of Chicken Meat and Chicken Products (Indonesia – Chicken (Article 21.5 – Brazil)) provides interesting guidance on systemic issues regarding the compliance phase of the WTO dispute settlement procedures. Scope of Article 21.5 of the DSU, Amended measures, Reasonable Period of Time, RPT, Compliance proceedings, Judicial economy, Import restrictions, Undue delay in approvals, Article XI of the GATT 1994, Article 8, Annex C of the SPS Agreement, Chicken meat and chicken products

United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (US–Tuna II (Mexico) (Recourse to Article 21.5 of the DSU by the United States / Second Recourse to Article 21.5 of the DSU by Mexico), DS381

These compliance proceedings concern a second revised measure adopted by the United States regarding the labelling of dolphin-safe tuna products (the 2016 Tuna Measure). The 2016 Tuna Measure places three types of conditions on the use of the dolphin-safe label: (i) conditions relating to the automatic disqualification of certain tuna products (eligibility criteria); (ii) conditions relating to certifications (certification requirements); and (iii) conditions relating to record keeping and segregation of dolphin-safe and non-dolphin-safe tuna (tracking and verification requirements). Regarding the eligibility criteria, tuna harvested using large-scale driftnets on the high seas and tuna products containing tuna harvested by setting on dolphins anywhere in the world are automatically disqualified for the dolphin-safe label. Regarding the certification and tracking/verification requirements, the 2016 Tuna Measure makes a distinction between the Eastern Tropical Pacific Ocean (ETP) large purse seine fishery, on the one hand, and all other fisheries, on the other hand.

A WTO Safe Harbour for the Dolphins: The Second Compliance Proceedings in the US–Tuna II (Mexico) case

AbstractSubsequent to the 2016 modifications concerning the strengthening of the administrative requirements on dolphin-safety outside the ETP fishery zone, the second WTO compliance proceedings have finally found the US Dolphin-Safe labelling scheme compatible with the multilateral trade system. We provide an overview of the long-running US–Mexico dispute and assess the final findings of the WTO adjudicators attempting to determine the effects of the multilateral litigation on the involved non-trade values and the real winners of the case. We find an improvement in dolphin protection, though more could be achieved through a qualification of the US measure under the principle of sustainable development also contemplated in the Preamble of the WTO Agreement, as well as an enhancement on consumer information, since declaration of dolphin-safety may now be better monitored and enforced through the new discipline for non-Eastern Tropical Pacific Ocean tuna products. However, we also observe that with no change to the appearance of the label or an informational campaign, the improved credibility of the label may hardly be passed-through to the average consumer. Furthermore, despite an increase in the stringency of the regulation for their competitors, Mexican producers do not gain greater access to the US and instead have been diversifying towards other markets. We then highlight that the Appellate Body missed an opportunity to reinforce the transparency of the system by supporting the first-ever decision to grant partially open panel meetings.

China–Broiler Products (Article 21.5 – United States) – can the sum of the parts be less than the whole?

AbstractThis article explores economic and legal issues in the WTO dispute China–Broiler Products (Article 21.5–United States). In 2011, the US initiated a dispute against the conduct and results of China's 2009 trade remedy investigation into US broiler products (chickens). The Panel Report found that China had acted inconsistently with its WTO obligations. On the basis of a redetermination, China continued to impose duties and the United States initiated WTO compliance proceedings. The compliance Panel Report, circulated in 2018, concluded that China had failed to comply with its WTO obligations when allocating costs to construct US domestic prices for broiler products. However, China was found to have acted consistently with its WTO obligations with respect to two claims which raise some interesting legal questions. Ultimately, after almost a decade of litigation, China removed the antidumping and countervailing duties on US broiler products in 2018.

A WTO Safe Harbour for the Dolphins: The Second Compliance Proceedings in the US – Tuna II (Mexico) Case

Subsequent to the 2016 modifications, concerning the strengthening of the administrative requirements on dolphin-safety outside the ETP fishery zone, the US Dolphin-Safe labelling scheme has finally been considered compatible with the multilateral trade system by the second WTO compliance proceedings. In the present work, we provide an overview of the long running US-Mexico dispute, and assess the final findings of the WTO adjudicators attempting to determine the effects of the multilateral litigation on the involved non-trade values and the real winners of the case. We find an improvement in dolphin protection, though more could be achieved through a qualification of the US measure under the principle of sustainable development also contemplated in the Preamble of the WTO Agreement, as well as an enhancement on consumer information, since declaration of dolphin-safety may now be better monitored and enforced through the new discipline for non-ETP tuna products. However, we also observe that with no change to the appearance of the label or an informational campaign, the improved credibility of the label may hardly be passed-through to the average consumer. Furthermore, it is underlined that, despite an increase in the stringency of the regulation for their competitors, Mexican producers do not gain greater access to the US and instead have been diversifying towards other markets. We then highlight that the Appellate Body missed an opportunity to reinforce the transparency of the system by supporting the first-ever decision to grant partially open panel meetings.

A WTO Safe Harbour for the Dolphins The Second Compliance Proceedings in the US – Tuna II (Mexico) Case

A WTO Safe Harbour for the Dolphins The Second Compliance Proceedings in the US – Tuna II (Mexico) Case

China – Broiler Products (Article 21.5 – United States) (DS427) – Can the Sum of the Parts Be Less Than the Whole?

This article explores economic and legal issues in the WTO dispute China – Broiler Products (Article 21.5 – United States) (DS427). In 2011, the US initiated a dispute against the conduct and results of China’s 2009 trade remedy investigation into US broiler products (chickens). The Panel Report found that China had acted inconsistently with its WTO obligations. On the basis of a redetermination, China continued to impose duties and the United States initiated WTO compliance proceedings. The compliance Panel Report, circulated in 2018, concluded that China had failed to comply with its WTO obligations when allocating costs to construct US domestic prices for broiler products. However, China was found to have acted consistently with its WTO obligations with respect to two claims which raise some interesting legal questions. Ultimately, after almost a decade of litigation, China removed the antidumping and countervailing duties on US broiler products in 2018.

The Legalization of the Non-Violation Concept in the GATT/WTO System

Article XXVIII:1(b) of the GATT refers to “any benefit … being nullified or impaired” by the application of any measure “whether or not it conflicts with the provisions of this Agreement”. This article suggests that the evolution of GATT/WTO law and practice relating to the non-violation concept is an interesting example of “legalization”, in the sense of indeterminately vague treaty terms being incrementally made more precise and sculpted into a workable legal test which is capable of being applied in the context of binding third-party adjudication. It begins by showing how GATT adjudicators transformed this indeterminately open-ended concept into a workable legal test, generally covering measures with a close nexus (in terms of timing, product coverage, and effects) to specific market access commitments (Section I). It then briefly reviews how the non-violation concept spread to regional trade agreements, taking the CUSFTA and NAFTA as examples. (Section II). Following a closer look at the key non-violation provisions in the text of the Uruguay Round Agreements (including the DSU, GATS, SCM Agreement, and TRIPS Agreement), it surveys the relevant WTO case law and shows that adjudicators have not strayed very far from the traditional legal standard developed under the GATT (Section III). It suggests that the traditional legal test aligns the non-violation concept to various concepts of general international law, and to GATT safeguards provisions and the close nexus test developed in the context of WTO compliance proceedings (Section IV). It concludes with an overall assessment (Section V).

European Communities and Certain Member States – Measures Affecting Trade in Large Civil Aircraft (EC and Certain Member States–Large Civil Aircraft) (DS316)

This dispute relates to the compliance proceedings in which the panel and the Appellate Body found that that European Union (EU) and certain of the member States acted inconsistently with their obligations under the Agreement on Subsidies and Countervailing Measures (SCM Agreement). The types of measures at issue in the original panel proceedings include the Launch Aid/Member State Financing (LA/MSF) for, inter alia, the A300, A310, and A380; French and German government ‘equity infusions’ provided in connection with the corporate restructuring of Aérospatiale and Deutsche Airbus; certain infrastructure and related measures provided by the German and Spanish authorities; and research and technological development funding provided by the European Communities and certain member States. The EU replaced the terminated the A300 and A310 programmes with new LA/MSF programmes, including the A350XWB LA/MSF subsidies.

The WTO in 2017: Systemic Developments, Disputes and Review of the Appellate Body's and Panels' Reports

This analytical but concise survey of WTO case law for 2017 is carried out within the framework of the PhD program in International Law and Economics of the PhD School of Bocconi University (Milan). Giorgio Sacerdoti, Emeritus Professor of International Law at Bocconi University and former Chairman of the WTO Appellate Body, has coordinated and supervised the individual comments of Appellate Body's and Panels' Reports. An abridged version of this review will be published in the 2018 Italian Yearbook of International Law as has been the case in the past years. The WTO system risks to be undermined by the direct challenge to its rules initiated by the Trump administration at the beginning of 2018 with the introduction of substantial anti-dumping duties on washers from Korea and solar panels from India, the announcement of safeguards based on the security exception of Article XXI GATT on steel and aluminium imports, and the restrictive measures on a variety of exports from China to the US. Apparently, the dispute settlement system is functioning well. Seventeen new disputes had been introduced through requests of consultations in 2017, bringing their total number to 535 from the establishment of the system. The Appellate Body issued five reports. Eleven panel reports were issued in 2017 (two of which in compliance proceedings under Article 21.5 DSU), six of which were not appealed. One arbitration award was issued under Article 21.3(c) DSU for the determination of the “reasonable period of time” to comply. The WTO dispute settlement system, however, has not remained unaffected by the above adverse political trend. While the US is challenging a key element of the system, namely the appointment process for replacing outgoing members of the Appellate Body, the other Members appear uncertain how to respond, inspired by the desire not to antagonise frontally the US at least at this stage.

Remarks by Tania Voon

The WTO general exceptions are crucial provisions that recognize that in some circumstances non-trade objectives will trump trade liberalization. That recognition flows from the fact that trade liberalization per se is not the purpose of the WTO; rather, trade liberalization is a means to achieve other objectives as specified in the preamble to the Marrakesh Agreement Establishing the World Trade Organization, such as raising standards of living and ensuring full employment. The predominant view is that the general exceptions are extremely difficult to satisfy. Indeed, I am aware of only three instances in which a respondent has successfully invoked GATT Article XX; of these, two are compliance proceedings, and one of those is under appeal. However, challenged measures typically fail to satisfy the requirements of the Article XX chapeau because they are discriminatory, and removing that discrimination provides a means of benefiting from the exception.

More than underpayments and civil penalties – Taking a strategic approach to regulatory workplace relations litigation

As the regulator established to promote, monitor and enforce compliance with the Fair Work Act 2009 (Cth) (FW Act), the Fair Work Ombudsman (FWO) plays a critical role in testing and clarifying the application of the FW Act and taking steps to ensure the integrity of the Australian workplace relations framework. The FWO engages in a wide range of activities designed to achieve these aims. An important function includes commencing civil litigations. The FWO litigates for a range of reasons, but primarily to achieve deterrence. However, many cases brought by the FWO on new and emerging issues have also shaped areas of workplace relations law and contribute to wider compliance by the regulated community more broadly. This article explores and highlights some examples of the way the FWO has addressed emerging enforcement challenges and shaped and tested the law through litigation. These include matters relating to accessorial liability; the general protections under Part 3-1 of the FW Act; and obtaining a wider range of orders in compliance proceedings.

US – COOL (Article 21.5 – Canada and Mexico), DS384/DS386

These compliance proceedings under Article 21.5 of the DSU concerned measures adopted by the United States to comply with the Dispute Settlement Body (DSB) recommendations and rulings inUS – COOL. InUS – COOL, the DSB found that a certain US country-of-origin labelling (COOL) measure regarding muscle cuts of meat (the Original COOL Measure), and the administration of that measure, were inconsistent with certain aspects of the TBT Agreement and the GATT 1994. The United States' measure taken to comply with the recommendations and rulings of the DSB consisted of an amendment to the Original COOL Measure (the 2013 Final Rule). In these compliance proceedings, the Panel and Appellate Body referred to the 2013 Final Rule, together with the Original COOL Measure, as the Amended COOL Measure. The Amended COOL Measure was the focus of these compliance proceedings.

Burden of Proof in International Courts and Tribunals

The rule on the burden of proof is a permanent feature of international adjudication, and plays a potentially significant role in the outcome of disputes. Fundamental principles underlying the rule on burden of proof include the need to maintain the fairness of adjudication though a rough equality of the parties and the need to ensure relative certainty for litigants. International courts and tribunals’ articulation of the rule largely recognises the importance of certainty, leaving problems relating to fairness to be addressed at the stage of the application of the rule through such mechanisms as the prima facie case approach. However a number of concerns arise relating to the scope for the arbitrary exercise of judicial power in the application of the rule. These concerns include the need for establishing a standard or standards of proof in international law, and the need for greater clarity regarding the classification of the substantive rules governing a dispute as general rules or exceptions respectively. More certainty regarding the allocation of the burden of proof in compliance proceedings would also be helpful. There is scope for optimism regarding future evolution in relation to the rule on burden of proof, as the multiple sources of the rule endow it with a special capacity for development.

Commentary on the Appellate Body Report in EC–Bananas III (Article 21.5): waiver-thin, or lock, stock, and metric ton?

AbstractAt first glance, the Appellate Body Report in Bananas III (Article 21.5; Second Recourse) does not seem to be a case for the Guinness Book. The AB upheld most of the Panel's findings, and the EC lost big. This was hardly surprising, given that the contested measure only marginally differed from the measure at issue in the first recourse to a compliance Panel. It is at second sight that this AB Report reveals its interesting facets. We highlight a few remarkable legal and economics aspects, some of a more systemic nature, some offering practical insights: For practitioners, the role of estoppel in WTO litigation, the legal effect of Panel suggestions, and the relevance of Uruguay Round Modalities Papers as interpretative tools may be of interest. Readers more concerned with systemic aspects of the WTO may take interest in the economics of tariff quotas, the inherently discriminatory nature of tariff-quota allocation in the WTO, and the relevance of compliance proceedings for the damage calculation under Article 22.6 of the DSU.

Catch Me if You Can: An Analysis of “Measures Taken to Comply” under the WTO Dispute Settlement Understanding

The objective of the compliance procedure is to ensure prompt compliance with the Dispute Settlement Body's (DSB) recommendations and rulings through an expeditious procedure. In their assignment, the compliance panels are faced with competing considerations of, on the one hand, ensuring Members the right of a “reasonable period of time” for implementing the DSB's recommendations and rulings and, on the other, ensuring prompt compliance. Compliance panels have to pay due respect to the fact that an Article 21.5 proceeding is not a new proceeding, which limits the scope of which claims may be raised in those proceedings and restricts the determination of which measures are “measures taken to comply”. In order to achieve those overall aims, compliance panels and the Appellate Body have accepted that claims other than those raised in the original proceedings may be presented in compliance proceedings. Due process principles form an integral part of the Dispute Settlement Understanding (DSU). The delicate task of the panels and Appellate Body is to determine which claims, not raised in the original proceedings, are admissible in an Article 21.5 proceeding. Compliance panels and the Appellate Body have established several limitations in order to limit the ambit of potential claims and measures that may fall within an expeditious Article 21.5 proceeding. However, the embraced approach to determining which new claims, not raised in the original proceedings, are to be considered in Article 21.5 proceedings and which measures fall within the realm of measures taken to comply bears the common characteristics of being subject to an extensive interpretation of Article 21.5 of the DSU.