Trade Organization Dispute Settlement Research Articles

President Biden's international trade agenda: Implications for the Canadian agrifood sector

AbstractThe 4 years of the Trump administration was marked by a number of events and policies that affected the Canadian agrifood sector. Changes to preferential trade agreements, the collapse of the World Trade Organization's dispute settlement framework, increased domestic support for US farmers, and diplomatic tensions between the United States and China all shaped international trade flows and created an environment of policy uncertainty. The Biden administration will change course on several important trade policy issues. We discuss how these changes could affect the Canadian agrifood sector along a number of dimensions, including a return to multilateralism, (re)engagement in preferential trade agreements, and movements toward a less combative and more predictable trade policy agenda. We expect Canadian agrifood trade flows under the Biden administration to exceed what they would have been under a second Trump administration.

Dilemmas in the implementation of the World Health Organization Framework Convention on Tobacco Control.

The article analyzes some dilemmas related to the implementation of the Framework Convention on Tobacco Control, underscoring the States parties' difficulties in adopting public policies with proven cost-benefit and aimed at reducing tobacco's supply and demand. Specifically, the article examines the recommendation to adopt policies for plain cigarette packaging, as provided in the guidelines for implementation of the Convention's Articles 11 and 13. Based on case analysis, we identified political and legal factors that hinder the Convention's implementation, including the regulatory chill produced by legal claims filed by the tobacco industry, which uses investor-State arbitration clauses from bilateral investment agreements. The article concludes that despite the costs imposed on States and the delays in the adoption of such policies, in the medium and long term the rulings handed down by the arbitration courts and the World Trade Organization's Dispute Settlement Body can consolidate the understanding of the legality and effectiveness of policies that adopt the model.

The Role of Precedent and Stare Decisis in the World Trade Organization's Dispute Settlement Body

AbstractThe World Trade Organization was established in 1995 and brought together countries from around the world for the purpose of fairly regulating the trade of goods, services, and intellectual property between its member states. While treaties and other trade agreements have existed between countries for hundreds of years, the WTO's most significant innovation is its dispute settlement process through the Dispute Settlement Body. Countries agree to be bound to the decisions of the DSB upon their admittance into the WTO. The DSB is a two-tiered adjudicative system consisting of the lower panels and the higher Appellate Body.The United States, under both the Obama and Trump administrations, has blocked the appointment of AB judges. This tactic has limited the number of active judges to three. The AB normally has seven members. The United States has listed a number of reasons for their boycott of the system, among them is that the AB is functioning as if its reports are to be binding precedent on the lower panel and to future DSB cases, in a manner similar to stare decisis. This issue has been observed over the years and there is conflict between interpretations of precedent under Article 3:2 of the Dispute Settlement Understanding and Article IX:2 of the WTO Agreement. Caselaw of the DSB from over the years has also raised interesting questions and the appearance of the use of precedent.This article will be examining the historical fundamentals and use of precedent and the doctrine of stare decisis. It will then turn into an examination of the institutional and regulatory framework of the WTO, particularly Article 3:2 of the DSU and Article IX:2 of the WTO Agreement, and whether it allows or leaves room for a system of binding precedent. Finally, jurisprudence of the DSB will be surveyed for evidence of this system. Reports that will be examined are Japan-Alcoholic Beverages, India-Patents, India-Autos, and Australia-Plain Packaging Tobacco.

Forum Shopping and Fairness in Mexico–United States Trade Disputes

Of all the countries in Latin America, Mexico has the strongest economic ties to the United States, formalized by the creation of the North American Free Trade Agreement in 1994, but this Agreement does not preclude Mexico from targeting the United States in the World Trade Organization's Dispute Settlement Mechanism. In fact, the Agreement's dispute‐settlement system encourages it to do so if the complaint at hand is to have a fair consideration. The North American Free Trade Agreement's dispute‐resolution system goes to a board containing representatives from the three‐member countries, which includes by default the complainant state and the defendant state. Therefore, even though Mexico has the closest economic relationship with the United States of the Latin American states considered in this project, it is also the most likely to target the United States in the World Trade Organization. This article focuses on how trade ties constrain Mexico's use of the Dispute Settlement Mechanism against its largest trade partner.

South-South Cooperation in the World Trade Organization's Dispute Settlement Body

The South–South Cooperation (SSC) strategy advocates that Global South states cooperate within international organizations to gain bargaining leverage and advance their interests in global governance. The SSC agenda advances a multipolar international system, multilateral negotiations, and mutual economic development, especially for less developed states. This research examines qualitative and quantitative documentation of SSC leadership of Brazil and India in the World Trade Organization’s Dispute Settlement Body. The analysis uses case studies of each actor’s profile in trade disputes and cross-tabulations of their success, both individually and collectively against Global North states. The findings support the proposition that Global South states have relatively high rates of success, especially when they collaborate in disputes against the Global North. This research extends the institutional analysis of SSC to the Dispute Settlement Body as an arena for rule-based decision making and adds a qualitative analysis of the SSC leadership and a quantitative analysis of categorical data of trade disputes. The conclusion summarizes the findings and suggests areas for future research.

Trade, Investment and Climate Change: How International Economic Disputes in Renewable Energy are Shaping New Norms of Regime Interaction

This paper analyzes renewable energy-related international economic disputes – both at the World Trade Organization (WTO) and investor-State dispute settlement (ISDS) before an arbitral tribunal as provided under investment treaties – to establish how their adjudication is redefining the norms of interaction between the international legal regimes for trade, investment and climate change. First, it will highlight how dispute settlement in international economic law is sensitive to the current realities of climate change and driving countries to secure greater regulatory space for renewable energy under newly negotiated trade and investment agreements. Second, it will analyze how changing geopolitical relations in the international economic regime are shaping shifts in the concept of differentiation under the climate regime. It uses the illustrative example of India, which increasingly finds itself at the crossroads of trade, investment and climate change, to argue that the blurring of lines between developed and developing countries’ measures in the renewable energy sector, as witnessed through renewable energy-related trade and investment disputes, have had an effect in diluting the concept of differentiation within the climate regime.

Mapping the Scope of Dispute Settlement in Regional Trade Agreements: Implications for the Multilateral Governance of Trade

AbstractThis article argues that the inclusion of provisions for the settlement of disputes in regional trade agreements enhances, rather than disrupts, the centrality of the World Trade Organization's dispute settlement system. Using a dataset that organizes exclusion clauses and special provisions for dispute settlement in regional trade agreements, the study develops a thematic typology that is used to examine the ways that disputes may be channelled between regional and multilateral dispute settlement institutions. This comparative empirical dimension offers a more accurate picture of the global contours of regionalization as they relate to the juridical aspects of trade governance, suggesting that the decentralization of dispute settlement inferred by the rapid development of regional bodies has been overstated.

The World Trade Organization's Dispute Settlement Understanding: Are All (Un)Equal?

The World Trade Organization (WTO) is one of the most visible and contested institutions within the global economic governance architecture. Both proponents and opponents of trade liberalization regularly voice discontent with the institution’s functioning and its effect on the economies of its members. Of particular interest is the WTO Dispute Settlement Understanding (DSU), often described as the organization’s flagship body. The WTO DSU helps parties to settle disputes related to the interpretation and enforcement of the provisions drafted and agreed upon over several trade negotiation rounds. This paper presents a game-theoretic approach to analyze whether the WTO DSU ensures equal access and outcomes to all parties who are part of a trade dispute. It particularly addresses the costs of litigation. The paper argues that due to these issues, developing countries will not reap equal benefits from the usage of the WTO DSU as their developed counterparts. Developing countries will, due to a relative higher cost of WTO litigation, be worse off, both as a plaintiff and as a defendant. They will file less complaints and settle for less beneficial outcomes. We also find that bilateral settlement is a very important feature in the WTO DSU.

The discursive (de)legitimisation of global governance: political contestation and the emergence of new actors in the WTO’s Dispute Settlement Body

The World Trade Organization's Dispute Settlement Body provides the teeth of the global trade regime – empowering it with substantial means to adjudicate in disagreements between Memberstates over the implementation of WTO law. The WTO's teeth have, however, also helped make the organisation controversial. The Dispute Settlement Body has frequently found itself at the centre of a much wider societal critique of the broader WTO – as well as contemporary global trade governance – in which its legitimacy to operate has been fiercely questioned. The political sensitivity of its work has been made most apparent in those cases where the principles of WTO law appear to run counter to environmental or consumer safety concerns, taking the system into the mass media and making it the subject of street protests. Yet, where rulings have given new access to non-state actors campaigning for these concerns (e.g. amicus curiae provisions), there has been further controversy amongst Member-states over whether the Dispute Settlement Body has acted outside its delegated authority by effectively rewriting ‘who’ or ‘what’ is an actor in the system. The changing character of this specific institutional arrangement is approached in the article as part of a wider struggle over the terms of what is ‘legitimate’ in global governance. Where WTO Dispute Settlement has been re-politicised, both inside and out-side the formal institution, a contradiction becomes visible – between its legal-technocratic identity and a world that is fundamentally political. The legal normalisation of new actor identities needs to be understood in this context, as an attempt to manage that tension and reinforce the claim that WTO Dispute Settlement is legitimate. How the institution has changed and new identities emerged since its birth in 1995 is enhanced if understood in the context of a struggle in which the terms of what is legitimate in global governance are ultimately unfixed.

Evaluating the Enforcement of the Decisions of WTO Dispute Settlement System: The Comply or Not to Comply Considerations

This paper evaluate the structure for dispute adjudication under the World Trade Organization (WTO) Dispute Settlement System (DSS). An analysis of the legal nature of WTO obligations is carried out to ascertain how it influences members when deciding whether to comply or not with the outcome of a WTO dispute. The paper examines the two broad models from which scholars and even countries have tried to understand their WTO’s legal obligations. In addition, the paper make the case that in reality WTO obligations are the products of a hybrid of the two dominant models or theories. Further, it is posited that the analysis and evaluation of WTO DSS should be restructured taking into account that despite the legalization of the WTO DSS and its enforcement mechanism, it is constrained by international legal discourse and politics. Finally, there are suggestions on possible ways of improving the remedy system, which would effectively incentive countries to comply with their WTO obligations.

A trade balance: litigation and negotiation in the World Trade Organization's dispute settlement system

The establishment of the World Trade Organization (WTO) has been widely accepted as representing the legalisation of world trading rules. However, it is important to reflect on the limits of this legalisation thesis in terms of the interface between international and domestic policy processes. By locating trading disputes in a political analysis of policy implementation, it is argued that it is difficult to establish conceptually how the WTO dispute settlement system could have authority separate from and above the conventional international politics of trade policy relations. Instead, the article argues that case outcomes should be expected to be largely the product of domestic political institutions and policy processes, and how these intersect with developments in the WTO dispute settlement system. Brief studies of the Australian government's dispute settlement strategy and two high-profile WTO disputes—the US upland cotton and European Union sugar cases—serve to suggest that the authority of international trade law is not as significant as assumed by the legalisation thesis. Rather, domestic politics and institutions have an important impact on the outcome of trade disputes.

Why Are WTO Panels Taking Longer? And What Can Be Done About It?

World Trade Organization (WTO) dispute settlement panels have steadily taken longer to complete their work since the establishment of the WTO, but since 2005, the delays have sharply increased. The Dispute Settlement Understanding (DSU) time frames for panel proceedings are problematic in light of the time and number of parties’ submissions. However, unexpected delays in panel work have become more frequent, which, if they continue to increase at their present rate, will offset reform of DSU time frames at other stages of the procedures. This article examines the reasons why delays have occurred and considers some possible solutions.

Calculating Trade Damages in the Context of the World Trade Organization's Dispute Settlement Process

Since its inception in 1995, the World Trade Organization (WTO) dispute settlement system has received over 250 notifications of trade disputes. While most have been settled, in a few cases the WTO arbitrators had to approve damage awards. This paper will use one of these cases (Hormones) to explain the methodology arbitrators use to calculate damages and how this methodology differs from an efficiency-based measure of welfare that economists would instinctively provide. Yet, there are rational reasons for this difference and the arbitrator's methodology does a better job of providing incentives for countries not to violate trade agreements.

Developing Countries and General Agreement on Tariffs and Trade/World Trade Organization Dispute Settlement

It has long been observed that developing countries made scant use of dispute settlement under the General Agreement on Tariffs and Trade (GATT). Less clear are the reasons for this. Most observers insist that the various GATT reforms that were intended to help developing countries failed to insulate them from the “power politics” of the system (Kuruvila, 1997). Not surprisingly, many of these same observers predict that the greater “legalism” of the World Trade Organization (WTO), and the Dispute Settlement Understanding (DSU), in particular, will encourage more participation by developing countries. Indeed, some go so far as to suggest that, enticed by a system in which, unlike in the GATT years, “right perseveres over might” (Lacarte-Muro and Gappah, 2000, 401), developing countries will have greater recourse to multilateral dispute settlement. The underlying presumption, of course, is that developing countries were especially ill-served by GATT’s diplomacy, and are better poised to benefit from the WTO’s more legalistic architecture. We argue that this conventional wisdom is wrong on both counts. In assessing how developing countries have fared in dispute settlement, two questions beg empirical attention. First, have developing countries secured more concessions, by which we mean favourable trade policy outcomes, in WTO versus GATT dispute settlement? And second, what explains any differences in the outcomes realized by developing, as opposed to developed countries? Most observers note that developing countries have, in fact, been more active in WTO dispute settlement. This greater participation is typically traced to the legal reforms ushered in by the DSU— notably the “right” to a Panel and automatic adoption of Panel reports. The argument is that these reforms have done much to temper the power politics that permeated the

Envisioning A Global Legal Culture

This paper envisions a global legal culture. This global legal culture will interact with the national legal cultures and will fundamentally change legal practice, even ostensibly local legal practice. Thus, there is a practical imperative in contemplating this evolving legal culture for all lawyers and legal scholars. US lawyers and US legal scholars face a special urgency because we are so far behind others in recognizing the practical importance of understanding the world's legal cultures. This paper hopes to initiate reflections on the blending of legal cultures in the world arena. The paper suggests two plausible vehicles for the creation of this legal culture: The World Trade Organization's Dispute Settlement Bodies, globalizing commercial legal cultures, and the United Nations' International Court of Justice, globalizing rights. These two tribunals not only suggest plausible global adjudicative systems, if not the final versions, but already provide some real world experience. The paper relies more directly on the experience of two more developed centralizing court systems, the US federal judiciary and the European system comprising the European Union's European Court of Justice (ECJ) and European Court of Human Rights. The European tribunals offer a recent and particularly valuable experience in the merging of national laws into a larger legal culture. In addition, the ECJ demonstrates the progression of open market adjudication into adjudication of nearly all of society's issues. The paper posits a blending of civil law thinking with common law thinking in evolving a global legal culture. This approach is more than transatlantic chauvism: these two legal models have migrated around the world, for good and bad reasons, so that they cover about 70% of the world's population. Because the paper anticipates a large portion of common law readers, it begins the analysis with a treatment of foundational aspects of civil law thinking and how that thinking might translate in the design of the global legal culture. Then the paper focuses on envisioning a global legal culture bringing together common law thinking, particularly the US version, and that of the civil law. The paper attempts to identify the tensions and to suggest possible resolution of these tensions. It notes the additional complication of merging the judicial philosophies of parliamentary and presidential governmental types. Again and with emphasis, the attention to the civil law and common law models support only a potential first generation of a global legal culture. Other legal cultures surely will have impact and the creative capacity of future generations will eventually be crucial. In the end, the paper merely hopes to offer a first stage framework, seeking to lay the groundwork for and encourage thinking about the dimensions of an emerging global legal culture.

A atuação internacional do Estado em benefício de interesses privados: uma análise jurídica da formação da "micropolítica" externa

Os juristas têm desprezado o estudo da formulação da política externa. A despeito disso, o Direito Internacional do Comércio coloca os Estados em uma posição na qual a diplomacia se confunde com a defesa dos interesses dos particulares beneficiados com tais normas. Nesse sentido, a política comercial externa deveria ser a resultante do diálogo entre governo e particulares interessados. Em tal diálogo, as normas jurídicas desempenhariam a importante função de tornar melhor o controle da formulação da política externa. O presente artigo analisa este argumento a partir do funcionamento do Órgão de Solução de Controvérsias da Organização Mundial do Comércio, especificamente o acesso das controvérsias aos Órgãos e os efeitos que suas decisões podem provocar sobre particulares.