World Trade Organization Dispute Settlement System Research Articles

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.

National Law as an Unpredictable Generator of International Law: The Case of Norm Export at the World Trade Organization

One of the most identifiable instances of national law generating international law is through the use of domestic legislation as the model for a treaty provision. This paper seeks to identify some consequences of using domestic legislation in this way by examining the World Trade Organization (WTO) where numerous obligations are modelled on national law. It argues that, far from straightforward, such a process is a particularly unpredictable form of law-making, the results of which are intelligible only as part of a complex process of "norm export". This paper proceeds in three parts: first, it outlines the motivation for norm export, and identifies one method, embedding domestic law in an international legal system; second, it identifies an example from international trade remedies law modelled on US provisions, and the subsequent unexpected interpretation by the Appellate Body; third and finally, it analyses the seeming failure of the US to establish uniform provisions consistent with its own law in this area, reframing critiques of the Appellate Body's treatment of these US-originated WTO provisions. It does this by acknowledging the multiple exercises of norm export by actors, not only in these specific agreements but also in others, most notably in this case, the constituent document of the WTO's dispute settlement system, the Dispute Settlement Understanding, stressing the complexities involved in norm export and the inherent unpredictability of such an exercise.

The WTO and Rules-Based Dispute Settlement: Historical Evolution, Operational Success, and Future Challenges

The World Trade Organization (WTO) has three main functions—first, negotiations on trade matters; second, oversight of existing WTO agreements; and third, dispute settlement. The WTO's negotiation function has broken down and its oversight function, while useful and valuable, is the least visible and least significant of the three functions. Thus, the credibility of the WTO as a functioning international organization essentially depends on ensuring the effectiveness of its dispute settlement function. This paper briefly traces the historical evolution of the dispute settlement system under the General Agreement on Tariffs and Trade (GATT) and then considers the current state of the WTO dispute settlement system—how effectively has it operated to date and what operational and procedural problems have arisen? It concludes by examining the challenges the WTO dispute settlement system will face in the coming years, considering, in particular, whether the system will be able to resolve effectively disputes between the major WTO powers—the United States, the European Union and China.

WTO dispute settlement system and democracy

Purpose– The purpose of this paper is to analyse the current proposals for reform of the World Trade Organization (WTO) dispute settlement system. Two areas of proposed reforms have been chosen: one is regarding democratic control over the WTO dispute settlement body and the other is regarding structural balance within the WTO.Design/methodology/approach– It is a theoretical study based on decided cases, opinions and writing of other writers.Findings– Democratizing a judicial body from within is not the most desirable method to control it. Separation of powers and checks and balances which is termed as institutional balance in WTO is a better way to rein in the judicial organ of the WTO.Originality/value– Most of the work on WTO judicial reforms have either concentrated on technical aspects. Some writers have written about the dispute settlement system from a political point of view. Most of the writings seem to be shy of pointing towards obvious developments in the WTO dispute settlement system, e.g. the precedent system. The work analyses the proposed reforms from two perspectives and presents writer’s opinion on them which is clearly and openly stated.

Can the WTO Rules Be Efficiently Breached for Welfarist Objectives?

After Eric Posner and Jack Goldsmith published their controversial book, The Limits of International Law, a number of critical reviews were written, even by rational choice theory law scholars, contradicting what they saw as ‘simplistic’ and ‘inconsistent’ assumptions about the role of international law. However, neither Posner nor Goldsmith seem to be affected by the critique and have continued to explain the book’s main thesis in new publications. For instance, the co-author Posner and Alan Sykes have recently published a book entitled, Economic Foundations of International Law, which apply the rational choice theory to explain the state cooperative behaviour at the International level. They did that by claiming that international law must be self-enforcing by the application of private contract theory of efficient breach. This article will evaluate Posner, Sykes and others claim of the need for efficient breach in the context of the World Trade Organization (WTO) law. The authors have mainly relied on the WTO acquis to introduce their theory to other subfields of public international law, such as, international human right law. Sometimes they justify their argument based on ‘the absence of welfarist justification of international law’ and most of the time on the weakness of the public international law enforcement mechanism, citing the WTO dispute settlement system as an example. This article will try to answer this question: does the lack of ‘welfarist grounds’ justify an efficient breach of existing WTO rules to serve the states self-interest objectives?

Renewable Energy and Trade: Interpreting against Fragmentation

SummarySeveral disputes relating to renewable energy are underway at the World Trade Organization (WTO). The Appellate Body has released its first decision on this subject on the feed-in tariff for electricity in the province of Ontario. The disputes raise once again the issue of the relationship between international trade law and environmental protection. Evolving WTO jurisprudence should be able to resolve many of the difficulties, although the crucial problem of the treatment of production and processing methods remains obscure after the Canada – Renewable Energy decision. Questions of fundamental theory lie close to the surface of these debates. The recent expansion in the number of international regimes and tribunals highlights the importance of approaches to interpretation in public international law. As countries negotiate new treaties to address the needs of global society, potential conflicts and overlapping provisions are likely to appear. Differences of opinion about reliance on non-WTO treaties in the WTO dispute settlement system illustrate problems that can be anticipated in several fora. To achieve workable solutions for renewable energy disputes and many others, interpretation should promote the harmonious integration of obligations, in accordance with the intent of the negotiators.

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.

The Politics of Compliance with Adverse WTO Dispute Settlement Rulings in China

Starting from 2004, China's trading partners, in particular the United States, have increasingly utilized the World Trade Organization (WTO) dispute settlement system (DSS) to challenge China's trade-related measures. As a major player in world trade, how China responds to adverse rulings is not only important to its trading partners, but also for the future of the international trade regime. China has thus far held a relatively good compliance record when facing adverse panel and/or Appellate Body rulings, except for the recent delay in full compliance in China—Publications and Audiovisual Products. Through examining the factors affecting China's decision making when targeted in a WTO dispute, this article finds that, in general, China is highly motivated to comply with the WTO DSS due to the reputational costs of noncompliance. Nevertheless, the recent delay in compliance in China—Publications and Audiovisual Products also demonstrates that successful implementation could be impeded by certain politically influential interest groups, especially when the measure at dispute is politically sensitive.

Legal Capacity and Developing Country Performance in the Panel Stage of the WTO Dispute Settlement System

Existing literature has yielded some evidence suggesting that developing countries are less likely to file World Trade Organization (WTO) trade disputes or to secure concessions in the consultation stage instead of the panel stage of the dispute settlement process. Furthermore, this 'bias' in the use of the dispute settlement mechanism against developing countries has often been attributed to developing countries' lack of legal capacity, or the financial, human and institutional resources available to analyse, pursue or litigate a dispute. However, much of this literature focuses on the constraining effect of legal capacity in the pre-panel ruling stage of the process. This article extends previous research and uses various alternative measures of legal capacity to more systematically analyse the effect of legal capacity on developing countries' performance during the panel stage of the dispute settlement process. Empirical analysis of WTO disputes filed by developing countries that have ended with a panel ruling between 1980 and 2010 shows that developing countries with greater government efficiency and regulatory quality are more likely to obtain positive panel rulings, although there is little evidence suggesting that legal capacity as measured by the size of a country's delegation in Geneva or its past experience in initiating WTO disputes may enhance its prospect of successfully defending its legal claims in the panel stage of the dispute settlement process. This result reinforces prior findings about the disadvantages developing countries face in the dispute settlement system and underscores the need for developing countries to engage in domestic capacity building in order to enhance their chances of successfully litigating at the WTO.

Experts in WTO Dispute Settlement

This article offers an overview of the procedural and substantive issues that concern the use of experts by World Trade Organization (WTO) panels, ie the WTO tribunals of first instance which are responsible for the management of evidence. The purpose of using experts in WTO dispute settlement is essentially to help panelists understand and evaluate the evidence submitted and the arguments made. Expert opinions can play an important part in the decision-making of panels. How experts are used by WTO panels goes to the very nature of the WTO dispute settlement system and this article explores: whether, and the degree to which, assistance/information can be sought/accepted from outside the WTO; the degree of panels’ discretion in doing so; panels’ responsibility in delineating and maintaining the respective roles for experts/panelists; due process safeguards; and importantly, the related accountability of the WTO dispute system when using outside experts to address its disputes.

European Union regulatory politics in the shadow of the WTO: WTO rules as frame of reference and rhetorical device

This contribution asks how the World Trade Organization (WTO) affects European Union (EU) regulatory politics. While WTO rules have no direct effect, authors who take a rational choice institutionalist perspective argue that these rules are enforced domestically through the mobilization of exporters triggered by the WTO dispute settlement system. This contribution challenges the plausibility of this argument and offers an alternative perspective rooted in historical and discursive institutionalism. It contends that WTO rules act as both a frame of reference influencing actors' perceptions of the scope of legitimate policy outcomes and as a rhetorical device that may be used by actors in domestic political battles over regulatory policy decisions. Two recent decisions on EU regulation with international trade effects are process-traced to demonstrate the value of the alternative perspective against the rational choice institutionalism model: Registration, Evaluation and Authorization of Chemicals (REACH) and the proposed ‘carbon border tax’ in the framework of the EU emissions trading scheme post-2013.

Interpreting risk in international trade

After an eight year risk analysis process, Biosecurity Australia released its final import risk analysis (IRA) in 2006, allowing apple imports from New Zealand into Australia, subject to stringent phytosanitary measures. New Zealand apple imports were previously banned due to the risks of transmitting pests and diseases, in particular, fire blight. New Zealand commenced dispute settlement proceedings at the World Trade Organization (WTO) on the grounds that Australia’s risk mitigation measures were scientifically unjustified, thus violating international trade law. The WTO largely ruled in New Zealand’s favour in August 2010, and again in November after Australia unsuccessfully appealed. This paper argues that the cause and nature of this dispute stem largely from the varied risk interpretations in the context of international trade and, by extension, from the non-scientific factors (such as values, interests and politics) shaping these interpretations. It examines the risk analysis, identifying a number of potentially important risk governance issues in the IRA process, derives the judgements and perspectives of the main stakeholders and the factors influencing their position, and finally analyses the case in the context of the WTO dispute settlement system. Despite the intent of the relevant WTO legislation, the dispute may not be appropriately reconciled through scientific considerations alone. The case study is used to explore the challenges accompanying import risk analysis under severe uncertainty.

'Reasonable Period of Time' in the WTO Dispute Settlement System

This article provides a detailed examination of the problems existing in the determination of the reasonable period of time (RPT) in the World Trade Organization (WTO) dispute settlement system. It begins with a brief discussion on how the RPT is determined, both from the provisions of the Dispute Settlement Understanding (DSU) and from the WTO cases. Then, it analyzes various problems relevant to the RPT determination. What follows is an evaluation of the relevant reform proposals made by some WTO Members, on the basis of which the author puts forward his own suggestions. In particular, this article suggests that the current notification system be reformed to reduce the 'black case work', and that an interim relief system be introduced into the DSU. The author believes that only with the perfection of the retaliatory mechanism of the WTO dispute settlement system can the RPT mechanism best play its role of ensuring prompt compliance. Oxford University Press 2012, all rights reserved, Oxford University Press.

An Empirical Study of China's Participation in the WTO Dispute Settlement Mechanism: 2001-2010

On 11 December 2001, China officially became a Member of the World Trade Organization (WTO) after years of negotiations. The paper shows how a major developing country has used the WTO dispute settlement system by examining China’s participation in the WTO dispute settlement mechanism from its entry through 31 December 2010. It provides a comprehensive analysis of the WTO dispute cases in which China has participated as a complainant, a respondent, or a third party.

China and the WTO Dispute Settlement System: From Passive Observer to Active Participant?

Since China's accession to the World Trade Organization (WTO) in December 2001, it has participated in a relatively small number of cases brought to the WTO Dispute Settlement Body (DSB), contrary to the many wild predictions made prior to entry. In the first few years post-accession, China seemed content to act as a passive observer, participating mainly as a third party. However, since 2006, there appears to have been a shift in attitude with China now taking a more combative stance, particularly in the past few years. This article will examine China's participation in the WTO DSB from 2002 to date to explore whether China's approach really has shifted from that of passive observer to that of an active participant, possible reasons to explain this transformation and what the implications of such a shift may be for other WTO Contracting Parties.

David’s Sling: Cross-Agreement Retaliation in International Trade Disputes

Cross-retaliation, where a World Trade Organization (WTO) member whose rights have been infringed under one WTO Agreement retaliates against the offending member under another WTO Agreement, is seen by some commentators as a way to counteract the deficiencies of conventional trade retaliation and mitigate the asymmetry of power in the WTO dispute settlement system. However, the potential of crossretaliation as an effective remedy remains unclear. This article argues that a credible and probable threat of cross-agreement retaliation could provide a powerful incentive for ex ante compliance. The credibility of the threat is established by reference to the WTO Agreement that is targeted. The suspension of Trade-Related Aspects of Intellectual Property Rights (TRIPS) obligations, in particular, holds great promise. The probability of the threat depends on the likelihood of the Dispute Settlement Body (DSB) authorization to suspend concessions, the outcomes of previous threats, and actions to operationalize cross-retaliation. WTO jurisprudence has fleshed out the requirements of Article 22.3 of the Dispute Settlement Understanding (DSU), allowing relatively safe assumptions as to the likelihood of DSB authorization to suspend concessions across agreements where significant economic disparities exist between the disputing parties. Previous cases featuring the threat of cross-retaliation reveal a modest influence on the policies of disputing parties. Finally, the operationalization of cross-agreement retaliation pursuant to the TRIPS Agreement is riddled with legal and policy problems, mainly in connection with the personal and territorial scopes of the suspension, the justiciable nature of intellectual property (IP) rights, the quantification of the suspension, the continuous supply of IP-dependent goods, and the consistency of the suspension with other, non-WTO international obligations. However, these problems do not prohibit developing countries from reaping the benefits of asymmetric information, so long as they create the impression of carefully structured retaliation plans that are ready to be triggered in the event of DSB authorization. A reasonable probability is the only certainty. Edgar Watson Howe (1853-1937)

Sense and Sensibilities of China and WTO Dispute Settlement

This article aims at making a preliminary assessment of China in the World Trade Organization (WTO) dispute settlement system from an international socialization perspective. When China joined the WTO in November 2001, it was not clear how China would behave in the WTO dispute settlement. At first, China proved to be a conciliatory defendant and reluctant complainant. Recently, however, China’s profile in dispute settlement has shifted to a more proactive one, leading some observers to label its behaviour ‘aggressive’. I argue that China’s behaviour should be viewed in a different light. From totally rejecting international third party adjudication in the past, China – by permitting WTO panels to determine its fate in trade disputes – has started to exhibit new willingness to accept binding international adjudication. In this context, China is demonstrating respect for international rules as well as its faith in western legal norms and institutions. Through more intense participation in WTO dispute settlement, China is also becoming increasingly vested in the maintenance of WTO norms and rules, and consequently, the WTO dispute settlement system is playing an important role in socializing China.

Sense and Sensibilities of China and WTO Dispute Settlement

This paper aims at making a preliminary assessment of China in the WTO dispute settlement system from an international socialization perspective. When China joined the World Trade Organization (WTO) in November 2001, it was not clear how China would behave in WTO dispute settlement. At first, China proved to be a conciliatory defendant and reluctant complainant. Recently however, China’s profile in dispute settlement has shifted to a more proactive one, leading some observers to label its behavior “aggressive.” I argue that China’s behavior should be viewed in a different light. From totally rejecting international third party adjudication in the past, China - by permitting WTO panels to determine its fate in trade disputes - has started to exhibit new willingness to accept binding international adjudication. In this context, China is demonstrating respect for international rules as well as its faith in western legal norms and institutions. Through more intense participation in WTO dispute settlement, China is also becoming increasingly vested in the maintenance of WTO norms and rules, and consequently, the WTO dispute settlement system is playing an important role in socializing China.

No International Organization is an Island . . . the WTO’s Relationship with the WIPO: A Model for the Governance of Trade Linkage Areas?

Trade has fuzzy boundaries where it overlaps with many different fields – be it the environment, intellectual property, or other. The World Trade Organization (WTO) is thus required to interact with other international institutions in order to come to an arrangement for dealing with these ‘trade and ?’ linkage areas. The relationship between the WTO and the World Intellectual Property Organization (WIPO) could in many respects serve as a model. The picture that emerges when the various forms of interaction of the two organizations are assessed is that they benefit most from complementarity. Thus, for example, the WIPO offers detailed intellectual property rules, whilst the WTO supplements this with effective dispute settlement. This advantage may largely be due to the fact that the WTO has incorporated many of the WIPO rules into its own law. One of the recommendations put forward here is for other ‘trade and ?’ spheres to do the same. On the other hand, the analysis highlights a number of problems that occur when two institutions cross paths. One such difficulty is a potential conflict of law. To help to resolve it, the WTO dispute settlement system should give greater consideration to the provisions of non-WTO law. Some hope for this is given in the US-Copyright case, but it is questioned whether this still holds in view of more recent caselaw. The interplay between the WTO and the WIPO thus forms the basis for a number of recommendations for better governance of trade linkage areas.

Sense and Sensibilities of China and WTO Dispute Settlement

This paper aims at making a preliminary assessment of China in the WTO dispute settlement system from an international socialization perspective. When China joined the World Trade Organization (WTO) in November 2001, it was not clear how China would behave in WTO dispute settlement. At first, China proved to be a conciliatory defendant and reluctant complainant. Recently however, China’s profile in dispute settlement has shifted to a more proactive one, leading some observers to label its behavior “aggressive.” I argue that China’s behavior should be viewed in a different light. From totally rejecting international third party adjudication in the past, China - by permitting WTO panels to determine its fate in trade disputes - has started to exhibit new willingness to accept binding international adjudication. In this context, China is demonstrating respect for international rules as well as its faith in western legal norms and institutions. Through more intense participation in WTO dispute settlement, China is also becoming increasingly vested in the maintenance of WTO norms and rules, and consequently, the WTO dispute settlement system is playing an important role in socializing China.