WTO Dispute Settlement Mechanism Research Articles

Why Developing Countries are at Disadvantage Position in WTO Dispute Settlement Mechanism

The Dispute Settlement Board of WTO aims to solve the disputes of WTO members regarding international trade. Dispute settlement process involves the parties and third parties to a case, and it operates through the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts and several specialized institutions. Although the dispute settlement mechanism provides opportunities to the developing countries to seek remedies if they are aggrieved by any other country, yet there are certain challenges for the developing countries to participate effectively in DSM. The study finds out the challenges that caused the role of developing countries less significant in the WTO dispute settlement process. Moreover, several recommendations have also been made for making the role of developing countries more effective.DOI: http://dx.doi.org/10.3126/ijssm.v1i2.10103 Int. J. Soc. Sci. Manage. Vol-1, issue-2: 60-63

ECFAAAAAAAAAWTOOOOOOOOO (The Consistency of Establishing Dispute Settlement Mechanism of ECFA with WTO Law)

Chinese Abstract: 我國政府和中國大陸簽署的海峽兩岸經濟合作架構協議（ECFA），屬於世界 貿易組織（WTO）下各會員國間簽署的自由貿易協定（FTA），而目前ECFA 協議 中也規劃訂定爭端解決機制，將兩岸間發生之貿易問題，交由此一機構處理；不 過WTO 架構下，本即訂有「爭端解決規則與程序瞭解書」（Understanding on Rules and Procedures Governing the Settlement of Disputes, DSU），並設有爭端解決機構（DSB）之爭端解決小組（Panel）及常設上訴機（Appellate Body, AB）以處理 各會員國貿易上爭端。若我國簽署ECFA 後，兩岸間之貿易爭端案件究應由DSB 享有管轄權？亦或ECFA 之爭端解決機構將影響WTO 下DSB 之管轄權？均將影 響我國貿易救濟措施之實行。因此本文將分析WTO 對此議題既有的判決意旨，並 探討ECFA 下另設爭端解決機制於WTO 法制下的適法性，以此分析提供我國和中 國大陸若發生貿易爭端時，所可能採取的救濟方法。English Abstract: According to the recently ratified Free Trade Agreement (Economic Cooperation Framework Agreement, ECFA) between Mainland China and the Taiwanese Government, a Dispute Settlement Mechanism shall be established to interpret ECFA regulations and to reconcile trade disputes occurred between contracting parties. However, under the framework of the WTO system, a Dispute Settlement System (including Panel and Appellate Body) has already existed to settle any WTO related trade dispute between WTO members. Considering both ECFA and WTO dispute settlement mechanism aim to solve trade disputes, it is highly possible that such co-existed mechanisms would both have jurisdiction upon the same subject matter. Hence this article would focus on analyzing the legitimacy and the consistency of establishing a dispute settlement mechanism under Free Trade Agreement. Moreover, this article would rely upon the perspective of WTO precedent: including Mexico - Taxes on Soft Drinks and Argentina - AD Poultry Dumping, to observe WTO DSB’s position on the issue of overlapping jurisdiction situation between FTA and WTO Agreement. Moreover, this article would also make suggestions to the government authority on the matters that should be given more consideration during the future ECFA negotiation process.

Transfer Pricing and the WTO

Transfer pricing is the phenomenon by which related corporate entities in different jurisdictions determine the price at which a transfer of goods or services between those two entities should be deemed to have occurred. This phenomenon is an inherent and endemic part of the international trading system. Given this, and given the significant governing role which the WTO plays in that system, the question stands: to what extent do, or could, the WTO institutions and WTO Agreements regulate transfer pricing and, more particularly, transfer mispricing? This article considers that question. Section I introduces the topic. Section II explains the concept of transfer pricing (and mispricing). Section III identifies the institutions of the WTO (and WCO) which are relevant to the phenomenon of transfer pricing and mispricing. Section IV identifies those provisions of the WTO Agreements the operation of which could have consequences for the phenomenon of transfer pricing and mispricing, in particular Article VII of the GATT and the WTO Customs Valuation Agreement. Section V considers whether, pursuant to the terms of the CVA and GATT, transfer mispricing could be raised in the WTO dispute settlement mechanism. Finally, section VI offers a brief conclusion about the likely future treatment of transfer pricing and mispricing in the WTO.

Industrial Policies and Their Impact on China's Use of the WTO Dispute Settlement System

Although China’s use of the WTO dispute settlement system has increased, its legal actions remain less aggressive than those of other large economies. This article examines how China’s subsidy policies make Chinese leaders reluctant to use WTO dispute settlement mechanisms in resolving trade disputes with other countries.

Remand to Fast-Track Prompt Implementation: A Critical Assessment of the 'Double Adoption' Remand Proposal in Chair's Text and an Argument for a 'Single Adoption' Alternative

Since the DSU’s adoption of the appellate procedure in 1995, the absence of the ‘remand’ authority of the Appellate Body has caused a unique problem in the WTO dispute settlement mechanism. Situations have arisen where the Appellate Body is rendered unable to complete the required analyses so as to bring finality to the disputes at hand. This recognition has made the remand issue one of the key topics in the actively ongoing DSU amendment negotiations. In 2011, the Chair of the negotiations circulated a proposed text on remand, featuring ‘double reports’ and ‘double adoption’. The ‘doubling’ feature in the proposed text, however, arguably leads to further delays and procrastination in terms of implementation by a responding Member. A remand mechanism that may undermine the ultimate objective of the WTO dispute settlement mechanism—prompt settlement of disputes following prompt implementation—would run the risk of eroding the Members’ confidence in the DSU. A ‘single report’, ‘single adoption’ remand scheme arguably offers a practical and workable alternative that ensures prompt implementation with the least disruption to the current practice of the Appellate Body.

International trade law and domestic policy: Canada, the United States, and the WTO

1 Judicial Review and the WTO 2 Courts and Public Policy Making 3 The Legalization of the GATT Trading Regime 4 The Establishment of the WTO Dispute Settlement Mechanism 5 Washington, Ottawa, and the WTO Agreement 6 The United States and the WTO 7 The United States, Trade Remedies, and the WTO 8 Canada and the WTO 9 The Impact of the WTO Dispute Settlement Mechanism on Domestic Law and Policy Table of Authorities Table of Cases Notes Select Bibliography Index

A Comparative Analysis of Reverse Majority Voting: The WTO's Dispute Settlement Mechanism, the EU Anti-Dumping Policy and the Reinforced SGP and Fiscal Compact

The reinforced Stability and Growth Pact entered into force in December 2011 with a new set of rules for economic and fiscal surveillance of the EU Member States. To strengthen the effective enforcement the SGP introduced the policy innovation of reverse qualified majority voting in the EU Council. Under reverse qualified majority voting the European Commission can impose a sanction on a Member State unless the Council votes against with a qualified majority within a specified period. This paper discusses the motivation and the impact of the new voting rule on EU Council decision-making and the Member States. It presents a comparative analysis of three cases where different types of reverse majority voting have been introduced, i.e. the dispute settlement mechanism of the World Trade Organisation, the EU trade defence policy and the reinforced SGP and Fiscal Compact. The comparison demonstrates that reverse majority voting considerably lowers the majority threshold to pass proposals rendering their adoption almost automatic in the EU Council of Ministers. As a result, the reverse majority rule increases the discretion of the executive relative to the legislative power. Moreover, evidence from the WTO’s dispute settlement and the EU’s antidumping policy suggests that the automaticity is also likely to change the balance between the rule- and political-based decision-making in the area of fiscal and budgetary EU policy. These findings chime with the growing role of majority-based decision-making in an enlarged EU of 27 Member States. However, the findings also highlight the potential trade-off between decision-making capacity and legitimacy particularly in an area considered to be traditionally part of the EU Member States’ national sovereignty.

Big Green Gaps: Our Inability to Tackle the Messy Issues at the Interface of Trade, Development and the Green Economy

This address to UNCTAD's 49th Trade and Development Board explores what Rio 20 failed to do: move us toward international consensus on what is appropriate state behavior in the pursuit of a green economy. We have a panoply of unilateral measures employed to capture both environmental and industrial policy-type benefits – from renewable energy subsidies to aviation levies – but little consensus on their propriety. Some are clearly WTO-illegal, some are not, and others occupy a legal grey area. But more important than legality is the question: can they actually be effective both environmentally (in disseminating more green technology) and economically (in fostering mature new entrants and innovators in the green tech space)? And how do we balance any global environmental benefits against the impacts on trading partners? Such questions cannot be answered in the WTO, and are caustic to the WTO's dispute settlement mechanism. But we have no other suitable venues for discussion.

Use of the WTO Trade Dispute Settlement Mechanism by the Latin American Countries Dispelling Myths and Breaking Down Barriers

The WTO's Dispute Settlement Mechanism (DSM) has been hailed as a fundamental aspect of the Multilateral Trading System for developing countries. At the same time developing countries face many challenges to ensure their effective participation in the mechanism. This paper presents statistical evidence of how Latin-American countries have been very active in their use of the DSM, especially when their use of the mechanism is compared to their participation in world trade. This paper also analyses why, to a large extent, Latin American countries have overcome the challenges of participating in the DSM; and have done so by coming up with innovative and creative solutions, without deviating from the guidelines established by WTO rules.

The End of the Bananas Saga

The article recalls the origins of the problem of the bananas trade war between the EU, several Latin-American countries and the US. It describes in a nutshell the numerous attempts to find a solution to this trade conflict through the WTO-Dispute Settlement Mechanism. It then analyses the legal, economic, political and procedural aspects of the negotiations from the 'Good Offices' Process in the WTO to the final negotiations of the Geneva Agreement on Trade in Bananas (GATB). Finally the article assesses the possible benefits of the GATB for the main parties involved in the GATB.

Trade disputes, quality choice, and economic integration

Recent work demonstrates the importance of developing high quality output in order to compete in export markets and other recent studies verify the prevalence of fixed and ongoing trade costs while participating in those markets. I consider the joint choice of quality and export promotion costs when trade relationships are subject to temporary disputes. When transparency is low and macroeconomic instability is high, disputes arrive more frequently and, therefore, firms may inefficiently choose lower levels of quality and export promotion. These, in turn, build shallower trading relationships with less trade volumes and higher tariffs, and generate greater trade reductions during the more common trade disputes. Several institutional features of the WTO dispute settlement mechanism that are generally lacking in preferential trade agreements such as improved transparency, dispute investigation, and the provision to recommend asymmetric continuation payoffs can ameliorate these inefficient quality choice outcomes. Hence, lower quality output and lower quality trading relationships may be more endemic to countries that depend on preferential trading areas as opposed to the WTO.

Can the WTO judges assist the development agenda?

PurposeThe purpose of this paper is to examine the critical issue of legal interpretation on the “development question” as they arise before WTO panels and Appellate Body, in view of the benefits inherent in a more‐rounded consideration of the development needs and concerns of WTO developing country Member States.Design/methodology/approachThe introduction sets out the background to the challenges of developing countries in utilising the dispute settlement process effectively and using existing support. By analysing relevant cases, Section 2 analyses the “development question” and how it has been so far considered in legal interpretation. Section 3 addresses WTO jurisprudence on development, examining situations wherein “development” arises in the course of WTO dispute settlement. An examination as to how this aspect of WTO jurisprudence may be revisited including the potential aid of trade policy review mechanisms, and procedures for enforcement is then undertaken. It concludes on the position that the WTO judicial review process can work better by providing the much‐needed balance between binding global trade rules and the domestic progress of its developing country membership at the level of dispute settlement.FindingsThis paper establishes the importance of recognising and addressing the fact that core challenges and concerns facing developing countries can and should be factored into the legal interpretation of issues in dispute settlement.Originality/valueA decisive enquiry into WTO development jurisprudence, this paper addresses developing country capacity to pursue the legal opportunities promised by the WTO dispute settlement mechanism, and how this can be redressed.

Prospects of Reform of the WTO Dispute Settlement Mechanism

In a context of economic globalization, the WTO emerged within the multilateral trading system as an international organization settling intergovernmental trade disputes. The WTO dispute settlement mechanism is rather an enhanced adaptation of its predecessor as it developed into an institutionalized and semi-judicialized system. the evaluation of the dispute settlement mechanism would contribute to a better understanding of the WTO as an international organization and its influence on the development of the international economic law. In general, three different movements occurred throughout the life of the dispute settlement mechanism, thus distinguishing its practice under the GATT and the WTO correspondingly: the emergence of a semi-judicial institution; the enhancement of the access to justice by developing countries; and the reinforcement of the implementation phase. With these three movements in sight, this article intends to investigate whether the WTO dispute settlement mechanism can still satisfy the needs of predictability and safety as defined by Article 3 of the DSU.

EU Dispute Settlements in the WTO: Selected Pending Cases

The EU is frequently referred to as one of the Titans of the WTO and this is why its trade disputes frequently receive a lot of attention from academics, practitioners and the media. This attention frequently arises at the later stages of the proceedings – during oral hearings, after the Panel Report or the Appellate Body Report. However, the focus of our study lies primarily on disputes which are still at the very early phase of their development. The scope of this report has required the narrowing down of the subject-matter, and the authors have concentrated on the movement of goods, covering five pending cases. First, the report covers cases where the EU is the respondent. It looks at the measures which the EU has adopted internally, examining their background and inquiring how these measures affect trade. It is generally known that EU legislation can pose barriers both to internal and to external trade, and it is interesting that such legislation can be challenged both within the EU – before the European Court, or in the international arena – before WTO bodies. An example of this is the pending disputes on seals and poultry. Then, the report looks at measures from third countries which EU traders have considered to be obstacles to trade, and which the EU decided to challenge using the WTO dispute settlement mechanism. These cases in which the EU acts as a complainant concern India’s and the Philippines’ measures on spirits, and China’s rules on raw materials.

Limits of the WTO as a Self-Enforcing Institution

Is there a limit to trade cooperation that the WTO can facilitate? In this paper I present a theory of the WTO in which the WTO is an equilibrium outcome of multiple bilateral repeated prisoners' dilemma games among countries. The equilibrium mimics an important feature of the WTO's Dispute Settlement Mechanism (DSM) - trading partners withhold retaliation during the DSM process. I call this property of the DSM forbearance. I show that when a sufficient number of countries participate in multilateral sanctions under the WTO, the threat of these sanctions provides incentives to allow forbearance(i.e. use the DSM). This causes countries to obtain outcomes that improve joint welfare. I also show that there are limits to forbearance that can be sustained by this mechanism - the fraction of simultaneous deviations against a single country that can be part of an equilibrium approaches a finite number as the number of countries participating in multilateral punishments becomes arbitrarily large. The results provide a theoretical basis for the DSM to offer prospective punishments rather than retroactive punishments and suggests a critical role for renegotiation.

WTO, Dispute Settlement Mechanism & Jurisprudence

This paper analyzes the distinction between GATT dispute settlement mechanism and the WTO dispute settlement mechanism. To highlight the distinction, it explains the state of historical development of GATT and the WTO. As one of the most important features of the WTO dispute settlement system, it establishes jurisprudence that is unique in the domain of international law. Like constitutional review of domestic laws and declaring laws inconsistent with the constitution ultra vires, the WTO dispute settlement mechanism authoritatively decides about the compatibility of the disputed domestic laws and policies with the WTO rules. When the disputed domestic laws and policies are found inconsistent with the WTO rules, the Dispute Settlement Body of the WTO issues mandatory instructions to its Member bring the inconsistent laws and policies consistent with the WTO rules.

THE NECESSITY OF CAPACITY BUILDING FOR INDONESIA'S EFFECTIVE UTILIZATION OF WTO DISPUTE SETTLEMENT MECHANISM: IMPLEMENTATION OF GATT ARTICLE XX FOR TRADE AND ENVIRONMENT ISSUES

AbstrakThe World Trade Organization Agreement, aimed to also protect theenvironment, provides a special provision on environment under article xx.Any dispute arose between parties in respect to the article should be settledtrough the WTO Dispute Settlement Mechanism. Although environmentalprotection should be sought in trade, it is often problematic for developingcountries. They generally lack an adequate domestic environmentallegislation and its enforcement because they place greater priority oneconomic development. Indeed, there have been a number of cases foughtbetween developing countries and developed countries on this very issuewithin the WTO Dispute Settlement Mechanism. In addition, there areseveral conditions that might prevent them of using the mechanism effectivelywhich includes: lack of understanding of WTO law and its jurisprudences,lack of institutional capacity, and the fear of retaliation from developedcountries when bringing the claim against developed countries to DisputeSettlement Mechanism. Indonesia, as one of developing countries also facesthe above three problems. This paper will discuss what Indonesia need toprepare so that they can use the Dispute Settlement Mechanism effectively toresolve any dispute (if any) with other country, particularly in respect to theviolation of the article XX under the WTO Agreement

Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System

It has been alleged since its inception that the WTO Dispute Settlement (DS) mechanism is biased against developing countries, as manifested in e.g. allegedly too low rates of dispute initiation. To shed light on this issue, this study analyses the determinants of developing country participation in the DS system, using bilateral industry-level trade data, and a data set on dispute initiation that is significantly richer than what has been employed in the literature. But the study also points to a number of fundamental conceptual and data problems that beset the whole empirical literature that seeks to draw policy conclusions based on country participation in the DS system. While perhaps appreciated by researchers working in this area, these problems appear to go unnoticed by practitioners drawing on this literature.

Sore Losers? Gatt/WTO Disputes and Exchange Rate Policy

In recent years, many IPE scholars have focused on the determinants of state decisions to initiate and/or settle trade disputes through the WTO's dispute settlement mechanism. Furthermore, some have suggested that these multilateral trade decisions themselves inform a state's trade policy: losing a WTO dispute, for example, has been shown to increase the likelihood of joining a preferential trade agreement (PTA). To date, however, this body of literature has paid little attention to the effects of GATT/WTO membership and disputes on governments’ other economic policy choices, such as monetary policy and the choice of exchange rate regimes. In this paper, we argue that states that have suffered GATT/WTO defeats are more likely to act as 'sore losers' - that is, to pursue exchange rate policies as a substitute for trade protection in order to improve the terms of trade. Using data on up to 57 countries from 1974-2000 we find robust evidence of such behavior over the last three decades. Countries that have suffered more defeats in GATT/WTO disputes are less likely to choose fixed exchange rate regimes and more likely to shift their exchange rate policy toward a more flexible regime. These countries are also more likely to 'fear pegging' (i.e., to adopt de facto floating exchange rates despite their de jure commitments to fixed rates) and more likely to experience real exchange rate depreciations in the aftermath of their defeats. These findings shed light on the complex relationship between trade and exchange rate policies. More broadly, they suggest that compliance with multilateral commitments may be 'in name only' when close policy substitutes allow states to circumvent these obligations.

Development or the Environment

Problem statement: The relationship between trade and environment is very complex though development and environment are invariably related to each other. There is a close relationship between development and conservation of the environment. The relationship between the WTO and MEAs is reducing and eliminating barriers to trade in environmental goods and services. This relation was acknowledged in 1972 Stockholm Conference on Human Environment. Over the past 20 years, an extraordinary number of international environmental agreements have been concluded. Very few MEAs actually regulate trade or contain trade-related provisions. Theoretically, MEA trade measures and WTO rules can and should interact in a positive and synergistic way. Approach: The main aim of this paper/research is to find out whether the international law has any method of dispute resolution or a systematic approach towards the ongoing debate between the environment and trade which is interlinked in a very complex manner. The resolution of these complex inter-linkages has become a challenge which we have to face. Results: The author had tried to highlight the complex relationship of WTO-MEA where both the environment and trade policy makers prefer unilateral solution for the environmental problem. Resorting to such unilateralism can pose a risk of arbitrary discrimination. The source of the conflict between the WTO and MEAs lies within the measures contained in MEA's and WTO rules. For example, the violation of WTOs non-discrimination principle by MEAs. The two vital questions that occurred were whether trade measures under multilateral environmental agreements are compatible with WTO rules and If MEA-related disputes are brought to the WTO system, should the WTO discourse on the relationship between the WTO and MEAs? Conclusion: Both trade and environment are crucial for the well being of human society. What is most important is to strike a proper balance between free trade and environmental protection. There are a large number of multilateral environmental agreements. Although Special Trade Obligations (STOs) can be found in only a minority, these MEAs usually incorporate environmental norms that may result in clashes with trade norms of the WTO. One of the major steps is to control trade, as it is contributing to environmental damage. The other is by providing additional incentives to join MEAs and restricting non-parties to trade with parties in restricted goods. e.g., Montreal Protocol bans trade with non-parties in ozone-depleting substances. If a conflict arise in the future between the WTO Agreements and other rules of international law, WTO dispute settlement bodies will have to consider recognized rules under public international law to settle the conflict. In the context of a dispute between two WTO members, any WTO member that considers that any of its WTO benefits have been nullified or impaired it has an absolute right to trigger the WTO dispute settlement mechanism and request consultations and the establishment of a panel.