Author Profile

Aindrila Biswas

5th year,B.A/BSC LLB NUJS. WB KOLKATA

Posted On by &filed under International Trade Law, Legal Articles.


INTRODUCTION

“Prompt compliance with recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members.”

—-World Trade Organization, Article 21.1 of the DSU

In 1994, the WTO members agreed on the Understanding on Rules and Procedures Governing the Settlement of Disputes or Dispute Settlement Understanding (DSU) (annexed to the “Final Act” signed in Marrakesh in 1994)[1]. Pursuant to the rules detailed in the DSU, member states can engage in consultations to resolve trade disputes pertaining to a “covered agreement” or, if unsuccessful, have a WTO panel hear the case[2]. The priority, however, is to settle disputes, through consultations if possible. By January 2008, only about 136 of the nearly 369 cases had reached the full panel process.

The operation of the WTO dispute settlement process involves the parties and third parties to a case and may also involve the DSB panels, the Appellate Body, the WTO Secretariat, arbitrators, independent experts, and several specialized institutions[3]. The General Council discharges its responsibilities under the DSU through the Dispute Settlement Body (DSB)[4]. Like the General Council, the DSB is composed of representatives of all WTO Members. The DSB is responsible for administering the DSU, i.e. for overseeing the entire dispute settlement process. It also has the authority to establish panels, adopt panel and Appellate Body reports, maintain surveillance of implementation of rulings and recommendations, and authorize the suspension of obligations under the covered agreements.[5] The DSB meets as often as necessary to adhere to the timeframes provided for in the DSU[6].

Since 1 January 1995 to 1 March 2007 of the extent to which WTO Members have complied with adverse WTO dispute settlement rulings rendered both by dispute settlement panels and the Appellate Body. The record indicates that, generally speaking, WTO Members found in violation of their WTO obligations in dispute settlement proceedings have done a reasonably good job in taking steps to correct these violations within a reasonable period of time. While there have been some cases where compliance has been delayed or where full compliance has yet to be achieved, this should not detract from the fact that the overall compliance record of WTO Members has been quite positive, which in turn has contributed significantly to the effectiveness of the WTO dispute settlement system as a whole.

It is to be recalled that Article 3.7 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) clearly states that the preferred remedy under the WTO dispute settlement system is the withdrawal of any WTO-inconsistent measure. If and only if this is not possible on a timely basis are alternative remedies to be pursued. These alternative remedies are (i) the granting of compensation by the responding Member to the complaining Member consisting of trade liberalization measures with respect to a volume of trade comparable to that adversely affected by the WTO-inconsistent measures; and (ii) if compensation is not possible and as a last resort, retaliation by the complaining Member consisting of trade-restrictive measures of a proportionate nature against the trade of the responding Member[7].

Up until 1 March 2007, there have been panel or panel/Appellate Body reports adopted by the WTO Dispute Settlement Body (DSB) in 109[8] cases excluding reports from so-called Article 21.5 of the DSU compliance proceedings, which have occurred in roughly one out of every five cases where WTO violations have been found in the original WTO litigation proceedings[9]. Of the 109 adopted panel or panel/Appellate Body reports, in nearly 90% of these cases the panel and/or the Appellate Body have found WTO violations.

Only 17 WTO Members—counting the European Communities as 1 Member rather than as 27 Members—or about 30% of all 150 WTO Members—counting the European Communities in this calculation as 27 Members—have ever been the object of adverse or partially adverse rulings by WTO panels and/or the Appellate Body for which compliance was required. Seven of these 17 WTO Members have been the object of only one adverse or partially adverse ruling. These seven Members are Brazil, the Dominican Republic, Egypt, Guatemala, Indonesia, Thailand, and Turkey.

Ten WTO Members have had multiple adverse or partially adverse rulings in WTO litigation proceedings. These 10 Members are (with the number of cases in which violations against them were found in parentheses) the United States (33), European Communities (16), Canada (8), Argentina (6), India (4), Mexico (4), Korea (5), Japan (4), Chile (2), and Australia (2).

COMPLIANCE RECORD OF WTO MEMBERS—SOME GENERAL OBSERVATIONS

As has been widely acknowledged by WTO Members themselves, the overall compliance record of WTO Members with adverse WTO dispute settlement rulings has generally been quite good in the cases to date in which WTO violations have been found. In virtually every one of these cases, the WTO Member found in violation of its WTO obligations has indicated its intention to bring itself into compliance and in most cases has already done so.

The record has also shown that compliance has usually been more rapid where WTO violations could be corrected through administrative action under the control of the Executive as opposed to legislative action. This outcome is not surprising since legislative action involves more complicated political processes; the enactment of corrective remedies through changes to national statutes usually takes a longer period of time in most national systems. As will be seen further, the experience of the United States in this regard is instructive.

The use of compensation as a transitional remedy until full compliance could be achieved has only occurred in one case[10]. Thus, the WTO dispute settlement model in practice has been a ‘compliance-retaliation’ model rather than a ‘compliance-compensation-retaliation’ model.

As for the resort to retaliation, out of the 109 cases where a panel or panel/Appellate Body report was adopted, retaliation has been requested in only 18 instances of which 9 have gone through the arbitration process under Article 22.6 of the DSU to establish the proper level of retaliation. The DSB granted authorization to retaliate in only eight cases. In one case (US1916 Act), the WTO-inconsistent measure was withdrawn soon after the arbitration was completed, thus obviating the need for final DSB authorization of retaliation. More will be said on retaliation in the final section subsequently.

Compliance Problems in WTO Dispute Settlement:

This Comment surveys the problems of compliance facing the World Trade Organization (WTO) dispute settlement system and considers reforms that might improve compliance. In general, the WTO dispute settlement system has an excellent compliance record. A recent examination of the implementation record of WTO decisions for the first ten years of WTO dispute settlement found a compliance rate of 83%[11]. Although new problem cases continue to arise, several of the ten problem cases outstanding at the time of the study have since been resolved[12]. This compliance rate is very good for an international state-to-state dispute settlement system[13].Moreover; the success rate of consultations in WTO cases that do not result in either adopted panel or Appellate Body reports is impressive[14]. The picture, however, is not so rosy if one looks beyond general statistics and considers the quality and timeliness of compliance actions.

Timeliness also encompasses inquiries into whether the time taken by the panel and appellate processes has met the standards specified in the WTO Dispute Settlement Understanding (DSU)[15].

An examination of the quality and timeliness of compliance in the first ten years of the WTO dispute settlement system reveals some interesting patterns. General Agreement on Tariffs and Trade (GATT) and Trade- Related Aspects of Intellectual Property Rights (TRIPS) cases typically result in the timely withdrawal of the contested measure[16]. The two TRIPS cases brought against the United States[17] and the European Communities –Bananas[18] case are the main exceptions to this trend[19]. In other words, the desired result has generally been achieved in GATT and TRIPS cases. There have also typically been timely withdrawals of the contested measures in safeguard and textiles cases; however, the contested measures in these cases were often in place for all or most of the initially intended period of effectiveness[20]. Thus, compliance was timely in terms of respecting the reasonable period of time for implementation set by the WTO dispute settlement process, but the overall WTO process took so long that implementation was not very meaningful in practical terms[21].

 

Finally, with respect to the overall timeliness of the panel and appellate process, a detailed examination of the time taken by panels to issue their reports shows that panels typically exceed the targets set in the DSU by many months, especially in Article 21.5 compliance proceedings[22].While the Appellate Body usually issues its report within ninety days of an appeal[23], the overall time taken by the process— especially when the “reasonable” periods of time for implementation are taken into account— is quite long[24]. This Comment will not further consider the problem of the length of proceedings, except to note that reforms are both needed and feasible[25].

Taken together, the foregoing suggests that although the WTO dispute settlement system may have an admirable record overall, considerable room for improving the quality and timeliness of compliance exists. Indeed, businesses have expressed concerns about non-compliance and delays as reasons not to use the WTO dispute settlement system, which raises serious concerns for the future[26]. Thus, it is appropriate to consider the question of what changes might be made to the system to address these problems. It has been considered that the changes in compensation and retaliation rules could resolve the dispute settlement system more perfect.

CASE STUDIES—UNITED STATES AND THE EUROPEAN COMMUNITIES:

The United States and the European Communities are the two WTO Members that have by far not only initiated the greatest number of WTO litigation proceedings against other WTO Members but that have also had the most number of litigation proceedings initiated against them. Thus, it is particularly instructive to review the compliance record of the United States and the European Communities, since together they have been the object of about one half of all adverse WTO rulings.

The United States has been the object of adverse or partially adverse rulings as a respondent in 33 cases. In four other cases, no WTO violations were found and the United States was fully exonerated. Of the 33 cases where violations were established, the United States has been able to comply or is in the process of complying solely through administrative actions in 26 cases. Sixteen of these were either anti-dumping or subsidy cases, three were textile cases, four were safeguard cases and three involved other WTO violations. As of 1 March 2007, the steps taken by the United States to implement the rulings and recommendations of the DSB in USUpland Cotton, USOil Country Tubular Goods Sunset Reviews, and USGambling were in compliance proceedings under Article 21.5 of the DSU. In seven cases[27] legislative action has been or is necessary to bring the United States into compliance. In four out of these seven cases, the US Congress has already passed remedial legislation[28]. Indeed, these legislative acts to comply by the US Congress, all taken since late 2004, have been among the most noteworthy and positive developments for the WTO dispute settlement system, given the previous harsh criticism of the system emanating from certain members of the US Congress, particularly with respect to trade remedy cases. There are some transitional problems in the USOffset Act (Byrd Amendment) case since the legislation repealing the Byrd Amendment does not take effect until 1 October 2007 and remedial legislative action is still required in the other three cases. Nonetheless, recent congressional actions to implement adverse WTO panel and Appellate Body reports have been significant and their importance for maintaining the legitimacy of the WTO dispute settlement system should not be underestimated.

As for the European Communities, it has been the object of adverse or partially adverse rulings in 16 of the 19 completed cases in which it was the responding party. In addition, the European Communities settled the matter prior to the issuance of the final panel report in three instances. In all 16 cases where the European Communities was found to be in violation of certain of its WTO obligations, the European Communities committed to bring itself fully into compliance with the adverse panel and Appellate Body reports. Its actual compliance record has also been good, although the administrative and legislative processes which must be observed to implement a decision are of course quite different from those used in the United States[29]. While the United States and the European Communities have been the WTO Members with the most extensive compliance experience, other WTO Members, both developed and developing, have also had to comply with adverse WTO rulings and, for the most part, have done so in a satisfactory fashion. As for other developed country WTO Members, Canada has taken actions to comply in six cases[30]. Canada has yet to comply in the two regional aircraft subsidy cases successfully brought against it by Brazil. For its part, Japan has taken actions to comply in three cases[31] where WTO violations were found and settled the matter prior to the adoption of the final panel report in one instance.[32] Finally, Australia has taken actions to comply in the two cases where WTO violations were found.[33]

A problem with the implementation of WTO dispute settlement recommendations and rulings is the lack of guidance over what exactly a losing party must do to comply. The tendency has been for the losing party to take minimal steps and declare itself in full compliance. The winning party often disagrees. One solution is to refer the matter to a compliance panel under art 21.5 of the DSU.In EC—Bananas III (Ecuador) and EC—Bananas III (US)[34], the DSB authorized retaliation for both Ecuador and the United States against the European Communities. However, only the United States actually imposed retaliatory measures against $115 million of its trade with the European Communities. These measures were subsequently withdrawn after a bilateral settlement and are no longer in effect.

In EC—Hormones (Canada) and EC—Hormones (US)[35], the DSB authorized retaliation for both Canada and the United States against the European Communities and both imposed retaliatory measures—the United States against $130 million of trade and Canada against some $20 million of trade. Despite claims by the European Communities that it has brought itself into compliance with the original panel and Appellate Body reports, these retaliatory measures currently remain in place. The European Communities has initiated dispute settlement proceedings against Canada and the United States seeking their removal[36].

In US—Offset Act (Byrd Amendment)[37], the DSB authorized retaliation by the eight original complaining parties against the United States, with the amount of the retaliation to be directly tied to the amount of the anti-dumping and countervailing duties actually refunded to US petitioners under the WTO-inconsistent statute. To date, only the European Communities, Canada, Japan, and Mexico have actually imposed retaliatory measures against US trade. Following a recent US court ruling that the Byrd Amendment does not apply to Canada and Mexico by virtue of certain NAFTA provisions, Canada and Mexico withdrew their retaliatory measures. However, the European Communities and Japan have indicated that their retaliatory measures will remain in place as long as anti-dumping and countervailing duties assessed against their exports to the United States continue to be distributed to domestic producers under the Byrd Amendment. This distribution of duties assessed may continue to occur with respect to certain existing orders even after the repeal of the Byrd Amendment becomes effective on 1 October 2007.

Finally, in the regional aircraft subsidy cases (Canada—Aircraft Credits and Guarantees and Brazil—Aircraft)[38] brought by Canada and Brazil against each other, the DSB authorized retaliation for each side against the other, but retaliatory measures have never been imposed as the two sides continue to seek a negotiated settlement to the dispute.

Implications for Panel Reform

Consideration of how the WTO dispute resolution process is perceived and the criticisms to which it has been subjected may provide useful information to policy makers in assessing how the panel process might be improved.

A. General Principles for Reform[39]

In light of the concerns discussed above, we should arguably focus panel reform on a few central issues, such as: (i) the need for panels to exercise restraint and refrain from moving into areas where negotiated rules are unclear, (ii) the need to focus on compliance in cases where the rules are clear and there has been a violation, and (iii) the need to ensure that the capabilities of the system are realistically portrayed and appreciated by Parties.

Encouraging panelists to exercise restraint may be pursued simply through recognition of the dangers inherent in “activism” and “law making,” and in creating a culture among the community of practitioners, WTO officials, and potential panelists that reflects the importance of closely adhering to the terms of relevant agreements and applicable standards of review. More radical proposals – such as altering the negative consensus rule to allow some percentage of DSB Members to block a panel decision – would obviously be much more controversial. In terms of compliance, the Parties to the DSB have already begun consideration of ways to streamline and clarify procedures after a panel has rendered an opinion. Finally, ensuring that the capabilities of the system are realistically assessed may suggest that we should go slowly in pursuing a more “adjudicative” structure for panels – a structure that could inappropriately downplay the continued need for negotiation and diplomatic interchange to achieve resolution of disputes.

B. Specific Proposals for Reform[40]

Concerns such as those set out above may also have implications for specific reform proposals that have been offered to increase the efficiency, consistency and transparency of panels. A few specific proposals are discussed below.

1. Permanent Body of Panelists: One proposal for panel reform that has received quite a bit of attention is the notion of establishing a permanent system of panelists, similar to that existing in the Appellate Body[41]. In light of the challenges facing the overall dispute settlement system, however, there are other considerations that could be brought to bear on the issue.

First, are there not benefits to the current system, whereby countries play an active role in the selection of panelists?[42]4 Since parties to a dispute arguably bear some responsibility for the composition of panels, they may be less inclined to criticize particular panelists for bias, lack of qualifications to hear a particular matter, etc. Certainly, such criticisms would be deflected to some degree to the extent Parties participate in the selection process.

Second, would a permanent body of panelists “put a face” on the panel system that is easier to attack by opponents. Under the current system, there is likely to be a greater diversity of panelists in terms of background, outlook, and experience as parties to a dispute seek to have panelists uniquely appropriate for their particular case, and perhaps favorable to a particular country’s outlook. While this may lead to less consistency, it may also create a less definable target for opponents who want to paint the system as dominated by “international bureaucrats” set on undermining national sovereignty.

Finally, would a permanent system of panelists not raise its own questions as to the ideological bent of panelists? A permanent body might give rise to fewer concerns about the bias of individual panelists against a particular country. While this may be true, a permanent body might be perceived as more ideological and more given to developing the predispositions – whatever they may be – of professional trade officials. Arguably, an expert body might feel more comfortable, and more qualified, than ad hoc panels in venturing into ambiguous areas that are better left to negotiations – exacerbating concerns that panels are “making law.”[43] This is not meant to suggest that these considerations are decisive or would outweigh the arguments in favor of more consistency and professionalism – only that they should be part of the mix in considering reforms[44].

2. Transparency

Many proposals for panel reform have focused on transparency and in some sense these reforms seem obvious. Making the system more open and less mysterious would seem to have obvious benefits, if for no other reason than that it would deprive critics of a powerful argument about democracy and fairness. While the fundamental benefit of transparency seems clear, looking at the issue with an eye toward the challenges facing the dispute resolution system in general does raise some additional considerations. Undoubtedly, many of the groups and individuals that have sought greater access to the WTO have done so out of a legitimate desire to work constructively within the system. The disruption seen at Seattle, however, raises the prospect that certain groups are interested more in destroying than improving the WTO[45].

This fact has implications for reform. Transparency in the context of the dispute resolution process is arguably best focused on two goals: (i) to allow interested groups and individuals to better follow and understand the workings of the system, and (ii) to the extent practicable, to allow greater input that will help elucidate the proper scope and application of WTO agreements. On the other hand, to the extent proposals for reform would heighten opportunities for activists to politicize cases or put extraneous pressure on panelists, the implications for the system may be far less positive.

CONCLIUSION:

The incentive for governments to negotiate and abide by international trade agreements depends in part on the effectiveness of enforcement provisions. Effective enforcement is particularly important for developing countries, as they will rarely be able to exert credible threats against large trading entities that do not abide by the negotiated rules of the game and often will not appear on the ‘radar screen’ of the WTO.

Domestic enforcement is a vital dimension in enhancing the relevance of multilateral commitments to domestic stakeholders (importers, exporters, consumer groups). In most countries, including high income nations, domestic interests are restricted in their ability to contest actions by national government agencies that violate WTO commitments. Civil society has a strong interest in seeking to maximize the extent to which international treaty obligations can be invoked in national legal systems. This will remove a number of layers of uncertainty and complexity associated with bringing cases to the WTO. Strengthening national enforcement mechanisms can help make the WTO a more relevant instrument from an economic development perspective by increasing the ownership of negotiated commitments. It also relaxes the constraint of having to convince one’s government to bring a case to the WTO and will reduce the burden of DSP at the WTO level. The easiest way of making WTO commitments enforceable nationally is to expand on the type of challenge mechanisms that have been introduced in the GPA.

The private sector must play a much greater role in enforcement. In part this can be achieved by

designing domestic legal mechanisms that increase the incentive for them to collect, compile and transmit information on the measures that are being applied by governments, both their own and foreign. Thus, there is a close link to our first point — giving private interests standing in domestic fora (via a general challenge procedure) can be expected to be a great motivator for greater involvement in both the development and enforcement of multilateral disciplines. But greater private sector participation is also vital in order to ensure that developing countries can defend their rights at the WTO level. This upstream dimension of DSP at the WTO is as important as the efficacy of the downstream panel and Appellate Body process.

Developing countries have an interest in re-negotiating the existing legal framework for remedies.

Remedies in the WTO do not guarantee paritas armis among the various players and unless corrective action is taken, developing countries might have even less incentive to submit cases. On this particular issue we side with Bhagwati’s (1999) proposal to opt for re-negotiation of concessions (instead of keeping it as an option) any time a developing country’s claim prevails before the WTO but implementation raises serious political problems.

Finally, we argued in favor of a formal amendment of the DSU with respect to notification of bilateral agreements to the effect that no such agreement will be applied unless previously cleared through the DSB. The reason for this proposal is twofold: when developing countries participate in such deals along with developed countries, because of the inequality of power between the two, they might be forced to non WTO-compatible solutions. On the other hand, when they do not (which is the vast majority of cases) they might see their rights under the WTO contract diminished since the parties to such deals hardly have the incentive to respect MFN.

Bibliography:

Book:

Mitsuo Matsushita, Thomas J Schoenbaun and Petros C. Mavroidis, “The World Trade Organization Law, Practice & Policy”; Pub: Oxford University Press, 2nd Edition; 2005

John H. Jackson Et Al; “Legal Problems of International Economic Relations”; Pub Oxford University Press; Edition 5th; 2008

Prof Raj Bhala;” A treatise on the General Agreement of Tariffs & Trade”; International Trade Law Series; Pub: Thomson Sweets & Maxwell, 2005,

William J. Davey, “Expediting the Panel Process in WTO Dispute Settlement, in The WTO: Governance, Dispute Settlement & Development Countries”; Pub: Thomson Sweets & Maxwell, 3rd Edition 2008

Marion Panizzon, Nicole Pohl and Pierre Sauvé (Edited by);“GATT & the Regulation of International Trade in Services World Trade Forum”; Pub: Cambridge University Press;1st Publication,2008

Anne O Krueger; “The WTO as an International Organization”; Oxford Indian Paperbacks, 1998

David Pal meter & Petros C. Mavroidis; “Dispute Settlement in the WTO Practice and procedure”; 2nd Edition; Cambridge, 2004

Petros C Mavroidis; “The General Agreement on Tariffs & Trade- a Commentary”; Pub: The Oxford Commentaries on the GATT/WTO Agreement; 1st Publication; 2005

Article:

Jeanne J. Grimmett, “Dispute Settlement in the World Trade Organization (WTO): An Overview”; September 7, 2010 CRS Report for Congress Prepared for Members and Committees of Congress.

William J. Davey, “The WTO Dispute Settlement System: The First Ten Years”, 8 J. INT’L ECON. L. 17, 46– 48 (2005)

Tom Ginsburg & Richard H. McAdams, “Adjudicating in Anarchy: An Expressive Theory of International Dispute Resolution”, 45 WM. & MARY L. REV. 1229, 1308– 12 (2004)

James C. Hecht ; “Operation of WTO Dispute Settlement Panels: Assessing Proposals for Reform”; Presented at The First Five Years of the WTO American Bar Association Section of International Law and Practice ; January 20-21, 2000 Georgetown University Law Center.

Joost Pauwelyn; “Enforcement and Countermeasures in the the WTO: The Rules and Rules-Toward a More Collective Approach”, The American Journal of International Law, Volume 94, Issue 2; Apr. ,2000

Dr. Georges T. Labaki; “The Dispute Settlement Process Before The WTO”; The Certified Accountant – October 2004; Issue: 20

 

[1] Stewart-Dawyer, The WTO Dispute Settlement System, 7 ;World Trade Organization, accessed December 1, 2010

 

 

[2] A list of covered agreements is included in Appendix 1 to the DSU

 

 

[3] WTO Bodies involved in the dispute settlement process, World Trade Organization, Jeanne J. Grimmett, “ Dispute Settlement in the World Trade Organization (WTO): An Overview”;September 7, 2010 CRS Report for Congress Prepared for Members and Committees of Congress

 

 

[4] Article IV:3 of the WTO Agreement

 

 

[5] Article 2.1 of the DSU

 

 

[6] Article 2.3 of the DSU

[7] See Article 22.1 of the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU).

[8] This number refers to the number of panel or panel/Appellate Body reports issued and adopted. Accordingly, cases such as EC—Hormones where two separate panel reports were issued—one for the complaints brought by Canada, EC—Hormones (Canada), and another for the complaints brought by the United States, EC—Hormones (US)—constitute two entries, while cases with multiple complainants such as US—Offset Act (Byrd Amendment) where only one panel report was issued constitute one entry. Mitsuo Matsushita, Thomas J Schoenbaun and Petros C. Mavroidis, “ The World Trade Organization Law, Practice & Policy;Pub: Oxford University Press,2nd Edition;2005,pp1150-1161

[9] Idib,There have been 22 panel reports and 12 Appellate Body reports circulated in compliance proceedings under Article 21.5 of the DSU.

 

 

 

[10] US—Section 110(5) Copyright Act.

 

 

[11] William J. Davey, The WTO Dispute Settlement System: The First Ten Years, 8 J. INT’L ECON. L. 17, 46– 48 (2005) [hereinafter The First Ten Years]

 

 

[12]JOHN H. JACKSON ET AL., “LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC RELATIONS”,pp 284;5th ed. 2008

 

 

[13] Even though the WTO system has faced more challenging cases, the success rate is comparable to the success rate of the GATT dispute settlement system. The First Ten Years, supra note 1, at 48; see ROBERT E. HUDEC, ENFORCING INTERNATIONAL TRADE LAW: THE EVOLUTION OF THE MODERN GATT LEGAL SYSTEM 344– 51 (1991). The success rate in the WTO system is clearly better than the success rate in the International Court of Justice. See, e.g., Tom Ginsburg & Richard H. McAdams, Adjudicating in Anarchy: An Expressive Theory of International Dispute Resolution, 45 WM. & MARY L. REV. 1229, 1308– 12 (2004) (finding a 68% compliance rate, as defined by the authors, for a sample of cases before the International Court of Justice).

 

 

[14] William J. Davey, Evaluating WTO Dispute Settlement: What Results Have Been Achieved Through Consultations and Implementation of Panel Reports?, in THE WTO IN THETWENTY-FIRST CENTURY: DISPUTE SETTLEMENT, NEGOTIATIONS, AND REGIONALISM IN ASIA 98, 102– 07 (Yasuhei Taniguchi et al. eds., 2007) [hereinafter Evaluating WTO Dispute

 

 

[15] See Understanding on Rules and Procedures Governing the Settlement of Disputes arts. 12, 16.4, 17.5, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, Legal Instruments— Results of the Uruguay Round, 33 I.L.M. 1125 (1994) [hereinafter DSU].

 

 

[16] Evaluating WTO Dispute Settlement, at 114– 15, 139– 40.

 

 

[17] Appellate Body Report, United States— Section 211 Omnibus Appropriations Act of 1998, WT/DS176/AB/R (Jan. 2, 2002) [hereinafter US— Section 211 Appropriations Act]; Panel Report, United States—  Section 110(5) of the US Copyright Act, WT/DS160/R (June15, 2000) (adopted July 27, 2000) [hereinafter US— Section 110(5) Copyright Act].

 

 

[18] Appellate Body Report, European Communities— Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R (Sept. 9, 1997).

 

 

[19] Evaluating WTO Dispute Settlement, supra note 4, at 115, 140. The two cases in which the United States has been found to have violated the TRIPS Agreement required Congressional action for implementation, which has not been forthcoming. Id. at 115. The prevailing party in the two cases, the European Union, has never sought authority to retaliate, perhaps because the cases involve a relatively limited amount of trade.

 

 

[20] Idib. at 110.

 

 

[21] Idib. at 113– 14

 

 

[22] William J. Davey, Expediting the Panel Process in WTO Dispute Settlement, in THE WTO: GOVERNANCE, DISPUTE SETTLEMENT & DEVELOPING COUNTRIES 409, 415– 18, 420– 21 (Merit E. Janow, Victoria Donaldson & Alan Yanovich eds., 2008) [Expeditingthe Panel Process].

 

 

[23] Idib. at 418

 

 

[24] Idib. at 419– 20

 

 

[25] Idib. at 421– 30

 

 

[26] See, e.g., Gary G. Yerkey, U.S. Poultry Producers Do Not Plan to Urge U.S. to File Case at WTO over EU Import Ban, INT’L TRADE DAILY (BNA), June 9, 2008 (noting EU failure to comply in the Hormones case). In the DSU reform negotiations, Mexico has been particularly critical of what it calls the “‘fundamental problem’ of the WTO dispute settlement system, namely the ‘period of time which a WTO-inconsistent measure can be in place without the slightest consequences’ to the offending party.” Daniel Pruzin, Mexico Presents ‘Radical’ Proposal for WTO Dispute Resolution Reform, 19 INT’L TRADE REP. (BNA) 1984, 1984 (2002).

 

 

[27] US—FSC, US—Offset Act(Byrd Amendment), US—Section 211 Appropriations Act, US—1916 Act, US—Section 110(5) Copyright Act, US—Upland Cotton, US—Hot-Rolled Steel.

 

 

[28] US—FSC, US—Offset Act(Byrd Amendment), US—Upland Cotton, US—1916 Act.

 

 

[29] Some notable cases where the European Communities has taken significant actions to comply include ECBed Linen, ECTariff Preferences, ECSardines, ECTrademarks and Geographical Indications, and ECExport Subsidies on Sugar. Like the United States, there have been several cases, most notably ECBananas and ECHormones, where the European Communities has experienced residual compliance problems as a result of dissatisfaction by other WTO Members with the actions taken to comply.

 

 

[30] Canada—Periodicals, Canada—Dairy, Canada—Autos, Canada—Pharmaceutical Patents, Canada—Patent Term, and Canada—Wheat Exports and Grain Imports.

 

 

[31] Japan—Alcoholic Beverages II, Japan—Agricultural Products II, and Japan—Apples.

 

 

[32] Japan—Quotas on Laver., Modern GATT Law:; Prof Raj Bhala;” A treatise on the General Agreement of Tariffs & Trade” ; International Trade Law Series; Pub: Thomson Sweets & Maxwell,2005,pp 123- 139

 

 

[33] Australia—Salmon and Australia—Automotive Leather II. As noted previously, a number of developing country WTO Members have also had to comply with adverse or partially adverse rulings in a number of WTO cases and, like their developed country counterparts, have successfully done so in most instances. For example, Argentina has taken action to comply in five cases. Korea has taken actions to comply in five cases, although in one of those cases (Korea – Certain Paper) the steps Korea took to comply were in compliance proceedings under Article 21.5 of the DSU as of 1 March 2007. India has taken action to comply in three cases. Mexico has also taken action to comply in several cases, most notably Mexico—Telecoms, Mexico—Corn Syrup, and Mexico—Anti-Dumping Measures on Rice. Chile, Turkey, Indonesia, and Thailand are other developing countries that have taken actions to comply with adverse WTO rulings. On the other hand, Brazil has still failed to comply with adverse WTO rulings in its long-running dispute with Canada over both countries’ subsidization of their manufacturers of regional aircraft.

 

 

[34] Art 21.5 Panel Report European Communities-Bananas, Recourse to Article 21.5 by Ecuador, WT/DS27/RW/ECU,12 April 1999. No presumption of consistency with WTO  agreements attaches to revised measures under  Article 21.5 Panel Report, European Communities- Bananas-Recourse to Article 21.5 by the European Communities, WT/D27.RW/EEC,12 April 1999

 

 

[35] EC- Harmones, Report of the Appellate Body, 13th February 1998, WT/DS26/AB/R;WT/DS/48/R,PARA.104

 

 

[36] United States—Continued Suspension of Obligations in the EC—Hormones Dispute, Request for the Establishment of a Panel by the European Communities, WT/DS320/6, 14 January 2005; Canada—Continued Suspension of Obligations in the EC—Hormones Dispute, Request for the Establishment of a Panel by the European Communities, WT/DS321/6, 14 January 2005.

 

 

[37] United States-Anti-dumping Measure on certain Hot-Rolled Products from Japan, Report of the Appellate Body, 23 August 2001, WT/DS184/AB/R.

 

 

[38] Canada-Measure Affecting the Export of Civilian Aircraft, Report of the Appellate Body (AB-1999),2 August 1999,WT/DS70/AB/R,para 203

 

 

[39] James C. Hecht ; “Operation of WTO Dispute Settlement Panels: Assessing Proposals for Reform”; Presented at The First Five Years of the WTO American Bar Association Section of International Law and Practice ; January 20-21, 2000 Georgetown University Law Center

 

 

[40] Idib

 

 

[42] Under the DSU, parties to a dispute have the right to object to panelists suggested by the Secretariat. DSU Article 8.6. In cases where the parties cannot agree on the composition of a panel within 20 days, the Director-General determines its composition. Id. at Article 8.7. It has become increasingly common for the parties to fail to reach agreement on a panel’s composition, which, if the trend continues, will to some degree undermine any benefits arising from party participation in the selection process.

[43] In fairness, such concerns would presumably apply equally to the Appellate Body, and it is questionable whether that body has exhibited any particular predisposition, as compared to panels, up until now.

[44] Joost Pauwelyn; “Enforcement and Countermeasures in the the WTO: The Rules and Rules-Toward a More Collective Approach”, The American Journal of International Law, Volume 94, Issue 2;Apr. ,2000,335-347.

[45] Idib

 

 

 


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