Hard enforcement: Dispute settlement WTO

 Hard enforcement: Dispute
WTO and other trade forums serve not only as
sites for the negotiation of agreements, but also
for the adjudication of disputes that arise over their
implementation and interpretation. While all WTO
members have access to the Dispute Settlement
Body, not all of them either bring complaints to this
body or are subject to complaints from their partners.
The great majority of the cases brought to the Dispute
Settlement Body involve developed countries, the
larger developing countries, or both.
The data in table 20 summarize the level of developing
countries’ involvement in WTO dispute settlement
through mid-2016.

 There are eight developing
countries with extensive participation in cases, having
each engaged in at least 10 cases as a complainant
and another 10 or more as a respondent. These are
mostly large, middle-income Asian and Latin American
countries. Fourteen other developing countries have
been a complainant at least once and a respondent
at least once. Another 10 have been complainants
but not respondents, and 3 have been respondents
but not complainants. That makes 45 developing
countries altogether that have had at least some direct
experience in the Dispute Settlement Body, accounting
for about one third of all developing country members
of WTO. Many of the others have been third parties
to one or more disputes, often with the simple aim of
learning how the process works, but have otherwise
had no exposure to it.
It is worth noting that the patterns of participation in
dispute-settlement cases are generally comparable to
those observed before with respect to the antidumping
cases (table 13). This is not entirely coincidental,
considering the fact that a great many cases concern
measures that a member has taken under the
antidumping laws. Those countries that either impose
the most antidumping orders, or are subject to most
orders, are the same ones that most frequently find
themselves either defending or challenging these
orders in the Dispute Settlement Body.
Developing countries face several practical barriers to
their effective participation in the dispute-settlement
system. The greatest of these is the need for expertise
in the law and process of WTO disputes, a field of
knowledge and practice that some developing
countries have cultivated (notably in China and in
Latin America) but that is lacking in most others.
This is a lacuna that can be filled by hiring lawyers
that specialize in this practice, but their services do
not come cheaply. Another concern is that the aim of
the system is not development but legal compliance.
Participation in the dispute-settlement system may
also be affected by cultural considerations. There
are some cultures that view the legal resolution of
disputes as a welcome alternative to reliance on
power politics, and where the pursuit of a person’s
legal rights is not seen as an act of aggression. Others
tend to see disputes as unfriendly proceedings that
are undesirable because one of the parties is bound
to lose face. Developing countries that inherited their
legal systems from England, Portugal, or Spain appear
to be more comfortable with litigation than are those
Table 20. Number of WTO disputes involving developing countries, 1995–2016
Source: WTO data at https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm.
Notes: Data are through July, 2016; does not include data on countries’ participation as third parties. Data refer to cases in
which the member was either a complainant or a respondent.
No cases 1 case 2–9 cases 10 or more cases
Complainant in
10 or more cases
— — — Argentina, Brazil,
China, Chile,
India, Indonesia,
Republic of Korea,
2–9 cases
Egypt, South
Republic of)
Pakistan, Peru
Philippines, Turkey
Respondent in
1 case Trinidad and
Malaysia, Uruguay Panama —
No cases
All other
Antigua and
Cuba, Hong Kong
(China), Singapore,
Sri Lanka
Costa Rica,
Honduras, Taiwan
Province of China,
Viet Nam

countries where legal systems were either inherited
from France or are primarily based on indigenous legal
traditions. These differing perspectives may go a long
way towards explaining why even relatively small Latin
American countries such as Ecuador and Honduras
have brought multiple cases to the Dispute Settlement
Body, but to date no sub-Saharan African country has
been a complainant in a single WTO dispute. Most
Asian countries show a similar reticence, but that is
not an absolute rule.
There are steps that countries can take to enhance their
capabilities in this area. One simple and inexpensive
way to build capacity is to follow the advice that
countries are often given to participate as third parties
in disputes between other countries. A WTO member
need not have a direct interest in a case, or play an
active role in its adjudication, in order to participate as
a third party. Other members recognize that this is one
means by which diplomats from developing countries
learn the ropes of the dispute-settlement system.
Developing countries can also receive help from the
Advisory Centre on WTO Law (ACWL), an institution
that renders legal assistance in dispute-settlement
cases. Membership dues and fees for ACWL services
are assessed according to a sliding scale. Among the
services offered are legal advice on WTO law, support
in WTO dispute-settlement proceedings, seminars and
internships. The ACWL’s role in most cases is to assist
the complainant country rather than the respondent.
ACWL’s legal opinions may also help developing
countries in the conduct of trade negotiations.
Among the issues on which ACWL has helped
countries to understand their rights and obligations
include such diverse matters as tax rates, balanceof-payment concerns, import and export restrictions,
renegotiation of tariff commitments, national security
exceptions, intellectual property rights, trade-remedy
laws, technical regulations or standards affecting
the sale of goods, and legal issues relating to trade
in services. ACWL also provides capacity-building
assistance through training courses, seminars and
workshops, and runs a secondment programme for
trade lawyers through which government lawyers from
developing country members and LDCs join its staff
as paid trainees for a nine-month term.
No amount of technical assistance can change the
fact that the smaller developing countries have less
leverage in the event that a case comes down to
retaliation. The magnitude of retaliatory measures that
are permitted to be imposed is determined more by
the size of the complaining country than by the size of
the respondent, meaning that the dynamics in a small
country versus large country case are very different
than those in which two large countries are involved.
Antigua and Barbuda managed to win a ruling that
United States restrictions on Internet gambling violated
that country’s GATS commitments, for example, but
the retaliation that this small member was authorized
to impose on the United States had little impact on
Washington. By contrast, when Brazil won a ruling that
the United States had violated its commitments not to
subsidize cotton the retaliatory power given to Brazil
was much more persuasive. The Cotton Four African
countries did not have the same leverage as Brazil,
which is one reason why they chose to negotiate on
that same topic when Brazil had opted to litigate.

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