The WTO: Looking forwards

Journal of International Economic Law

Volumn 9, Issue 1, 2006, Pages 3-29

  Davey, William J ^a  

^a UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

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EID: 33645293491     PISSN: 13693034     EISSN: 14643758     Source Type: Journal    
DOI: 10.1093/jiel/jgl002     Document Type: Review

References (124)

1. Ministerial Declaration on the Doha Work Programme, adopted 18 December 2005 (WT/MIN(05)/ DEC, 22 December 2005) ('Hong Kong Declaration'). No declarations were adopted at Cancun or Seattle, and the meetings ended in confusion.
2. Doha Ministerial Declaration, adopted 14 November 2001 (WT/MIN(01)/DEC/1, 20 November 2001).
3. The problems of decision-making are outlined in the so-called Sutherland Report. The Future of the WTO: Addressing the Challenges of the Next Millennium 2005, chaps VII-VIII (Report of the Consultative Board to the Director General Supachai Panitchpakdi, hereinafter the 'Sutherland Report'). The Sutherland Report was the subject of a recent, two-part mini-symposium in 8 JIEL 287, 591 (2005). On the seriousness of the challenge presented by FTAs, see the Sutherland Report, above, chap II;
4. WTO Secretariat, World Trade Report (WTO 2003);
5. William J. Davey, 'Regional Trade Agreements and the WTO: General Observations and NAFTA Lessons for Asia', Illinois Public Law Research Paper No. 05-18, available at http://ssrn.com/abstract=863846 (visited 10 February 2006).
6. In respect of aid and market access commitments, see Hong Kong Declaration, above n 1, paras 47-57 and Annex F.
7. The Hong Kong Declaration's 2013 date applies to 'the parallel elimination of all forms of export subsidies and disciplines on all export measures with equivalent effect'. Hong Kong Declaration, above n 1, para. 6. Based on other types of programs mentioned in paragraph 6, other export measures would seem to include export credits, export credit guarantees and insurance, the operation of state trading enterprises and food aid. It may not be easy to agree to disciplines on those other measures.
8. The commitment is, at a minimum, to provide duty-free and quota-free market access to Least Developed Country products covering at least 97% of a member's tariff lines. Hong Kong Declaration, above n 1, Annex F (item 36) and para (a)(ii). There is concern on the part of LDCs that it would be technically possible to include in the 3% of tariff lines that may remain subject to tariffs and quotas many products that are of particular export interest to them. In this regard, it is worth recalling that there were many developing country complaints about the implementation of the WTO Agreement on textiles and clothing, which called for the elimination of textile and clothing quotas imposed under the multifibre arrangement in four stages from 1995 to 2005 and which was also based on removing restrictions on a specified percentage of tariff lines in each stage. The complaints were that the interim percentages could be met without liberalizing most of the products of interest to developing countries, such that most restrictions remained in place until the final stage, when they all had to be eliminated. An analysis by the WTO Secretariat concluded that it appeared that liberalization of restriction products before 2005 had been kept to a 'bare minimum'. WTO Secretariat, 'The Global Textile and Clothing Industry Post the Agreement on Textiles and Clothing', Discussion Paper No. 5 (2004), 13-15.
9. Hong Kong Declaration, above n 1, paras 10 and 23.
10. The reference is to the Director-General's conference room in Geneva, which at one time was painted green.
11. It appears that over time, participants in the green room meetings have become better versed in their roles, particularly those participants that are viewed as representing groups. Because the key individuals in a member's delegation at a ministerial are often not the same as those that are used to playing such a role in Geneva in respect of more routine matters, it is important that they are made aware of their function at a ministerial. In addition, the Hong Kong ministerial was preceded by numerous mini-ministerials, which meant that the individuals representing the major players were accustomed to working with each other. I have sometimes wondered whether these mini-ministerials are all that useful, especially when the typically rather limited results of the meetings are contrasted with the extensive time and effort that goes into their preparation. However, they are certainly useful in ensuring that the relevant ministers have experience in dealing with each other in advance of the real ministerial. If key ministers do not get along, this may not be so helpful, but in the usual case, I think it is quite useful. In this regard, it is worth noting that the Sutherland Report calls for more such contacts. Sutherland Report, above n 3, chap II. While I doubt the usefulness of Report's recommendation of annual ministerials or leadership summits every five years, the success of Hong Kong supports the Report's recommendation for more frequent contacts among senior officials and ministers in the run-up to key ministerials.
12. 'What happened in Hong Kong?: Initial analysis of the WTO Ministerial', Oxfam Briefing Paper 85 (2005), at 5.
13. Ibid, at 5-7.
14. Quoted at http://www.wto.org/english/thewto_e/minist_e/min05_e/ min05_18dec_e.htm (visited 12 January 2006).
15. Quoted at http://www.ustr.gov/Document_Library/Transcripts/2005/December/ Remarks_by_USTR_Portman_at_the_Closing_Press_Briefing.html (visited 12 January 2005).
16. Quoted in 'WTO Ministerial Agrees on Setting Course for Final Stage of Talks; Some Disappointed', 22 BNA International Trade Reporter 2046 (22 December 2005).
17. 'World Trade: Hard Truths: The Doha trade round is alive, but hardly healthy', The Economist, 24 December 2005, 97-98 (US edition).
18. See above n 10, at 3.
19. 'Fast track' or trade promotion authority (as it is now called) is significant because it provides, subject to specific procedural requirements, that the results of a trade agreement negotiation will be presented to Congress for a 'yes or no' vote within a reasonably short period of time. It is commonly thought that unless Congress agrees to give itself the option of voting only for or against an entire agreement, Congress will be unable to restrain itself from amending key parts of the agreement, as effectively happened in the case of the Kennedy Round results in the 1960s. As such, the absence of trade promotion authority severely undermines the credibility of US negotiators and is commonly thought to make trade negotiations virtually impossible. Indeed, all GATT/WTO rounds since the Tokyo Round and recent US free trade agreement negotiations have been concluded under such authority. See generally John H. Jackson, William J. Davey and Alan O. Sykes, Legal Problems of International Economic Relations, (4th edn, West Publishing 2002) 80-88.
20. Although the authority technically expires in mid-2007, to meet various procedural requirements, it is generally accepted that as a practical matter the negotiations must conclude by the end of 2006 or thereabouts. 19 USCA 3803-3805. While it is possible that the existing trade promotion authority could be extended or a new version adopted that seems unlikely. In recent years, it has been difficult to get such authority through Congress. President Clinton lacked such authority for most of his presidency, and President Bush obtained such authority only with some difficulty. Given President Bush's perceived diminished influence in Congress, the increased controversy surrounding trade agreements (as seen in the narrow approval by Congress of CAFTA - the Central America Free Trade Agreement) and the congressional elections scheduled for November 2006, it would seem particularly difficult to extend trade promotion authority before the end of 2006. 'Doubts Voiced About Year-End 2006 WTO Deadline, Raising Spector of TPA Renewal', 23 BNA International Trade Reporter 9 (5 January 2006).
21. Amendment of the TRIPS Agreement, Decision of 6 December 2005 (WT/L/641, 8 December 2005).
22. See Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, Decision of 30 August 2003 (WT/L/540, 1 September 2003);
23. Declaration on the TRIPS Agreement and Public Health, adopted 14 November 2001 (WT/MIN(01)/DEC/2, 20 November 2001).
24. The United States was the first to deposit its formal acceptance of the amendment. WT/LET/506 (22 December 2005).
25. For an excellent analysis of the Doha Declaration on TRIPS and subsequent developments, see Frederick M. Abbott, 'The WTO Medicines Decision: World Pharmaceutical Trade and the Protection of Public Health', 99 AM J Int'l L 317 (2005).
26. William J. Davey, 'The WTO Dispute Settlement System: The First Decade', 8 JIEL 17-50 (2005), (hereinafter Davey, 'The First Decade');
27. William J. Davey, 'Implementation in WTO Dispute Settlement: An Introduction to the Problems and Possible Solutions', Illinois Public Law Research Paper No. 05-16 (30 November 2005), available at http://ssrn.com/ abstract=862786 (visited 10 February 2006) (hereinafter Davey, 'Implementation');
28. William J. Davey, 'Implementation of the Results of WTO Trade Remedy Cases', Illinois Public Law Research Paper No. 05-20 (30 November 2005), available at http://ssrn.com/abstract=863905 (visited 10 February 2006) [noting that many trade remedy cases (except for safeguard cases) have led only to adjustment, not to removal of the underlying measure, a result that may be appropriate given the violation found but one that may reduce the perceived benefits of using the system] [hereinafter Davey, 'Implementation (Trade Remedies)'].
29. During the DSU review, which was held in 1998 and 1999, members generally expressed satisfaction with the system and agreed that it needed only fine tuning, although in fact many proposals for change were put forward during the review. The ongoing negotiations on DSU reform have unfolded in a similar manner. Although extensive proposals for changes have been made, there seems to be a general consensus that only limited modifications will be made. William J. Davey, 'Reforming WTO Dispute Settlement', in Dukgeun Ahn and Mitsuo Matsushita (eds), New Perspectives on the World Trading System: WTO and East Asia, (Cameron 2004) chap 5,
30. also available at William J. Davey, 'Reforming WTO Dispute Settlement', University of Illinois, Public Law & Legal Theory Research Paper No. 04-01, available at http://ssrn.com/abstract=495386 (visited 10 February 2006).
31. Besides the creation of the Appellate Body, the major change between the GATT dispute settlement system and the WTO system was to provide that certain stages of the process would go forward absent a consensus to the contrary in the Dispute Settlement Body (in contrast to the GATT requirement of a consensus to go forward). Those stages are panel establishment, report adoption and authorization of suspension of concessions. In addition, default terms of reference of panels were provided for in the absence of an agreement thereon and the Director-General was authorized to compose panels in the absence of party agreement.
32. Robert E. Hudec, 'GATT Dispute Settlement After the Tokyo Round: An Unfinished Business', 13 Cornell International Law Journal 145, 159-166 (1980).
33. Robert E. Hudec, 'The New WTO Dispute Settlement Procedure: An Overview of the First Three Years', 8 Minnesota Journal of Global Trade 1, 14-15 (1999).
34. See, e.g., Claude E. Barfield, Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization (AEI Press 2001) (hereinafter Barfield, Free Trade, Sovereignty).
35. See, e.g., Eric A. Posner and John C. Yoo, 'Judicial Independence in International Tribunals', 93 California Law Review 1 (2005).
36. For an overall evaluation of the system, see sources cited above n 22.
37. The WTO dispute settlement website numbers of consultation requests per year for the years 1995-2003 were 25, 39, 50, 41, 30, 34, 23, 37 and 26, respectively. Available at http://www.wto.org/english/tratop_e/dispu_e/ dispu_status_e.htm (visited 12 January 2006). The average for the five years from 1999 to 2003 was 30.
38. The members requesting consultations were Bangladesh; Canada (2); Chile; Costa Rica; Ecuador; the EU (7); Guatemala; India; Indonesia; Japan; Korea (2); Mexico (2); Norway; Pakistan; Taiwan; Thailand and the United States (5). Eric A. Posner and John C. Yoo, 'Judicial Independence in International Tribunals', 93 California Law Review 1 (2005). Ibid.
39. The Director-General composed panels in the GMO case (DS291) in March 2004; in the Hormones Suspension cases (DS320 and 321) in June 2005 and in the aircraft subsidy cases (DS316 and 317) in October 2005.
40. US Cotton (DS267); EC Sugar (DS266).
41. In an article published in JIEL one year ago, I calculated the successful implementation rate of adopted panel/Appellate Body reports at 83%. Davey, 'The First Decade', above n 22, at 47. An examination of cases not leading to reports suggests a high rate of resolution, in terms of settlements or withdrawals of challenged measures. William J. Davey, 'Evaluating WTO Dispute Settlement: What Results have been Achieved Through Consultations and Implementation of Panel Reports?', Illinois Public Law Research Paper No. 05-19, available at http://ssrn.com/abstract=863865, at 18-23 (visited 10 February 2006) (hereinafter Davey, 'Consultations'). Hudec calculated the overall success rate of GATT dispute settlement at 60% complete satisfaction and 29% partial satisfaction.
42. Robert E. Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System, (Butterworth 1993) 286 (table 11.7). For a discussion of how the WTO system had to deal with many unresolved carryover cases from GATT, see text below at n 76.
43. Davey, 'The First Decade', above n 22, at 49-50.
44. Davey, 'Implementation', above n 22, at 9-10.
45. See text below n 7 9-90.
46. In respect of reports adopted before 2004, the currently outstanding exceptions not involving the United States are EC Hormones (DS26 and 48; claimed implementation now being determined in panel proceedings; DS320 and 321); the aircraft subsidy cases involving Brazil and Canada (DS46, 70 & 222); and Argentina's complaint about certain Chilean agricultural measures [DS207; announced as settled in 2005 (22 BNA International Trade Reporter 1807 (10 November 2005), but Argentina requested an Article 21.5 panel on 29 December 2005. WT/DS207/18; 23 BNA International Trade Reporter 21 (5 January 2006)].
47. Davey, 'Implementation', above n 22, at 5-7.
48. The various cases involving Canada's challenges to US antidumping and countervailing duties on softwood lumber may present a particular challenge if the Executive Branch is to maintain its compliance record.
49. In the US FSC (DS108) case, the EU suspended concessions in March 2004, and the repeal occurred in November 2004. In the 1916 Antidumping Act case (DS136 and 162), the results of the EU-requested arbitration on the level of suspension of concessions were issued in February 2004 (WT/ DS136/ARB), although the EU did not seek authorization to suspend concessions. The 1916 Act was repealed in December 2004. In the Byrd Amendment case (DS217 and 134), suspensions of concessions were applied by the EU and Canada in May 2005, with other complainants imposing measures subsequently, with the repeal legislation being adopted in February 2006. See below n 45.
50. WT/DS108/AB/RW. For example, the legislation contained certain preferences for national goods that seemed to be clear violations of GATT's national treatment obligations.
51. According to press reports, 'The revenue-neutral package would repeal the U.S. export tax regime, which the World Trade Organization ruled against in early 2002 in a case brought by the EU, and replace it with $138 billion in broad-based corporate tax relief'. 'Congress Passes Export Tax Conference Bill; EU has no Plan to Lift Sanctions Immediately', 21 BNA International Trade Reporter 1662 (14 October 2004).
52. A panel has found the transitional provisions to be WTO inconsistent, WT/DS108/RW2. The matter is on appeal, where a decision is expected on 13 February 2006.
53. The repeal of the Byrd Amendment was not finalized until February 2006, although the conference bill containing it passed both the House and the Senate in late 2005. Because of minor changes made by the Senate to the conference bill, the House had to approve the Senate version, which occurred on 1 February. 23 BNA International Trade Reporter 184 (2 February 2006).
54. The need to include the repeals in conference bills is explained by the difficulty of getting trade-related legislation through Congress on a stand-alone basis. Seventy-two senators voted for a non-binding resolution in December instructing the Senate conferees not to accept repeal of the Byrd Amendment. 'Senate tells Conferees to Reject Byrd Repeal in 72-19 Vote', Inside US Trade, 25 November 2005. Of course, many of the senators subsequently voted for the conference bill anyway, but their need to be able to demonstrate that they tried to save the Byrd Amendment is instructive as to how Congress operates.
55. There were several mutually agreed extensions of the reasonable period of time for implementation in the Hot-Rolled Steel (DS184) and Section 211 (Havana Club) (DS176) cases. In the Section 110(5) Copyright case (DS160), the United States paid compensation of $3.3 million over three years, ending in December 2004.
56. Part of the compromise that led the Senate to approve the Uruguay Round agreements included a Clinton administration commitment to support a proposal by Senator Dole to create a US mechanism to review the appropriateness of WTO dispute settlement system decisions adversely impacting the United States, under which US withdrawal from the WTO would be considered if the system exceeded its jurisdiction three times in five years in ruling against the United States. 'Administration Offers to Support WTO Review Body in Deal with Dole', Inside US Trade, 25 November 1994. The review mechanism was never adopted.
57. See, e.g., Barfield, Free Trade, Sovereignty, above n 27;
58. Claude E. Barfield, 'Securing American Sovereignty: A Review of the United States' Relationship with the WTO', available at http://www.aei.org/ publications/filter.all,pubID.22847/pub_detail.asp (visited 16 January 2006);
59. Claude E. Barfield, 'Should the WTO Determine U.S. Tax Policy?', available at http://www.aei.org/publications/filter.all,pubID.20858/pub_detail. asp (visited 16 January 2006) (hereinafter Barfield, 'U.S. Tax Policy').
60. Eric and Yoo, above n 28.
61. See Sutherland Report, above n 3.
62. US Shrimp (DS58); US Lead and Bismuth Steel (DS132).
63. EC Asbestos (DS135).
64. For example, the two short pieces by Barfield, above n 49, were presented as testimony to congressional committees.
65. Barfield, Free Trade, Sovereignty, above n 27, at 43-56 [discussing US Shrimp (DS58); India QR (DS90); Turkey Textiles (DS34)].
66. There were understandings added to GATT 1994 to clarify uncertainties that had arisen under GATT practice. The understandings explicitly confirmed that the dispute settlement system had jurisdiction to consider such cases. Understanding on the Balance-of-Payments Provisions of GATT 1994, n 1; Understanding on the Interpretation of Article XXIV of the GATT 1994, para. 12. While the Appellate Body's dictum that a panel should always require a respondent in the first instance to prove compliance with GATT Article XXIV if the Article XXIV exception is raised may be criticized, the jurisdiction of the dispute settlement system to consider such cases is crystal clear. See generally William J. Davey, 'A Comment on Are the Judicial Organs of the World Trade Organization Overburdened?', in R. Porter, P. Sauvé, A. Subramanian and A. Beviglia Zampetti (eds), Efficiency, Equity and Legitimacy: The Multilateral Trading System at the Millennium, (Brookings 2001) 329-333.
67. Barfield also questions whether in the long run the system will be able to deliver credible decision on such technical issues as telecommunications and food safety. Barfield, Free Trade, Sovereignty, above n 27, at 56-63. This is legitimate concern, but one that has not yet presented serious problems in the first eleven years of the system's operation. In fact, the problem in this area is likely to be less with the system's ability to produce credible decisions than with the polar contrasts in views as between the populations of different parts of the world (e.g., the differing acceptance of GMO foods in the EU and the United States).
68. Barfield, U.S. Tax Policy, above n 49.
69. I am unaware of an environmental case that has gone 'beyond the negotiated rules'; indeed, no such case has presented implementation problems, certainly not for the United States. While the Appellate Body has interpreted the Safeguards Agreement in an overly restrictive manner (in my view), it remains to be seen whether national authorities - now that the new rules have been clarified and elaborated - will be all that restricted in exercising their discretion, so long as they analyze the issues as required by the Appellate Body's jurisprudence (something that the relevant US agency seemed unwilling to do initially). As to the antidumping cases, the United States has not been treated different than other countries [US Government Accounting Office, World Trade Organization: Standard of Review and Impact of Trade Remedy Rulings, GAO Report 03-824 (July 2003)], and, in respect of specific administrative actions, most WTO antidumping cases do not lead to significant changes in the measures applied, which typically remain in force. Davey, 'Implementation (Trade Remedies)' above n 22. As to the general measures - the 1916 Antidumping Act and the Byrd Amendment, the former was almost never invoked in its 90-year history and the demise of the Byrd Amendment is probably a desirable policy outcome, given its operational problems and the fact that most payments went to only a few companies. US Government Accountability Office, 'International Trade: Issues and Effects of Implementing the Continued Dumping and Subsidy Offset Act', GAO Report 05-979 (September 2005). An overall effect on US sovereignty? A very minor one, at best.
70. William J. Davey, 'Has the WTO Dispute Settlement System Exceeded Its Authority?: A Consideration of Deference Shown by the System to Member Government Decisions and Its Use of Issue-Avoidance Techniques', 4 JIEL 79-110 (2001) (analyzing first four years of WTO Appellate Body reports).
71. See text above n 47.
72. William J. Davey, 'Dispute Settlement in GATT', 11 Fordham Journal of International Law 51, 65-81 (1987).
73. Eric and Yoo, above n 28.
74. Ibid, at 7.
75. Laurence R. Helfer and Anne-Marie Slaughter, 'Why States Create International Tribunals: A Response of Professors Posner and Yoo', 93 California Law Review 899 (2005);
76. Eric A. Posner and John C. Yoo, 'Reply to Helfer and Slaughter', 93 California Law Review 957 (2005).
77. Posner and Yoo, above n 63, at 46-50.
78. There are only four WTO members that have made three or more consultation requests or been the object of three or more requests that have not been GATT members for 20 years, i.e., since at least 1986: Guatemala (6 requests, 2 responses); Honduras (6 requests); Ecuador (3 requests, 3 responses); Costa Rica (4 requests). Interestingly, 7 of the 19 requests involve the Bananas case (DS16, 27 and 158).
79. Davey, 'The First Decade', above n 22, at 21.
80. If one groups related cases and counts them as one dispute (see Davey, 'The First Decade', above n 22, at 18 n 1) and classifies the dispute by the principal agreement at issue (a classification that is sometimes difficult for cases that are not subject to formal proceedings), I calculate that there were about 130 disputes between 1995 and 1999, of which 50 were GATT disputes and 22 were trade remedy disputes (antidump or countervail), together representing 56% of disputes. If one looks at the last six years (2000-2005), I count 118 disputes, of which 32 were GATT disputes and 47 were trade remedy disputes, together representing 67%. In other words, in recent years the WTO system has been mainly and increasingly dealing with the same sort of case that was predominant before 1995. (Also note that in some cases there is more than one principal agreement at issue.)
81. In this regard, it is worth noting that some of the reasoning used by the authors could also be used to question whether the GATT usage statistics in the 1980s were overstated because the 1979 restatement of the rules and fine-tuning at points in the 1980s focused attention on the system and resulted in more cases being brought after a long period of comparative disuse, such that the 1980s usage statistics overstate what the use of the GATT dispute settlement system would have been in the long run. Similarly, the impact of the increasing ineffectiveness of the system in the early 1990s, see text below n 76, probably would have reduced use going forwards, also suggesting that the 1980s usage data may have overstated the GATT system's long term usage rate.
82. See above n 31.
83. Davey, above n 23, at 33-34 (discussing US proposals designed to increase party control of dispute settlement).
84. Posner and Yoo, above n 63, at 48-49.
85. Ibid, at 50.
86. See above n 34.
87. Given that 36 reports were adopted in the 1980s and 21 reports were adopted in the 1990s, the rate of non-adoption increased by 50% - from 18% of cases to 32%. The number of adopted reports is from Pierre Pescatore, William J. Davey and Andreas Lowenfeld, Handbook of WTO/GATT Dispute Settlement (Transnational Publishers 1991-1996); non-adopted reports based on author's knowledge of circulated GATT reports.
88. Davey, 'The First Decade', above n 22, at 17-21 [citing EC Bananas (DS27); EC Hormones (DS26 and 48); Japan Film (DS44); US Shrimp (DS58); US Helms-Burton (DS38); Turkey Textiles (DS34); India QR (DS90); US Section 301 (DS152) and, at the end of the early period, US FSC (DS108)]. The suggestion that the early WTO cases were easy ones - involving low-hanging fruit -may have been true for some of the cases resolved at the consultation stage but not to most of those that were litigated before panels.
89. For example, one panelist who ruled against the United States in a number of controversial cases, including Gasoline (DS2 and 4) and FSC (DS108), was later accepted by the United States as chair of important antidumping panel (Zeroing - DS294). The chair of Shrimp panel (DS58) has been accepted by the United States in subsequent panels (e.g., Korea Procurement, DS194; US Export Restraints, DS163).
90. William J. Davey, 'The Case for a WTO Permanent Panel Body', 6 JIEL 177 (2003), accompanied by eight other viewpoints.
91. See also William J. Davey, 'A Permanent Panel Body for WTO Dispute Settlement: Desirable or Practical?', in Daniel L. M. Kennedy and James D. Southwick (eds), The Political Economy of International Trade Law: Essays in Honor of Professor Robert E. Hudec, (Cambridge University Press 2002) 496-527.
92. It is my understanding that some quality control has been exercised informally in the selection of serious candidates for the Appellate Body. Of course, the existence of the Appellate Body would serve as a quality control on panels in any event.
93. See generally Davey,'Consultations', above n 34, at 18-23.
94. North America Free Trade Agreement, chap 20.
95. Only once has a panel significantly modified its report. 'For First Time, WTO Panel reverses Interim Findings in Final Decision', 22 BNA International Trade Reporter 1746 (3 November 2005). To the extent that the interim review process is useful to ensure that panel reports are factually accurate, that function could be adequately replaced if parties were allowed to file motions to correct errors in the report during the time between the report's issuance to the parties and circulation to the WTO membership (i.e., during the time the report is being translated).
96. The one possibly significant effect would be on potential appellants, because they would have less time than at present to decide whether to appeal or to prepare their appeal. Given the brief time for the appellee to respond once an appeal is filed, this effect would seem in fact to increase fairness overall.
97. William J. Davey, 'The First Decade', above n 22.
98. Davey, 'The First Decade', above n 22, at 8-14;
99. Davey, 'Implementation', above n 22;
100. Davey, 'Implementation (Trade Remedies)', above n 22.
101. While there may be enforcement problems in that it may be difficult to ensure that the payment is made, the right to receive a payment will still be more valuable, especially for developing countries, than their never-used and probably unusable right to suspend concessions. One way to solve the enforceability problem would be to require WTO members to create funds from which damages could be paid without specific legislative approval. This should not be all that controversial as it is the way that civil judgments against governments are typically paid. In any event, if a payment is not made when due, there would always be the fallback of suspension of concessions.
102. Problems with developing country capacity could be avoided by exempting them from having to pay compensation. If they are not exempted, some sort of formula would be needed to tie the amount of any payment due to the size of the member's economy or otherwise provide for a sliding scale that would minimize 'discrimination' against poor members.
103. The prospective nature of WTO remedies currently gives countries no incentive to comply promptly and may even encourage foot-dragging since it is only after the first implementation attempt is found to be inadequate that suspension of concessions is typically authorized. To minimize this problem and to create incentives for prompt compliance, it should be provided that any remedy (whether retaliation or money payment) will be calculated from a date before the date set for implementation (e.g., date of adoption of the relevant report or date of panel establishment or even earlier). Since no remedy would be imposed if implementation occurs within the reasonable period of time, there would be an incentive to meet that deadline for implementation.
104. Increasing sanctions over time would also seem to offer some real possibilities for improving implementation. Such a procedure would help to avoid the perception that the payment of fines or damages is simply an alternative to compliance. In a sense, this concept has been used by the EC in the FSC case, where the duty it imposed on a long list of US products started at 5% and was increased at a rate of 1% each month.
105. Doha Ministerial Declaration, above n 2, para. 47.
106. When the WTO Agreement came into force on 1 January 1995, 52 of the 128 GATT Contracting Parties (40%) were not yet WTO members. When GATT was terminated as of 1 January 1996, 16 GATT parties (listed below n 106) were still not members of the WTO. See information on dates of effectiveness for WTO members at the WTO website, available at http://www.wto.org/english/ thewto_e/whatis_e/tif_e/org6_e.htm (visited 10 February 2006). The Tokyo Round results were also not implemented on schedule by all countries. See below n 99.
107. 'Opponents Succeed in Last Minutes Changes to Services Text', Inside US Trade, 19 December 2005.
108. International agreements, including GATT and WTO accords, are typically signed subject to ratification. They become binding only later when a formal acceptance is deposited. Depending on the subject or scope of the agreement, such an acceptance may not be possible until parliamentary approval is obtained. This means that it is likely some countries will become bound by an agreement only long after it has entered into force for others. See above n 92.
109. WTO Agreement, Article X:3 (WTO, GATT, TRIPS), X:5 (GATS). In each case, provision is made for potentially requiring non-ratifying members to leave the organization, but use of those provisions seems unlikely. A similar provision was never used in GATT, although one amendment of Article I, which required unanimity to change, was eventually abandoned even though it had been ratified by all but one contracting party. GATT, Analytical Index: Guide to GATT Law and Practice, (6th edn, GATT 1995) 1005.
110. As n 99 indicates, many countries are late in accepting even tariff agreements. As WTO agreements have become more controversial, it may not be as easy to assume today as it was in the past that missing late acceptances will in fact ultimately appear.
111. GATT, BISD 26S/3-191 (1980).
112. Of course, the termination of the current WTO Agreement and the creation of a new WTO II would put enormous pressure on every existing member of the soon-to-be defunct organization (WTO I) to become a member of the new organization and undertake all the new, as well as existing, commitments. At the present time, however, such an approach would entail real risks. It would re-open the entire WTO package in every member, and it is not clear to me that the Uruguay Round results, which I would argue are now more controversial than they were in 1994, could be easily implemented in some major countries. Moreover, such an approach seems a bit like a 'nuclear option' and would probably be completely unpalatable to the membership.
113. Most major parties accepted the protocols by the specified implementation date but not all. For example, in the Tokyo Round, the tariff protocol came into effect on 1 January 1980 for Argentina, Austria, Denmark, the EEC, France, Hungary, Ireland, Italy, Jamaica, Luxembourg, Netherlands, New Zealand, Norway, South Africa, Sweden, Switzerland and the United States, with the supplementary protocol coming into effect on that date for the Dominican Republic, the EEC and Indonesia. The other 26 parties were 'late'. GATT, Status of Legal Instruments (looseleaf).
114. The procedures on modification of schedules and the relevant history are discussed in GATT, above n 95, at 959-963.
115. The modifications are announced in the WT/LET document series.
116. The Sutherland Report discusses the flexibilities inherent in what it refers to as the GATS scheduling approach. Sutherland Report, above n 3, at 66-67. While it cites as an innovation the opening up of different sectors at different speeds, this is essentially the traditional approach of GATT to tariff commitments, i.e., the opening up of product markets at different speeds, although in GATS, there is no national treatment obligation until a sector is scheduled. If there is a true innovation in GATS scheduling, it was the inclusion in some GATS schedules on telecommunications of the so-called reference paper, which essentially added substantive obligations. The use of schedules as discussed here is simply in the nature of their traditional use.
117. Such a decision could list financial and other resource commitments made by the WTO and its individual members, but ultimately the WTO does not have a means to force such contributions. Including such commitments in a protocol would arguably mean that non-fulfilment of a commitment would be actionable in the WTO dispute settlement system, but it would be difficult for any one member to demonstrate a precise impact on it caused by another member's non-compliance, thus making any dispute settlement action largely symbolic.
118. As a practical matter, any agreement on trade facilitation will likely function as a plurilateral agreement initially because of delayed acceptances. 105 The Sutherland Report supported the use of plurilateral agreements. Sutherland Report, above n 3, at 66. The WTO Agreement, Article X:9, requires a consensus to add a plurilateral agreement to Annex 4 of the WTO Agreement, which would be necessary in order for the agreement to be under the WTO dispute settlement system. While the return to GATT à la carte of the 1980s is not to be wished for, it seems inevitable that there will have to be some degree of 'variable geometry' (as it is called in the Sutherland Report) allowed into the WTO, if only because of the difficulties of the amendment process.
119. Above n 95. Non-substantive amendments may come into effect for all members on ratifications by two-thirds (WTO Agreement, Article X:4-5); amendments dealing with certain fundamental issues -MFN treatment, GATT schedules and WTO decision-making - come into effect only when accepted by all (ibid, Article X:2). See generally ibid, The Modifications Are Announced in the WT/LET Document Series Article X:1.
120. GATT 1947 ceased to exist on 1 January 1996. According to the WTO website (see above n 92), at that time the following GATT parties were not yet WTO members: Angola, Benin, Chad, Congo, Fiji, Gambia, Grenada, Haiti, Niger, Papua New Guinea, Qatar, Rwanda, St. Kitts & Nevis, Solomon Islands, United Arab Emirates and Zaire.
121. For example, according to the WTO website, three signatories to the GATS Fifth Protocol (on financial services), which came into force on 1 March 1999, had not deposited their acceptances as of November 2003. Available at http://www.wto.org/english/tratop_e/serv_e/finance_e/finance_status_5prot_e.htm (visited 21 January 2006).
122. WTO Agreement, Article X:7.
123. WTO Agreement, Article IX:2. This provision explicitly provides that it is not to be used to 'undermine the amendment provisions of Article X'. In the Uruguay Round, several understandings on GATT articles were added to the definition of GATT 1994. While an analogy can be drawn between those understandings and Article IX interpretations, it should not be pushed too far. Since the changes embodied in the understandings were formally accepted as treaty text, they should probably be viewed as doing more, at least in some cases, than would be permitted by an Article IX interpretation.
124. This might raise an issue for Australia since I understand that changes to the DSU are viewed by it as requiring ratification by Australia, although the WTO Agreement, as noted above, provides for immediate effect.