WTO dispute settlement: Praise and suggestions for reform

International and Comparative Law Quarterly

Volumn 47, Issue 3, 1998, Pages 647-658

  Schoenbaum, Thomas J ^a  

^a UNIVERSITY OF GEORGIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 84923997355     PISSN: 00205893     EISSN: 14716895     Source Type: Journal    
DOI: 10.1017/S0020589300062217     Document Type: Article

References (104)

1. The WTO was created by the Marrakesh Declaration of 15 Apr. 1994 and the Marra-kesh Agreement Establishing the World Trade Organization (hereafter referred to as the WTO Agreement) of the same date. The texts are reproduced in The Results of the Uruguay Round of Multilateral Trade Negotiations, The Legal Texts (GATT Secretariat, 1994) and in (1994)33 I.L.M. 1145.
2. WTO Focus Newsletter 1 (Aug. 1997). New cases are filed at an average rate of two to three per month.
3. WTO Focus Newsletter 3 (Dec. 1977).
4. WTO Focus Newsletter
5. The following Appellate Body reports have been adopted by the Dispute Settlement Body of the WTO: US-Standards for Reformulated and Conventional Gasoline, AB-199–1
6. Japan-Taxes on Alcoholic Beverages, AB-1996–2
7. US-Restrictions on Imports of Cotton and Man-Made Fibre Underwear, AB-1996–3
8. Brazil-Measures Affecting Desiccated Coconut, AB-1996–4
9. US-Measures Affecting Imports of Woven Wool Shirts and Blouses, AB-1997–1
10. Canada-Certain Measures Concerning Periodicals, AB-1997–2
11. EC-Regime for the Importation, Sale, and Distribution of Bananas, AB-1997–3
12. EC Measures Concerning Meat and Meat Products (Hormones), AB-1997–4
13. Japan-Measures Affecting Consumer Photographic Film and Paper, AB-1998–1. These and other WTO reports are available on the worldwide web at http://www.wto.org.
14. In every case so far the nation on the losing side of a WTO dispute has announced its intention to implement corrective action. In the Japan-Taxes on Alcoholic Beverages case Japan and the US are still negotiating on a timetable for elimination by Japan of its discriminatory system of liquor taxation. See Inside US Trade 5 (31 Oct. 1997).
15. The WTO dispute-settlement system was created by the 1994 Dispute Settlement Understanding (hereafter the “DSU”), one of the Uruguay Round trade agreements. For the text see The Legal Texts, Inside US Trade, at p.404.
16. Idem, Art.43.
17. Idem, Art4:7.
18. Idem,Arts.6–7.
19. Idem, Art.l7.
20. Idem,Art2.
21. For a scholarly summary and evaluation of this experience, see Emst-Ulrich Peters-mann, The CATT/WTO Dispute Settlement System (1997), pp.66–91.
22. See Robert E. Hudec, Enforcing International Trade Law, The Evolution of the Modern CATT Legal System (1993), pp.138–150
23. William J. Davey, “Dispute Settlement in GATT” (1987) 11 Fordham Int-LJ. 51,67–78.
24. See Davey, Fordham Int-LJ.
25. An example of a dispute that is best settled by adjudication is the Beef Hormone case, Fordham Int-LJ. This case concerned primarily important questions of interpretation concerning one of the WTO “covered agreements”, the Sanitary and Phytosanitary Agreement The Appellate Body, in deciding this case, clarified many interpretative points, including the key questions of the burden of proof and the extent of the risk-assessment process required under the agreement Such interpretation, once settled, can serve as a basis for future cases or as a starting point for new negotiations between the parties.
26. DSU.Art.4.
27. Idem,Art.5.
28. Idem, Art.13–2.
29. Idem, Art.25.
30. Idem, Art.4:7.
31. Idem.
32. Idem, Art.12.
33. Idem, Art5:5.
34. see Eleanor Roberts Lewis and David J. Weiler, “Will the Rubber Grip the Road? An Analysis of the US-Japan Automotive Agreement” (1996) Law & Policy in Int. Bus. 631.
35. Idem, pp.653–654.
36. Report of the Appellate Body, AB-1997–3. The Bananas dispute is multifaceted.
37. Its origin was an EC Regulation which granted preferential treatment for bananas produced within certain former colonies in the African, Caribbean and Pacific regions (ACP countries) (1993) OJ. L47/1 (13 Feb.). This was successfully challenged at the GATT by several Latin American governments
38. GATT Dispute Settlement Panel Report on the EEC-Import Regimefor Bananas (1995) 341. L.M. 177, not adopted by the contracting parties.
39. However, a challenge brought by Germany in the ECJ was rejected on the grounds that the GATT is not directly applicable as such in the legal order of the EC: Case 280/93 Federal Republic of Germany v. Council of the European Union (1995) 34 I.L.M. 154 (5 Oct 1994). In 1994 the EC adopted a new Framework Agreement which included banana quotas that satisfied Colombia, Costa Rica, Nicaragua and Venezuela. On 17 Oct. 1994 the USTR initiated a s.301 investigation into the EC banana regime in response to a petition filed by Chiquita Brands International Inc. and the Hawaiian Banana Industry Association; see Request for Public Comment, 60 Fed. Reg. 3284,13 Jan. 1995. Based upon this investigation, it was decided to invoke the WTO dispute-resolution process.
40. See “US Will Take Banana Dispute with EU to WTO, USTR Kantor Says” (1995) 12 Int. Trade Rptr. (BNA) 1658,4 Oct.
41. The Appellate Body interpreted the WTO's Lomé waiver to exempt only preferential treatment for developing countries that is required by the Lomé Convention. Report of the Appellate Body, Int. Trade Rptr., at p.72.
42. Invalidating the EC banana import programme will have very little economic impact on either the EC or US, but threatens to cause widespread economic dislocation in the ACP developing countries that would be affected. See “Bananas: ‘EU Must Comply’ ”, Financial Times, 20 Oct. 1997. p.5.
43. See GATT 1994, Art-XXIII in The Legal Texts, Financial Times. at p.521.
44. DSU,Art.26.
45. DSU.
46. Non-violation and situation disputes are subject to a modified panel process DSU.
47. Idem, Art-2. The principal covered agreement is the General Agreement on Tariffs and Trade (G ATT) 1994.
48. Idem, Art. 1:2.
49. Idem.
50. US: The Cuban Liberty and Democratic Solidarity Act, Publ. L. No.104–114
51. 110 Stat. 785 (12 Mar. 1996)
52. codified at 22 U.S.G §6021–6091
53. reprinted in (1996) 35 I.L.M. 357. Upon the ECs request, the WTO panel suspended its work in Apr. 1997.
54. WTO Focus Newsletter (Aug. 1997).
55. For evaluations of this issue, see Olivia Q. Swaak-Goldman, “Who Defines Members' Security Interest in the WTO?” (1996) Leiden J.I.L. 361
56. Kees Jan Kuilwijk, “Castro's Cuba and the US Helms Burton Act” (1997) J. World Trade 49.
57. See Vaughan Lowe, “US Extraterritorial Jurisdiction: The Helms-Burton and D'Amato Acts” (1997) 461.CL.Q. 378.
58. DSU.Art.ll.
59. For an elaboration of this, see P. J. Kuyper, “The Law of GATT as a Special Field of International Law” (1994) Neths. Y.B.I.L. 227.
60. DSU, Art.3;2
61. DSU nA.
62. Idem, pp.73–75.
63. Idem, pp.59–61.
64. DSU, Art3:7.
65. In contrast, a member State that wishes to join in multiple consultations must have a “substantial trade interest”: idem, Art.4:l 1
66. to intervene, a third party must have a “substantial interest” in the matter before a panel: idem. Art.10:2.
67. The initiation of the Bananas case under US law was a s.301 petition by these companies under the US Trade Act of 1974. See idem.
68. 19 U.S.C. §§2411 et seq.
69. (1994) OJ. L349/71 (31 Dec).
70. 19 U.S.C. §2411(a)(1).
71. For discussion, see Alan O. Sykes, “Constructive Threats in International Commercial Relations: The Limited Case for Section 301” (1992) Law & Policy in Int. Bus. 263.
72. 19 U.S.C §2411(a).
73. 19 U.S.C §2413(a).
74. This was made explicit in the US Statement of Administrative Action (p.366)
75. prepared in connection with the Uruguay Round implementing legislation. H.R.Doc.No.316, 103rd Cong. 2nd Sess. 137 (1994).
76. 19 U.S.C. §2411(a).
77. DSU, Art.23 forbids unilateral retaliatory action.
78. DSU, A rt.4:l.
79. Idem, Art.2:1.
80. Idem, Art.12.
81. Bananas case, Idem, at p.8.
82. For a separate but similar proposal for private-party access to the WTO dispute-settlement mechanism, see Andrea Giardina and Americo Beviglia Zampetti, “Settling Competition-Related Disputes: The Arbitration Alternative in the WTO Framework”, 31 J. of World Trade 5 (1997).
83. See also Glen T. Schleyer, “Power to the People: Allowing Private Parties to Raise Claims Before the WTO Dispute Resolution System” (1997) Fordham L.Rev. 2275 for a broader proposal for private-party access.
84. Liechtenstein v. Guatemala I.CJ. Rep. 1955,4.
85. Barcelona Traction, Light and Power Company Case-Second Phase: Belgium v. Spain I.C.J. Rep. 1970,3.
86. Both sides in this case have submitted enormous amounts of contradictory evidence, and there is growing doubt whether the WTO panel will be able to establish the facts necessary to apply legal principles or to come to a recorrtmended solution. The adversary process does not fit this type of market-access competition case. Inside US Trade (9 May 1997).
87. E.g. the US gun manufacturer Smith and Wesson has filed a s.301 action to open the Brazilian market; members of the Telecommunications Industry Association are considering a s.3Ol case over opening the fibre optics market Inside US Trade, 22 Aug. 1997.
88. 575 U.N.T.S. 159. Closely related to ICSID is the dispute-settlement mechanism under the Energy CharterTreaty of 12 Dec. 1994,done at Lisbon, 17 Dec. 1994(EEC)
89. (1995) 35 I.L.M. 390. Art26 of this treaty provides for compulsory dispute settlement between a private investor and a contracting party. If the dispute cannot be settled by negotiation, after three months the investor may choose to submit it for resolution either to a court or administrative tribunal of the State party, to a previously agreed dispute-settlement procedure or to international arbitration or conciliation.
90. North American Free Trade Agreement (NAFTA), 17 Dec 1992, US-Can.-Mex.
91. (1992) 32 I.LM. 289 (containing chaps.1–9), 605 (containing chaps.10–22).
92. Treaty Establishing a Common Market, 26 Mar. 1991, Arg.-Braz.-Para.-Uru.
93. (1991) 30 I.LM. 1041.
94. The MERCOSUR dispute-settlement system is contained in the Brasilia Protocol, 17 Dec. 1991, 6 Inter-Am. Legal Materials 1 (Simon Pumell, trans., 1996).
95. Asia-Pacific Cooperation Forum: Dispute Mediation Experts' Group Reports on a Voluntary Consultative Dispute Mediation Service (1996) 35 I.LM. 1102.
96. ICSID, Art.25(l).
97. Idem, Art.42(2).
98. Dépeçage is the subjection of different issues to rules derived from different legal systems. This is authorised in idem. Art 42(1).
99. NAFTA.Arts. 1l15–1124.
100. Idem, Art.1131.
101. Brasilia Protocol, Art26(l).
102. Brasilia Protocol.
103. Proposals are pending to negotiate a limited international code on competition policy. See Giardina and Zampetti, Brasilia Protocol
104. Spencer Weber Waller, The Internationalization of Antitrust Enforcement” (1977) Boston Univ.L.Rev. 343.