Reform of the WTO Dispute Settlement System

Reform of the WTO
Dispute Settlement System
Fixing What Ain't Broke?
Prof. dr. Peter L.H. Van den Bossche
Lecture, Melbourne Law School, 10 February 2014
© P. Van den Bossche 2014
Questions Addressed
•
Origins of the WTO dispute settlement
system (DSS)?
•
Key features of the WTO DSS?
•
The WTO DSS to date?
•
Negotiations on the reform of the WTO
DSS?
•
Dangers facing the WTO DSS?
2
Origins
•
Dispute settlement under the GATT 1947
• Articles XXII and XXIII GATT 1947
• From power-based, diplomatic to rules-based,
quasi-judicial dispute settlement
• Breakdown in 1980s due to the consensus rule
• US unilateralism in trade disputes
•
Uruguay Round negotiations on dispute
settlement (1986-93)
• Understanding on Rules and Procedures for the
Settlement of Disputes (DSU)
• A significant leap forward towards judicial dispute
settlement
• A ‘miracle’?
3
Key Features
•
Jurisdiction
• Compulsory and exclusive
•
Objectives
• Preference for mutually agreed solutions
• Prompt settlement of disputes
• Provide security and predictability to multilateral
trading system
• Preservation of rights and obligations
• Clarification of existing provisions ... but no judicial
activism
4
Key Features
•
Institutions
• Dispute Settlement Body deciding by reverse consensus
• Ad hoc dispute settlement panels and the standing
Appellate Body
•
Process
• Confidentiality/transparency
• Time frames: short but always too long ...
•
Remedies for breach
• Final: withdrawal/modification -- prompt or within RPoT
• Temporary: compensation or retaliation
5
WTO DSS from 1995 to 2014
•
Number of disputes and reports
•
Nature of disputes
•
Complainants and respondents
•
Agreements at issue
•
Compliance
6
Number of Disputes
•
Requests for consultations: 474
50
41
35
30
29
37
34
23
27
26
20
19
12
1995
1998
2001
2004
7
Number of Reports
•
Reports
• Panel: 188
• Appellate Body: 110
•
Amicable resolution of disputes
• Mutually agreed solution reached or
complaint withdrawn: 20%
•
Active disputes
• Appellate review: 1
• Panel process: 17 + 7
• Consultations: 23
8
Comparing Numbers
•
International Court of Justice (ICJ)
• Judgements and advisory opinions: 57 + 6
• Pending cases: 10
•
International Tribunal on the Law of the
Sea (ITLOS)
• Judgements and advisory opinions: 19 + 1
• Pending cases: 1 + 1
9
19
13
2007
14
20
17
8
2010
2013
Nature of Disputes
•
•
Disputes on technical trade issues of ‘little
interest’ to the general public
•
EC – Computer Equipment (1998)
•
EC – Bed Linen (2001); US – Stainless Steel (2008)?
Disputes on politically sensitive issues
generating much public attention
•
US – Shrimp (1998); Brazil – Retreaded Tyres (2007);
US – Tuna II (2012); Canada – Renewable Energy
(2013); EC – Seal Products (--)
•
EC – Hormones (1998); EC – Asbestos (2001); US/
Canada – Continued Suspension (2008); US – Clove
Cigarettes (2012); Australia - Plain Packaging (--)
•
US – Gambling (2005); China – Audiovisual Products
(2010); EC – Seal Products (--)
10
Nature of Disputes
• EC – Bananas (1997); EC – Tariff Preferences
(2004)
• EC – Export Subsidies on Sugar (2005); US –
Upland Cotton (2005)
• EC – Airbus (2011); US – Boeing (2012)
• China – Raw Materials (2012); China – Rare Earths
(--)
11
Complainants
Upper Middle Income
22%
Lower Middle Income
13%
Other High Income
18%
Low Income
6%
EU
19%
US
22%
12
Complainants
Developed
1995
1997
1999
2001
Developing
2003
2005
2007
2009
2011
2013
13
Member
No of cases initiated
US
106
EC / EU
90
Canada
33
Brazil
26
Mexico
23
India
21
Argentina
20
Japan
19
Korea
16
Thailand
13
14
Respondents
Upper Middle Income
20%
Lower Middle Income
15%
Other High Income
16%
Low Income
6%
EU
17%
US
26%
15
Member
No of cases defended
US
121
EC / EU
92
China
31
India
22
Argentina
22
Canada
17
Japan
15
Brazil
15
Mexico
14
Korea
14
16
Agreements at Issue
SA
GATS ILA
GPA RoO
CV
SCM
SPS
TBT
TRIMS
GATT
TRIPS
ADA
ATC AoA
17
Australia in WTO Dispute Settlement
•
As complainant
• in 7 disputes
• against EU (2), US (2), Korea (1), India (1) and Hungary (1)
• regarding GATT, TBT, TRIPS, SCM, Safeguards, and Agriculture
•
As respondent
• in 14 disputes
• complaints by US (4); Cuba (1); Dominican Republic (1); Honduras (1); Ukraine (1); New
Zealand (1); EU (1); Philippines (2); Switzerland (1) and Canada (1)
• regarding GATT, SPS, SCM, AD, TBT, and TRIPS
•
As third party/third participant
• in 55 panel proceedings
• in 29 Appellate Body proceedings
18
Compliance with Recommendations and Rulings
No compliance within RPoT
15%
Compliance within RPoT
85%
19
DSU Reform Negotiations
•
Doha Round negotiations (2001 - ...)
• Pre-Doha DSU review process
• Mandate: para. 30 of Doha Ministerial Declaration
• Outside the ‘single undertaking’
• Negotiation in special session of DSB
• Initial deadline: May 2003
•
WTO DSS is ‘functioning well’ but ...
• 40 proposals for reform
• Relating to 24 out of the 27 DSU provisions
• 100 pages of compilation of draft legal text
• Radical as well as technical proposals
20
Issues on the DSU Reform Agenda
•
Chairman’s Text of July 2008 (TN/DS/25)
• Consolidation of ‘universe of issues’ under consideration
• Unified legal text as basis for further work
•
Issues under discussion
• Mutually agreed solutions
• Panel composition
• Third party rights
• Timeframes
• Transparency, BCI protection and amicus curiae briefs
• Special and differential treatment for DCMs
• Remand
21
Issues on the DSU Reform Agenda
•
Issues under consideration (cont.)
• Sequencing & post-retaliation
• Effective compliance
• Flexibility and Member control
•
Current state of play
• Improved and revised texts in many areas
• Convergence and technical work completed on some
issues
• Clarification of positions and of remaining differences
on other issues
• Still significant work required for completion
• Compilation of recent texts (JOB/DS/14)
22
Dangers Facing the WTO DSS
•
Overloading the WTO DSS?
• Large number of disputes
• More parties and third parties
• Increasing number of measures and claims
• More law to be considered
• More measures at issue regulatory in nature
• Evidentiary requirements more rigorous
• More languages
•
Institutional imbalance?
• Paralysis of the ‘legislative’ branch of the WTO?
• Dispute settlement as the only show in town?
• Judicial activism on request and/or by default?
•
Fixing what ain’t broke?
23

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