Developing countries and dispute settlement proceedings

A lot has been written about the role of developing countries in the WTO, especially the use of the dispute settlement mechanism. China and India are often quoted as examples of how a country actively engages with the WTO to further its national interest. However, critics of the WTO often argue that developing countries are at a disadvantage at the WTO since they do not possess the capacity to face complex dispute settlement proceedings. Enhancing legal capacity is offered as a common panacea to overcome this shortcoming so that countries are equipped to take on a more active role.

Jan Bohanes and Fernanda Garza have made a brilliant analysis of developing countries participation in the dispute settlement mechanism of the WTO. In their piece titled "Going beyond Stereotypes : participation of Developing Countries in WTO Dispute Settlement" they have analysed a broad range of issues related to developing country participation in the WTO dispute settlement mechanism. Apart from the trading power of the country and its role in global trade, many other factors impact a developing countries participation in the DSM. The authors have analysed how legal capacity, domestic governance, duration and complexity of dispute resolution, limited retaliatory capacity, preferential trade, political pressure and potential cultural factors have a bearing on how active a developing country is in the WTO dispute settlement proceedings. They have noted the role of ACWL in enhancing legal capacity for developing countries. I have often noted in this blog that private-public collaboration, that is between the government and business would be necessary to effectively deal with a WTO dispute. This collaboration due to a variety of reasons, including lack of information and a cultural mindset of animosity, is lacking in developing countries. The authors have with numerous examples explained the lack of legal capacity both within and outside government in WTO law to deal with the quagmire of WTO legal issues.

The conclude:

"The conclusions that emerge from our analysis are as follows. First, participation of developing countries in the WTO dispute settlement system is a reflection of a broad range of factors.

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Second,  participation in WTO litigation is not a goal in itself. Being an active participant in WTO disputes is of course a healthy expression of being a participant in the global economy. 

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Fourth, the major challenges for developing countries to effectively use WTO litigation appear overwhelmingly linked to their  domestic governance. Developing countries should therefore strengthen their bureaucracies, streamline their internal decision-making mechanisms, and reorganize institutions to create conditions favourable for coordination and communication both within the government, and between the government and the private sector.

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Fifth, governments should actively seek to participate as third parties in WTO disputes. This will provide them with first-hand  experience of WTO litigation, which has been shown to be very significant for active participation, because it provides valuable experience and de-dramatizes perceptions of international litigation within the domestic bureaucracy.

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Sixth, developing countries should take advantage of the services offered by the ACWL. The ACWL has proven to be a uniquely successful international legal aid organization, but many WTO developing countries do not take advantage of its services, largely because they lack the internal capacity to capitalize on what the ACWL can offer them."

Overall, the piece is a very useful guide for developing countries to strengthen their capacity to engage with a complex, international legal system.