A GATS dispute after a long time

News of a WTO dispute concerning General Agreement on Trade in Services (GATS) after a very long time trickled in with Russia seeking consultation with EU on the "Third Energy Package".  More on that here.

"The measures concern the production, supply and transmission of natural gas or electricity, the alleged discriminatory certification requirements in relation to third countries in this sector and the requirement in respect of granting access to natural gas and electricity network capacity by transmission service operators. 

According to the Russian Federation, these measures are inconsistent with a number of obligations and specific commitments of the European Union and constitute an infringement of these obligations and commitments.

The inconsistencies alleged by Russia refer to the GATS (General Agreement on Trade in Services), the Agreement on Subsidies and Countervailing Measures and the Agreement Establishing the WTO."

Russia, being a new member of the WTO, seems to be initiating its forays into dispute settlement. The dispute being one relating to EU's commitments under GATS caught my attention. There are very few GATS disputes as compared to the other WTO Agreements.

Some chance of GATS jurisprudence evolving?

Dispute settlement - Contrasting yet similar experiences

A recent blogpost in the IELP blog got me thinking - Two contrasting yet similarly placed experiences with dispute settlement in the WTO

- Switzerland's role in dispute settlement 

- African countries role in dispute settlement

While the motivations and reasons for non-participation may be varied, it is interesting to see contrasting profiles having a similar engagement with the WTO's crown jewel.

More trade disputes

For those who follow Business Beyond the Reef, it is always interesting to see some updates. There was one recently on the recent trade disputes at the WTO - here.

Reproducing the list here:

European Union — Certain Measures on the Importation and Marketing of Biodiesel and Measures Supporting the Biodiesel Industry (Complainant: Argentina) 15 May 2013 

Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (Complainant: Cuba) 3 May 2013 

Peru — Additional Duty on Imports of Certain Agricultural Products (Complainant: Guatemala) 12 April 2013 

India — Certain Measures Relating to Solar Cells and Solar Modules (Complainant: United States) 6 February 2013 

Indonesia — Importation of horticultural products, animals and animal products (Complainant: United States) 10 January 2013 

China — Measures Imposing Anti-Dumping Duties on High-Performance Stainless Steel Seamless Tubes (Complainant: Japan) 20 December 2012 

Argentina — Measures Relating to Trade in Goods and Services (Complainant: Panama) 12 December 2012 

European Union — Certain Measures Affecting the Renewable Energy Generation Sector (Complainant: China) 5 November 2012 

China — Measures Relating to the Production and Exportation of Apparel and Textile Products (Complainant: Mexico) 15 October 2012 

China — Certain Measures Affecting the Automobile and Automobile-Parts Industries (Complainant: United States) 17 September 2012 

United States — Countervailing and Anti-dumping Measures on Certain Products from China (Complainant: China) 17 September 2012 

United States — Measures Affecting the Importation of Fresh Lemons (Complainant: Argentina) 3 September 2012 

United States — Measures Affecting the Importation of Animals, Meat and Other Animal Products (Complainant: Argentina) 30 August 2012 

Argentina — Measures Affecting the Importation of Goods (Complainant: Mexico) 24 August 2012 

Argentina — Measures Affecting the Importation of Goods (Complainant: Japan) 21 August 2012 

Argentina — Measures Affecting the Importation of Goods (Complainant: United States) 21 August 2012 

European Union — Certain Measures Concerning the Importation of Biodiesels (Complainant: Argentina) 17 August 2012

European Union — Anti-Dumping Measures on Imports of Certain Fatty Alcohols (Complainant: Indonesia) 30 July 2012 

Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (Complainant: Dominican Republic) 18 July 2012 

China — Anti-Dumping and Countervailing Duties on Certain Automobiles (Complainant: United States) 5 July 2012 

South Africa — Anti-Dumping Duties on Frozen Meat of Fowls (Complainant: Brazil)

I was surely following some of them. The list has a fair share of developed and developing countries, across continents and across issues from renewable energy to intellectual property. The notable exception is Africa except for the last case. The list is another indication of the robust, rule based dispute settlement system of the WTO.

Hat tip to Steve.

Annual Report 2013

The Annual Report 2013 of the WTO is out.

The chapter on dispute settlement brought out an interesting aspect of "consultations" which is an obligatory process before a formal panel is established to hear a WTO dispute.The number of disputes filed in 2012 were the largest in the past decade.

"Sharp increase in “requests for consultations” 

The number of “requests for consultations” – the first stage in dispute settlement proceedings and an obligatory step before the establishment of a panel to adjudicate a complaint – increased more than threefold in 2012 to 27, compared with eight in 2011 (see Figure 1).

However, this does not mean that 27 new disputes will necessarily be working their way through the dispute settlement system in 2013, as about half of disputes overall do not proceed beyond the consultations stage. Often, the parties reach a satisfactory settlement, or a complainant decides for other reasons not to pursue the matter. This shows that consultations are often an effective means of dispute resolution in the WTO.

Consultations are one of the key diplomatic features of the WTO dispute settlement system. They allow parties to clarify the facts involved and the claims of the complainant, possibly dispelling misunderstandings as to the true nature of the measure(s) at issue. In this sense, consultations serve either to lay the foundation for a settlement or for further proceedings under the DSU. For those disputes that are not settled at the consultations stage, which may last up to 60 days, the next step is the establishment of a panel by the DSB."

A safety valve, perhaps? 

Airbus-Boeing dispute - public screening

For those interested in the Airbus Boeing subsidy case, the WTO panel hearing the compliance proceedings in DS316 is making parts of the proceeding public by showing a video recording of the proceedings as announced here. Another step in moving towards transparency? The next step could perhaps be an online video of the proceeding for those who cannot reach Geneva?

I have blogged about the Airbus Boeing dispute earlier here, here, here and here.

Commentaries on the contest for the next WTO chief

As the contest for the next chief of the WTO gathers momentum several commentaries on the vision, goals and strategies of the potential contenders are hitting the shelves. Vox EU recently carried a piece on the importance of the context to multilateralism. Bernard Hoekman and Petros Mavroidis called for paying more attention to the contest since, according to them it, had great significance to the future of the trading system.

"The Director-General of the WTO does not have a magic wand that can be used to remove the fundamental constraints and factors that have impeded the successful conclusion of an ambitious Doha Round outcome. But he or she does have a critical role to play in helping the membership to identify and pursue options that will promote growth in ways that do not undermine the multilateral trading system."

Commenting on the importance of the "crown jewel" of the multilateral trading system - the dispute settlement process they had this to say:

"It is little known outside trade circles but it has become the busiest state-to-state international court extant, with WTO members having brought over 450 cases since the WTO was created in 1995. These dimensions of the WTO tend to be neglected in terms of public attention but they are critically important in maintaining international cooperation on trade matters and providing traders with the certainty they need to invest and engage in international trade."

This commentary has been followed up by a brilliant e-book by the above authors on the positions and views of 7 of the 9 candidates. The IELP blog commented on it here. 

One distinguishing feature of the selection process of the WTO as compared to perhaps other international institutions is the transparency of the process in terms of the candidature, their positions and selection procedure. Though the ultimate selection may hinge on many factors, the public discussion and debate in international circles as compared to a closed room selection process is a positive sign for the multilateral institution.

Developing countries and strategizing at the WTO

I have often written about developing countries participation at the WTO both in terms of negotiations and dispute settlement. An example that is often heralded as a beacon of hope for the developing and Least Developed Countries in multilateral trade participation is Brazil. Brazil's successful participation and strategy at the WTO has been a subject of extensive research over the years.

Came across this interesting paper by Gregory Shaffer, Michelle Ratton Sanchez and Barbara Rosenberg that summarizes the strategy that Brazil has adopted in engaging successfully with the multilateral trading system. It summarizes the strategy thus:

First, we argue that international trade law and judicialization have mattered in Brazil, unleashing a competition for expertise and helping to transform the government’s relations with business and civil society regarding trade policy. 

Second, and related to this point, we contend that being a defendant in WTO cases can help catalyze these changes, giving rise to mechanisms of public-private coordination to defend a country’s interests at the international level.  

Third, we find that these developments have not represented a weakening of the state, but rather the strengthening of the state’s ability to engage at the international level through a diffusion of international trade law and policy expertise. 

 Fourth, we observe that these processes reflect a growth of pluralism for trade policymaking within Brazil, as the government has been pressed to become more transparent and open to dialogue. 

Fifth, we maintain that these processes are not automatic, but are a function of domestic as well as international factors. We highlight the roles of Brazil’s professional, merit-based Ministry of Foreign Affairs, the development of Brazilian career paths in the international trade field, Brazil’s private sector that has been able to overcome collective action problems to engage with the government, and a general shift in orientation in Brazil’s development strategies.

 Sixth, we find that although the example of Brazil offers some hope to other developing countries, these countries generally face greater challenges and will need to develop their own strategies in light of their own contexts.  

Seventh, we conclude regarding the need to take into account the reciprocal interaction of the domestic and international spheres to understand the operation of international legal orders."

Are there lessons for other developing countries to develop internal institutional capacities to engage with the multilateral trading system? Another more recent study on the participation of Latin American countries participation in the WTO highlighted the importance of private sector involvement and the need for creative solutions to engage with the rule based system. 

Developing countries must engage proactively in the system be it through negotiation, dispute settlement, participation in the  proceedings of various Committees at the WTO or private sector engagement. The strategy should be to actively engage withthe rules rather tan shy away from it. However each country would have to develop its own creative, need based strategy depending on its own requirements. Though there is no one-size-fits-all strategy, lessons learnt in Brazil's engagement would surely help other developing countries. A BRICS strategy perhaps?

Vera Thorstensen on currency manipulation and world trade

I have written about the growing significance of the currency question in international trade law here, here, here and here. Though there does not seem to be any immediate dispute at the WTO around this critical issue, Vera Thorstensen and others have summarised the issues in this CUTS paper. Titled "Trade and Exchange Rates: Effects of Exchange Rate Misalignments on Tariffs" the paper argues that the WTO must play a more active role in addressing the concerns that a devalued or manipulated currency could adversely impact a country's rights under the international trading system. 

Persistent exchange-rate misalignments cannot but create potentially infinite variations of market-access conditions among WTO members. This situation is directly the opposite of what the multilateral system sought with the establishment of the MFN principle, that aimed to assure that no particular country would have a commercial advantage in its trade with another contracting party, which otherwise could raise tensions and divert trade

The effects of misalignments are also distorting many other rules and instruments negotiated under the WTO, such as antidumping, subsidies, safeguards, rules of origin, GATT articles I, II, III, and XXIV. 

The WTO can no longer ignore what is happening behind its magnificent structure of complex trade rules. The persistence of opposite exchange-rate misalignments, of countries with overvalued currencies and others with undervalued ones, for long periods is eroding the objectives of the rules-based multilateral trading system.

The core principles of WTO construction - transparency, predictability and confidence - are under question. The strengthening of trade rules, with the negotiation of instruments to neutralise the effects of exchange rates, is fundamental to the existence of the WTO. Otherwise, the WTO might become a diplomatic-juridical fiction - void of economic reality. 

Historically currency exchange issues have been dealt with by by the IMF and this jurisdictional barrier has kept the WTO from intervening. Will the WTO members allow this topic to gain centre stage at the multilateral body? Will Brazil's submissions be discussed in more detail at the Committees of the WTO? Will a dispute settlement case be initiated by a WTO member against a persistent manipulator of currency? How will the Panel and Appellate Body react? Will ti get included in future trade negotiation rounds as an addendum? Is the situation as serious as made out to be that the WTO would become void of economic reality if it does not recognize and address the issue of widespread currency manipulation? What impact does this have on domestic policy space, multilateral rules and barriers to international trade?

Hacking and the WTO

I had blogged about cyberespionage and the applicability of WTO rules here.

Now, a piece in National Interest which argues that hacking should be remedied through a dispute at the WTO. It argues fo rusing international law, especially TRIPS obligations to ensure cyber security.

I am not sure how realistic this is but this surely would make the WTO dispute settlement tread dangerous waters...

Antigua, the U.S and a rule based system of dispute settlement

The proceedings of the WTO Dispute Settlement Body in a recent meeting throws light on the Online Gambling case (DS 285). While WTO watchers are keenly awaiting Antigua's proposed moves in relation to the cross-retaliation in this case, the use of cross-retaliatory measure in the field of IP has evoked strong reactions.

Some excerpts from the meeting indicate the strong, divergent viewpoints held as well as possible outcomes:

"Dominica, speaking on behalf of Antigua and Barbuda, said that Antigua and Barbuda was disappointed at the lack of compliance by the US and its failure to identify a single measure designed to implement the DSB’s recommendations and rulings.  Furthermore, Antigua and Barbuda was concerned that, at the January 2013 DSB meeting, the US had used terms such as “theft of intellectual property” and “government-authorised piracy” in relation to the lawful and expressly authorised use of trade remedies provided for in the WTO agreements. 

In Antigua and Barbuda’s view, the use of such intemperate and dismissive language by the US was a fundamental challenge to the WTO and a reputational assault both on the DSB that had given the approval for intellectual property (IP) suspensions and on Antigua and Barbuda that had sought its right to exercise it.  Antigua and Barbuda called on members to defend the WTO’s fundamental principles and to ensure that its rulings are applied equally by all countries despite their size. 

...

The United States noted that Antigua and Barbuda had assured the DSB that it would notify and provide specific details about how it would implement the suspension of concessions and that Antigua and Barbuda would not encourage or allow itself to become a haven for IP piracy. With regard to the status of the dispute, the US did not agree with Antigua and Barbuda’s view that the US had been unwilling to negotiate in good faith.  The US had been following the established, multilateral WTO process for responding to the DSB’s findings and had, in 2007, begun the process of modifying its Schedule of Specific Commitments under the General Agreement on Trade in Services (GATS).  The US had offered substantial compensatory adjustments in other service areas and every member had agreed to the compensation package except Antigua and Barbuda.  The US had also sought to offer Antigua and Barbuda elements other than new services concessions.  The US remained open and ready to engage with Antigua and Barbuda to find a solution."

What will the result be n this case:

1. A negotiated, amicable settement or a compensatory package?

2. Protracted dispute settlement proceedings on what constitutes compliance and claims of compliance and non-compliance?

3. A strong cross-retaliatory move by Antigua suspending rights of US IP holders?

4. Proceedings disputing the validity of the measures undertaken to cross-retaliate?

5. No action by Antigua and letting the dispute seeing no end?

Will it also be a case where the "rule-based" nature of the dispute settlement will be established? Or will it go the way that political economy of relations often force it to? The dispute in many ways is the test of the multilateral institutions rule based dispute settlement system - in terms of its efficacy, remedies and compliance.

After Australia and New Zealand, UK proposes to introduce tobacco plain packaging

After Australia and New Zealand, reports that tobacco plain packaging would be implemented in U.K is doing the rounds bringing stocks of major tobacco companies down. The Guardian reported the move recently here. The plain packaging may come into effect later this year in the U.K.

"Ministers are to introduce plain packaging for cigarettes along the Australian model with legislation this year, after becoming convinced that the branding is a key factor in why young people start to smoke. 

The legislation, to be announced in the Queen's speech in May, is also expected to ban smoking in cars carrying anyone aged under 16 years. Ministers acknowledge that the ban is likely to be difficult for the police to enforce, but they believe peer group pressure will have an impact similar to the ban on drivers using mobile phones."

Will the plain packaging moves spread to other countries? How will major tobacco companies react? How will countries that rely on tobacco manufacturing for employment generation and national growth react? How will the panels established at the WTO decide on concerns of public health objectives in the context of intellectual property rights and trade?

 

Of stakeholders and interests at the WTO

I had earlier blogged about a business survey conducted by the WTO to access how businesses feel about the WTO here. A more recent meeting took place reported here.

Pascal Lamy recently commenting on it said:

"What really makes this year’s exercise unique is the information from the private sector. More than 600 replies have been received so far and still counting. Particularly impressive though is the geographic spread. The replies have come in from over 120 countries and territories, from Antigua to Zimbabwe. But some are still missing; notably from several partner countries that replied in 2011. The final cut off is the end of this month and I would urge you to get your reply in.  And beware!  You may find that even if your government has not replied, your private sector has."

Another step by the WTO to broaden the base of stakeholder involvement? Today, governments are the only representative of varied stakeholder business interests at the multilateral institution. In dispute settlement, it is the State that represents the interests even though major business interests may be impacted. is there scope for more private sector involvement? Is the WTO attempting to create that window of opportunity to directly reach out to the business community? How will member country governments react? Should affected, private businesses have a greater role in the dispute settlement process? Should they bear the cost of litigation hen their interests are affected? Should public funds be used to protect private business interests? While the need for multi stakeholder consultations and involvement at the domestic level is a given, who should represent State interests at the international level? Many contend that multiple voices of civil society, business and non-state representatives should be heard. Others argue that they should be heard through the prism of the State since they may not be as representative as they claim to be but pursue their self interest. A debate of representation that is going to stay for some time.

A Canadian viewpoint on domestic content

A viewpoint from Canada on the Ontario FiT ruling and the role local content rules should play in domestic policy making is found here. The Council for Canadians have been at the forefront of defending Ontario's local content requirements for renewable energy. One may not agree with the view, but one would have to contend with it in the context of globalization and its impact on local economies.

"“Without local content requirements for solar and wind power, the Green Energy Act is almost worthless to Ontario,” we said in November, when news leaked of the WTO decision. “Our provinces and local governments should have the right to ask for some local content in big projects like energy, transit and construction. These kinds of policies are used the world over to create vibrant local businesses. The alternative way of attracting investment is to cut wages and taxes, which is just a race to the bottom. We need more options if we are going to make our economies more sustainable.”

Local content, non-discrimination, development of local industry and capability, cheaper goods to the market - all contested arguments in the ongoing debate. One interesting aspect in this piece is that how a position/stand of a producer/manufacturer could change when one benefits from local content to losing markets from it.

EU and Japan also appeal - Ontario case becomes more interesting

I have blogged about the Canadian FiT case at the WTO case here, here and here. News of Canada appealing the matter was reported here. It was not surprising since Canada had lost the case and was contesting the finding of the panel report that it had violated the provisions of the TRIMS and GATT.

Reports of the EU and Japan cross-appealing caught my attention. This would presumably be mainly on the interpretation of the provisions of the ASCM, especially the definition of a subsidy and benefit.

It is clear that the Appellate Body would decide the legal contours of this dispute, especially the compatibility of local content requirements with WTO law in the context of governments guaranteeing a minimum feed in tariff. With a number of countries across the world, both developing and developed, having massive renewable energy support programs (many of them with local content requirements), the AB ruling all be keenly awaited. One hopes that going by timeframe of the Antigua and Airbus-Boeing cases at the WTO dispute settlement, the wait for a closure is not too long!

EU Seal product case and a day to day account!

The EU Seal Product case is being fought at the WTO panel and the proceedings are on. I have blogged about the issue earlier here, here and here.

For a running commentary on the proceedings it is interesting to see Rob Howse's account of the proceedings detailed out on the IELP blog here, here, here and here! It gives a sense of the legal analysis being undertaken, the nuances as well as the excitement of courtroom drama that is associated with legal disputes.It is the window to the otherwise closed world of dispute settlement.

Would be interesting to see blogs dedicated to unravelling the debates of dispute settlement proceedings  on a day to day account! Too much to ask?

U.S. challenges India's renewable energy program

It seems to be the week of renewable energy in international trade law circles with the United States requesting consultations with India in relation to domestic content requirements in India's national solar program.

The USTR carried this piece:

"United States Trade Representative Ron Kirk announced today that the United States has requested World Trade Organization (WTO) dispute settlement consultations with the Government of India concerning domestic content requirements in India’s national solar program. India’s program appears to discriminate against U.S. solar equipment by requiring solar energy producers to use Indian-manufactured solar cells and modules and by offering subsidies to those developers for using domestic equipment instead of imports. These forced localization requirements of India’s national solar program restrict India’s market to U.S. imports. Tackling these barriers is a top priority of the Obama Administration. 

... 

On January 11, 2010, India launched its national solar policy, the Jawaharlal Nehru National Solar Mission (JNNSM). Phase I of that national policy is composed of two parts: Batch 1 and Batch 2. Under Batch 1, India required developers of solar photovoltaic (“PV”) projects employing crystalline silicon technology to use solar modules manufactured in India. Subsequently, under Batch 2, India expanded this domestic sourcing requirement to crystalline silicon solar cells as well. In its draft policy for Phase II of the JNNSM, India has stated that it is considering expanding the scope of the domestic content requirements further to include solar thin film technologies, which currently comprise the majority of U.S. solar exports to India. India also offers solar energy developers participating in the JNNSM a guarantee that the government will purchase a certain amount of solar power at a highly subsidized tariff rate, provided that they use domestically manufactured solar equipment instead of imports. 

These elements of India’s national solar policy appear to be inconsistent with India’s obligations under the WTO agreements. These obligations include Article III of the General Agreement on Tariffs and Trade 1994 (GATT 1994), which generally prohibits measures that discriminate in favor of domestically produced goods versus imports; Article 2 of the WTO Agreement on Trade-Related Investment Measures, which prohibits trade-related investment measures that are inconsistent with GATT Article III; Article 3 of the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), which prohibits conditioning a subsidy on the use of domestic over imported goods; and Article 5 of the SCM Agreement, which prohibits causing adverse effects on other WTO Members through subsidies that discriminate against imported goods."

The case has been widely reported here, here and here.With Canada appealing the feed in tariff case at the WTO (that came to a finding that domestic content requirements int he Ontario context were violative of Canada's obligations under TRIMS and GATT) and the US requesting for consultations on this issue, will 2013 be the year where renewable energy support programs around the world will be challenged at the dispute settlement mechanism?

Antigua, gambling and a dispute

The US-Gambling case (DS 285) more popularly known as the Antigua case makes for an interesting case study of a WTO dispute settlement case.Yet another Caribbean country taking on the US, very similar to the rum cases that I had blogged about here. While I am not going into the legal aspects of the GATS violations in this blog post (it basically related to the interpretation of commitments that the US had undertaken under the GATS), the case brings to the fore many aspects of the nature of the dispute settlement process itself. For a brief summary of the dispute see this synopsis here.The AB essentially held that US measures of totally prohibiting online betting and gambling services of Antigua were inconsistent with the obligations it had undertaken under GATS.

Some observations about the dispute:

1. Long standing dispute - The request for consultations by Antigua was made in 2003. It is 2013 and the dispute has not reached a final conclusion to the satisfaction of the complainant even after the AB had ruled in its favor in 2007. This raises the issue of the efficacy of the dispute settlement system to provide efficacious remedies in a time-bound manner.

2. Evidence of a rule-based system - The case has been heralded by some as evidence that both smaller and large trading countries have equal rights in the system. As mentioned by Antigua's lawyer here:

"With Antigua, it’s $21 million. Maybe with China it’s going to be U.S. $21 billion. One of the messages we want to get across is that the WTO was sold to smaller countries as a level playing field and a way for them to expand the reach of commerce, subject to a set of rules that apply to everybody. I think more than anything else, this case is about fairness. The WTO is supposed to be fair.”

This goes back to the point that the dispute settlement mechanism, which is considered as as the crown jewel of the the WTO system, is based on rules and not on power politics. Countries irrespective of their trading and geo-political strength can challenge larger, more powerful trading partners at the dispute settlement. However, the inability of Antigua to meaningfully implement the WTO decision raises questions about the fairness of the system. Of what use is a rule-based system if the complainant cannot implement a decision or bear the fruits of it. Is the threat of other sanctions or the reality of trade much more overbearing that a judicial decision?

3. Landmark GATS case - This case is also considered as one of the few (there are only 23 cases that cite the GATS Agreement out of the over 400 WTO cases) cases where the commitments under the GATS were scrutinized by the dispute settlement mechanism. With services trade gaining in importance, this percentage is definitely going to grow.

4. Cross-Retaliation - The WTO has authorized Antigua to retaliate against the U.S. due to the latter's failure to comply with the decision. Antigua has threatened to retaliate in another sector - intellectual property - by ignoring copyrights of US holders by selling material on a website.This is an interesting strategy of retaliating in a sector not a subject matter of the dispute (the case was about GATS commitments, but the retaliation is proposed under copyrights) but which is a very strongly guarded right in the US. Will this strategy be used by other countries in their disputes? What implications does the suspension of obligations under TRIPS have for the legal framework that protects these rights? Shamnad Basheer has this detailed study of how a cross-retaliation model can be used by developing countries to ensure compliance in WTO cases. The USTR seemed concerned at the prospect of a suspension of obligations under TRIPS:

"The United States is concerned, however, that the Arbitrator agreed with Antigua’s request to suspend WTO concessions not just with respect to services, but also with respect to intellectual property rights (IPR).  Any authorization pursuant to the award would be strictly limited to Antigua; every other WTO Member remains obliged to protect U.S. IPR under WTO rules, including enforcement against any IPR-infringing goods.  Moreover, even with respect to Antigua, it would establish a harmful precedent for a WTO Member to affirmatively authorize what would otherwise be considered acts of piracy, counterfeiting, or other forms of IPR infringement.  Furthermore, to do so would undermine Antigua’s claimed intentions of becoming a leader in legitimate electronic commerce, and would severely discourage foreign investment in the Antiguan economy."

The Gambling case is an interesting case reflecting the many challenges that the dispute settlement mechanism faces. It also brings us back to the question as to what constitutes "compliance" in a case, which the US claims to be undertaking. We faced that in the long drawn Airbus-Boeing subsidies case too.

Shamnad Basheer has a great blogpost on the dispute on SpicyIP here.

For a different take, see Eyes on Trade blogpost which believes that this is yet another example of trampling of US domestic policy space by the WTO (after Tuna safe dolphins, COOL decision and Clove Cigarettes case) and it also sees "tiny" countries used as pawns by business interests to take on the major markets.

"The delicious and tsunami-scale irony is that now Antigua (population 88,000 and GDP $1 billion) is being "borrowed" by gambling interests to cross-retaliate against the United States - by removing intellectual property rights from U.S. products in the first use of such a sanction. Except, wait, didn't Ralph Nader warn against just this scenario of some commercial interest finding a tiny country to attack U.S. public interest policies back when the WTO was being debated?"

Another classic case study for the international trade law books?

An electronic repository of all dispute settlement cases at the WTO

The WTO website is one of the most informative sites I have come across. The ease of access and information content is truly appreciative. I have blogged about it earlier too. 

The WTO recently had a "Trade Data Day" event organized which interalia had a presentation by Valerie Hughes on the "Digital Dispute Settlement Registry Database" that would be available sometime in 2013. The presentation of the main features of the Registry is found here.

The main features of the Registry are that apart from being an electronic repository for all dispute settlement cases it would be a storehouse of information with latest "search" facilities. Sophisticated searches on claims addressed in panels and appeals, Agreements covered, key words, procedural rulings, panelists-specific date and multi-member queries would be possible. This use of technology to enhance transparency and availability of data in forms and structures of one's liking is immensely democratizing. One hopes that this facility would kick off soon so that access to valuable insights of the dispute resolution process is available to interested readers! Imagine being able to access information on the way panelists have decided on the chapeau test of Article XX in panels over the last 18 years. 

Some facts about the dispute settlement process I picked from the presentation referred to above:

 - 455 disputes in 18 years

 - 100 members have participated (63% from developing countries)

 - 250 different people have served as panelists from 50 countries

 - Amicus curiae briefs received in 35 disputes

 - Open hearings in 11 disputes

One would hope that the Registry is available soon to make access to dispute settlement cases more meaningful and enriching!

2013 - Would multilateralism prevail?

With the Bali Ministerial is fast approaching (in the context of trade negotiations a year is definitely 'fast approaching') calls for a reinvigoration of multilateralism have started surfacing again. The failure of the Doha round and a growth in bilateralism are seen as threats to the rule-based, non-discriminatory international legal framework.

Peter Sutherland, a former GATT and WTO Director General, called upon the US and China to take a lead in restoring the credibility of the WTO negotiation process. Writing in Livemint on the issue he stated:

"It is not too late to reverse the apparently inexorable tide of bilateralism. But the only way to do so is by proceeding with WTO negotiations. Even if the Doha Round cannot be concluded, there may be other routes, such as implementing what has already been agreed. 

Another alternative might be to advance multilateral negotiations among willing countries in specific areas, such as services, with other WTO members joining later. 

But if we are to move forward rather than revert to earlier, more dangerous times, the US, in particular, must reassert a constructive role in multilateralism. The US must lead again, as it did in the past. And now it must do so with China at its side."

WIll multilateralism prevail in 2013? WIll the low hanging fruit of multilateral negotiations be picked? Will a Trade Facilitation Agreement get a thumbs-up? Will more plurilateral agreements be entered into, to be adopted later by all members? Will it lead to the resurrection of multilateral negotiations to break the juggernaut of PTAs and FTAs? How will the impasse be broken? Which countries will take a lead? How will dispute settlement react to the progress in negotiations? How much pressure would it be able to withstand? Will it be continue to evoke the respect it does now?

One would need to see through 2013 for some of these answers, I guess.

Long running trade disputes and the WTO

The WTO dispute settlement is praised for its effectiveness and enforceability. In the international context, it is one of the few "judicial systems" that has credibility as a rule based system that offers penalties and has a greater prospect of implementablity without being drowned in the power play of world politics.

However, the time taken to resolve certain disputes does cast a shadow on the efficacy of the system. Though the DSU has mandated clear time frames, some politically sensitive disputes have lingered on. The WTO recently was witness to the signing of a "historic" trade agreement between the EU and Latin American countries ending a nearly 20 year old dispute over bananas. This traces the long journey of the dispute at the WTO.

Will we see a similar bilateral or plurilateral agreement over the issue of subsidies to manufacture of large civilian aircrafts which is epitomized by the Airbus-Boeing dispute that is slowly nearing a decade now?