India and dispute settlement

A regular follower of Trade Law and Development Journal, here is the latest issue on India and the international economic system. 

A piece on India's engagement with the WTO dispute settlement system by James Nedumpara caught my attention. Highlighting India's experience with the dispute settlement system so far, its engagement with challenges faced thereof, the author does conclude that India would have to sustain the capacity already built:

"India’s challenge in the future will be to sustain the capacity already built. Trade disputes are cyclical and it may require positive intervention on the part of the government to foster and nourish trade-related capacity. This article has highlighted the need to establish better channels of communication between the government and industry. Furthermore, a bottom-up approach to stakeholder participation will be feasible only if the government encourages private sector and educational institutions to take greater interest in international trade issues. A large number of trade-related governmental institutions and adjudicatory bodies in India are yet to achieve a desired level of sophistication in WTO matters. Equipping these agencies with the necessary understanding of WTO matters will be crucial for India’s chances of playing a leading role in WTO dispute settlement." 

The WTO dispute process involves the State as the primary actor. However, the interests are largely those of private businesses and sectors, both small and large. To find that partnership model of India's State capacity, legal brilliance and private sector participation will decide the success of India at the WTO dispute settlement process.

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?

Future of the WTO

Joshua Meltzer's detailed piece on the future of trade talks and the WTO is a brilliant exposition of issues involved and the possible way forward. 

(Doha talks)

Titled "The Future of Trade", this Foreign Policy piece highlights the criticality of concluding the Doha round, the increasing threat of Free Trade Agreements undermining the multilateral system, the pressures on an already overburdened dispute settlement mechanism, role of developing countries like China and India in the global governance agenda as well as the challenges the WTO will face in the coming years.

It concludes:

"Since its establishment, the WTO has delivered significant global economic benefits through the liberalization of world trade. As a key institution for global economic governance, the WTO has also stabilized the rules on trade and provided an effective dispute settlement mechanism to manage trade conflicts. This has given businesses the confidence to engage in the type of global trading strategies that have allowed a company like Apple to have iPod components manufactured and assembled in different countries and then shipped back to the United States, generating greater profits for Apple and ultimately providing a cheaper product to consumers.

Despite its indisputable benefits, the WTO currently faces a range of serious challenges. The most obvious challenge to the WTO is that it is losing its role as the primary vehicle for liberalizing trade. This has been driven by the difficulty in concluding the Doha round and the proliferation of free trade agreements. In fact, for some countries, FTAs will deliver deeper and broader trade liberalization than would be possible, at least at the moment, within the WTO. As outlined, the proliferation of FTAs is a fact, and the Doha round has effectively stalled."

An interesting read. 

Antidumping - good, bad or ugly?

Anti-dumping duties are a common tool used by both developed and developing countries to protect local industry from a surge in cheap imports. It is viewed as an inevitable policy choice in a free trade environment when countries tend to  protect their industries. What motivates the imposition of anti-dumping duties? Is it a protectionist weapon in the hands of countries that undermines free trade with reduced barriers? Should it be discouraged? Is it a word in the WTO lexicon that needs to be gradually shunned? Or is it a legitimate domestic policy choice for countries to protect their local industries from unfair imports? This post does not go into the rationale of antidumping or the relevant rules but discusses two commentaries on the use and misuse of antidumping in international trade.

Mark Wu argued in his detailed piece "Antidumping in Asia's Emerging Giants" that this tool will be increasingly used by China and India in the coming years.

"Scholars and policymakers have assumed that India and China’s recent rising use is a fleeting anomaly, triggered by historic tariff cuts and a need to retaliate against other countries that are targeting them. In fact, this is not fully correct. Many industries in India and China have yet to discover the utility of antidumping laws. China has not yet fully embraced a strategy of using antidumping sanctions as a retaliatory instrument. And retaliation does not explain why India continues to use antidumping sanctions aggressively, even after others have ratcheted down their use of antidumping sanctions against India. These signs suggest that India and China’s use of antidumping sanctions as a protectionist instrument will not level off in the years to come. Instead, as their domestic markets grow, American and European exporters will likely incur larger costs from antidumping duties imposed by India and China."

Mark Wu essentially argued that the rules of antidumping need to be reformed with the U.S. and E.U. at the forefront so that it is not misused as a tool of "protectionism"' by developing economies. I had blogged about this article here with some questions.

More recently, Vox carried an interesting piece titled "Antidumping as cooperation" where two economists Chad P Bown and Meredith Crowley have argued that antidumping need not necessarily viewed negatively. They argue that it is sometimes a necessary component of a free trade regime which ensures imposition of a tariff above a county's bound rates. They aver that the underlying motivations for the use of the measure needs to be fully understood in order to strategize a stand at the WTO with respect to the antidumping rules. They conclude that understanding the motivations of the use of these measures will ensure that necessary rules can be crafted to ensure that the limits of these rules can be set properly set.

" If future research shows that trade volume shocks in sectors with relatively inelastic import demand and export supply are an important determinant of antidumping use for a large set of countries, the current WTO rules – which are not written so as to be sympathetic to economic logic – might be re-examined. Recognition that unexpected events in the turbulent global economy trigger tariff hikes might result in a more informed set of negotiations over what constitutes an appropriate versus inappropriate use of the exceptions to the liberal trade policy rules of the WTO. This could better inform the discussion about potential limits and boundaries to cooperation in the WTO system."

The multilateral trading system often faces the uncomfortable questions of impinging upon the sovereignty of national policy space. Critics in developing countries argue that it restricts domestic policy choices to protect legitimate national interest. Antidumping is an exception which provides this flexibility within trade rules to protect one's domestic interests. It is like a safety valve that can be used effectively within the contours of the multilateral agreement. To shun it would be to legitimize that view that multilateral rules do in effect restrict policy space. Developing countries are increasingly using the tool to protect their local industries. Whether the imposition is in consonance with multilateral trade rules depends on the facts and circumstances of each instance. An improper use of antidumping duties can be challenged at the DSM of the WTO. There is a need to balance the legitimate use antidumping has in world trade with the dangers of it's misuse. The above study probably would provide some answers to tread that line.

Joel Trachtman on development policy space and the WTO

The debate of development policy space within WTO rules has often been a constant subject of this blog. I have blogged about it here, here and here. How much regulatory space do countries, especially LDCs and developing countries, have in terms of crafting and implementing development policies which are not WTO inconsistent? Can countries, even after the advent of the multilateral trading system, pursue independent development policies? Is there scope within the WTO rules to pursue one's own economic and political developmental agenda? 

Joel Trachtman offers some analysis and answers to some of these questions in his 2006 paper titled "The WTO and Development Policy in China and India" wherein he analyses the policy choices that developing economies like China and India have within the WTO system. Obligations arising out of different WTO Agreements are analysed and policy space within each of the categories is suggested. He has listed out 5 categories of broad obligations that a country would have to follow in the rule based multilateral system:

1. Category 1: goods and services liberalization - embodied in the GATT Agreements

2. Category 2: standards liberalization in the TBT and SPS Agreements

3. Category 3: intellectual property rights under the TRIPS

4. Category 4: investment measures under the TRIMs

5. Category 5: export subsidies and import substitution subsidies categorised under the Agreement on Subsidies and Countervailing Measures

After a detailed analysis of these categories and the options developing countries have in terms of pursuing their development agenda, the author concludes:

"This paper has shown ambivalence regarding restrictions on the “right to regulate” for industrial policy under WTO law. Some restrictions may be desirable, and may be favorable, as Hudec suggested, and as Indian and Chinese policy confirm. Other restrictions may be undesirable. As Amsden and Hikino have argued, “[a]t close examination . . . the new rules of the World Trade Organization, a symbol of neoliberalism, are flexible and allow countries to continue to promote their industries under the banner of promoting science and technology. The success formula of late industrialization—allocating subsidies in exchange for monitorable, result-oriented performance standards—is still condoned." It would seem useful to institute a development policy review mechanism that could provide exceptions to developing countries for appropriate development-motivated policies."

The issue of development policy space within the WTO is a complex question. A blanket rejection of WTO rules as infringement of policy space is a naive and unreasonable stand to take. It is counterproductive and deprives a country of the advantages that a multilateral system has to offer. The challenge is to judiciously manouevre within the WTO rules to further one's national interest. To what extent WTO rules permit such manoeuvering is debatable. There are many exceptions within the WTO rules that permit individual policy choices. However, they need to be exercised in a non-discriminatory and justifiable manner. Exceptions, contingencies and interpretation of rules does allow a little leeway for developing countries to pursue their domestic development agenda. Further, an approach in industrial policy might be strategically very different from the agricultural sector while engaging with multilateral rules. A countries strengths and weaknesses would have to be analysed sectorally to effectively use the rule based system.

This would require a painstaking analysis of what is the right development policy and its analysis with respect to different obligations. It would require a specific, sector wise analysis, weighing of different options and making a comparison of its WTO consistency. At times, WTO inconsistency may have to be implicitly allowed if the cost of compliance is not too high. This takes us back to the fundamental issue - enhancing domestic capacity to engage with the multilateral system. Developing countries must enhance their capacity, not only legal capacity, in a multi-stakeholder mode (involving trade policy experts, economists, legal experts, industrial policy experts, agricultural economists, political leadership, special interest groups as well as the bureaucracy) to address this issue. It is too complex an issue to be left to the domain of a single stakeholder.

Protectionism - A wave or a whimper?

Is Protectionism on the rise again? I had blogged about the France Industries Minister's comments here. Argentina is facing a request for consultation against its import licensing requirements from EU about which I had blogged here. US and China are often locked in battles accusing each other of "protectionist" tendencies. News reports about India's ban on avian imports was a cause of concern for the US. Does the global recession lead to an increased sense of insecurity and hence a rise in measures that comprise of trade restricting measures leading to protectionist moves. Is it a temporary, cyclical or ever increasing phenomenon?

In a talk in Bangkok recently, Pascal Lamy, Director General of WTO warned against the rise in protectionism.

"Darker spots are, unfortunately, more numerous: a clear revival of protectionist rhetoric, statements in favour of import substitution policies, more or less transparent administrative measures, tax concessions, subsidies, domestic preferences in government procurement.

Protectionism is like cholesterol: the slow accumulation of trade restrictive measures since 2008 — now covering almost 3 per cent of world merchandise trade, and almost 4 per cent of G20 trade — can lead to the clogging of trade flows."

A recent joint study by OECD, WTO and UNCTAD for the G 20 on trade and investment restrictions reveals growing protectionism amongst countries. In a joint summary statement, the concern about different forms of restrictions was raised:

" The accumulation of trade restrictions is a matter of concern, which is aggravated by the relatively slow pace of rollback of existing measures.  This situation is clearly adding to the downside risks to the global economy.  Moreover, government support to selected sectors is distorting competition and restricting trade.  G-20 governments should resist any further deterioration in their collective trade policy stance and rely on open markets and the benefits of freer trade to help reboot growth in the world economy.  Increasing trade is critical to stimulating global recovery."

The Report itself was categorical in its concern for protectionist efforts. It stated:

"There is a revival of protectionist rhetoric in some countries …

The politics of trade in some countries seems to be turning inward-looking.  Of particular concern are statements by some G-20 Leaders in favour of import substitution policies as the pillar of economic growth in their countries.  This is generating regional and global trade tensions which have largely been absent since the coordinated policy responses to the global financial crisis were launched. 

Some G-20 governments are reportedly considering raising import barriers, or in some cases have already done so, to protect their domestic industries from what they may consider to be unfair competition.  In certain cases, the barriers seem to take the form of procedural or administrative actions to slow down the clearing of goods at borders rather than new laws or regulations.  This can render trade conditions even more difficult since lack of transparency about conditions of entry into a market increases uncertainty for traders and raises the risks and costs of doing business. 

There has also been a reported increase in restrictions placed on government procurement activities in some countries.  More open trade in government procurement allows governments to purchase goods and services based on who offers taxpayers the best deal, ultimately saving money.  The optimal action would be to convince trading partners to further open their public procurement markets rather than closing domestic markets. 

With tight government budgets, high unemployment, slower growth, and the prospects of further multilateral market opening seemingly slipping away, the threat of protectionist pressures looms even larger.

Implementation of new trade restrictions continues unabated …

Since mid-October 2011, 124 new trade restrictive measures have been recorded, affecting around 1.1% of G-20 merchandise imports, or 0.9% of world imports.    The main measures are trade remedy actions, tariff increases, import licences and customs controls.  There were fewer new export restrictions introduced over the past seven months than in previous periods.

The more recent wave of trade restrictions seems no longer to be aimed at combatting the temporary effects of the global crisis, but rather at trying to stimulate recovery through national industrial planning, which is an altogether longer-term affair.  In addition to trade restrictions, many of these plans envisage the granting of tax concessions and the use of government subsidies, as well as domestic preferences in government procurement and local content requirements.

Accumulation of trade restrictions has become a major concern …

The new measures restricting or potentially restricting trade that were implemented over the past seven months are adding to the trade restrictions put in place since the outbreak of the global crisis.  The accumulation of trade restrictions is now a matter of concern.  The trade coverage of the restrictive measures put in place since October 2008, excluding those that were terminated, is estimated to be almost 3% of world merchandise trade, and almost 4% of G-20 trade.

The accumulation of trade restrictions is aggravated by the relatively slow pace of removal of existing measures.  Out of a total of 802 measures that can be considered as restricting or potentially restricting trade implemented since October 2008, 18% have been eliminated.  At the time of the last monitoring report in October 2011, around 19% of the restrictive measures had been removed, which means that the rate of removing restrictive measures is actually slowing down.

Moreover, the accumulation of restrictions has to be considered in a broader perspective where the stock of trade restrictions and distortions that existed before the global crisis struck, such as in agriculture, is still in place." 

The Report analyses in detail export restrictions, TBT measures, SPS measures, initiation of anti-dumping and countervailing measures, Government support measures amongst G 20 countries. The Joint summary concluded that more effort at multilateralism is required to ward of protectionist tendencies.

"We appeal to G-20 governments to redouble their efforts to strengthen multilateral cooperation to find global solutions to the current economic difficulties and risks, and to seek to avoid situations that would create trade tensions between them.  The multilateral trading and investment system needs to continue acting as an insurance policy against protectionism.  Stronger global cooperation is needed to rebuild a robust architecture for trade and investment in the 21^st century.  The forthcoming G-20 Summit in Los Cabos should send a strong and clear signal about the need to keep markets open, resist protectionism, and preserve and strengthen the global trading and investment system so that it continues performing this vital function in the future.   A firm commitment to improve multilateral transparency and peer review should be pursued."

While what constitutes protectionism and what is an exercise of domestic policy space is debatable, the Report highlights the growing trend towards inward looking policies. Recently, the WTO Appellate Body ruled against the Dolphin Safe labelling measure of the United States as being violative of Article 2.1 of the TBT Agreement. Can the measure now be considered protectionist since it is less favourable to fish from Mexico? Would non-compliance of the WTO measure be an inward looking act? A letter written to the US President by some  US House of Representatives members in support of the labelling measure raises interesting questions of the limits of domestic policy and WTO obligations.

Protectionism is used generally in terms of measures initiated by countries that restrict trade. Some of them may be within the confines of the exceptions provided by the WTO Agreements itself. Some of the measures may be more trade restrictive than necessary while some of them may be justified as per the WTO rules. While determination of which measures fall within the ambit of the rules is a complex, legal exercise requiring a detailed appraisal of law and fact, the general tenor of the Report detailing out such measures signifying a "protectionist" move if not wave should not be missed.

Alvaro Santos, Robert Howse and Andrew Lang on Domestic Policy space and WTO - Brilliant exchange

I was delighted to see an Online symposium in Opinio Juris on Alvaro Santos' article on domestic policy space and the WTO. The discussion on the article by two leading international trade law luminaries Robert Howse and Andrew Lang was extremely enriching and very engaging. I had written about the article in a blog piece here. In this blog I will reflect on this interesting exchange as well as my thoughts on the issues involved.

In his original article titled "Carving Out Policy Autonomy for Developing Countries in the World Trade organisation : The Examples of Brazil and Mexico" Alvaro essentially argues that there is sufficient policy space within the WTO Agreements for developing countries to pursue their developmental agenda provided they are legally equipped and capacity to engage with the multilateral system is strengthened. Providing a synopsis of this stand Alvaro in the Opinio Juris piece states:

"In “Carving Out Policy Autonomy for Developing Countries in the World Trade Organization: The Experience of Brazil and Mexico”, I argue against the commonly held assumption that WTO legal obligations overly restrict countries’ regulatory autonomy. Despite the presence of restrictions, I claim that there is still flexibility in the system for countries to carve out regulatory space for themselves. That countries can expand their policy autonomy means that governments of developing countries have more agency and responsibility than development scholars typically admit. At the same time, however, the asymmetry of power and resources between countries does affect their experience in the system and thus influences the outcomes to a greater extent than liberal trade scholars usually acknowledge.

         ...

However, to show that countries subjected to similar international obligations can pursue divergent trade and development policies is to make clear that there is policy space and that this space can be put to different uses with divergent outcomes. Developing countries’ governments should bear responsibility — and their citizens should hold them accountable — for the kind of developing strategy they pursue, or refrain from pursuing, within the international trade regime."

The basic thrust of this piece is that, subject to certain limitations, WTO rules do afford sufficient domestic policy space for developing countries to pursue their developmental agendas and as part of the strategic lawyering that is proposed, it is suggested that it should be part of this overall developmental discourse.

Robert Howse while giving the example of compulsory licensing in the TRIPS Agreement as an example of policy autonomy broadly agrees with the view that the WTO rules offer sufficient policy space. He comments on the lack of expertise of WTO law in many countries which perhaps hinder the serious engagement of many countries in the dispute settlement system as well as postulates the need for taking forward the learnings of Brazil and mexico to other countries.

"In some countries, there is no independent expertise about WTO law. The government and the people only hear the views of officials who have been more or less inducted into the global trade policy elite, or those of the WTO Secretariat, or those of interests who are using the notion of WTO illegality to block a policy they oppose for other reasons. Today, however, NGOs are playing an increasingly useful role in entering policy debates and contesting interpretations that are particularly restrictive of policy space (ICTSD’s work on TRIPs is a good example). To be able to do this NGOs had to reposition themselves at least partly from being anti-globalization advocates trying to oppose and delegitimate the system to knowledgeable and shrewd lawyers who see the tensions, flexibilities, and balances in the existing norms that can be a basis for contestation within the legal framework as it stands. I am still struck by how journalists (many, though not all), who can be important in transmitting the meaning of WTO law in a domestic policy debate, will go to the same experts-mostly trade officials, lobbyists, or retired officials, and a few professors who are also consultants or closely connected to the WTO Secretariat-and take their views as the correct ones concerning the meaning of WTO law."

Andrew Lang while agreeing with the broad principle the existence of policy autonomy within the WTO also highlights the need for analysing the receptivity of the dispute settlement mechanism to respond to the development strategies of the developing world. In other words, he states that "the power to shape the interpretation of the law in WTO dispute settlement, in other words, is not just a function of the legal capacities of the parties to a dispute, but also about the structural conditions which make certain legal arguments appear more convincing, persuasive, institutionally appropriate, textually grounded, and so on to legal interpreters." He makes the important point that in the coming decade the importance of the dispute settlement bodies is going to become very crucial and central to global trading and will need to respond to the growing strategic lawyering that Alvaro's article talks about.

"A related thought has to do with the pressures that this project will place on the WTO dispute settlement system. Alvaro, and other writing in this area, are right to say that struggles over the interpretation of WTO law are likely to become an even more central aspect of global trade politics over the next decades, partly as a result of more and more Members building their legal capacity in precisely the way Alvaro describes. Is the dispute settlement system equipped at present to respond to the challenges that this will pose? Does it currently possess a sufficient set of juridical tools and techniques to carve out both a legitimate and effective role for itself as it finds itself ever closer to the centre of trade politics? One of the tasks for the next decade or so it to try to craft a way of ‘doing law’ in international economic governance which bears the weight that strategies such as those described in this article will necessarily place on it."

Andrew Lang ends with a different idea in terms of the absence of the notion of Autonomy itself in a globalised world wherein national policy choices are determined by a host of international factors, WTO law being only one of them. Proposing a radical shift in perception, he proposes that positive experimental domestic autonomy and institutional pluralism should be advocated rather than the "negative" restraint on autonomy by the WTO rules. What this would entail, I assume, is that the international economic order will be based on pluralism of national economic policies rather than an exception of autonomy to globalised rules at present. I am not very sure how that translates into multilateral trade rules, non-discrimination and lack of protectionism? 

"A related thought has to do with the pressures that this project will place on the WTO dispute settlement system. Alvaro, and other writing in this area, are right to say that struggles over the interpretation of WTO law are likely to become an even more central aspect of global trade politics over the next decades, partly as a result of more and more Members building their legal capacity in precisely the way Alvaro describes. Is the dispute settlement system equipped at present to respond to the challenges that this will pose? Does it currently possess a sufficient set of juridical tools and techniques to carve out both a legitimate and effective role for itself as it finds itself ever closer to the centre of trade politics? One of the tasks for the next decade or so it to try to craft a way of ‘doing law’ in international economic governance which bears the weight that strategies such as those described in this article will necessarily place on it."

Finally Alvaro has brilliantly responded to the two responses. Reiterating his stand that developing countries should use the existing legal frameworks to pursue policy autonomy, he states:

" Finally, a word on the character of policy autonomy. Lang calls policy autonomy an illusion because international law –or multiple layers of transnational legal regimes- to some extent already structures countries’ economic policy choices when it comes to trade-related regulations. We can imagine procedural rules about sovereignty, state responsibility, jurisdiction and treaty-making, or overlapping substantive regimes of investment and finance, to name a few. So, a country is never entirely free from constrains. I think that diagnosis is right although once made visible, a country might also be able to influence those background legal regimes that affect its choices on trade measures.

At any rate, it might be that Lang’s understanding of policy autonomy and mine are not so far apart. I see policy autonomy not as some limitless or pre-regulatory status that developing countries should strive to inhabit but as a quest for empowerment within the existing international regulatory regimes that could yield better consequences for them. The call is not for disengagement but for a different kind of engagement. If there were a rallying cry it would not be “leave me alone” but “let me experiment and thrive in the system”."

This interesting exchange throws open many issues in the context of the engagement of developing countries in the WTO? What are the limits to domestic policy choice within the WTO. While it is recognised that WTO rules do provide for domestic autonomy, what are the contours and limits of it? Are there certain fundamental principles that even domestic policy choice cannot question? Can we generalise on these limits or do they depend on the facts of each case that are brought to the dispute settlement body? WTO law and interpretation are becoming increasingly complex quagmire of legalese and requirement of legal expertise is a sine qua non for effectively engaging with the trading system. Engaging and using domestic policy autonomy would perforce require a thorough understanding of the law as well as its nuanced interpretation. How many developing countries are capable of this journey? Is the domestic, political regime prepared for such an engagement? 

Another issue of recognising domestic policy autonomy within the WTO regime is to understand that the developed world too would be using this same policy space for protecting their interests. In today's globalised world as much as developing countries are markets for the developed world, developing countries are increasingly exploring markets in the developed world.  Further, using domestic policy space by another country has serious impact on an exporting countries exports. There will be essential trade offs a country will have to make. While using its domestic policy space in a particular context will serve its domestic developmental agenda, the use by another country will affect its trade interests which also may be part of its developmental agenda. How does one reconcile these interests? While countries want to protect domestic industry within WTO rules and it is a legitimate claim, they want reduced barriers and access to markets when their exports are affected. How does one balance the two policy choices of a developmental agenda and market access? In other words, where should the line between domestic policy space, protectionism and innovative interpretation of WTO rules be drawn? Can there be a legitimate domestic policy choice on the grounds of protecting one's domestic industry as part of a country's developmental agenda? Would it be permissible even if it is discriminatory vis a vis foreign competitors? Is there a danger of increased protectionism by the developed world (or even the developing world) by innovative policy autonomy interpretation that the developing world may not be able to use because of a lack of legal capacity? 

Is the assumption that reduced barriers to trade is not in the interests of developing countries? Is the assumption that international trade is not an ally of a country's developmental agenda? Isn't it possible that domestic policy autonomy is hijacked by "hegemonic" national business interests which may not always be co-terminus with national interests? At times domestic policy choice is not guided by developmental agendas but by vested interests to keep international competition at bay. Is this also a permissible domestic policy choice that a developing country should adopt? Does domestic business interest always constitute national interest?

One of the extremely positive outcomes I see from this exchange is the possibility of Law Schools providing independent, "development friendly" advice to developing countries to engage with the WTO. As Alvaro stated:

"Moreover, beyond the role of developing country governments and NGOs, Howse makes clear that there is also a role for legal scholars to play. I am enthusiastic about his idea of using law school clinics to provide independent and development-friendly legal advice to countries in need of counsel for WTO litigation and to other groups, like NGOs, for domestic policy debates about the meaning of WTO obligations. I am on board and hope that this exchange could be the beginning of a project of that sort."

I would be excited to study the journey of India and other developing countries in their use of the Dispute Settlement mechanism to further developmental agendas.It would be worthwhile to study a few developing countries engagement with the DSM in relation to their developmental paradigms like Alvaro did for Mexico and Brazil. One will have to go into the specific examples of measures taken and whether the domestic measure was part of the larger developmental agenda or a purely "protectionist" measure. I would indeed watch very keenly the progress of this project as it seeks to bring international law from its "rarified" confines as many see it to "grassroot" domestic policy making and the rigours of democratic political compulsions.