Historical learning in the design of WTO rules: the EC sugar case

The Uruguay Round Agreement made significant changes to the governance of international trade. Trade rules and dispute settlement mechanisms were altered and a series of specific agreements provided for liberalisation across economic sectors. The Agreement on Agriculture, arguably the most difficult and contentious to negotiate, permitted the continued use of trade-distorting instruments, both domestically and at the border. Rule-enforcement in agriculture therefore relies crucially on the clarity of the rules. This paper provides an in-depth study of a unique and critical case for understanding the new rules: the EC sugar regime. This policy was challenged unsuccessfully under the pre-Uruguay Round rules, but successfully under the new rules. This case is particularly valuable in allowing us to isolate the effect of the Uruguay Round on agricultural trade disputes: the policy under challenge was essentially unchanged and the legal actions addressed the same concern – excessive export subsidisation. Drawing on primary and secondary materials and interviews with key policy actors, sugar is used to illustrate how those involved in the multilateral process learned from particular rule weaknesses revealed in earlier cases, revising those rules in the Uruguay Round in such a way that dispute panels can more readily and objectively determine rule breaches

Dispute Settlement in the World Trade Organization (WTO): An Overview

[Excerpt] Dispute settlement in the World Trade Organization (WTO) is carried out under the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU). In effect since January 1995, the DSU provides for consultations between disputing parties, panels and appeals, and possible retaliation if a defending party fails to comply with a WTO decision by an established deadline. Automatic establishment of panels, adoption of panel and appellate reports, and authorization of requests to retaliate, along with deadlines and improved multilateral oversight of compliance, are aimed at producing a more expeditious and effective system than had existed under the General Agreement on Tariffs and Trade (GATT). To date, 405 complaints have been filed, approximately half involving the United States as complainant or defendant. Expressing dissatisfaction with WTO dispute settlement results in the trade remedy area, Congress, in the Trade Act of 2002, directed the executive branch to address dispute settlement in WTO negotiations. WTO Members have been negotiating DSU revisions in the currently stalled Doha Development Round of trade negotiations but no final agreement on the DSU has been reached. Use of the DSU has revealed procedural gaps, particularly affecting the compliance phase of a dispute. These include a failure to coordinate procedures for requesting retaliation with procedures for tasking a WTO panel with determining whether a defending Member has complied in a case and the absence of a procedure for withdrawing trade sanctions imposed by a complaining Member where the defending Member believes it has fulfilled its WTO obligations. As a result, disputing Members have entered into bilateral agreements permitting retaliation and compliance panel processes to progress on an agreed schedule and have initiated new dispute proceedings aimed at removing retaliatory measures. Where a U.S. law or regulation is at issue in a WTO case, the adoption by the WTO of a panel or Appellate Body report finding that the measure violates a WTO agreement does not give the report direct legal effect in this country; thus federal law is not affected until Congress or the executive branch, as the case may be, takes action to remove the offending measure. Where a restrictive foreign trade practice is at issue, Section 301 of the Trade Act of 1974 provides a mechanism by which the United States Trade Representative (USTR) may challenge the measure in a WTO dispute settlement proceeding and authorizes the USTR to take retaliatory action if the defending Member has not complied with the resulting WTO decision. Although Section 301 was challenged in the WTO on the ground that it requires the USTR to act unilaterally in WTO-related trade disputes in violation of DSU provisions requiring resort to multilateral WTO dispute settlement, the United States was ultimately found not to be in violation of its DSU obligations. H.R. 496 (Rangel) would create an Office of the Congressional Trade Enforcer that would, inter alia, investigate restrictive foreign trade practices in light of WTO obligations and call on the USTR to pursue WTO cases where alleged violations are found; express congressional dissatisfaction with WTO decisions; and restrict implementation of a revised methodology for calculating dumping margins adopted by the Commerce Department in 2007 in response to adverse WTO decisions. S. 363 (Snowe) would grant the U.S. Court of International Trade exclusive jurisdiction to review de novo certain USTR determinations under Section 301 of the Trade Act of 1974, which may in some cases involve the initiation and conduct of WTO disputes, and would amend various Section 301 authorities themselves. S. 1466 (Stabenow) and S. 1982 (Brown) would establish mechanisms under the Trade Act of 1974 requiring the USTR to identify particularly harmful foreign trade practices and, where appropriate, to initiate WTO cases to remedy these practices

(WP 2014-02) Trade Volatility and the GATT/WTO: Does Membership Make a Difference?

Using bilateral trade data for 210 countries over the period 1948-2003, this paper attempts to shed some light on the relationship between WTO and members’ trade volatilities. We show that the trade among WTO members tends to be more stable than the trade outside the WTO, and there is strong evidence of interdependence of trade volatilities. The results show comovement of trade volatilities across all dyads in general, and much stronger comovement among WTO members than between WTO and non-WTO members. Such strong comovement implies that WTO member countries not only share the benefits of having an interdependent and more predictable trade system, but also share the risks of contagious world trade collapse as evidenced by the 2008 global financial crisis. In addition, we find that larger economies and countries covered by other types of integration agreements can do better in coping with such type of contagion

World Trade Organization (WTO) Decisions and Their Effect in U.S. Law

[Excerpt] Congress has comprehensively dealt with the legal effect of World Trade Organization (WTO) agreements and dispute settlement results in the United States in the Uruguay Round Agreements Act (URAA), P.L. 103-465. The act provides that domestic law prevails over conflicting provisions of WTO agreements and prohibits private remedies based on alleged violations of these agreements. As a result, provisions of WTO agreements and WTO panel and Appellate Body reports adopted by the WTO Members that are in conflict with federal law do not have domestic legal effect unless and until Congress or the executive branch, as the case may be, takes action to modify or remove the conflicting statute, regulation, or regulatory action. Violative state laws may be withdrawn by the state or, in rare circumstances, invalidated through legal action by the federal government. The URAA also contains requirements for agencies to follow where a change in a regulation or the issuance of a new agency determination in a trade remedy proceeding is needed to comply with a WTO decision and existing law may be sufficient to carry out the action. While the URAA prohibits private rights of action based on Uruguay Round agreements, plaintiffs, in cases brought under other statutes, have argued that the agency actions they are challenging in court are inconsistent with a WTO agreement or a WTO decision and should conform with U.S. WTO obligations. Although courts have deemed WTO decisions to be persuasive, they have also held that they are not binding on the United States, U.S. agencies, or the judiciary, leaving the issue of whether and how the United States complies in a particular WTO proceeding to the executive branch. Legislation introduced in recent Congresses generally reflected congressional concerns that the WTO Appellate Body had interpreted WTO agreements in an overly broad manner to the detriment of the United States and that the executive branch had in some cases too readily used existing statutory authorities to comply with these decisions, particularly where U.S. trade remedies were involved. Legislation particularly focused on WTO decisions finding the U.S. use of “zeroing” in antidumping proceedings to be in violation of the WTO Antidumping Agreement and an administrative modification instituted by the Department of Commerce in original anti-dumping investigations in response to one of the earliest of these decisions. Under the practice, the department calculates dumping margins by taking into account only sales below fair market value—generally the price in the exporting country—and assigns a zero value to sales at or above this price. While it is argued that zeroing improperly creates or inflates dumping margins, U.S. courts have consistently upheld the department’s use of the practice as valid under U.S. antidumping law

Europe\u27s Evolving Regulatory Strategy for GMOs --- The Issue of Consistncy with WTO Law: of Kine and Brine

This Essay deals with one question: If challenged, how would regulatory restrictions on genetically modified organisms ( GMOs ) be judged by a World Trade Organization ( WTO ) adjudicating body. Many of the controversies about the effect of WTO law on domestic regulation have been influenced by the view that the law as it stands may well impede the ability of governments to regulate new and uncertain risks to health and the environment. The result in the Beef Hormones case is often cited for this proposition. In this Essay we aim to show that, contrary to an increasingly widespread popular perception, if WTO law is properly interpreted, GMO-related measures, where non-discriminatory against other WTO Members, can pass the test of consistency with even the most stringent of relevant WTO rules

Collective retaliation and the WTO dispute settlement system

Copyright @ 2009 The Estey Centre for Law and Economics in International Trade. Estey Centre Journal of International Law and Trade Policy is an open access journal.Article 22 of the Dispute Settlement Understanding (DSU) of the WTO offers, as last resort countermeasures, withdrawal of the concessions the state parties had agreed to in their schedules of commitments. The problem is that such a withdrawal of concessions would have very little impact on the economy and consequently on the behaviour of the respondent state if that party happened to be a developed state vis-à-vis a small, developing country. To deal with this situation a remedy of “collective countermeasures”, contained in Article 54 of the Draft Articles on State Responsibility of the International Law Commission (ILC), has been proposed; it has been argued that this remedy should apply, as a general principle of public international law, as a last resort in WTO disputes. The counter-arguments are, first, that the WTO regime is a self-contained regime and therefore the general principles of international law do not apply in this case, and, second, that the WTO legal system is based on a distinct idea of “compliance” with WTO rules as a primary remedy, as opposed to reparative and punitive justice. The concept of “compliance” with WTO rules is akin to the concept of “liberalization”, which is a linchpin of the WTO multilateral system. Therefore the idea of “collective countermeasures” or, in other words, “collective punishment” is repugnant to the principles of WTO law, and it is argued that the present remedies under Article 22 of the DSU are adequate

Bolstering Global Trade: Governance A Work Program for the WTO presented by the High-Level Board of Experts on the Future of Global Trade Governance

The WTO provides the foundation of the rules-based global trading system that has played a critical role in sup- porting growth in global GDP during recent decades. Preserving the salience of the WTO is vital in managing the adjustment pressures from globalization and sustaining the cooperation needed to govern trade relations in a world in which the transformation towards a global digital economy and associated servicification of production creates new policy challenges. Efforts to address these challenges are stymied by disagreements between WTO members regarding the priorities for the multilateral trading system. These disagreements reflect differences in views on the extent to which national policies have adverse international effects and the costs and benefits of ne- gotiating additional trade policy rules. The result has been to impede progress on rule-making for both long- standing core policies of concern to many WTO members (e.g., agriculture) as well as new policy areas. Matters have been compounded by dissatisfaction by some Members regarding the functioning of the WTO dispute set- tlement body and transparency mechanisms. While preferential trade agreements are important complementary vehicles for countries to pursue deeper coop- eration on trade policy matters than has been possible in the WTO, such initiatives depend on the strong foundation of basic rules provided by the WTO. Moreover, they only offer partial solutions – many of the emerging policy areas of concern to business and civil society call for multilateral cooperation. Re-vitalizing such coopera- tion does not require major changes in the organization. What is needed is willingness to engage in candid, substantive discussion of perceived problems and possible solutions. The recent Agreement on Trade Facilitation, with its positive approach to addressing development concerns, and the success of Members in incrementally deepening cooperation on some matters under the purview of some WTO agreements – e.g., addressing specific trade concerns arising from proposed new product regulations – show that WTO Members can innovate and agree to common approaches towards trade policies while recogniz- ing differences in social preferences and national circumstances

The WTO from the Perspective of a Developing Country

This Essay starts by laying out the shortcomings of the WTO. In Part II it lays out the issues at stake in the Seattle Conference. Part III is about the effects of the Seattle fiasco. Part IV gives the author\u27s views on what a development round should be. Part V asserts that the WTO should promote fair labor standards. Finally, Part VI discusses the prospects for the WTO to address concerns of developing nations

CAP Reform in the Light of the WTO Doha Round Negotiations

Our paper focuses on the question: how the measures of June 2003 agreement can help the EU to meet the new WTO commitments. As decoupling of direct payments and WTO classification of the new payments seem to be one of the most important questions from the point of view of WTO negotiations, our analysis focuses mainly on the Single Farm Payment (SFP). We assesses the decoupled nature of the single farm payment (SFP) based on WTO and OECD criteria. We conclude that the SFP meets not only the current WTO (design based) criteria of decoupling, but can also be qualified as effective fully decoupled system using the OECD terminology.CAP reform, WTO, decoupling, International Relations/Trade, Q17, Q18, F13, F15,