tambi gerard mbah-ll.m dessertation itc-ilo final copy for submission

of 25

“The use of the WTO Trade Dispute Settlement System by sub-

Saharan African developing countries”

By

TAMBI GERARD MBAH

Email: [email protected], Telephone: +237674572783

A final dissertation submitted for the LL.M in International Trade Law,

Contracts and Dispute Resolution.

University of Turin & International Training Centre of the International

Labour Organisation (ITCILO).

NOVEMBER, 2015

of 25

Abstract The World Trade Organization (WTO) Dispute Settlement System (DSS) is the central pillar of the multilateral

trading system. it is design to ensure the prevalence of the rule of law within international trade, provide all WTO

member countries with opportunities to exercise their rights under multilateral trade agreements and enhance

security and predictability of the multilateral trading system. Unfortunately since the creation of the system, no

sub-Saharan African Developing Country (SSADC) has actively participated in the system as a principal party

(complainant or respondent).These countries have till date only used the system as third parties. This dissertation

critically examines factors that hinder the SSAD countries from using the system, support systems to the use of

the WTO dispute settlement system and propose recommendations to overcome the barriers to the use of this

system. In conclusion the extent to which overcoming identified barriers will enhance the use of the system by

these countries will be discussed.

Acknowledgments

I want to thank Dr. Marina Foltea for her patience and guidance in supervising this work; Mr. Asahafa Samuel

and Mrs Lorenza Mola for their interest and useful suggestions. Last but not the least my gratitude goes to all the

staff and classmates of the ITC-ILO Trade law class of 2014/2015 academic year for their support and

encouragement which inspired me to come out with this work.

of 25

Contents PART ONE

1. Introduction.............................................................................................................4

2. General overview of the use of the WTO DSS…………………………………5-8

PART TWO

3. Barriers to the use of the WTO DSS by SSAD countries………………………9

3.1 Lack of interest in trade disputes by governments of SSAD countries………..9-10

3.2 Weak trade-policy infrastructures…………………………………...................10

3.3 Pressure and Dominant Position of respondent countries...............................10-11

3.4 Limited budgets and priority of social needs…………………………………....12

3.5 Shortage of trained personnel……………………………………………..........13

3.6 Inability to enforce DSB recommendations…………………………………….13-14

4. Support to enhance the use of the WTO DSS...................................................15

4.1 Supports available to the SSAD countries……………………………………….15-16

4.2 Shortcomings in supporting SSAD countries…………………………………16-17

PART THREE

5. Possible recommendations on enhancing the use of WTO DSS...........................18

6. Conclusion...................................................................................................................19-20

7. References...................................................................................................................21

8. APPENDIX A: overview of the WTO’s dispute settlement mechanism………22-25

of 25

1. Introduction.

The WTO’s dispute settlement system (DSS) is open to all WTO Members irrespective of the country’s

power. The prime object and purpose of the WTO DSS is the prompt settlement of dispute between WTO

Members providing a secure and predictable multilateral trading systems1

.The WTO DSS involves two main

institutions ;the political type institution which is the dispute settlement body ( DSB) composed of all WTO

members and administers the DSS and the judiciary type institutions which are the dispute settlement panels and

the Appellate body .Both are established under certain conditions and are responsible for the actual adjudication

of trade disputes at first instance and on appeal between WTO Members. Despite the equality of all WTO

members to effectively use the DSS, there have been a major challenge in the use of the system to the extend it

has been highly and efficiently used by developed and developing countries in Europe, America and Asia

.Countries in the African continent but for South Africa and Egypt are yet to effectively use the system as

principal parties (complainants and respondents).

The issue to be determined in this paper is whether or not the fact that African countries especially SSAD

countries are not using the system means that they do not encounter international trade disputes? If this is

answered in the negative then what factors hinder the use of the system by the SSAD countries and how can these

barriers be overcome to enhance the use of the system. As per the table of contents above this dissertation is

divided into three parts. Part one presents a brief history, structural organization, functions and importance of the

DSS, which is followed by a general overview of the use of the system by WTO Members focusing on SSAD

countries. Part two critically examine the barriers to the use of the DSS by SSAD countries, the type of support

available to enhance the use of the WTO DSS by SSAD countries and the shortcomings of this support. Finally

part three presents possible recommendations to overcome the barriers and enhance the use of the system by

SSAD countries. This is followed by a short, Conclusion.

___________________________________________

1.

For the introduction of the DSS purpose and object see Peter van den bossche & Werner zdou, the law and policy of the world trade

organization, third edition at page 305 paragraph 4

of 25

2. General overview of the use of the WTO DSS.

The historical evolution of the DSS can be traced as far back as 1947 during the era of GATT (General

Agreement on Tariffs and Trade) during which disputes between the Contracting Parties were resolved following

consultations (diplomacy) between them and in case no agreement was found all parties were invited to

investigate the dispute and propose recommendations. This system allowed retaliation in the event that the

recommendations were not observed by the disputing parties. This procedure was uncertain mostly because there

were no strict time limits for the proceedings and biased as it was based on power of the countries. The

shortcomings of the GATT gave birth to the WTO DSS in 1995 during the Uruguay Round. The system is rule

based, equitable, fast, effective and mutually acceptable by all parties but for some exceptional circumstances

(special and differential treatments) which favoured the least developed and developing member countries to

enable them effectively utilized the system. Unfortunately developing and least developing countries most

especially those of sub Saharan Africa are not effectively utilizing the system for reasons which shall be critically

examined in subsequent chapters2.

The WTO DSS has been used by developed and developing member countries in like manner with the

United States of America and the European Union registered as the most active users of the system while

developing member countries such as Argentina, Brazil, China, Chile, Thailand, India, Mexico and Indonesia

from the year 2000 till date have in like manner as the United States of America and the European Union brought

several disputes before the WTO DSS. It is noteworthy that in some years such as the year 2000, 2001, 2003,

2005, 2008, 2010, 2012, 2013, 2014 and September 2015 developing Members have brought more dispute to the

DSS than developed Members3

either against the economic superpowers as in the US-Underwear case a

complaint by Costa Rica, US- Gambling case a complaint by Antigua and Barbuda (2005) or against other

developing Members as in the Thailand—Cigarettes case a complaint by Philippines (2011).

Despite the above statistics the WTO DSS is however not effectively utilized by developing and least

developed SSAD Members. Information from the WTO website dispute settlement page on the participation of

WTO Members in the DSS indicates that while developed and developing countries in the Americas, Europe and

Asia are actively utilizing the system as complainants and respondents most developing and least developed

countries especially those in sub-Saharan Africa are till date utilizing same only as third parties

(observers).Before diving into the specific situations of SSAD countries in relation to the use of the WTO DSS , it

will be necessary to have the following statistics in mind to enable the reader have an understanding of the

general overview of the use of this system.

of 25

In just under fifteen years of dispute settlement under the DSU, over 400 disputes have been initiated with no

African country initiating any dispute under the DSU while only one Least Developed Country (LDC) have

initiated a dispute which did not progress beyond the consultation phase4. The United States (U.S.A) and

European Communities (EC) between them have been complainants in approximately forty-one percent of all

cases. From the above statistics one might be tempted to immediately conclude that the system is failing with

regards to the participation of developing Members in sub Saharan Africa.

Yet, a different set of statistics may represent another view as over forty percent of all complaints have

been initiated by developing countries and of the over forty WTO Members to have initiated at least one dispute

case, about twenty-nine have been developing Members and the U.S.A and the EU, between them have been

Respondents in approximately forty percent of all cases.5 What is not so clear from these statistics, however, is

precisely why this is the case. A number of studies have attempted to provide reasons for such a situation by

assessing statistically patterns of initiation of WTO complaints; economic size; market power; legal capacity

differences favour the use of the system by powerful countries because of their ability to retaliate to enforce

rulings.6

Recently the WTO DSS has been mostly utilized by the above cited developing countries while most SSAD

Members have utilized same as third parties (observers), statistics from the WTO website dispute settlement page

present the situation of the SSAD Members as follows: Nigeria, Zimbabwe and Mauritius have used the system

six times; Cameroon, Namibia and Ghana have used the system once; Swaziland has used the system trice while

Gabon, Congo and Seychelles have never used the system7

The WTO DSS has been generally analysed by different professions to wit: lawyers, economists and

politicians. Unlike the lawyers, these last two groups are interested in determining the conditions under which

countries participate in the system, and the costs and benefits of this participation. A first set of observations from

this source concerns possible relations between countries’ levels of engagement in the system, their shares and

patterns of trade, and the retaliation opportunities that these provide (Bown and Hoekman, 2005; Horn et al.,

1999; Nordstrom, 2005). The authors cited countries’ shares of world trade, numbers of traded products and

numbers of trading partners as determinants of their participation.

Their hypothesis is that ‘the probability of encountering disputable trade measures is proportional to the

diversity of a country’s exports over products and partners, which means that larger and more diversified

exporters would be expected to bring more complaints than smaller and less diversified exporters (Horn et al.,

1999:ii). They find that the hypothesis ‘goes quite far toward predicting the actual pattern of complaints across

of 25

countries’ (ibid.).8 especially when the cost of litigation is controlled for. However, they also find that the G4

countries9 are overrepresented in the DSS, relative to their positions with regard to these attributes.

10

A second, related set of observations regards the negative consequences a case may have as a reason why

some developing countries especially have not been active in the system. Examples of these are provided by

Bown (2005), who develops a model to analyzing a subset of disputes, namely, those dealing with issues of

market access. He finds that lost market access and economic losses determine countries’ decisions to initiate

cases. However, several other political and economy factors affect the decision not to litigate ... Other things

being equal, adversely affected exporters are less likely to participate when they are involved in a preferential

trade agreement with the respondent, when they lack the capacity to retaliate against the respondent by

withdrawing trade concessions, when they are poor or small, and when they are particularly reliant on the

respondent for bilateral assistance’ (ibid.: 291). Bown’s arguments partly recapitulate those of Hoekman and

Mavroidis (2000) whose list of countries’ reasons for not initiating cases includes practicing policies similar to

those that a case tries to change, and fear of the political as well as economic impact of a case on bilateral

relations with another state.

A final set of observations from this literature focuses on biases and inequalities within and between

institutions managing trade, including the WTO in general and the DSS in particular (Busch and Reinhardt, 2003;

Shaffer, 2003). Here, the main problem identified is that the DSS (and the WTO) has become too technically

complex and demanding for most developing countries to use effectively in the absence of adequate assistance.

Underlying this is the observation that there is too much law and too little politics in the system.

Proponents of this position link these observations to others concerning developing countries’ typically

weak trade-policy infrastructures, their shortage of trained personnel and, their lack of knowledge about the

system. This view is systematically elaborated by Hoekman and Mavroidis (2000), who present the overall

dispute process in two stages – ‘upstream’, which is that part of the process before a case is officially brought

before the DSS, and ‘downstream’, which is after a case has been officially initiated. During the first stage, a

country’s trade-policy infrastructure plays the central role. It is here that information is gathered, analyzed and

transferred to the government, which then decides whether to pursue a case or not.

Not only the existence but also the functioning of trade-policy infrastructures is critical for countries’

engagement in the system, according to Shaffer (2003). His study of the infrastructures of the US and the EU

finds that an institutionalized linkage between private companies and officials is a key characteristic of the major

users of the system. While under existing WTO rules only member states may initiate a case, this generally occurs

on the basis of persuasion from private companies. This is facilitated where local private companies are strong

of 25

and where the established infrastructure gives private companies a voice and the chance to lead their case

informally through the initial stage.

From the above analysis it is evident that the SSAD countries have utilized the DSS as third parties only in

the same or similar disputes. They are not actively involved in the system despite the fact that they are actively

involved in international trade with the most of the developed and developing countries supra utilizing the WTO

DSS. The issue to be determined here is why the SSAD countries are not effectively utilizing the DSS whereas

they are actively participating in international trade in like manner as most developed and developing supra

actively utilizing the system.

__________________________________

2.For the historical evolution of the DSS see Alavi Amin, African Countries and the WTO's Dispute Settlement Mechanism.

Development Policy Review, Vol. 25, 1, pp. 25-42, January 2007. (The DSM : a short history)

3

For statistics on complainants and respondents in dispute resolution see www.worldtrade law.net and

www.wto.org/english/tratop_e/dispu_e.htm. as from the year 2000 - september2015.

4Request for consultations by Bangladesh to India on the imposition of anti-dumping duties by India on batteries from Bangladesh on the

2nd

of February 2004 and by the 20th

of February the parties informed the DSB that a mutually satisfactory solution had been achieved. 5

As at 5 November 2009, the WTO records 400 dispute settlement cases initiated. This represents 400 Consultation requests received.

However in a number of disputes there were multiple complainants Associated with a single consultation request.

6 See C. Bown, ‘Participation in WTO Dispute Settlement: Complainants, Interested Parties and Free Riders’, World Bank Economic

Review, 19 (2005), p. 287-310 (assessing market power); M. Busch, E.

7

For statistics of the SSAD countries as third party see www.wto.org/english/tratop_e/dispu_e.htm as at 25 September 2015. 1.

Cameroon has used the DSS once as third party in EC — Bananas III 2012 case, 2. Gabon has never used the DSS , 3. Congo has never

used the DSS , 4. Nigeria has used the DSS six times as third party in the US — Shrimp case 2001, Australia — Tobacco Plain

Packaging (Ukraine) case 2014, Australia — Tobacco Plain Packaging (Honduras) case 2014, Australia — Tobacco Plain Packaging

(Dominican Republic) case 2014, Australia — Tobacco Plain Packaging (Cuba) case 2014, Australia — Tobacco Plain Packaging

(Indonesia) case 2014 5. Ghana has used the DSS once as third party in the EC — Bananas III case 2012 , 6.Mauritius had used the DSS

six times as third party in EC — Bananas III case 2012, Mexico — Corn Syrup case 2001 , EC — Tariff Preferences case 2005, EC —

Export Subsidies on Sugar (Australia) case 2005, EC — Export Subsidies on Sugar (Brazil) case 2005 , EC — Export Subsidies on

Sugar (Thailand) case 2005 , 7.Kenya has used the DSS three times as third party in , EC — Export Subsidies on Sugar (Australia) case

2005, EC — Export Subsidies on Sugar (Brazil) case 2005, EC — Export Subsidies on Sugar (Thailand), Swaziland has used the DSS

three times as third party in EC — Export Subsidies on Sugar (Australia) case 2005, EC — Export Subsidies on Sugar (Brazil) case

2005, EC — Export Subsidies on Sugar (Thailand) , 8.Namibia has used the DSS once as third party in EC — Seal Products case 2014,

10. Seychelles has never used the DSS and 11. Zimbabwe has used the DSS six times as third party Australia — Tobacco Plain

Packaging (Honduras) case 2014, Australia — Tobacco Plain Packaging (Dominican Republic) case 2014, Australia — Tobacco Plain

Packaging (Cuba) case 2014, Australia — Tobacco Plain Packaging (Indonesia) case 2014, EC — Asbestos case 2001, Australia —

Tobacco Plain Packaging (Ukraine case 2014)

8. This author’s update of the data supports these conclusions.

9. Canada, EU, Japan and US.

9. The G4’s over-representation is due to the number of cases between them. African Countries and the WTO’s Dispute

Settlement Mechanism 2

10.

of 25

3. Barriers to the use of the WTO DSS by sub-Saharan African Developing countries.

This chapter is dedicated to a critical analysis of the barriers to the use of the WTO Trade Dispute Settlement

System by sub-Saharan African developing Members. From the overview of the use of the system in chapter two

above , it is difficult to actually bring out the exact factors hindering the use of the system by the SSAD Members

since most developing countries such as India , Brazil , China , Indonesia, Argentina frequently using the system

in recent years have similar if not the same economic, political , social and cultural situations as the SSAD

Members .This makes one to wonder what exactly hinders the participation of the SSAD Members in the DSS as

principal parties i.e. complainants and respondents. The issues for determination here is why the SSAD Members

fail to effectively utilize the system whereas they are effectively involved in international trade with other

Members effectively utilizing the system. The various factors hindering the use of the system by the SSAD

Members shall be critically examined in this chapter .These factors are classified under the following headings:

lack of interest in trade disputes by governments; Weak trade-policy infrastructures; Pressure and Dominant

Position of Developed Countries; Limited Government’s Budgets and Priority to Social Needs; Shortage of

trained personnel, and their lack of knowledge about the DSS and Inability to enforce DSB recommendations.

3.1 Lack of interest in trade disputes by governments of SSAD Members

Lack of interest in trade disputes by governments of SSAD Members is one of the most important

barriers to the use of the system by these countries. The fact that only governments of countries are represented in

the WTO, gives a duty to every government Member to ensure her effective use of the WTO and particularly the

DSS by mastering international trade agreements negotiated and entered into, most especially their rights and

obligations in these agreements, the possible disputes that may arise and the procedure to resolve such disputes.

Most governments of SSAD Members pay less interest to foreign affairs most especially relating to the WTO.

They are interested in foreign affairs particularly in the area of peace and security which may threaten their

national peace and security while neglecting international trade issues, the WTO and its DSS.

Also WTO litigations involve much bureaucratic bottle necks. This therefore gives rise to the need

for several exchanges of correspondences and meetings between the foreign affairs ministries and the ministry of

justice of a Member which usually takes a long period of time, funds and considering the unorganized nature of

these institutions governments of SSAD Members are bound to encounter hardship in WTO litigations which

discourages them from effectively participating in the system.

The governments of SSAD Members give very little support to their diplomatic missions concerned

with the WTO issues and considering the complex nature of the WTO system, delegates from these countries

of 25

cannot possibly follow all WTO meetings and sessions precisely that of the DSS. There are several thousand

meets at the WTO on trade disputes each year giving rise to a representation problem as most SSAD Members

with their limited diplomats and little support cannot afford to send top officials to attend all WTO meetings and

sessions. This results to their ineffective utilization of the system.

3.2 Weak trade-policy infrastructures

The fact that the private sector of WTO Members have no direct access to the DSS but are represented by the

government creates a problem on how to ensure that the government is made aware of the measures constituting

violation of WTO agreements to be able to advice herself whether or not to access the DSS. Unlike the classical

example of the U.S.A, Section 301 of the Trade Act of 1974 and the EU as per European Union's Trade Barriers

Regulation, the SSAD Members have Weak trade-policy infrastructures which hinder the identification and

communication of trade barriers to their governments to enable them investigate and if need be access the DSS

for redress. This is as a result of the fact that these countries lack reliable alert mechanisms for the private sector

to notify the governments of international trade activities affecting their economies to enable the government take

prompt actions. Also the issue of bribery and corruption hinder the functioning of some available trade unions and

alert mechanisms in the SSAD countries. Their leaders are involved in bribery and corrupt practices with

perpetrators of trade barriers and are not willing to communicate the government of such barriers.

Most foreign affairs ministers of SSAD Members assume lead positions in trade dispute matters despite the

fact that they have limited background in this area. Also the staff in the foreign affairs ministries who represent

member country in the WTO are usually appointed based on political affiliation to the ruling party and not on

knowledge in international trade law and policy. These diplomats are threatened in instances where a change is to

be made with someone versed with WTO law and policy so they use all their influences to relegate such persons

to an unrelated position. This weak trade policy infrastructures barrier continues to be a genuine problem for most SSAD

Members since these governments are under less pressure from the private sectors engaged in trade to access the WTO DSS.

3.3 Pressure and Dominant Position of respondent countries

The SSAD Members are highly under political and economic pressure from most developed and

developing respondent countries such as the United State of America, European Union countries, China, India,

Brazil, Argentina, Indonesia Malaysia etc , who dominates international trade by virtue of their strength measure

by their advancement in technology. These developed and experienced developing countries are capable of

violating trade concessions and avoiding the oodles of the DSS by indicating to victim SSAD countries possible

of 25

counter reaction by them in areas not necessary in international trade in which the victim countries are dependent

on them.

This can either be political or economic pressure. Politically, the fact that most SSAD countries had as

colonial master some of these dominant respondent countries ,who play primary indirect role in the politics of the

SSAD countries they can easily dictate to leaders of these country members. For instance the role of France in

French speaking sub Saharan African countries. Economically these respondent countries are advance in

technology and control a greater percentage of the global wealth which gives them the possibilities of persuading

these SSAD countries in this area with little or no possibility to resist.

Also the fact that concerns have been raised as to the unequal representation of Members in the WTO

secretariat with the SSAD countries being the most underrepresented makes them feel inferior as compared to

respondent Members who feel superior and in reality are in a dominant position and dominants in the WTO

precisely DSS .11

The possibility of economic or political pressure and domination would appear to be a perceived rather than a real

obstacle but whether perceived or real the mere fact that same is an obstacle hinders the SSAD countries from effectively

utilizing the DSS.

________________________________________________________

11 See item 7 of the DG of WTO statement on WTO Young Professionals Programe during the General Council of 20

th February2015.

of 25

3.4 Limited budgets and priority of social needs.

Another major hindrance faced by the SSAD Members in effectively utilizing the system is that they have

limited resources to spend on legal assistance to defend their WTO rights. Most of the SSAD Members are within the

heavily indebted countries classified by the World Bank Group 12 .They focus more on other social needs to wit: food,

water shelter , health etc.and possibility to repay their debts than funding WTO litigations which is very costly relative

to their budgets compared to larger, wealthier Members. The relative costs of WTO litigation are much higher for

SSAD Members in relation to the size of their economies and budgets and investing in and WTO legal expertise

makes less sense for them in relation to other budgetary needs. Also the SSAD Members face higher absolute

costs for an individual case, since they participate less frequently in WTO dispute settlement, they do not benefit

from experience to minimize cost.

The U.S.A and EC, for example, have respectively participated as principal parties or third party in around

98% and 86% of WTO cases that resulted in an adopted decision.

Due to their prior and ongoing litigation

experience, the U.S.A and EC face fewer start-up costs for an individual case. For a particular case, the US and

EC spend primarily only the “variable costs” of preparation and litigation of that case. It is therefore less cost-

effective for SSAD Members to develop significant internal legal expertise to handle WTO complaints. SSAD

Member’s best alternative is either to work with private law firms, or with a subsidized legal services

organization that is autonomous of the WTO, such as the Advisory Centre on WTO Law. Both private law firms

and legal service organizations are more likely to be frequent players, representing multiple parties in WTO

litigation over time. Private law firms and subsidized legal services organizations such as ACWL are able to

develop legal expertise in a more cost-effective manner which they can deploy for a particular case.13

However

despite the availability of these private law firms and subsidized legal service organizations to aid the SSAD

Members access and effective utilization of the system , these countries still face financial constraints in

relation to WTO litigation as they cannot effectively participate in the system reason being their social needs such

as food , health , shelter , road infrastructures etc. are their priority and require almost greater percentage of their

budgets with nothing reserved for WTO litigations. Also the financial situation of the SSAD Members visa –vis

their social needs makes it very cost ineffective for these countries to finance WTO litigation by ensuring a

continuous quality of trained experts in WTO law and pay the primary fees for bringing or defending a dispute in

the system

___________________________________________

12 http://data.worldbank.org/income-level/HPC

13 See Shaffer, Gregory, The Challenges of WTO Law: Strategies for Developing Country Adaptation (February 22, 2010). World Trade

Review, July 2006. Paragraph on The Financial Challenge: Subsidized Legal Assistance; Private Sector Support; Pooling Resources

through Regional and International Legal Centers.

of 25

3.5 Shortage of trained personnel.

Another barrier faced by the SSAD Members is that of internal capacity constrains which include the

shortage of trained personnel on the DSS. This barrier has a nexus with those discussed above 14

the barriers

discussed above affects the quantity and quality of trained personnel from SSAD Members in WTO law. To

effectively examine this barrier, references shall be made to some of the issues discussed above.

As concerns the shortage of trained personnel on the system, this is as a result of the fact that most SSAD

Member’s regular universities and higher institutions of learning have not included in their programs specialized

courses on the WTO law .Generally there are courses in international trade law offered by universities in sub

Saharan Africa precisely in South Africa15

and specialized courses on WTO law offered by the Trade Policy

Training Center for Africa (TRAPCA) 16

. Also due to financial constraints the SSAD Members are not willing to

finance their citizens in institutions offering special courses on WTO law abroad, notwithstanding some of these

governments are able to finance their citizens but due to some corrupt practices, politicians with no background in

law are sponsored for such training on WTO law and the end result is that they lack knowledge on the DSS and

cannot properly represent their nation’s interest in the system. Also the WTO and other organizations such as the

ACWL fund special training programs on the WTO law for developing and least developing countries with most

of the SSAD countries eligible17

to benefit from same but as a result of the fact that membership in these

organizations mentioned is by governments it is therefore the responsibility for the governments of these

countries to secure candidates for positions in the training courses which are most at times politically motivated

and competent persons with background in trade law are not nominated by their governments.

From the upshot, the shortage of trained personnel in the WTO DSS from the SSAD countries, hinders the

effective utilization of the system by these Members as the governments of these countries have to solicit for

external expertise from private law firms or subsidies legal services organizations which is highly expensive as

compared to utilizing the expertise of civil servants of their country.

3.6 Inability to enforce DSB recommendations

The SSAD Members are often faced with the inability to enforce compliance of the Dispute Settlement

Body (DSB) recommendation. The only remedy for a complaining member to cause a losing member to comply

with the DSB recommendation is to retaliate by suspending equivalent measures. Considering the variance in the

economy of Members, if a SSAD Member with a small economy for instance Cameroon is faced with a situation

of enforcing compliance of the DSB recommendation against a developed country with a large economy such as

the U.S.A the retaliation mechanism is highly questionable

of 25

If this small SSAD Member resolves to retaliate against a developed large economy country suspending

equivalent measures this is unlikely to generate any political or economic loses within the economy of the

developed country to generate pressure to induce compliance. Also if the SSAD Member retaliates by suspending

concessions and for instance raise tariffs this is likely to be detrimental to her than the developed country and

would not ensure compliance of DSB recommendation by the developed Member. From the above analysis it is

certain that most SSAD countries are reluctant to use the system either as complainant or respondents but prefer

to be observers avoiding to go through the inconveniences of enforcing DSB recommendation. However in

practice there has been till date a high level compliance of DSB recommendations notwithstanding the economies

of the complaining and the losing Member.

_____________________________________________________

14 See above discussions on lack of interest in trade disputes by governments; Weak trade-policy infrastructures; Limited Government’s

Budgets and Priority to Social Needs 15

See http://www.llm-guide.com/africa/concentrations/51/WTO%20Law 16

See http://trapca.org/index.php/about-us/about-trapca.html 17

For training programs WTO law offer to developing and least developing countries see information on

https://www.wto.org/english/tratop_e/devel_e/teccop_e/ittc_e.htm&http://www.acwl.ch/e/training/Introduction.htm

of 25

4. Support to enhance the use of the WTO DSS.

The Dispute Settlement Understanding (DSU) contains several provisions providing for special treatment

or consideration for developing and least developing countries. it provides for members to exercise due restraint

in using the system in disputes involving least developing countries and additional special consideration in

disputes involving developing countries all in a bid to enhance the use of the system by all Members irrespective

of their level of development. Furthermore apart from the provisions of the DSU which provide support to least

developing and developing countries to enhance the use of the DSS there is also another support system available

for these countries in the form of legal assistance to these countries in DSS proceeding. The SSAD Members

being developing countries benefit from the above cited supports available to enhance their use of the DSS. These

support systems available to the SSAD Members shall be critically examined in subsequent paragraphs.

4.1 Supports available to the SSAD countries.

Due to the technical and complex nature of the numerous WTO negotiations and agreements it is but

normal that the dispute arising from these agreements are normally technical and complex. Developing countries

particularly the SSAD countries involved in such disputes face difficulties in using the system. As a result of

these difficulties it is necessary for support systems to be put in place to enhance their effective use of the system.

The support available to these countries shall be critically examined in subsequent paragraphs.

The primary support available for the SSAD Members is the special rules for developing countries contained

in the Dispute Settlement Understanding (DSU). The DSU being the law governing the procedure for settlement

of dispute in the WTO DSS recognizes the difficulties encountered by developing countries particularly the

SSAD countries and therefore contain special rules for these countries which include : the possibility for a

complainant developing country against a respondent developed country referring the matter to the Director

General pursuant to Article 3.12 of the DSU and the Decision of 5 April 1966 (BISD 14S/18) for his good offices

to facilitate a rapid solution to the dispute and, if necessary, request the establishment of a panel in accordance

with applicable accelerated procedures of time frame contained in the DSU ; special attention to be given by

Members to the interest of developing Members during consultation, including at least one panelist from

developing country Member in disputes between developing and developed country member ; extension of time

for consultation and to file argument in favour of developing Members for measures taken by such members,

specification of differential and more-favourable treatment for developing Members in panel reports, special

attention to be paid to the interest affecting developing Members in the event of implementation of

recommendation and rulings and finally WTO Secretariat may make experts available to developing countries to

provide legal advice and assistance in respect of dispute settlement.

of 25

Another support available for the SSAD Members is the legal assistance for developing countries. From the

above discussion on internal capacity constraints it is certain that most SSAD countries lack specialized in-house

legal expertise to enable them participate effectively in the WTO DSS, despite the fact that WTO Members can be

assisted and represented by private legal counsel in WTO dispute proceeding it is highly costly but preferable for

developing countries particularly SSAD countries as noted by the appellate body in the EC –Bananas III (1997)

case19

for .the WTO secretariat to provide legal assistance to all WTO member country upon request with focus

on least developing and developing countries through the institute for Training and Technical Cooperation

Division. Article 27.2 of the DSU requires that the WTO secretariat make available qualified legal experts

available to assist developing countries upon request.21

Also the Geneva based Advisory Center on WTO law

provides effective legal services for developing Members and least developing Members in WTO dispute

settlement proceeding at a discount rate 22

,offers free of charge legal advice on substantive and procedural

aspects of the WTO law and training courses and seminars on WTO law and policy and secondment programs

for Trade Lawyer for ninth months23

.

In addition, the participation of civil society in the identification of trade barriers and the development of

arguments which may lead to WTO dispute settlement proceedings is also a support system available to SSAD

countries to enhance their use of the DSS. Various NGOs such as Oxfam, the International Centre for Trade and

Sustainable Development (ICTSD), Ideas Centre and regional organizations have developed the capacity to

analyse situations in the light of the rules contained in the agreements and to advise developing countries on

WTO activities particularly the DSS.

4.2 Shortcomings of support to SSAD countries

Despite the fact there exist several efficient support systems to developing Members particular SSAD

countries to enhance their use of the DSS, these support systems have several shortcomings. First and foremost

the support system based on the special rules in favour of developing Members contained in the DSU are of

limited significance since these rules are merely directives and no sanctions follow same in the event of non

compliance. Also these rules being beneficial only to the developing Members can only be invoked by them for

their benefits for instance referring a matter to the Director General pursuant to Article 3.12 of the DSU and the

Decision of 5 April 1966 (BISD 14S/18)hoping that his good offices will facilitate a rapid solution to the dispute

and, if necessary, request the establishment of a panel in accordance with applicable accelerated procedures of

time frame contained in the DSU, including at least one panelist from developing country Member in disputes

between developing and developed Members, extension of time for consultation and to file argument in favour

of developing Members for measures taken by such Member and WTO Secretariat may make experts available to

of 25

developing countries to provide legal advice and assistance in respect of dispute settlement24

. If the SSAD

Members are not verse with the DSU they cannot use same for their benefits.

As concerns the shortcomings on legal assistance for developing Members, the WTO secretariat

support to developing Members is limited by the requirement that the secretariat’s experts give assistance in a

manner ensuring the continued impartiality of the secretariat. The experts provided by the secretariat are highly

qualified lawyers in WTO law and since most SSAD Members lack experts with knowledge in WTO DSS, this

position is most often occupied mainly by developed Members which puts the independence of the experts in

question in relation to the SSAD Members. Also the secretariat being one of the divisions of the WTO primarily

involve in the system needs to be independent and seen as being independent in providing legal assistance to

developing Members this is provided with some limitation to maintain their independence and neutrality . Also

as concerns the ACWL and other civil society organizations offering legal services to developing countries ,these

services are limited since these developing countries need to comply with certain requirement laid down by these

organizations to be able to benefit from their legal assistance .For instance as concerns the ACWL, a developing

Member needs to first and foremost to qualify for these services be a member of the ACWL and pay a single

contribution calculated on the basis of their share of world trade. ACWL services are invoiced by the hour, at a

rate which varies in accordance with the member's category. However, as was mentioned earlier, the total amount

of the service is limited to CHF 276,696 for category A members, CHF 207,522 for category B and CHF 138,348

for category C. 26

From the above analyses, despite the fact that there exist several support systems to enhance the use of

the DSS by the developing countries particularly the SSAD Members their shortcomings cannot be overlooked.

The barriers discussed above makes it necessary for possible recommendations to enhance the use of the system

by SSAD countries to be presented.

_____________________________________________ 18

See Peter van den bossche & Werner zdou, the law and policy of the world trade organization, third edition at pages 198, 215, 229,

274 and 277-80. And articles 3.12 , 4.10, 8.10, 12.10, 12.11, 21.7, 27 of the DSU 18.

19 See note by appellate body in the EC –Bananas III ( 1997) case ‘that the representation by counsel of a government’s own choice may

well be a matter of particular significant –especially for developing country member- to enable them to participate fully in dispute

settlement proceeding’ 21

See articles 27.2 of the DSU. 22

see www. Acwl.ch/e/training/training.html 23

See www. Acwl.ch/e/disputes/WTO_disputes.html 24

see paragraph on support system available to SSAD countries above 26

see ACWL Schedule of Fees set out in Annex IV of the Agreement

of 25

5. Possible recommendations on enhancing the use of the System by sub-Saharan African

Developing countries.

In this section, possible recommendations on enhancing the use of the DSS by SSAD Members shall be

identified and critically examined. These recommendations shall be examine in a sequence in line with the

barriers above discussed.

Firstly, as concerns Lack of interest in trade disputes by governments of SSAD countries, the WTO should

encourage governments of SSAD countries to focus and invest more scarce resources in the WTO issues and not

to spend much scarce resources on political trade negotiations while neglecting the enforcement mechanisms for

trade negotiated agreements .This is possible if these countries divert their focus from peace and security and

focus on multilateral trade issues which if well organized can eradicate poverty , ensure good health, ensure free

basic education etc. which will bring peace and stability in these countries .If the governments of these countries

are encouraged by the WTO to see the needs of focusing on WTO judicial aspects these countries shall organize

and eliminate the bureaucratic bottlenecks and support trade missions to the WTO27

and increase the use of the

system.

Secondly, as concerns the Weak trade-policy infrastructures barrier, this is a problem within the domestic

frame work of not only the SSAD countries but of many other countries most especially Latin American

countries28

. Despite the work being done by ACWL and Various NGOs such as Oxfam, the International Centre

for Trade and Sustainable Development (ICTSD), Ideas Centre and regional organizations to develope the

capacity to analyse situations in the light of WTO agreements and to advise developing countries on WTO

activities, including the DSS’s problem of identification and communication of trade barriers to governments still

persist in the SSAD countries. However there is the need to open and enhance communication between the

private sector and government in order to promote full participation in the multilateral trading system and in the

DSS in particular. This can be done by creating informal or formal institutional mechanisms and legislations such

as that in the U.S.A Section 301 of the Trade Act of 1974 and EU as per European Union's Trade Barriers

Regulation to enhance communications channels between the private sector and government on trade barriers.

Thirdly, as concerns the Pressure and Dominant Position of respondent Members and Inability to enforce

DSB recommendations this can be term a perceived obstacle to some developing countries such as Brazil, India,

China, Argentina etc. actively involved in the system but a real obstacle to SSAD Members. Since this barrier

arises mostly at the consultation and enforcement stages of the DSS proceeding,it is advisable for the DSB to be

of 25

actively involved at all stages of the proceeding from the consultation to the enforcement stages of dispute

settlement to check any pressure and domination from developed and experience developing countries on the

SSAD Member. This will encourage the SSAD Members to access the DSS against any member country without

fear of any political or economic pressure and domination.

Finally, as concerns Limited budgets, Priority of social needs, Shortage of trained personnel these are all

financial barriers. The first proposal to overcome this barrier is to lower further the threshold for certain

inexperience developing Members alongside least developing countries to bring complaints against other

members. Also a number of developing Members particularly the SSAD countries have proposed the creation of a

Dispute Settlement Fund for developing countries and to introduce a system of payment of litigation costs for

developing countries that prevail in a dispute. The proponents (supporters) of these two proposals have recently

pooled their efforts and suggest that the payment of litigation costs should only be agreed in cases where access to

the Dispute Settlement Fund is not possible.29

These proposals are particularly beneficial to inexperienced

developing Members in the DSS particularly the SSAD Members.

6. Conclusions

From the above analysis, the rate of participation in the DSS by SSAD Members has been lower than that of

all other developing countries. This can be attributed to three main factors to wit: Their low level of development,

insignificant share in international trade and their minority position in WTO. The SSAD Members face common

obstacle in participating in the DSS as the African group unlike the Latin American and Asian developing

Members who have found ways of effectively overcoming the commonly identified obstacles to their

participation in the DSS. The SSAD Members under the canopy of the African group have together proposed the

creation of a Dispute Settlement Fund for developing countries; a system of payment of litigation costs for

developing countries that prevail in a dispute and a further lower threshold for certain inexperienced developing

countries alongside least developing countries to bring complaints against other Members. However a major

effort is required from the SSAD Members in terms of training and institutional reform to overcome the barriers

to their participation in the DSS. In order for these countries to effectively participate in the system it is necessary

for them to develop internal mechanisms that enable communication between the private sector and the

government on the trade barriers encountered with a view of assessing whether WTO proceedings are advisable,

need for the DSB to carryout checks on the DSS proceeding stages to minimize economic or political pressure

and domination by respondent developed and experienced developing Members , investing more scarce resources

not only on multilateral trade negotiations but also to redress any violation of agreement arising from

multilateral trade negotiations.

of 25

All in all the SSAD Members face a common problem in relations to their participation in the WTO

particularly in the DSS but unfortunately they lack a common front to overcome these barriers to their

participation in the system unlike the Latin America and Asian developing countries who in the cause of

overcoming their barriers to the participation in the system make proposals not only beneficial to them but to all

developing Members. it is clear from the above analysis that if the SSAD Members come together to implement

the proposals discussed above and make other proposals to overcome the common obstacles to their participation

in the DSS, they will be as active as the Latin America and Asian developing countries in the utilization of the

system.

________________________________________

27 for explanation see 3.1 Lack of interest by governments of SSAD countries above.

28 See Staff Working Paper ERSD-2012-03 Date: February 2012, World Trade Organization Economic Research and Statistics Division”

USE OF THE WTO TRADE DISPUTE SETTLEMENT MECHANISM BY THE LATIN AMERICAN COUNTRIES – DISPELLING

MYTHS AND BREAKING DOWN BARRIERS”. 29

In the case of the Dispute Settlement Fund the proponent is the African Group, and in the case of the payment of litigation costs, the

proponents are India, Pakistan, Cuba, Egypt and Malaysia

of 25

SELECTED BIBLIOGRAPHY

Alavi Amin, African Countries and the WTO's Dispute Settlement Mechanism. Development Policy

Review, Vol. 25, No. 1, pp. 25-42, January 2007. Available at SSRN: http://ssrn.com/abstract=956448or

http://dx.doi.org/10.1111/j.1467-7679.2007.00358.x .

Bown, C. P. (2005) ‘Participation in WTO Dispute Settlement: Complainants, Interested Parties and Free

Riders’, World Bank Economic Review 19 (2): 287-310.

Bown, C. P. and Hoekman, B. (2005) ‘WTO Dispute Settlement and the Missing Developing Country

Cases: Engaging the Private Sector’. Paper presented atconference on WTO Dispute Settlement and

Developing Countries: Implications, Strategies, and Reforms. Center for World Affairs and the Global

Economy (WAGE), University of Wisconsin, 20-21 May.

Busch, M. and Reinhardt, E. (2003) ‘Developing Countries and General Agreement onTariffs and

Trade/World Trade Organization Dispute Settlement’, Journal of World Trade 37 (4): 719-35.

David Evans and Gregory Shaffer, Dispute Settlement at the WTO: The Developing Country Experience,

Cambridge: Cambridge University Press, 2010.

Davey, William J, The WTO Dispute Settlement Mechanism (June 25, 2003). Illinois Public Law Research

Paper No. 03-08.

Francois, Horn, Kaunitz, Trading Profiles and Developing Country Participation inThe WTO Dispute

Settlement System, Issue Paper No.6 published by International Centre for Trade and Sustainable

Development (ICTSD) December, 2008.

Gregory Shaffer, Developing Country Use of the WTO Dispute Settlement System: Why it Matters, the

Barriers Posed University of Minnesota Law School Legal Studies Research Paper Series Research Paper

No. 08-50.

Jackson, John H, Dispute Settlement and the WTO. Journal of International Economic Law, Vol. 1, Issue

3, pp. 329-351, 1998.

Jackson, J. H. (1998) The World Trade Organization: Constitution and Jurisprudence, Chatham House

Papers. London: Royal Institute of International Affairs.

Mosoti, Victor, Africa in the First Decade of WTO Dispute Settlement (June 2006). Journal of

International Economic Law, Vol.9, Issue 2, pp. 427-453, 2006. Available at SSRN:

http://ssrn.com/abstract=915626 or http://dx.doi.org/10.1093/jiel/jgl013

Shaffer, Gregory, The Challenges of WTO Law: Strategies for Developing Country Adaptation (February

22, 2010). World Trade Review, July 2006. Available at SSRN: http://ssrn.com/abstract=873938

Staff Working Paper ERSD-2012-03 Date: February 2012, World Trade Organization Economic Research

and Statistics Division” USE OF THE WTO TRADE DISPUTE SETTLEMENT MECHANISM BY THE

LATIN AMERICAN COUNTRIES – DISPELLING MYTHS AND BREAKING DOWN BARRIERS” by

RAÚL A. TORRES

Understanding the WTO, fifth edition, written and published by the World Trade Organization

information and external relation division 2012.

of 25

APPENDIX A: OVERVIEW OF THE WTOS DISPUTE SETTLEMENT MECHANISM Source: Staff Working Paper ERSD-2012-03 Date: February 2012, World Trade Organization Economic Research and Statistics

Division” USE OF THE WTO TRADE DISPUTE SETTLEMENT MECHANISM BY THE LATIN AMERICAN COUNTRIES

– DISPELLING MYTHS AND BREAKING DOWN BARRIERS”.

All dispute settlement proceedings at the WTO begin with an initial phase involving consultations, as

stipulated in Articles XXII and XXIII of the GATT 1994 and Article 4 of the DSU. This reflects the wish of

Members to begin by exhausting the avenue of negotiation as a means of resolving a dispute before resorting to

adjudication by a third party, namely the panel. Consultations also enable parties to the dispute to familiarize

themselves with the facts and the legal arguments used by both sides, because the request for consultations has to

identify the measure at issue and the rules that are considered to have been violated. A negotiated solution

remains possible throughout the process, even once the panel has been established or once the panel report has

been issued. Parties may also have recourse to the good offices of the Director-General or to mediation at any

time during the dispute.

If the consultations fail to settle the problem within 60 days of the request for consultations, the requesting

party may ask the DSB to establish a panel. A request for the establishment of a panel may also be made if the

consultations have not been entered into within a period of 30 days after receipt of the request for consultations or

if ten days have elapsed without a response from the party to which the request for consultations was addressed.

The DSB must establish the panel no later than the second time that the request appears on the agenda of a DSB

meeting. Since a DSB meeting may be especially convened within 15 days following the request for the

establishment of a panel, unless the requesting party agrees otherwise, the period of consultations should not

exceed 90 days. They may in fact be of indefinite duration as long as the parties agree that it is still possible to

find a negotiated settlement to the dispute, and they could involve several meetings.

Once the DSB has decided to establish a panel, the process enters one of the most critical stages which

will have an impact on the proceedings as a whole and their result: namely the selection of the persons composing

the panel. The three panelists are chosen either by the parties on the basis of names put forward by the WTO

Secretariat, or if there is no agreement on the panelists within 20 days after the establishment of the panel, the

responding party may ask that the selection be made by the Director-General, who shall do so within ten days.

Unless the parties to the dispute agree on the terms of reference of the panel within a period of 20 days, the

standard terms of reference set forth in Article 7.1 of the DSU shall be applied. It is important to note that the

terms of reference of the panel include the examination of the obligations of parties under the WTO Agreements,

but not international obligations that may have been assumed by the parties under other treaties. No obligation

assumed outside the scope of the WTO Agreements supersedes the obligations assumed under those Agreements.

of 25

Each panel adopts its own rules of procedure based on the DSU and the timetable for the proceedings, after

having consulted the parties. Panel procedures consist of the presentation of written submissions by the parties

and the holding of meetings with the panel. The first step in the panel procedure is the presentation of the initial

written submission by the complaining parties. Two to three weeks later, the responding party presents its first

written submission. The panel has to hold at least two meetings with the parties; the first of these occurs one to

two weeks after receipt of the first written submissions. The panel is also required to meet the third parties if there

are any, and the latter are requested to present their submissions during that first meeting.

The written replies shall be submitted two to three weeks after the first meeting with the panel, which shall

schedule a second meeting two to four weeks after receiving the written replies. The panel shall subsequently

draw up and circulate to the parties to the dispute a draft "descriptive part" of the report.

Each report is divided into two main sections: the "descriptive part" setting out the arguments of fact and of

law put forward by the parties, as well as the description of the facts of the case, and the "findings" in which the

panel decides on the merits of the arguments put forward and makes its recommendation. The recommendation in

most cases will be limited to requesting the DSB to call on the offending country to bring its measure into

conformity with the agreements. The parties have two weeks to make comments on the draft descriptive part.

After this first partial review of the report, the panel has between two and four weeks to submit an "interim

report" to the parties; this interim report will become final if none of the parties requests that it be reconsidered.

The interim review stage gives the parties to the dispute the opportunity to make comments on specific

aspects of the interim report; such comments must be dealt with in the final report. The total duration of the

interim review is one month and one week. Once the final panel report has been prepared, it is submitted to the

parties to the dispute, and three weeks later circulated to the Members of the DSB. The total period between

establishment of the Panel and its report to Members must not exceed nine months.

Following circulation of the report, it is adopted by the DSB within a maximum of 60 days, unless one of the

parties notifies its decision to appeal or the DSB decides not to adopt the report. The mechanism for adoption is

one of the most significant changes compared with the previous WTO dispute settlement system. The adoption of

the panel's report is based on the principle of negative consensus, that is to say that the report will be adopted

unless there is a consensus among Members against its adoption. In this way, the possibility for the losing party in

the dispute to block adoption of the report is eliminated. The same adoption mechanism is also used when an

Appellate Body’s (AB) report is adopted, in which case, both the latter report and the panel report as amended by

the AB report are adopted simultaneously.

of 25

The appellate review is a remedy available only to the parties to the dispute and may not be requested by a

third party. Once the intention to appeal has been notified to the DSB, the appellant has ten days to submit its

statement of appeal to the AB. The statement shall contain the grounds of the appeal, specifying the errors on

points of law contained in the final report of the panel and the arguments and supporting arguments. The appellee

may, five days after receipt of the statement of appeal, present a submission rebutting the claims made by the

appellant. At the same time, other parties to the case have 15 days from the date of the announcement of the

appeal, to appeal in turn the decision of the panel and to submit their statement of appeal to the AB; the same

right is available to the appellee, which may have an interest in appealing other matters not raised in the original

appeal.

As in most civil law systems of judicial review, the appeal must be limited to questions of law; the

establishment of the facts in the dispute is thus reserved to the panel. There may be some question as to the value

of the somewhat artificial transfer of a domestic civil law concept to the international legal sphere. This is

particularly relevant in the context of an international trade dispute in which it is difficult to distinguish questions

of fact from questions of law, owing to the dual nature of an inconsistent measure as a fact giving rise to the

dispute and, at the same time, as a reflection of a legal interpretation of the content of the agreements.

The working procedures for the appellate review also provide for the participation of third parties which

must also have participated in the previous stage of the proceedings. Provision is likewise made for an oral

hearing of the parties five days after receipt of the letter of opposition. The final report of the Appellate Body

should normally be circulated 60 days after the notice of appeal but, unlike in the case of the panel reports, there

is no procedure enabling the parties to take cognizance of and comment on the report. The AB report must be

adopted 30 days after its circulation, on the basis of the same principle of negative consensus used by the DSB:

Once the panel report or AB report has been adopted, the implementation phase of the recommendations is

initiated, if the panel has found that the measure challenged is inconsistent with the obligations laid down in the

agreements. The mechanism for determining the "reasonable period of time" for implementation of the

recommendation is an inherently complex one. The "reasonable period of time" may be:

(i) A period of time proposed by the aggrieved party and approved by consensus by the

DSB;

(ii) a period mutually agreed by the parties; or

(iii) a period decided by an arbitrator.

of 25

In every case, the interpretation made under Article 21.3 of the DSU has been that the reasonable period of time

must be no longer than 15 months from the adoption of the report.

In the majority of the cases, the Member found to be in breach of its WTO obligations would have made

efforts to bring the aggrieving measure into conformity, including by adopting new measure, prior to the expiry of

the reasonable period of time. If the Member that has prevailed in the dispute still is of the view that the changes

to the aggrieving measure, or the measure that replaced it, are still in breach of WTO obligations, it may request

the establishment of a panel under Article 21.5 of the DSU to rule on whether the Member found to be in breach

has implemented the DSB recommendations. If the losing party is found to still be in breach of its obligations or

has failed comply with the recommendations within the reasonable period of time, the aggrieved party may

request compensation or, if this is not granted, suspend concessions to the recalcitrant party. Any countervailing

or retaliatory measure has trade restrictive effects, and for that reason, in the WTO framework, such measures are

temporary and have the objective of promoting implementation of the recommendation contained in the final

report. The WTO mechanism for the suspension of concessions has also been automated and the aggrieved party

will be authorized to take retaliatory measures unless there is a consensus to the contrary. The most interesting

aspect of the current system is that a suspension of concessions is not limited to the sector or agreement

concerned by the offending measure. Indeed, Article 22.3 of the DSU establishes a hierarchy of authorized

retaliatory measures in the same sector, in another sector under the same agreement, or under another agreement.

Such "cross-retaliation" may be invoked in cases where the aggrieved party does not deem it sufficient or

effective to suspend concessions in the same sector or another sector successively, and considers that the

circumstances are serious enough. The sectors and level of the suspension of the concessions is determined by the

complaining party. However, if the Member who has been found in violation believes that the level of retaliation

exceeds the level of nullification and impairment, or that cross retaliation was not correctly applied it may refer

the issue to arbitration under Article 22.6 of the DSU.

tambi gerard mbah-ll.m dessertation itc-ilo final copy for submission

Documents