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Implications of Bananas and Hormones Cases

Implications of Bananas and Hormones Cases. Thomas Cottier Professor of Law of Counsel, Baker&McKenzie Santiago de Chile 13.11.2000. WTO Dispute Settlement. Right to obtain a Panel (20 days) Panel Proceedings (6-9 months) Adoption by DSB Rejection and appeal by Party or Parties

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Implications of Bananas and Hormones Cases

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  1. Implications of Bananas and Hormones Cases Thomas Cottier Professor of Law of Counsel, Baker&McKenzie Santiago de Chile 13.11.2000

  2. WTO Dispute Settlement • Right to obtain a Panel (20 days) • Panel Proceedings (6-9 months) • Adoption by DSB • Rejection and appeal by Party or Parties • Appellate Body Proceedings (3 months) • Selective Appeal, Cross Appeal • Binding upon adoption by DSB (NO EXIT) worldtradeinstitute.ch

  3. Facts of Cases • EC: Violation of various GATT and GATS provisions by allocating preferential tariff quotas to ACP countries • EC: Violation of SPS Agreement by banning the use of natural and artificial growth hormones on imported beef due to lack of scientific evidence as to health risks worldtradeinstitute.ch

  4. Common Traits • Complicated and very extensive cases • Failure to implement in time • First cases calling for arbitration on implementation: • determination of reasonable period of time (Art. 21.3 c DSU) • determination of level for suspension of concessions (Art. 22.6). worldtradeinstitute.ch

  5. Important Findings • Representation by Private Counsel • Application of GATT and GATS to same facts possible • Review of Revised Regulation 404 • Impact of NO-EXIT rule, suspension of compensation and surcharge tariffs worldtradeinstitute.ch

  6. Failing Implemention • Both decisions have not been sufficiently implemented • New quotas • Revision of Lomé Convention (reciprocity) • Denial of use of domestic remedies in EC (no direct effect) • Reputational Damage to WTO in Europe worldtradeinstitute.ch

  7. Remedies at Implementation • Reasonable Period of Implementation • Compensation (hardly used) • Suspension of Concession by DSB • determination of nullification and impairment (injury and losses suffered since measures was implemented), so far by arbitration: • 191.4 (520) USD in Bananas case • 116.8 (202) USD in Hormones case • 11.3 (75) CND in Hormones case • Use of 100 % tariff surcharge on target list worldtradeinstitute.ch

  8. Substantive Issues • Bananas: Implication for preferential policies not fully covered by FTA or regional integration • Timing and structural adjustments in monocultures • Hormones: Relationship of SPS and Codex Standards - Interaction • Risk Assessment and Risk Management • Impact of Consumer Perceptions? worldtradeinstitute.ch

  9. Procedural Issues • Calculation of compensation for nullification and impairment • Carousel policies for targeting tariff surcharges • Relationship of Art. 21.5 and 22.6 DSU • Biased regime in favour of large markets worldtradeinstitute.ch

  10. Political Questions‘ Doctrine? • Bananas and Hormones are two of only three cases failing implementation • High political sensitivity and visibility • Limited Legitimacy of Panels and Appellate Body • Need for Judicial Restraint in Big Issues? worldtradeinstitute.ch

  11. WTO Dispute Settlement • Formal Consultations: 189 (148) since 1995 • Settled Cases 22 • Active Cases 31 • Settled Cases 32 • Most cases are resolved by way of consultations/negotiations before panel stage (72% in 1995- 1999) Figures: March 2000 worldtradeinstitute.ch

  12. How to Proceed in the Private Sector ? • Efforts abroad • Efforts at home • Formal dispute settlement worldtradeinstitute.ch

  13. Private Sector Efforts Abroad • Intervention with Government • pattern of market access denial • Administrative and Court Proceedings • alleged violations of national laws • alleged violations of WTO law? • Contractual Arrangements with Competitors • Trade barrier at disposition of private Party (IPRs, licensing agreements) worldtradeinstitute.ch

  14. Action before the WTO • Trade Negotiations • long-term interests, lobbying • Consultations • informal talks • bilateral settlement • Dispute Settlement WTO • Right to Diplomatic Protection (U.S, EEC) • Efforts at Convincing Government worldtradeinstitute.ch

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