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• Tony Jones • Karla Lawson • Kate Linton • Roger Panetta •

• Tony Jones • Karla Lawson • Kate Linton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 •. WTO/DSU Reform Working Group Meeting Moderator: Roger Panetta of the WTO Discussants: Kate Linton of the United States Tony Jones of the European Union

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• Tony Jones • Karla Lawson • Kate Linton • Roger Panetta •

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  1. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Moderator: Roger Panetta of the WTO Discussants: Kate Linton of the United States Tony Jones of the European Union Karla Lawson of the Developing Nations November 25, 2002 Geneva, Switzerland

  2. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting DOHA: WTO Ministerial Declaration “We agree to negotiations on improvements and clarifications of the Dispute Settlement Understanding. The negotiations should be based on the work done thus far as well as any additional proposals by members, and aim to agree on improvements and clarifications not later than May 2003, at which time we will take steps to ensure that the results enter into force as soon as possible thereafter” Adopted: November 14, 2001 Source: WTO DOHA Ministerial Declaration, November 2001

  3. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Today’s Agenda • Opening Remarks by Roger Panetta of the WTO • Brief Review of the DSU • Presentation of DSU Reform Questions/Issues • Statements • Kate Linton of the United States • Tony Jones of the European Union • Karla Lawson of the Developing Nations • Working Group Discussion • Conclusion

  4. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting DSU and the WTO “The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows smoothly” “Adispute arises when a member government believes another member government is violating an agreement or a commitment that it has made in the WTO. The authors of these agreements are the member governments themselves — the agreements are the outcome of negotiations among members. Ultimate responsibility for settling disputes also lies with member governments, through the Dispute Settlement Body” Source: WTO Dispute Settlement Gateway, Fall 2002

  5. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting WTO Dispute Settlement: Key Facts Dispute Settlement Understanding (DSU) “a horizontal WTO agreement. It sets up procedures or solving disputes which may arise among WTO Members in the implementation of the different WTO Agreements (GATT, other agreements related to trade in goods, GATS, TRIPS)” Dispute Settlement Body (DSB) “is responsible for the management of the DSU. It includes representatives of all WTO Members. The DSB is empowered to establish panels of experts to examine a case, adopt panel and Appellate Body reports, monitor the implementation of panel recommendations and authorize the suspension of concessions when a country does not comply with a ruling” Source: European Union Website, Fall 2002

  6. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Aims of the DSU (Article 3) • To provide security and predictability to the multilateral trading system • That a prompt settlement of disputes is essential • To secure a positive solution to a dispute • Once a violation is determined the aim is to secure the withdrawal of the offending measure • Compensation is to be resorted to only if the withdrawal of the measure is impracticable • As a last resort, have suspension of concessions or other obligations (“Retaliation”) Source: Dr. Malawer of the United States, Fall 2002

  7. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Dispute Settlement Body Appellate Body Panels Consultation Flow Chart of Litigation Source: Dr. Malawer of the United States, Fall 2002

  8. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO Members’ Share of 187 Complaints (1995 – 2000) Source: United States Government GAO Report GAO/T-NSIAD/OGC-00-202

  9. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO Members as Defendants in 150 Distinct Matters (1995 – 2000) Source: United States Government GAO Report GAO/T-NSIAD/OGC-00-202

  10. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting U.S. Litigation in WTO: 1995 – 2002 (Sept.) Source: Dr. Malawer of the United States, Fall 2002

  11. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • Outcome of Completed U.S. Disputes in the WTO Source: United States Government GAO Report GAO/T-NSIAD/OGC-00-202

  12. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting DSU Reform Questions and Issues • Transparency • Amicus Curiae Briefs • Sequencing • Streamlining • Domestic Legal System Protections • Compliance • Retaliation • Alternatives to Retaliation (monetary compensation?) • Permanent vs. Ad Hoc Panels • Appellate Body Reform • Better Training, Funding & Resources

  13. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Kate Linton of the United States US Position On DSU Reform Three Main Concerns • FSC’s and beef hormones; binding dispute resolution and retaliation have escalated trade disputes to major controversies • The DSU and trade remedies; ignoring the negotiated standards • Keeping the public out; a secret and non-transparent system

  14. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting DSU Tensions Between The US And EU: The Problem • FSC provisions enacted in 1984 to make US laws comparable to other countries’ tax systems • Enacted pursuant to GATT Council Understanding agreed by US and EU • No complaints until the US was successful on bananas and beef; EU then sought a counter-punch •WTO rejects prior Understanding, rules that US modifications are insufficient and authorizes $4 Billion in trade retaliation •EU’s acceptance of future US modifications is unknown and destabilizing, escalating FSC and beef to major trade controversies

  15. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting DSU Tensions: Proposed Reforms • US and EU immediately commit to mediation of beef, FSC and all other outstanding disputes • US and EU agree to not initiate DSU proceedings without intensive and good faith prior efforts to resolve • US and EU memorialize commitment to diplomacy in bilateral agreement • US encourages other members to focus on cooperative problem solving, rather than adversarial proceedings, and enter similar agreements with the US

  16. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting The DSU and Trade Remedies: The Problem “Congress finds that WTO panels and the Appellate Body have ignored their obligations to afford an appropriate level of deference to the technical expertise, factual findings, and permissible legal interpretations of national investigating authorities – particularly the Department of Commerce and the US International Trade Commission.” • WTO panels have struck down every single safeguard measure imposed by the US that has been before them • WTO panels have rewritten trade remedy standards to impose new requirements

  17. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting The DSU And Trade Remedies: Proposed Reforms • Reaffirm the importance and validity of trade remedy laws • Reaffirm that DSU panels and Appellate Body must follow the deferential standard of review agreed upon by the members • Reaffirm that it is not the role of the DSU to rewrite the agreements to impose new obligations and requirements

  18. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting The DSU and Transparency: The Problem • DSU proceedings are shrouded in secrecy and conducted behind closed doors • Industry, workers, other WTO members and the public have an important and legitimate interest in seeing how the dispute settlement system operates and how decisions are made • The lack of transparency undermines acceptance, legitimacy and the motivation to implement DSU rulings

  19. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting The DSU and Transparency: Proposed Reforms • Permit the public to observe all panel and Appellate Body meetings and hearings • Make all party submissions public • Make final panel reports immediately available to WTO members and public • Clarify the rules and guidelines for amicus briefs

  20. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • • WTO/DSU Reform Working Group Meeting • Tony Jones of the European Union • EU Introduction • • The European Union is actively engaged in efforts to improve the World Trade Organization's Dispute Settlement Understanding • • The EU believes disputes should be resolved as quickly and efficiently as possible to maintain a stable, predictable trade environment • • The EU affirms that attempts to resolve trade disputes should first be made through negotiations • • The EU supports the legitimacy of the WTO's Dispute Settlement Understanding to seek panel rulings on disputes should negotiations fail

  21. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting EU Proposals • However, the EU encourages reforms in the Dispute Settlement Understanding • Toward this effort, the EU has presented for consideration numerous proposals • Three important proposals are: - Establishment of a more permanent system of panelists - Transparency in the dispute settlement process - Regulation of amicus curiae submissions

  22. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Moving From Ad Hoc to More Permanent Panelists • WTO's present reliance on ad hoc panelists as inefficient, cumbersome, and exclusive • Establishment of a more permanent system of panelists would increase the efficiency and legitimacy of the dispute settlement process • Benefits include: - Reduction of the time taken to create panels - Improved quality and consistency in panel decisions - Panels would be more representative of WTO membership

  23. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • • WTO/DSU Reform Working Group Meeting • Transparency • • The EU encourages transparency in the panel and Appellate Body proceedings • • Transparency affirms WTO legitimacy in the public eye • • However, proposals calling for complete transparency of dispute proceedings must be tempered • • WTO membership in dispute should have the option to close specific portions of proceedings to the public • • Confidential negotiations may allow for a faster resolution among parties involved • • Allowing third parties and non-governmental organizations to observe dispute proceedings may politicize the process with negative impact on WTO image

  24. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • • WTO/DSU Reform Working Group Meeting • Regulation of Amicus Curiae Submissions • • Panels may find useful amicus curiae submissions from third parties especially from competent international organizations • • EU is concerned about possible negative impacts on the dispute settlement process • • WTO must establish a better defined framework for the receipt, handling, and consideration of amicus curiae submissions • • Amicus Curiae submissions should not delay panel proceedings • • Panels should not be bound to consider amicus curiae submissions pursuant to dispute rulings

  25. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting EU Conclusion • The EU’s proposals to improve the dispute settlement understanding within the WTO seek to enhance the efficiency and legitimacy of resolving international trade disagreements • Establishment of a more permanent system of panelists, developing greater transparency in the dispute process, and providing for a better framework for amicus curiae submissions will affirm the World Trade Organization as the premier international trade authority

  26. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Karla Lawson of the Developing Nations Background • Uruguay Round • Case History

  27. Source: 1999 WTO Conference on Developing Countries

  28. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Developing Nations: Perceived Problems • Resource and Knowledge Limitations - Monetary - Human • Appellate Body - Cost - Time • Remedies - Compensation and Damages • Transparency

  29. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • WTO/DSU Reform Working Group Meeting Developing Nations: Proposed Solutions • Resources - Subsidization - Smaller Cases = Smaller Panels • Appellate Body - Create a “level playing field” • Remedies - “Beyond Sanctions” • Transparency - Caution!

  30. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • • WTO/DSU Reform Working Group Meeting • Working Group Discussion • • At the Moderators discretion the Discussants of the Working Group are invited at this time to comment on any of the issues raised during this meeting • • Please remember to present your comments within the context of working within a functioning and multilateral trading system that respects the rule of law

  31. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • • WTO/DSU Reform Working Group Meeting • Working Group Conclusion • • An imperfect system • • The evolution of world trade continues • - history shows it is not certain • • Transparency + Training + Resources + $$$ + Cooperation = Fair, Equitable and Open System to All Nations • • The whole has to be greater than the sum of its parts • - multilateralism, law and cooperation • • "the hour of capitalism's greatest triumph is its hour of crisis” - Peruvian economist Hernando DeSoto

  32. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • Appendix I http://usembassy.state.gov/tokyo/wwwhec0528.html Senator Baucus on WTO Dispute-Settlement Negotiationshttp://usinfo.state.gov/topical/econ/wto/02080901.htmU.S. Proposes Opening WTO Dispute-Settlement Proceedingshttp://www.twnside.org.sg/title/twe276.htmDSB Special Session takes up dispute settlement reviewhttp://europa.eu/int/comm/trade/pdf/contribdsu_en.pdfContribution of the European Communities and Its Member States to theImprovement of the WTO Dispute Settlement Understanding http://www.twnside.org.sg/ttle/propose-cn.htmWTO's dispute settlement system and the proposed Centre on WTO lawhttp://www.dbtrade.com/publications/newamerica_dsu.htmAssuring America's Continuing Support for the WTOhttp://www.eurunion.org/states/home.htmEuropean Union in the US: The Member Stateshttp://www.ictsd.org/weekly/02-04-16/story5.htmEC Paper on DSU Reform Advocates Transparencyhttp://222.ictsd.org/weekly/02-03-19/stoinbrief.htm Members discus 'Sequencing' and Timeframe Constraintshttp://www.dbtrade.com/publications/wto_comments.htmDewey Ballantine LLP: Review of the Dispute Settlement Understanding

  33. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • Appendix II WTO’s Dispute Settlement Gatewayhttp://www.wto.org/english/tratop_e/dispu_e/dispu_e.htmUSTR Dispute Settlement Webpagehttp://www.ustr.gov/enforcement/dispute.shtmlUSTR Preliminary Views of the U.S. Regarding Review of the DSUhttp://www.ustr.gov/pdf/uspaper1.pdfGarrett, Geoffrey and Smith, James. "The Politics of WTO Dispute Settlement." Yale University, September 1999http://www.yale.edu/leitner/pdf/1999-05.pdfJackson, John. " Dispute Settlement and the WTO." Paper presented at Center for International Development at Harvard University, Nov 1999.http://www.ksg.harvard.edu/Trade_Workshop/jackson.pdf"World Trade Organization: US Experience in Dispute Settlement System: The First Five Years." U.S. General Accounting Office, July 2001. http://frwebgate.access.gpo.gov/cgi-bin/useftp.cgi?

  34. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • Appendix III The WTO Dispute Settlement System: Prospects for Reformhttp://www.law.georgetown.edu/journals/lpib/symp00/shirzad.pdfSenator Baucus Presses for WTO Dispute-Settlement Reformshttp://usinfo.state.gov/topical/econ/wto/02041602.htmOxfam’s Trade - WTO institutional reformhttp://www.caa.org.au/campaigns/election/globalisation/wto.htmlKodak letter to USTR: DSUhttp://www.dbtrade.com/casework/film/DSU_comments.htmWTO Members Highlight Sequencing Issue As Main Focus of Dispute Settlement Talkshttp://subscript.bna.com/SAMPLES/wto.nsf/85256269004a99228525625400656cb3/ba2ec649ce34b6e385256b7d000511f8?OpenDocumentEU Offers Proposal for WTO Dispute Rules With Ban on U.S.-Style 'Carousel' Retaliationhttp://subscript.bna.com/SAMPLES/wto.nsf/85256269004a99228525625400656cb3/71af866395c6d11a85256b730005ae6d?OpenDocument

  35. • Tony Jones • Karla Lawson • KateLinton • Roger Panetta • • DSU REFORM • ITRN 603 • NOVEMBER 25, 2002 • • Appendix IV • Georgetown symposium on DSU Reform • http://www.law.georgetown.edu/journals/lpib/symp00/symp2000.htmlKenneth W. Dam, Deputy Secretary, U.S. Department of the Treasury, Testimony before the Senate Committee on Finance regarding the WTO decision on the extraterritorial income exclusion provisions and international competitiveness, Julu 30, 2002 http://www.senate.gov/~finance/sitepages/hearing073002.htm • Alan Wm. Wolff, Major Problems with WTO Dispute Settlement, http://www.dbtrade.com/publications/major_problems_with_wto.htm (September 26, 2002) • Stuart S. Malawer, Viewpoint – Trade & Tax: Is the U.S. the Enron of Trade? Vol. 2 No. 218 Statewide Daily Record (March 23, 2002). • Robert A. Rogowsky, WTO Disputes: Building International Law on Safeguards, Virginia Lawyer (June/July 2001). • Senate Finance Committee, Report Accompanying the Bipartisan Trade Promotion Act of 2002, http://www.senate.gov/~finance/sitepages/legislation.htm • (February 28, 2002). • USTR, Basic Concepts and Principles of the Trade Remedy Rules, http://usinfo.state.gov/topical/econ/wto99/rules0210.htm (October 17, 2002). • USTR, Dispute Settlement Update, http://www.ustr.gov, (July 16, 2002). • USTR, US Paper on Transparency Submitted for WTO Dispute Settlement Negotiations, http://www.ustr.gov/enforcement/disputes.html, (August 9, 2002).

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