1 / 63

WTO Law 4

WTO Law 4. Dispute Settlement System. Historical Development. Special features of WTO DS. Text drafted by diplomats (see e.g. Art. 3.7, 3.10 DSU) Exclusive Jurisdiction (Art. 23.2 DSU) Compulsory Jurisdiction (Art. 23.1, 6.1 DSU) No unilateralism (Sec. 301 – WT/DS152 / TBR)

kaspar
Download Presentation

WTO Law 4

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. WTO Law 4 Dispute Settlement System

  2. Historical Development

  3. Special features of WTO DS • Text drafted by diplomats (see e.g. Art. 3.7, 3.10 DSU) • Exclusive Jurisdiction (Art. 23.2 DSU) • Compulsory Jurisdiction (Art. 23.1, 6.1 DSU) • No unilateralism (Sec. 301 – WT/DS152 / TBR) • Speedy procedure (Art. 3.3 DSU) • Two levels of judiciary for standard decisions and Art. 21.5 DSU decisions (correct compliance) • Comprehensive jurisprudence

  4. Special features of WTO DS - 2 • Quasi-judicial type of procedure (Art. 16, 17.4, 19 DSU) • Confidential nature • Looking for „nullification or impairment“ (Art. XXIII GATT, Art. 3.1) • Supervised implementation (Art. 21, 22 DSU) • Rules are superseding the general rules about state responsibility (lexspecialis) • But may be complemented by those rules where there is no special regulation • Complementary rules in other WTO Agreements (Art. 1.2, annex 2 DSU)

  5. Statistics of success • 1995 - 2009 • 328 DS mattersbroughtby 442 claims • 265 Panel requests (after preliminaryconsultations, see Art. XXII GATT, 6.2 DSU) • 152 Panel reportsadopted • 94 Appellate Body reportsadopted

  6. Legal Basis of a claim (Art. XXIII GATT) • Either • A benefit • accruing directly or indirectly • to the applicant • under the covered agreements • has been nullified or impaired • by a measure • if in violation of WTO LAW: always prima facie nullification or impairment (to be rebutted, see Art. 3.8 DSU) • other than by violation • or by omission (to act according to an obligation) • Or • the attainment of any objective of the covered agreements is being impeded

  7. Types of claims • Art.XXIII GATT • Violation complaint • Non-violationcomplaint • Situation complaint • See also the DSU (art. 26.1and .2) • 26.1 forthe non-violationcoplaint • 26.2 forthesituationcomplaint

  8. Kodak Fuji Case: Non-violation complaint • Japan – Measures affecting consumer photographic film and paper (WT/DS44/R) of 1989 („Kodak/Fuji“) • US claims nullification or impairment of japanese concessions bound under Art. II GATT for the import of photographic film products by governmental measures (1960-1980) • By non-binding „distribution measures“: notifications, reports, recommendations, guidelines • By the „Large Stores Law“: duties to notify state and small retailers, requirement of permit, waiting periods for opening • By „promotion measures“: Enforcement of competition law, special „fair competition rules“ • Claim: violation of Art. III.4 GATT and non-violation nullification or impairment

  9. DS Bodies Arbitrators Art. 22.6 DSU single, ad hoc, mostly a panelist

  10. Panels - Institution 1 • Groups of 3 to 5 experts (Art. 8.5 DSU) • Three panelists unless parties agree within 10 days after establishment of panel to have a 5-member panel (DSU Art. 8.5) • Qualification and affiliation (Art. 8.1 DSU) • May be either government officials or non-government persons (DSU Art. 8.1) • Should be “well-qualified” (familiar with WTO dispute settlement) (DSU Art. 8.1) • Panelists who are government officials are directed to serve “in their personal capacities” and governments shall not give them instructions or seek to influence them (DSU Art. 8.9) • Independance (Art. 8.2,3 DSU). Also: State officials (Art. 8.8,9 DSU). Developing States Member (Art. 8.10 DSU) • Unless the parties agree otherwise, citizens of the two parties and “third parties” to the dispute will not be considered (DSU Art. 8.3) • A party that is a developing country may request that at least one panelists be from a developing country (DSU Art. 8.10)

  11. Panels – Institution 2 • “Indicative” List (Art. 8.4 DSU, not exclusive), • Proposals (Art. 8.6 DSU) • WTO Secretariat proposes panelists to the parties (DSU Art. 8.6) • Parties directed not to oppose proposed panelists “except for compelling reasons” (DSU Art. 8.6) • Nomination (Art. 8.7 DSU) if no agreement between the panelists > no delay possible • If no agreement on panelists within 20 days after establishment of a Panel – either party may request that the Director-General select the panelists and Director-General shall do so within 10 days (DSU Art. 8.7) • Paid by the WTO-

  12. Panels - Function • Assisting the DSB • In making an objective assessment of the matter before it (Art. 11 DSU) • Including an objective assessment of the facts of the case • And the applicability of and conformity with the relevant covered agreements • in making recommendations (Art. 16,19 DSU) by issuing a report, • that has to be adopted by the DSB • Each panel is assisted by the WTO Secretariat (article 27.1). The legal affairs division is always involved, but it is usually complemented either by the rules division or by other operative divisions of the Secretariat. They form an interdisciplinary team of economists and lawyers.

  13. Appellate Body - Institution • Standing Body of 7 persons (Art. 17.1 DSU) • Persons of “recognized authority” • “Demonstrated expertise” in law, international trade and the subject matter of the WTO agreements (Art. 17.3 DSU) • Independent from governments • nominated by the WTO members and then recommended by a selection committee to the General Council. • Membership in the AB shall be broadly representative of the WTO membership (geographic diversity, Art. 17.3 DSU) • Staggered 4-year terms, only one reappointment possible (Art. 17.2 DSU) • The chair of the appellate body is elected yearly and may only be reelected once. In principle it is rotating. The appellate body has its own Secretariat providing legal and administrative support.

  14. Appellate Body - Function • Each appeal heard by a 3-person “division” (Art. 17.1 DSU) • elected at random and by rotation – deciding about the chairman of the division • Reviewing: on appeal by the parties (Art. 16.4 DSU) - issues of law and legal interpretations in the panel report (Art. 17.6 DSU) • Before deciding: exchange of views with the other AB members • Decisions are taking either by consensus or, if necessary, by a majority vote. • Dissenting opinions may be added to the report, but they shall be anonymous (article 17.11). • Decisions are in fact reports (Art. 17.14 DSU) as recommendations (Art. 19 DSU) to the DSB, not binding per se • The Appellate Body follows its own working procedures.

  15. Dispute Settlement Body (DSB) • All WTO members (plenary body) • Administers the rules and procedures of the DSU • Supervises the implementation (Art. 21 DSU) • Decisions by consensus • Except that “reverse consensus” applies for decisions to: • Establish a dispute settlement Panel (Art. 6 DSU) • Adopt a Panel or Appellate Body report (Art. 16, 17, 19 DSU) • Authorize suspension of concessions or other obligations (Art. 22 DSU)

  16. DSB Decisionmaking – Reverse / Negative Consensus • Art. 2.4 DSU: consensus as a rule generally also in the DSU procedures, • The losing party could block an adoption • But in the DS decisionmaking the rule is different • Negative / reverse consensus • Art. 6.1, 16.4. 17.14, 22.6 DSU • i.e. a consensus to stop the entry into force of a recommendation, that is otherwise automatic • The winning party will normally be opposed

  17. Extent of jurisdiction • Art. 3.2 DSU: • The system serves • to preserve rights and obligations of Members under the covered agreements • And to clarify the existing provisions of those agreements by interpreting them according to the “customary rules of interpretation of public international law”

  18. Limits of Jurisdiction • Art. 3.2 DSU: • “Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.” • See also Art. 19.2 DSU for the AB • Discouraging “judicial activism” • What about extensive teleological interpretation?

  19. MAIN PARTIES • Complaining Member • Standing • If it claims, that its benefits are nullified or impaired (Art. XXIII GATT, 3.3 DSU) • Note the very broad interpretation in the Bananas case concerning the USA (WT/DS27) • If multiple Complainants (Art. 9 DSU) • Single panel or • Different panels with the same panelists • If requested: separate reports (Art. 9.2) • Defending Member • As named in the application • If multiple defendants • Different panels with the same panelists (practice) • Always separate reports

  20. THIRD PARTIES • Art. 10 DSU: • Any Member having a substantial interest in a matter before a panel • Upon notification of the interest to the DSB • Different from the consultation stage (Art. 4. 11 DSU): no rejection by the parties possible • Opportunity to be heard by the panel and to make written submissions to the panel • Third parties shall receive the submissions of the parties to the dispute to the first meeting of the panel • Third party submissions shall also be given to the parties to the dispute and shall be reflected in the panel report • Alternative: different procedure of its own (10.4) before the original panel (if possible) • Third parties in the panel procedure may become “passive parties” in the AB procedure (Argentina - Safeguard Measures on Imports of Footwear (WT/DS121/AB/R)

  21. Obligations of Parties • The parties of the procedure have to comply with the requirements of the DSU in good faith. • The Appellate Body, in the US – FSC (WT/DS108/AB/RW), made clear, that • "the procedural rules of WTO dispute settlement are designed to promote not the development of mitigation techniques, but simply the fair, prompt and effective resolution of trade disputes."

  22. INCLUSION OF PRIVATE VIEWS • Parties may freely choose the members of their delegation, which may include: • Private attorneys (Bananas WT/DS27/AB/R, para. 4-12) • Representatives of NGOs • Parties may also include briefs of NGOs and private persons in their submissions to the panels and the AB (Shrimp WT/DS58/AB/R, para. 99-110)

  23. AMICUS CURIAE BRIEFS • Individuals or organization (governmental or non-governmental) • Presenting their views on questions arising in the case • By amicus briefs (with or without invitation) or by testimony • Power of the panels? • Art. 13.1 DSU: „Each panel shall have the right to seek information and technical advice from any individual or body which it deems appropriate.” • See Shrimp Case WT/DS58/AB/R, para. 99-110 • Power of the AB? • Assumed in the Asbestos Case (WT/DS135/9), an „explanatory note“ under 16.1 of the AB Working procedures inviting and conditioning amicus briefs in the case (Shrimp Case WT/DS58/AB/R, para. 99-110) • Vigorously refuted by the General Council (WT/GC/38, 04/12/00) pointing to Art. V:2 WTOA

  24. Types of DS Procedures • Standard procedures (P / AB) • Nullification or impairment? (Art. 3.8 DSU, XXIII GATT) • Violation (Art. 3.8) • Non-violation (Art. 26.1) • Situation (Art. 26.2) • Art. 21. 3 (c) DSU procedures (Arbitrator) • RPT • Art. 21.5 DSU procedures (P / AB) • Correct implementation? • Art. 22. 6 DSU procedures (Original P or Arbitrator) • Limits of retaliation

  25. Alternative Procedures • Arbitration under Art. 25 DSU • It should be expeditious and has its own procedural law as agreed by the parties • It can be enforced under the rules (mutatis mutandis) of Art. 21 and 22 DSU • Art. 5 DSU (diplomatic methods): • good offices • conciliation • mediation

  26. Outline of the Procedure 4.7 DSU 12.9 DSU 17.5. DSU 16.4 DSU 17.14 DSU

  27. TIME LIMITS ARE NECESSARY FOR EFFICIENCY Art. 3.3 DSU: “The prompt settlement of situations in which a Member considers that any benefits accruing to it directly or indirectly under the covered agreements are being impaired by measures taken by another Member is essential to the effective functioning of the WTO and the maintenance of a proper balance between the rights and obligations of Members. “

  28. PANEL PROCEEDINGS – STAGES (ART. 3 DSU) • First Written Submission of Complainant (normally 3-6 weeks after Panel composed) • First Written Submission of Respondent (normally 2-3 weeks thereafter) • First Meeting of the Panel with the Parties (normally 1-2 weeks thereafter) • Second Meeting of the Panel with the Parties (normally 1-2 weeks after Written Rebuttal Submissions) • “Descriptive Part” of Panel Report (history of the dispute and recitation of the arguments of the parties) • “Interim Report” (draft of entire report including Panel’s legal findings and conclusions) • Final Report

  29. CONSULTATIONS • Art. 3.7 DSU • Art. XXII GATT • Art. XXIII GATT • Mandatoryprerequisite of a DS procedure • Scopedefinestheadmissibililty of a claim

  30. APPLICATION • Written request (Art. 6.2 DSU) • Stating the facts (the specific measures at issue) • and providing a brief summary of the legal basis • And the nullification or impairment • not extensively, but „sufficient to present the problem clearly“ • that were subject of the consultations that have been duly held • proposed text of the special terms of reference, if any Whetherstandardorspecial, theterms of referencearedecisiveforthesubject matter of thecasetobedecided (7)

  31. Attacked Measure • What is the measure, which can be attacked? • Executive acts • Mandatory legislation • Legislation leaving discretion • Sec. 301 decision (DS152): „chilling effect“ sufficient?

  32. ESTABLISHMENT OF THE PANEL • Only after due consultations • Exchange of information (sometimes counterproductive) • On application of the complaining WTO member • At the latest on the second DSB meeting after the application • Complainant can require a session within 15 days after the application • Respondent can block panel establishment at the first DSB meeting which has the request on its agenda • Unless there is negative consensus (i.e. “to refuse”

  33. TERMS OF REFERENCE • Either on proposal of the applicant member • If agreed upon by the defendant party within 20 days after establishment • Else: • Or: drawn up by the chairman upon authorization of the DSB „in consultation with the parties“. • What is not in the terms of reference is not before the panel > Art. 7.2 DSU • Limits: Art. 3.2 DSU "To examine, in the light of the relevant provisions in (name of the covered agreement(s) cited by the parties to the dispute), the matter referred to the DSB by (name of party) in document ... and to make such findings as will assist the DSB in making the recommendations or in giving the rulings provided for in that/those agreement(s)."

  34. WORKING PROCEDURES OF PANELS • The working procedures for the panels are contained in appendix 3 to the DSU. • The panel has a certain discretion to deal with particular situations in the case, but it has to stay within the frame of due process (EC-Hormones – WT/DS26/DS48) and it must not disregard or modify explicit provisions of the DSU (India-Patents US – WT/DS50) appendix 3 also contains a proposed timetable. • Furthermore the panel, after the first organizational meeting, will decide on detailed ad-hoc working procedures.

  35. TASK OF THE PANEL • Art. 11 DSU: „ ... a panel should make an objective assessment of the matter before it, • including an objective assessment of the facts of the case and • the applicability of and conformity with the relevant covered agreements, • and make such other findings as will assist the DSB in making the recommendations or in giving the rulings provided for in the covered agreements.

  36. OBJECTIVE ASSESSMENT OF THE MATTER • A Panel is violating its duty to objectively assess the matter before him • if it makes a finding in a matter that was not before him (ne ultra petita) – too much • if it does not consider all the facts and the law cited by the parties within its terms of reference – too little • if it exceeds its margin of appreciation (as stated by the AB!) when assessing the law or • if it misinterprets evidence in „deliberate disregard“ or willful distortion“

  37. Standard of Review • How much deference is paid to the members? • „de novo review“ or „total deference“ • AB: none of that > objective assessment of the matter (Art. 11 DSU) • Which argument can be drawn from Art. 17.6 Antidumping Agreement? • In other parts of WTO law there is no comparable rule! • Practice: • deference in the public health cases (Hormones, Asbestos) • in all cases where a party invokes an exception? Or only particular exceptions (outside trade concerns)? • Closer scrutiny in trade remedy cases (Antidumping, Anti-Subsidies etc., cf. the Frozen Lamb case – WT/DS177/DS178) • a „critical examination“ of the members‘ explanation, „in depth“h

  38. PANEL REPORT • Descriptive Part (Art. 15.1 DSU) • Interim Report (Art. 15.2 DSU) • Final Report (Art. 19 DSU, Recommendations)

  39. RECOMMENDATIONS OF A PANEL • Statement of consistency – no recommendation • Determination of inconsistency - recommendation, “that the Member bring the measure into conformity (Art. 19.1 DSU)” • No requirement of a particular action • But rarely the suggestion of implementation (Art 19.1 DSU) • Either admitting alternatives • Or recommending the reversal of a measure

  40. APPELLATE PROCEDURE • Notice of Appeal (only by the main parties, Art. 17.4 DSU, no further standing necessary) • Appellant’s Written Submission • Appellee’s Written Submission • Third Participants’ (who may further participate) Written Submission • Oral Hearing before the Appellate Body Division • Appellate Body Decision

  41. APPELLATE BODY DECISION • On appeal (Art. 17.4 DSU), the Appellate Body • May “uphold, modify or reverse” the legal findings and conclusions of law appealed in the Notice of Appeal and any Cross-Appeal (Art. 17.13 DSU) • No authority to remand the dispute to the Panel for further consideration

  42. ADOPTION OF REPORTS BY THE DSB • Panel (Art. 16 DSU) or AB Report (Art. 17.14 DSU) • Adopted (becomes a binding international law obligation) • If final (no appeal or an AB Decision) • By reverse consensus (30 days time limit) • i.e. consensus not to adopt

  43. BINDING FORCE • In the case among the parties • No “stare decisis” doctrine • Guidance clause Art. XVI WTOA???????????? • Existence of authoritative interpretation (Art. VIII WTOA) • But • Reference to former decisions (panels and AB) • AB decisions are observed by the panels • Result: certain stability and predictability of the judicial findings • See the Zeroing Case WT/DS344/AB/R U.S. – Stainless Steel (Mexico)

  44. PREVIOUS PANEL AND AB DECISIONS • Art. 31(3)(b) VCLT: "any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation„ • Are previous Panel Decisions (under the old GATT) such practice? • Japan Alcohol Panel: yes (Japan Alcoholic Beverages (WT/DS8,10,11R) • AB in the same case: no „We do not believe that the CONTRACTING PARTIES, in deciding to adopt a panel report, intended that their decision would constitute a definitive interpretation of the relevant provisions of GATT 1947. Nor do we believe that this is contemplated under GATT 1994. • .... they are not binding, except with respect to resolving the particular dispute between the parties to that dispute. • ... we agree that "a panel could nevertheless find useful guidance in the reasoning of an unadopted panel report that it considered to be relevant". • „This reasoning applies to adopted Appellate Body Reports as well.“ (WT/DS58/AB/RW – US Shrimp Art. 21.5)

  45. RESULT OF A LOST CASE • Follow the recommendations ? • Art. 19.1 DSU • Particular recommendations (e.g.: repeal of a statute) • Alternative: Compensation ? • See Art. 21.1, 21.3, 21.6 DSU • But also Art. 3.7 and 22.1 DSU • Duty to comply and perform • Compensation only temporarily • Risk of non-compliance: retaliation by suspension (Art. 22 DSU) • Upper ceiling: scope of nullification or impairment (Art. 22.4 DSU) • No reparation for damages before the expiry of the „reasonable time“ for compliance (Art. 21.3 DSU)

  46. IMPLEMENTATION • Obligation to implement • “Prompt compliance” is recognized as essential for the credibility of the system (Art. 21.1 DSU ) • “Immediate” compliance is expected wherever practicable (Art. 21.3 DSU ) • Where immediate compliance is impracticable, the Member must implement within a “reasonable period of time” (Art. 21.3 DSU ) • Normally 12 – 15 months • Progress report (21.6) necessary • In case of non-compliance • authorization for retaliation (suspension of obligations, Art. 22 DSU) • but only as a „last resort“ (Art. 3.7 DSU) • Specific rules for cases brought by Developing Countries, see Art. 21.7 and 21.8 DSU

  47. RULES ABOUT IMPLEMENTATION - 1 • “Prompt compliance” is recognized as essential to the credibility of the system (Art. 21.1 DSU) • “Immediate” compliance is expected wherever practicable (21.3) • Where immediate compliance is impracticable, the Member must implement within a “reasonable period of time” (Art. 21.3 DSU) • The DSB shall keep under surveillance the implementation of adopted recommendations or rulings. The issue of implementation of the recommendations or rulings may be raised at the DSB by any Member at any time following their adoption. Unless the DSB decides otherwise, the issue of implementation of the recommendations or rulings shall be placed on the agenda of the DSB meeting after six months following the date of establishment of the reasonable period of time pursuant to paragraph 3 and shall remain on the DSB's agenda until the issue is resolved (Art. 21.6 DSU)

  48. RULES ABOUT IMPLEMENTATION - 2 • Compensation and the suspension of concessions or other obligations are temporary measures available in the event that the recommendations and rulings are not implemented within a reasonable period of time. (Art. 22.1 DSU) • “The provision of compensation should be resorted to only if the immediate withdrawal of the measure is impracticable and as a temporary measure pending the withdrawal of the measure which is inconsistent with a covered agreement.” (Art. 3.7 DSU) • “A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred.” (Art. 3.7 DSU) • “Compensation is voluntary and, if granted, shall be consistent with the covered agreements.” (Art. 22.1 DSU) • See generally Art. 3.2 DSU: “rule of law”-argument • The historic argument: GATT practice and Art. XVI.1 WTOA

  49. IMPLEMENTATION PROCESS

  50. STEPS OF THE IMPLEMENTATION PHASE • DSB meeting within 30 days after adoption: • Statement of intent by the obligated party (Art. 21.3 DSU): immediate implementation or in „reasonable time“ • „Reasonable time for implementation“ (Art. 21.3 DSU) • proposed by the MS and approved by the AB • positive consensus ! • mutually agreed by the parties within (w/i) 45 days after the adoption • decided by binding arbitation w/i 90 days after the adoption (15 months, shorter or longer) • single arbitrator • usually from the original panel • Regular timeframe (Art. 21.4 DSU): From the establishment of a panel to the determination of a reasonable period – 15 months • Surveillance by the DSB (Art. 21.6 DSU) • The implementation of the recommendation is monitored by the DSB. The matter remains on the agenda of each meeting until the issue is resolved. • At the end of the reasonable period: either implementation, temporary compensation or suspension in retaliation

More Related