International Trade Flashcards
WTO - Dispute Settlement
- key to WTO effectiveness
- alleged GATT violations subject to formal dispute settlement process
Goals of WTO Dispute Settlement Process
- promote security, predictability, + mutually acceptable solutions to trade disputes
- Can handle large numbers of disputes w/ relative efficiency
- Need quick + effective trade dispute resolution to avoid parties resorting to unilateral sanctions to perceived violations of trade rules
Stages of Dispute Resolution
- Parties initially asked to enter consultations to seek consensus solution
- If fails, WTO Dispute Settlement Body (DSB) establishes panel to hear dispute -> compose terms of reference + convene meetings w/ the parties + any interested third parties
- Parties then offer submissions on facts + legal args
- Panel then makes its findings + submits interim report to parties for comment, then to DSB for final adoption
- Losing party may appeal to Appellate Body for review of issues of law
Composition of Dispute Settlement Panels
- members generally drawn from trade community
- Cause of concern for environmentalists b/c they argue panelists often lack experience in complexities of env issues implicated in their decisions + consequently often fail to give env factors sufficient weight
- Environmentalists also believe WTO should accept amicus curiae briefs from public interest NGOs
Core GATT Principles
- Article I: Most Favored Nation obligations (MFN)
- Article III: National Treatment obligation
- Article XI: Prohibition on quantitative restrictions
GATT - Article I
Most Favored Nation obligations (MFN) - prohibits discrimination between the products of different States -> if a WTO member gives a privilege or advantage to an import or export from one country, it must be extended immediately and unconditionally to “like products” from any other Member state
- Prevents countries from playing favorites between trading partners
- Ensures equal treatment
- Reduces trade barriers
GATT Article III
National Treatment obligation – prohibits discrimination between imported + domestically produced goods
- Requires foreign products be treated no differently than domestic “like products”, + seeks to prevent domestic measures from being used to protect domestic industry
GATT Article XI
Prohibition on quantitative restrictions
- Covers restrictions on trade such as bans, quotas, and licenses on exported and imported products
“Like Products”
- important q b/c env regs often seek to distinguish between similar products on basis of env impacts (such discrim only allowed if they’re not viewed as “like products”)
->Argue govs should be allowed to discriminate between products on basis of how they’re produced in country of origin
-Vs. trading community argues this could undermine trade through increased protectionism + interfere w/ sovereignty of exporting countries - known as the PPM debate (PPM = processes or production methods)
Tuna/Dolphin Cases
- early 1990s
- challenge by Mexico to US restrictions on imports of tuna
- Underlying issue of dolphins dying in purse seine nets – MMPA amended to require nations exporting tuna to US to certify that its fleet had a dolphin mortality rate comparable to that of the US fleet (i.e. didn’t use purse seine nets) -> if not, US had to ban imports of tuna from the uncertified country + all other countries who received tuna from the uncertified country
- GATT panel found for Mexico – basically, as long as the tuna caught + traded was the same regardless of the dolphin mortality rate, GATT panel refused to allow US to distinguish the two
Args in Favor of PPM Like Products
- Many env policies require distinguishing between products according to how they’re produced, as part of effort to internalize env costs of production
- Also lots of domestic regs on PPMs -> should be able to distinguish among imports based on PPMs
- Int trade system prevents countries from favoring sustainably produced goods + services -> punishes efforts toward sustainable development
Concerns Re PPM Like Products
- standards might be environmentally inappropriate for some competitors
- developing countries argue their social priorities differ from those of developed countries + therefore the env measures are forcing them to prioritize env issues that aren’t actually as high on their priorities
WTO Appellate Body Approach to Like Products
- slightly more nuanced - provides some room for non-trade concerns, + moves away from narrow focus on product’s physical characteristics
- four criteria, discussed in EC – Measures Affecting Asbestos and Asbestos-Related Products, AB, 2001
WTO Appellate Body - Criteria for Like Products
EC – Measures Affecting Asbestos and Asbestos-Related Products, AB, 2001
Four Criteria for analyzing likeness:
- (i) properties, nature + quality of the products
- (ii) the end-uses of the products
- (iii) consumers’ tastes and habits/perceptions and behavior in respect of the products
- (iv) the tariff classification of the products
- Appellate Body noted these are general tools, though, to be applied on case-by-case basis, not treaty-mandated or a closed list of criteria
- Also noted the criteria are interrelated + stresses examining all the evidence
How might you address the like products issue?
- harmonizing domestic env standards is often suggested as an alternative to trade sanctions for addressing environmentally harmful production processes by exporting nations
- q of how much leeway you have if you can’t get int agreement - difference between doing something internally (ex blocking GMO entry) vs trying to dictate what’s happening elsewhere -> one thing to try and get a standard w/in your own jurisdiction, another thing to try and export it elsewhere
