TAILIEUCHUNG - Trade disputes

One member government believes that another member government is violating an agreement or a commitment made to the WTO | Fulbright Economics Teaching Program Trade: Institutions and impact Lecture 7 2006-2007 Trade disputes WTO dispute settlement procedures Sanctions Examples What’s a trade dispute in WTO? One member government believes that another member government is violating an agreement or a commitment made to the WTO – “Unfair” antidumping levies – Non-tariff barriers – Administrative practices Note: initial antidumping determination purely national process Ari Kokko Ari Kokko 1 Fulbright Economics Teaching Program Trade: Institutions and impact Lecture 7 2006-2007 The WTO dispute settlement process Emphasis on consultations and voluntary settlement of disputes Detailed schedules for formal dispute settlement process – complaint to Dispute Settlement Body – expert panel – report and proposed resolution – process for appeals Ari Kokko The panel process Complaint and consultation – 60 days for bilateral discussions Establishment of panel – must be done within 45 days Final panel report to parties – max 6 months after establishment of panel, includes conclusions and recommendations Final panel report to all DSB members – 3 weeks after parties have received it Report automatically adopted after 60 days if there is no consensus against it Ari Kokko Ari Kokko 2 Fulbright Economics Teaching Program Trade: Institutions and impact Lecture 7 2006-2007 Appeals The panel’s ruling can be appealed by either party Appeals examined by three person group from permanent 7-member Appellate Body – Appellate Body report in 60-90 days New report accepted or rejected by DSB within 30 days – rejection requires consensus Ari Kokko After adoption of panel report Country at fault must reform its policy according to recommendations – statement of intent within 30 days – compliance required within “reasonable” period of time Alternative is to negotiate payment of mutually acceptable compensation – 20 days for negotiations Trade sanctions can be authorized by DSB if compensation

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