There is study evaluating the WTO dispute settlement data482. The data displays a high rate of
compliance with WTO dispute settlement rulings by the WTO Members483. The study
analyses the first ten years of the WTO dispute settlement system and illustrates that 83 per
cent484 of panel and Appellate Body reports successful adopted. The author of that study
states that “it is the case that most reports are eventually implemented”485
. There is another
study examining the period from 1995 to March 2007, noting the “generally positive record
of Members in complying with adverse rulings”486
. It found that 90 per cent of 109 panel and
Appellate Body reports adopted during that period found violations of WTO law, and that in
“virtually all of these cases the WTO Member found to be in violation indicated its intention to bring itself into compliance and the record indicates that in most cases has already done
so”487
. Indeed, there are high compliance rates with adverse DSB rulings brought by both
developed countries and developing countries488.
The study demonstrates that
“WTO dispute settlement experience to date does not suggest that responding Members have a manifestly worse record of compliance with DSB rulings in
482
Ibid.
483 Ibid.
484 Davey, W., (2005), 'The WTO Dispute Settlement System: The First Ten Years', Journal of International
Economic Law (JIEL) 8(1) 17, at 46-48. Available from: http://jiel.oxfordjournals.org/content/8/1/17. [Accessed: November 9, 2013].
485 Davey,W., (2006), 'The WTO: Looking Forwards' Journal of International Economic Law (JIEL) 9(1) 3, at
12. Available from: http://jiel.oxfordjournals.org/content/9/1/3.extract [Accessed: November 9, 2013].
486 Nottage, H., (2008), “Evaluating the Critique that WTO Retaliation Rules undermine the utility of WTO
Dispute Settlement for Developing Countries”.
487 Wilson, B., (2007), ‘Compliance by WTO Members with Adverse WTO Dispute Settlement Rulings’: The
Record to Date’, Journal of International Economic Law (JIEL) 10(2) 397, at 397-403. Available from: http://jiel.oxfordjournals.org/content/10/2/397. [Accessed: November 9, 2013].
488
134
cases where the complaining Member was a small or developing country than in cases where the complaining Member was another type of developing country or developed country”489
.
In fact, during 17 years, developing countries raised many disputes against developed
countries and succeeded in getting decisions of legal violations in 88 per cent of the disputes;
therefore they are successful in dispute settlement. Also, they have achieved implementation
in 94 per cent of the rulings in their favour. It has been observed that developing countries
have even been successful in cases against developing countries. It observed that the
developing countries have increased their participation in the DSB where they were hesitant
in using DSU490.
However, under the DSB, seventeen disputes have led to requests for authorization of
retaliation. The requests have been made by thirteen Members; eight of them were
developing country Members491. Some of those countries which have varying market sizes
and trade shares492 found “utility in at least requesting retaliation”493. Regarding the rate of
the WTO disputes, there are only nine cases in which “the complainant pursued and gained
retaliation rights from the DSB with retaliatory measures being imposed in only five of those
disputes”494. In those five, developing countries “pursued their right to retaliate through to the
489 Malacrida, R,.(2008), ‘Towards Sounder and Fairer WTO Retaliation: Suggestions for Possible Additional
Procedural Rules Governing Members' Preparation and Adoption of Retaliatory Measures’ Journal of Wolters
Kluwer,(JWT)42(1)360,at20. Available from:
http://www.kluwerlawonline.com/static.php?type=aboutus&page=index[Accessed: November 9, 2013].
490 Hoda, A,. (2012), ‘Dispute Settlement in the WTO, Developing Countries and India’. 491 They are Antigua and Barbuda, Argentina, Brazil, Chile, Ecuador, India, Korea and Mexico. 492 Hoda, A,. (2012), ‘Dispute Settlement in the WTO, Developing Countries and India’. 493
Nottage, H,. (2008), “Evaluating the Critique that WTO Retaliation Rules undermine the utility of WTO Dispute Settlement for Developing Countries.
494 Ibid. For more details see Hoda, A,. (2012), ‘Dispute Settlement in the WTO, Developing Countries and
India’. Under Article 22.6 of the DSU, on the level of ‘suspension of concessions or other obligations’, nine disputes led to Arbitration proceedings.
135
Arbitration stage”495
. So, it has been suggested that developing countries “have seen merit in
pursuing actual DSB authorisation to retaliate”496
and have been “at least as active as
developed countries in requesting authorisation from the DSB to retaliate”497
. While the DSB
has authorised retaliation, “retaliation has been the exception rather than the rule”498
. It has
been observed that “the overall positive record of Members in complying with adverse rulings is reflected in, and confirmed by, the low number of cases where Members have
sought and received authorisation to impose retaliatory measures”499 .
However, there were worries via the Uruguay Round that small Members may not benefit
from dispute settlement procedures and they were uncomfortable about the impact of quasi-
judicial dispute settlement procedures500. The reason behind this concern is that the small
nations do not have the economic muscle for effectively enforcing a retaliation or cross-
retaliation in large countries, which was the last necessary tool to enforce the ruling in a
495
Nottage, H., (2008), “Evaluating the Critique that WTO Retaliation Rules undermine the utility of WTO Dispute Settlement for Developing Countries”.
496 The disputes pursued by developing countries are: US-Upland Cotton (Article 22.6-US), US-Gambling
(Article 22.6 -US), US-Offset Act (Byrd Amendment)(Article 22.6-US)(Brazil, Chile, India, Korea, Mexico),
Canada-Aircraft Credits and Guarantees (Article 22.6-Canada), and EC-Bananas III (Ecuador)(Article 22.6
EC).
497 Nottage, H., (2008), “Evaluating the Critique that WTO Retaliation Rules undermine the utility of WTO
Dispute Settlement for Developing Countries”.
498
Ibid. See, also, Malacrida,R., (2008), ‘Towards Sounder and Fairer WTO Retaliation: Suggestions for Possible Additional Procedural Rules Governing Members' Preparation and Adoption of Retaliatory Measures’ at 7; A number of disputes resulted in a mutually agreed solution after the authorisation to request retaliation was made, such as: Australia-Measures Affecting Importation of Salmon (DS18); Canada-Measures Affecting the Importation of Milk and Exportation of Dairy Products (DS103 and DS113); US-Section 110(5) of the US Copyright Act; US-Anti-Dumping Act of 1916 (DS136 and DS162); Japan-Measures Affecting the Importation of Apples (DS245); US-Final Countervailing Duty Determination with Respect to Softwood Lumber from Canada (DS257) and US-Investigation of the International Trade Commission in Softwood Lumber from Canada (DS277); US-Final Dumping Determination on Softwood Lumber from Canada (DS264) and US-Oil Country Tubular Goods Sunset Reviews (DS268). See Malacrida, R., (2008), ‘Towards Sounder and Fairer WTO Retaliation: Suggestions for Possible Additional Procedural Rules Governing Members' Preparation and Adoption of Retaliatory Measures’ Table at Annex B. See also, Nottage, H., (2008), “Evaluating the Critique that WTO Retaliation Rules undermine the utility of WTO Dispute Settlement for Developing Countries”.
499 Wilson, B., (2007), ‘Compliance by WTO Members with Adverse WTO Dispute Settlement Rulings’. at 397.
See also, Nottage, H., (2008), “Evaluating the Critique that WTO Retaliation Rules undermine the utility of
WTO Dispute Settlement for Developing Countries”.
500
136
dispute501. Therefore, cross-retaliation may be considered as a beneficial tool for developed
countries rather than developing countries. Retaliation has been sparingly used by developed
countries, but a WTO Member may rely on moral pressure rather than apply legal measures
to enforce compliance502. Also, the cross-retaliation agreements on goods, services and
intellectual property rights raised another concern for developing countries using the DSU,503
which affects their participation in the dispute settlement system.504. It has been observed that
there are discrepancies in the imposition of retaliatory measures between developing and
developed countries in some cases such as EC-Bananas III (Ecuador), US-Gambling
(Antigua and Barbuda)505. Therefore, in the next part, I will discuss the developing countries’ recourse to retaliation as well as cross retaliation under the DSU.