In contrast to dispute settlement where the DMS may be used to resolve a dispute once it happens, the DMS could be used as a means of dispute avoidance, i.e. preventing a conflict of interests between the parties from escalating into a full blown dispute which could affect their relationship both economically and diplomatically. Generally, dispute avoidance may take the form of policy formation and information dissemination, i.e.
forming a policy which does not result in a conflict of interest with other parties and letting them know about it. Indeed, letting the other trading parties know about what laws and measures are going to be used would undoubtedly minimise the discord which may arise between them. But, in some instances this may not be adequate. It may be necessary that assistance from a third party is required. This is where APEC DMS m a^
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In the Shrimp/Turtle dispute, a series of consultations had been attempted but k without success. But, what needs to be remembered is that consultations were arranged after the trade ban had been imposed. By that time, trade loss had already been incurred and trading relations between the disputing parties had certainly been made uneasy.
However, by applying the principle of dispute avoidance provided by the APEC’s DMS to this situation, the parties might have prevented the conflict from reaching the same magnitude as it did in the real case.
For dispute avoidance to be applied successfully, the initial process of dispute avoidance has to start at a very early stage, i.e. before the United States had deployed its ban pursuant to its law on the import of shrimp or shrimp products harvested without the use of the turtle excluder device (TED) which would affect other countries. From the facts of the case, the time for the dispute avoidance process to have taken place should be in 1996, just after the revised guidelines (1996 Guidelines), whose effect was to extend the scope of Section 609 provision beyond the US jurisdiction, were published in compliance with the order of the Court of International Trade (CIT).
From the previous practice of the US government, it should be able to anticipate the forthcoming difficulties with other shrimps exporting countries. The trading records on the US part should demonstrate that Thailand and Malaysia are two of its main
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exporters of its shrimp and shrimp products. Therefore, the US law which would inevitably cause some difficulties to these countries should be discussed with them beforehand. Although this may be time consuming, in the long run all parties involved could appreciate the amount of benefit created by such a meeting. With all the modem technology in the field of communication and the frequency of meetings hosted by the APEC forum, it should not be difficult to arrange such a meeting.
In practice it is perhaps unrealistic to expect the US government to foresee all affected exporting countries, unless there are no flaws in the transparency relating to the publication of measures for environmental purposes which allows ready access to the public both domestically and internationally. The US government could, at the very least, make its measures known publicly. It could use the forum of APEC to lay its cards on the table, for example at the Trade or Environment Ministerial Meeting, or at the regularly held Senior Officials’ Meeting. Alternatively, the parties could make use of the Trade Policy Dialogue, under the auspices of the Committee on Trade and Investment, in order to meet up and discuss an alternative.
The DMS could be novel in that it could introduce the third party during the consultation, hence engendering a mediation atmosphere, if parties had found an impasse during the meeting. To break the ice, the third party mediator could indeed play an important role. This third party mediator would act in the same way and for the same purpose as he would in the dispute settlement process. It is also possible that a panel of three mediators could be formed, acting as a team of experts, where the case involves highly technical, scientific or legal complications.
Among the composition of the panel, at least one mediator each could come from the trade and environmental domains. For the same reason as argued in the earlier section of this chapter, the intermingling of both trade and environmental mediators would facilitate the parties in reaching their compromise. However, a set of guiding principles on appointment and conduct of the panellists and the overall process of mediation should be formulated as soon as possible. By having guiding principles formally drawn up, the credibility and consistency of the mediation process would be enhanced. This, in turn, might help attract more members to use the dispute avoidance mechanism.
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The panel of expert mediators in the hypothetical DMS Shrimp/Turtle case could help bring Thailand, Malaysia and the United States to a sort of conclusion which would yield a compromise between the US environmental policy and the trade loss of Thailand and Malaysia, amounting to millions of dollars. In so doing, the US government should make their terms and goals explicit to the DMS panel, detailing their concerns for protection of the sea turtles. At the same time, the Thai and Malaysian governments should explain to the panel how much trade loss they will suffer as a result of the US law. These governments may persuade the panel to lean in their favour as trade is a necessary engine for their economic growth. If trade stalls, their striving for economic and developmental betterment would be impaired. The mediators would then exercise their skills to persuade each party to reach a compromise. For example, in this case, the US may be asked to consider an alternative measure which is more proportionate than the trade ban, such as labelling requirements. On the part of Thailand and Malaysia, more time to bring their conservation regimes in line with the American’s could be agreed upon. Moreover, technical and financial assistance from the US government could be provided in order to ensure the compliance with the US law.
Apart from having experts as mediators during the process, non-state actors like interested NGOs and industries whose interests are at stake may be allowed to participate either by being present at the meeting or by submitting their view in writing in the form of amicus curiae briefs. These documents could provide details of how necessary the measure in question is in order to secure environmental protection. As an alternative, the NGOs from all parties could meet up in parallel to the DMS process. At such parallel proceedings, the NGOs could agree upon a common principle or opinion which could then be presented to the mediator. This would certainly save time as the NGOs would not need to present their opinions individually. In the hypothetical Shrimp/Turtle case, Thailand and Malaysia could have their NGOs submit papers demonstrating that they have had adequate sea turtle conservation programmes.
At the dispute avoidance stage, the problem of admitting amicus curiae documents could be less acute. This is because, at this stage a concrete and legally binding decision is not the aim. Instead, the aim of the APEC’s DMS dispute avoidance is to steer parties away from the escalation of a conflict of interest into a full blown dispute. Thus, the process of dispute avoidance while helping the parties come to their
compromise also provides a channel for non-state actors to contribute their views. This aspect could prove to be helpful for the development of the trade and environment debate, as information from the non-state actors could be more readily accepted. But again, a set of guidelines might be needed in order to prevent the dispute avoidance process being inundated with NGO’s papers.
Indeed, adding another function to the existing APEC’s framework would involve some financial sacrifice. With the already tight budget of APEC, funding for the process of dispute avoidance may have to be provided by the parties in the dispute themselves. But, as a number of APEC members are still developing countries, they may not be prepared to pay such a large sum of money. Again, if the APEC central fund is established, those poor members of APEC would not be denied their chance to consult with other trading partners who would introduce a measure for environmental purpose which could adversely effect their market access. As the Shrimp/Turtle case has demonstrated, a large amount of litigation fees was incurred from the start to the finish of the dispute settlement process. By having the APEC central fund in placed) Thailand and Malaysia’s legal costs could have been funded partly by such a fund. In effect, by shifting some of the legal costs to APEC, it could encourage members to use the DMS dispute avoidance avenue.
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Naturally, making all APEC members contribute to the central fund could trigger some unwillingness from some APEC members, hence deterring members from using the DMS avenue. But when comparing this amount of contribution with the amount of trade loss which might result, the establishment of the central fund could prove worthwhile.
Apart from the financial constraint, it has to be borne in mind that in order for dispute avoidance to work successfully, the main driving force is the political willingness of the parties to come together and find a compromise, and such a willingness may not be found in all situations. With the alternative of the WTO forum which could offer a judicial ruling, the idea of dispute avoidance might be overlooked.
Some successful results generated by the dispute avoidance process may have to materialise before the credibility and confidence in the system are built up.
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Moreover, by dispute avoidance via mediation the parties are more likely to reach an outcome which accommodates their interests, rather than focusing on the determination of their legal right which can only render a legal compromise at the end of the proceeding without achieving the underlying purpose of the measure. In trade and environment disputes, this means that, most of the time, rather than the natural resources or the environment being preserved, the parties in the dispute have focused on redeeming their commercial loss. In the Shrimp/Turtle case, for instance, the parties during the dispute avoidance stage could focus their case on how to protect the turtles from being incidentally killed by using a proportionate trade measure instead of focusing on how to retaliate against the offender. Thus, the goals of both trade and environment would be achieved with an optimum result.
If APEC can successfully promote the idea of dispute avoidance, this would be a novel means for dispute resolution in the field of trade and environment as no other forum would have offered a “two track” environmentally sensitive dispute resolution system. (See Diagram D.) The APEC’s DMS dispute avoidance would therefore not only be valuable to the Asian members of APEC, by preserving the Asian ways of doing business, it will be beneficial to the North American members too. For the latter groups, the more choice of forum could mean more chance to pursue their environmental priorities.
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APEC’s Trade and Environment DisputeResolutionMechanism
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