Dispute Settlement at the WTO: The Developing Country Experience

Now, let us have a look at how this correlation has played out in the case of India.

Journal of World Trade

Together, both figures show that with increase in exports, China and India have significantly increased the number of times they have joined disputes as third parties. This can partly be attributed to their increase in trading stakes, and to some extent to their growing willingness to enhance their understanding of, and expertise in, WTO law. High aggregate trading stakes, export-oriented economic structure and a wealth of DSU experience, which have further resulted in high economies of scale and low start-up costs in building in-house dispute settlement capacity, have better enabled these countries to self-enforce their WTO rights.

Moreover, it may be fair to argue that their rapidly growing market size and position in the global economy have strengthened their capacity to negotiate a settlement, threaten retaliation or face a retaliation threat, although it is very difficult and beyond the scope of this book to assess or measure the same. As a result, these countries can generally benefit more from a successful WTO litigation because their in-house capacity enables their governments to litigate and defend the market access interests of their industries in a cost-effective manner.

Hence, high trading stakes and market size have, to some extent, contributed to making these countries less susceptible to high participation costs at WTO DSU. The above observations reinforce the claim that DSU participation benefits come at a cost and these costs may not be equally affordable by all WTO members. In other words, with the more complex and rule-oriented system of WTO DSU, the Member States require higher relative capacity to use the adjudicatory mechanism than they required under the previous trading regime; that is, they require more resources to monitor and enforce their international trade rights.

This terminology lacks a universally accepted definition. The use of purely economic indicators by the World Bank and International Monetary Fund IMF , social and economic indicators by the United Nations UN , and of self-identification process employed by WTO to categorise countries and define development has, to some extent, diluted the meaningfulness of this term.

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At the other end, the same group comprises least developed countries with very low per capita income and GDP. These diversely developed countries have very different levels of development, market size and foreign trade interests. Moreover, they have hugely diverse experience of participation at WTO DSU as some of them have participated actively, while others have had a minimal or no DSU participation experience.

For instance, from January to January , Brazil has filed 30 complaints and responded to 16 complaints, while Cuba has filed a single complaint and responded to none at WTO DSU.

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In light of this, the book seeks to analyse specific capacity-building strategies that a specific group of developing country members can practically employ in the future. To achieve this purpose, it centres its attention on the experience and interests of those developing country members of WTO that are classified as middle income countries MICs including upper middle, middle and lower middle income countries as on 15 April by the World Bank. The economies and markets of MICs have risen faster than the rest of the world, and they have shown increasing enthusiasm for creating new market opportunities and defending domestic policies through the use of WTO DSU.

This can be seen in Table 1. The table also indicates that MICs, including the larger ones, have been relatively more comfortable in joining the disputes as third parties, as compared to participating as complainants or respondents. This reflects, to some extent, that the top three users of DSU too have their reasons to avoid the costly system of litigation; however, their continuing interest in DSM is evident from their striking rate of participation as third parties. Third parties to WTO disputes enjoy substantial rights of participation: Given this enthusiasm, it is an opportune time to evaluate the strategies MICs, particularly large MICs, have employed to develop in a cost-effective way their WTO dispute settlement capacity.

Academics, lawyers, economists and political scientists have written extensively about the participation challenges faced by various developing countries at WTO DSM. They have struggled in negotiating a settlement or conducting successful bilateral or multilateral consultations. Moreover, on several notable occasions, developing countries have found it difficult to ensure compliance even after a favourable ruling has been given by the Panel or Appellate Body AB. Bohanes and Garza confirm that the main challenges which various developing countries have faced in the process of enforcing international trade rights are the lack of legal capacity, weak domestic governance, insufficient retaliatory powers and fears of political consequences and pressures.

Multiple participation challenges, as listed above, are central to the most common problem that most developing countries have faced: India, for example, has low indexed per capita income, but it is a major emerging economy which has participated actively at WTO DSU and has demonstrated the capacity to mobilise the required resources to monitor and enforce its WTO rights.

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The problem of insufficient capacity becomes even more severe if a developing country challenges a measure or if its measure is challenged by a developed country. In short, wealthy complainants have become significantly more likely to secure their desired outcomes under the WTO, but poorer complainants have not. Can this resource gap between developed and developing country members be bridged? These issues are addressed in the following section. Broadly, there are two options that can be explored for addressing the capacity-related challenges.

The first option is to introduce changes at the international level which can include changing WTO rules , and the second option is to find solutions at the domestic level. The first option can be explored through proposals presented by developing countries, and by academics and organisations committed to the notion of WTO reform The second option can be explored by making use of the first-hand experiences of certain upper middle, middle and lower middle income countries that have employed varied strategies to mobilise resources for the utilisation of DSU provisions.

However, in practice, these provisions are far too limited and inadequate to provide developing countries with an effective DSU access. The reasons behind this claim are discussed at length in various scholarly works. These proposals, amongst others, include the appointment of a special WTO prosecutor for developing countries, introduction of an additional provision for technical and administrative assistance, and training of adjudicators on special and differential treatment provisions contained in the WTO agreements.

Scholars have also argued in favour of allowing direct applicability of WTO law in national courts for enabling developing countries to self-enforce favourable awards. They propose that developing countries with small trading stakes and market size amidst high litigation cost can benefit significantly from a small claims procedure established at WTO. Other academics, as well as policymakers, have criticised these proposals. Sign in via your Institution Sign in. Purchase Subscription prices and ordering Short-term Access To purchase short term access, please sign in to your Oxford Academic account above.

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Related articles in Google Scholar. Citing articles via Google Scholar. The Conflict and Its Resolution. The Global Pact for the Environment: Dispute Settlement at the WTO: The Developing Country Experience.

Enabling Developing Countries

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