WTO head notes ‘confidence’ in dispute resolution scheme

Posted on July 04, 2012

ECONOMIES, including those in the developing world, have displayed “very broad confidence” in the World Trade Organization’s (WTO) dispute settlement mechanism, the head of the Geneva-based organization said, noting that nearly two out of three members have participated in such procedures.

“There is very broad confidence in the WTO dispute settlement mechanism. Ninety-eight members have participated in one capacity or another, which is 63% of the membership,” WTO Director-General Pascal Lamy said in a statement based on his speech before WTO legal affairs division on June 28.

“Importantly, developing Members are just as active as developed ones,” Mr. Lamy added, noting that only the six most frequent complainants were “developing country-members”, citing Argentina, Brazil, India, Mexico, South Korea and Thailand.

Members have brought a total of 439 trade disputes to the WTO since 1995, he added.

“Many of these disputes have been solved by direct consultations between the parties,” Mr. Lamy said further, noting that dispute settlement panels had been formed in 206 cases -- less than half the total trade disputes.

Disputes on countries’ compliance with rulings of panels had been raised in only 30 cases, less than 7% of the total, he added.

Trade sanctions for non-compliance were used in only 17 cases, just 4% of the total. “[T]his is particularly noteworthy as the suspension of trade concessions is an almost automatic right of members in cases of non-compliance,” Mr. Lamy said.

WTO panel proceedings last 11 months on the average, excluding the time parties take to compose their panels and translation time, Mr. Lamy noted, saying “this compares quite favourably” to proceedings in other international courts which take at least two years to resolve cases.

The WTO chief, however, noted that dispute settlement rules could still be “clarified and perfected.”

“These are being addressed in the current negotiations for the improvement and clarifications of [the rules],” Mr. Lamy said.

The Philippines has brought five complaints before the WTO.

The latest case was against Thailand’s customs and fiscal measures on cigarettes filed in February 2008. A decision favoring the Philippines was upheld in June last year, after an appeal by Thailand.

The Philippines has been a respondent in six cases. These include two complaints against its tax treatment on distilled spirits -- filed separately by the United States in January 2010 and the the European Union in July last year. The Philippines lost the case in December last year after an appeal. -- K. A. M. Patria