Non-Compliance & Retaliation in the WTO — What’s the Data? — Any Surprises?

                                    Intl Law  

 

In the recent report of the Dispute Resolution Body of the WTO, in its annex entitled “Overview of the State of Play,” there is a chart listing cases brought under Article 22.2 of the Dispute Settlement Understanding. It enumerates cases that resulted in WTO authorization of ‘retaliation.’ This is important and it is unfortunate this data is buried so deep.

What is shown by the data?

Out of almost 500 cases filed in the first 20 years of the WTO (1995-2015) only 10 cases resulted in authorization by the WTO of retaliation. Not very many.

Actually, it is even less than you see. One case was brought by different parties. Technically they were counted as two separate cases. In fact, they really aren’t. Another case authorization was given twice. If you combine those cases and consider them as one you have only 8 cases. What gets even more interesting is that a number of those cases where authorization was given, retaliation was never implemented.

Which countries had retaliation authorized against it? The U.S. leads with 4 such cases and the EU with 2 such cases. (Canada and Brazil with one each in the same case.)

So where does that leave us as to the question of non-compliance and retaliation of WTO decisions?

Well the answer is pretty clear. Out of 500 cases filed (request for consultations) only 8 cases resulted in authorization for retaliation. and less were even implemented. While this is not the whole story it does indicate a pretty good rate of compliance. And not unexpectedly it’s the U.S. and the EU who bore the brunt of retaliation. And in these cases it’s those two countries that requested such authorization against each other.

But this makes sense. The volume of trade between the U.S. and the EU is huge. As trade flows increase disputes increase. That’s only natural.  It is not the absence of  disputes that characterizes a legal system. But it’s the way they are resolved. The WTO has a good story to tell about resolving global trade disputes and having the offending measures lifted. In fact, an excellent story to tell.

 

 

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About Stuart Malawer

Distinguished Service Professor of Law & International Trade at George Mason University (School of Public Policy).
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