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Low-income countries should be empowered to access the WTO dispute settlement system

Low-income countries should be empowered to access the WTO dispute settlement system

 


 26/11/2018

 

Armouti Advocates Managing Partner Baha’a AL Armouti was a keynote speaker in the annual conference of the Strategic Alliance for WTO and Trade Remedies Law and Practice, which was hosted last week in New Delhi by the Federation of Indian Chambers of Commerce and Industry (FICCI).

 

In his speech, AL Armouti reflected on his view of the current developments affecting the WTO and the efficiency of the Dispute Settlement System:

Recently, I was trying to figure out where we stand today, as an international community, concerning our state of commitments, and what could the future hold for us in light of the current circumstances and the current developments that seem to have weakened the international trade framework generally and the WTO specifically. I have concluded that we are still ok.

 

 There is for sure a crack in the Jewel, but it is not severe enough to split it apart, at least in the near future. I would say that the crack has been there since day one, but we have only noticed it as we got closer and closer to the crown.

He also emphasized the advantages of the Dispute Settlement System:

There is no doubt that the Dispute Settlement System is quite an achievement, especially that it has provided, for the first time, a rule-based and a time-bound system since the establishment of the WTO in 1995.

When tackling the drawbacks of the Dispute Settlement System, Armouti shed light on the most popular cons often envisaged by the Trump administration, which lead to the blocking of the election process of the Appellate Body judges by the US to address them. He also explained that these drawbacks were minor, and the WTO could remedy them by amending the Appellate Body’s Working Procedure, as proposed by many scholars and WTO members:

These popular drawbacks stem from the allegation that the Appellate Body's practice had violated the WTO rules. First, the ruling process took longer than allowed by the Dispute Settlement Understanding in many cases. Second, some Appellate Body's judges resumed working on cases despite the expiration of their term, and third; that Appellate Body's decisions were overreaching.

As for what he believes to be significant drawbacks of the WTO Dispute Settlement System, he said:

What I take from the Appellate Body blocking story is that it reveals how political intimidation works in the WTO, in attempting to enforce positions on members unilaterally without resorting to dialogue.

 

Political intimidation is a significant contributor to the crack of the Jewel, and WTO members should seriously consider not letting it prevail in practice, to save the Appellate Body hence the WTO as a rule-based system from completely transforming into a power-based system

The second important drawback in his view and the most significant is the inability of low-income developing and least developing countries to resort to the WTO Dispute Settlement System:

While everyone seems to be busy with developing the WTO rules, low-income developing and least developed countries are still struggling to understand them, and still unable to resort to the Dispute Settlement System, at all.

In presenting the main reasons behind the non-use of the Dispute Settlement System by many developing and least developing countries, Baha'a reflected on the experiment of Jordan:

I believe that the non-use of the Dispute Settlement System by many developed and least developing countries, including Jordan, was an indirect result of the general unfamiliarity with the free market economy system and its mechanics before joining the WTO.

 

The culture and knowledge of the free market economy were not there before joining the WTO, especially within the institutional memory of governmental institutions. In Jordan, we moved very quickly from a semi-closed economy to a free and open market economy in 3 years, which made the WTO perceived more as commitments than rights. For instance, we never had trade remedies in our economic regime before joining the WTO in the year 2000, while trade remedies knowledge and practice existed in the United States and Europe for more than 100 years.

He added that other reasons also involve lack of awareness campaigns for the different sectors including the public sector, the private sector, and the judiciary:

Awareness programs conducted in Jordan by the WTO were not sufficient. With the lack of the free market economy knowledge and practice, awareness must be at a very intensified level, and the WTO still lags in this regard.

The last reason he mentioned for the non-use of the Dispute Settlement System by many developing and least developed countries was cost:

Cost remains a serious obstacle to the use of the Dispute Settlement System. The United States, for instance, employs more than 300 lawyers to handle dispute settlement cases, while many other countries have none. Also, In one WTO case, dispute settlement proceedings turned very costly for Japan reaching as much as 10 million dollars. For sure, low-income developing and least developed countries cannot afford the costs of the WTO Dispute Settlement System.”

At the end of his speech, he concluded:

We need to replace the cracked jewel with a shiner, more beautiful, and uncrackable Jewel that is considered genuine by all WTO members.

 

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