World Trade Organization Settlement Procedures - Case Study Example

Evaluate the dispute settlement procedures of the WTO Introduction: The developing nations need entrance to foreign markets if they are to reap the profits of globalization. Multilateral negotiations under the World Trade Organization (WTO) play an essential role in assisting market access. However, throughout the worldwide economy, pressures for protectionism proliferate, intimidating to roll back these benefits. Therefore, the WTO’s dispute settlement system is extensively seen as one of the most significant and unbeaten characteristics of the trade regime. (WTO Dispute Settlement, 2004, p. 1). The WTO’s process for determining trade disputes under the Dispute Settlement Understanding is crucial for implementing the rules and therefore, to guarantee that, trade flows easily. The liability for settling arguments lies with member governments, through the Dispute Settlement Body (Dispute Settlement, n.d). The dispute settlement procedures of the WTO: It has been known that the main objective of WTO is to reduce or eliminate a range of non-tariff barriers and disparities in trading conditions between nations. However, WTO is also considered to be an influential organization as far as settling arguments is concerned. It has the right to make binding judgments in situations where trade rules are conditional on argument or they are contravened. In this respect, WTO is an important institutional power for trade liberalization (Held, 1999, p. 165). The WTO’s process highlights the rule of law, and it makes the trading structure more safe and expected. A process for settling arguments existed under the previous GATT, however, it had no permanent timetables, rulings were easier to obstruct. Several cases were dragged for an extended time period. The Uruguay Round agreement launched a more planned procedure with more clearly defined phases in the process. The agreement stresses that punctual settlement is necessary if the WTO is to operate efficiently. Even though much of the process looks like a court or hearing, the solution is that the nations concerned should discuss their issues. They need to resolve the conflict among themselves (Understanding the WTO: Settling Disputes, n.d.). At all phases, nations in disagreement are persuaded to consult each other so as to resolve “out of court”. At all phases, the WTO director-general are available to suggest his good offices, to reconcile or to assist attain conciliation (The panel process, n.d.). Evaluation: Trade liberalization assures substantial returns, however comes with hazards. One such hazard is the risk that a foreign administration will surrender to lobbying of its domestic manufacturers and grant them security. This can weaken a developing nation’s interest in redistributing resources to the distressed export division, since poor nations tend to have less scope for export markets. Consequently, the mere expectation of such protectionism can discourage or weaken much-desired trade reform in developing nations. The WTO dispute settlement structure can help cover against this hazard by helping to perpetuate market access once it is won. Hence, it can encourage the developing nations to begin an open-trade growth approach. The usual observation, off course, is that developing nations face considerable obstacles in employing WTO dispute settlement. The obstacles include the lack of market size of the developing nations with which to plausibly threaten retribution for disobedience. It implies that even if a developing nation has been able to taste the fruit of legal success, it may not be capable of forcing the defendant to open up. This may discourage developing nations from filing complaints in the first position. A developing nation might also be unwilling to kick off a conflict owing to fears of retaliations, such as the postponement of foreign aid or one-sided trade preferences. The other problem encountered by the developing nations is the lack of legal capability. To take complete benefit of WTO law, developing nations need the facility to insistently follow their rights in the increasingly intricate legal trade regime. For such capability, a nation must have a number of things. It requires skilled trade lawyers to take proceedings of a case, but also experienced politicians and officials to settle on whether it is significant litigating a case. This is considered to be the most decisive phase of the procedure (WTO Dispute Settlement, 2004, p. 3-4). Having so many obstacles, the developing nations may gain little from WTO dispute agreement. However, this is far from being factual. Poorer petitioners have filed and won recognitions from large industrialized nations during a wide variety of disagreements, with millions of dollars at stake. These cases include exports of underwear (Costa Rica v. US), shrimp (Thailand and Pakistan v. US), wool shirts (India v. US), gasoline (Venezuela and Brazil v. US), sardines (Peru v. European Communities) and poultry (Brazil v. European Communities). In spite of lack of a convincing threat to hit back, these developing nations have thrived in making effectual use of WTO dispute settlement. It is for this reason that the defendants favor to avoid being found “non- compliant” since such a tag may harm their outlook of achieving conformity when they, consecutively, file as appellants. In this manner, defendant administrations may value the honesty of the multiparty trade regime over the result of a single case. The poor appellants prefer to look forward to expand market access. In these several dozens of cases, rich defendants have granted to poor litigants. According to this viewpoint, the stress on reprisal at the WTO is mislaid. Although it is true that larger nations can more believably threaten to react, threats of reprisal are not the key to the structure. Looking into the facts, the first thing to notice is that most WTO arguments are among a few members that report for the bulk of global trade, particularly the US and Europe. By contrast, developing nations have had little experience with dispute resolution. Depending on this elucidation, a few developing nations, for example, Brazil and India, have commenced a comparatively large number of arguments, while others, like China, are more and more lively in dispute resolution as third parties, seeking to obtain experience with the scheme (WTO Dispute Settlement, 2004, p. 4). The problem is that developing nations are far less probable than wealthier ones to persuade a resolution prior to a ruling is issued. Alternatively, richer nations tend to determine their arguments through negotiation, either in meetings or at the panel phase prior to a verdict. On the other hand, poorer petitioners are unable to get appellants to offer considerable allowances at these points in the procedure. During trade disagreements between the United States and the European Union, for instance, all cases deferring concessions have concluded previous to the panel rules. In brief, the benefits of adjudication inexplicably take place prior to formal litigations are complete, and often before it even begins. This is why it is particularly vital for developing nations to close the space in case of “early settlement” (WTO Dispute Settlement, 2004, p. 6). Conclusion: The long-term objective, of course, is to increase this know-how in the capitals of developing nations. However in the short-term the focus might be on funding organizations like the Advisory Centre to augment personnel and embark upon this extensive mandate, or build up others to fill this position. These nations also require help in checking conformity with the WTO judgments that they win. Both household and foreign trade organizations and consumer assemblies can play a major role in this respect. Indeed, these associations have strong inducement to keep track of protectionist performances. The challenge for developing nations is not only to support domestic trade organizations and consumer assemblies, but to counterfeit contacts with foreign ones (WTO Dispute Settlement, 2004, p. 6). The role of WTO and its DSB and Appellate panel therefore has huge and enormous legal relevance in today’s world as it can promote free trade in its truest term, abolish monopolies of super powers in the economic arena and promote uniform economic growth across the entire world. It should also address the environmental problems and issues the world is facing. Thus and hence the activities of WTO and its bodies should be monitored, appraised and rectified if necessary and hence lays its legal relevance. References: 1. “Dispute Settlement”, n.d. World Trade Organization. Available at: http://www.wto.org/english/tratop_e/dispu_e/dispu_e.htm (Accessed on Oct. 26, 2009). 2. Held, D, 1999. Global transformations: politics, economics and culture. Stanford University Press (Stanford). 3. “Understanding the WTO: Settling Disputes”, n.d. World Trade Organization. Available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm (Accessed on Oct. 26, 2009). 4. “The panel process”, n.d. World Trade Organization. Available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp2_e.htm (Accessed on Oct. 26, 2009). 5. “Case Study: the timetable in practice”, n.d. World Trade Organization. Available at: http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp3_e.htm (Accessed on Oct. 26, 2009). 6. “WTO Dispute Settlement”, Apr. 2004. Available at: http://userwww.service.emory.edu/~erein/research/SIDA.pdf (Accessed on Oct. 26, 2009). Read More