The GATT/WTO Agreements effectively protect the interests of the developing country members of the WTO - Essay Example

?Proposition: The GATT/WTO Agreements effectively protect the interests of the developing country members of the WTO Position: Negative Introduction The principal thesis pursued by international agreements, in so far as they deal with the imbalance of power in international trade, is that international negotiations are capable of having outcomes that are not influenced by the relative power of the countries that are parties thereto.1 However, experience and inquiry appear to indicate the reverse, that despite international negotiations the developed countries still reap the benefit of these agreements more than developing countries. It is the aim of this study to demonstrate how the GATT/WTO agreements, though aimed at improving the playing field and protecting the interest of developing countries in international trade, are not effective in attaining these objectives. Due to the need for conciseness, the paper shall choose to discuss three crucial components of the GATT/WTO that impact upon developing countries: the tariff and subsidies issues surrounding the trade in agricultural products, the protection of trade-related intellectual property rights, and the application of the dispute settlement mechanism. The most recent developments of the Uruguay and Doha Rounds and data from the nineties to the present shall provide the context for the discussion. Changes introduced by the WTO The GATT was aimed mainly to regulate the imports and exports among member countries; however, the bilateral and multilateral agreements arrived at under the WTO provisions actually impact upon the countries’ entire economy. Whereas before, the WTO agreement regulated largely only the exchange of goods, nowadays the newer WTO provisions arrived at under the Uruguay rounds have trespassed into traditionally untouched areas, which include intellectual property rights and services outsourcing.2 This is according to Bhagirath Lal Das, former Chairman of the GATT Council and of the GATT Contracting Parties.3 Das further cites the relatively recent agreements on information technology goods and electronic commerce, as well as prospective introduction of provisions for the protection for investors’ rights, the social clause, and other pending proposals. These additions are seen to impact greatly on the national economies of member states; for instance, the proposals on the protection of investors’ rights will tend to impact greatly on the balance of payments situation of developing countries, as well as the balance of investments within the sectors and regions within their jurisdictions.4 The Doha Round is the most recent round of trade negotiations among members of the WTO. More formally known as the Doha Development Agenda, it is comprised of talks in the areas of agriculture, non-agricultural market access (NAMA), services, intellectual property (TRIPs), trade and development, trade and environment, trade facilitation, WTO rules, special and differential treatment, and the dispute settlement understanding (DSU).5 The principal aim of the Doha Round is to improve the trading prospects of developing countries.6 To keep the discussion concise, it shall revolve around the crucial issues concerning agriculture, TRIPs, and the DSU. Agriculture WTO provisions In the Doha Round, the term “modalities” signifies a way or method of doing something, or more precisely, a plan for the final terms, such as how tariffs are to be cut, and how far agricultural support and subsidies are to be reduced, together with other associated conditionalities.7 The modalities in agricultural trade dealt on three areas – market access, domestic support, and export subsidies. In the case of access to markets, the tariffs, tariff quotas and safeguards were discussed for products such as pineapples, potatoes, cheese, sugar, beef, rice, wheat, and so forth. The cuts on tariff were agreed to depend on four factors, namely: (1) How high the current tariff is - For this first factor, it was agreed that higher tariffs have higher cuts – developed countries are committed to tariff cuts ranging from 50% to 66-73%, provided that the average tariff cut be no less than 54%, while developing countries are to cut tariffs by 33.3% to 44-48%.8 (2) Whether the product is “sensitive” (all countries) or “special” (developing)9 – Sensitive products are agreed to have cuts of only 1/3, ? or 2/3 of the normal tariff cut, but with the quantity allowed in at a lower quota, while special products may be allowed even lower cuts than these, and in some instances be completed exempted from the tariff reductions.10 (3) Whether the applied tariffs are lower than the bound tariffs – According to this provision, tariff cuts are specified from the legally bound rates, so in the case where countries charge rates other than the legal rates, the actual tariff cut may be less (or more, in the case of those who charged higher than the legal rates). Thus, if a country has a bound tariff of 100% but was charging only 25%, the bound tariff would be reduced by 42.7%, that is, cut down to 57.3%. In this case, the 25% tariff that the country actually charges is not affected, but may actually be doubled without infringing upon the provision.11 (4) The country’s status – There is a difference in the treatment of least-developed countries, as they are not required to make any cuts on any products. Developing countries, and the small and vulnerable economies, generally are expected to make smaller cuts and are allowed more flexibilities than the developed countries. Special terms are also extended to countries that recently joined the WTO.12 For domestic support, consistent with the reduction in protectionist measures that is the aim of liberalization, the support for prices or earnings for agricultural industries are to be substantially cut (but not eliminated) because they represent “distorting” support.13 Countries which provide the largest amounts of support will be required to make the biggest cuts, with a “de minimis” (small) amount limited to 2.5% of the value of production for developed countries, and 6.7% for developing countries. These figures may be further limited for individual products so as to avoid concentration.14 However, for certain agricultural products classified under “Green Box,”15 there is a wide range of support that is allowed without limit. These are the so-called non-trade distorting support measures, including development, infrastructure, research, agricultural extension, structural adjustment, and so forth. There will be precautionary conditions set up so that direct income supports will be prevented from stimulating production.16 As for export subsidies, these are agreed to be eliminated entirely by 2012. Included among these measures are subsidies that are hidden in export credit, disciplines on state trading enterprises, and non-emergency food aid.17 Reactions to the Agricultural modalities There are a number of adverse reactions to the reading of the provisions in the latest Doha negotiations. Khor18 noted that the provisions require developing countries to undertake agricultural tariff cuts by two-thirds that of the developed countries. This amounted to the aforementioned 33.3% and 44% to 48% increase, or a maximum average of 36%. While this appears to be advantageous compared to the developed countries, it is actually a substantial 50% increase over the agreed percentage increase during the Uruguay Round, which pegged the average increase at a maximum of 24%. Furthermore, the special products flexibility allowed for developing countries is observed to be much less than that which the G33 had requested.19 Another observation has been made concerning the special safeguards mechanism (SSM) on agricultural products. The Doha version includes so many conditions that must be complied with before the mechanism applies, and the remedies prescribed are highly restrictive. For instance, the extra duties under SSM can be allowed to exceed the Uruguay Round bound rates, but only under limited conditions while the quantum of the extra duties is very limited. On the other hand, the existing Special Agricultural Safeguard (SSG) used mainly by developed countries, contain no such conditions or limitations. In principle, the SSM should be easier to use than the SSG, although this is apparently not the case.20 A special case is made in the matter of cotton. This is a product upon which the African countries repose particular emphasis, and yet the Doha provisions retain its earlier proposal of a more significant cut in domestic support than the average cut. Were this to be accepted by the developed countries, progress may be made; however, the U.S. retained its cotton subsidies with the same and even upgraded terms in the recently adopted U.S. Farm Bill, and therefore appears undisposed in reducing its cotton subsidies at the WTO that would undercut the provisions of the Farm Bill.21 It is further noted that loopholes or misleading texts exist in so far as the Overall trade distorting domestic support (OTDS), the “Green Box” support, and the classification of sensitive and special products are concerned. For instance, the allowable OTDS for the U.S. is required to be cut in half from the allowable amount. Therefore, the present allowable level of $48.3 billion is to be cut to $14.5 billion. However, the actual 2007 OTDS of the U.S. (the most recent figure at the time the provision was arrived at) was actually $7-8 billion. Therefore, the $14.5 billion OTDS level is actually double the $7-8 billion actual OTDS, which allows the U.S. a wide margin to increase, not to decrease, its OTDS. Similarly in the EU, the applied 80% cut would reduce allowable OTDS to fall from its present Euro 110.3 billion to Euro 22 billion. However, even without WTO provisions the EU expects its OTDS to fall to Euro 12 billion by 2014 based on its own CAP22 reform. Therefore the WTO provisions allow the EU to actually increase, not decrease, its OTDS, and fails as a significant limiting restraint.23 The former reduction in the apparent OTDS of the U.S. and the EU are not entirely favourable to the WTO objectives. This is because together with the decrease in OTDS of these two member-states is an increase in “Green Box” support, indicating a shift in subsidies and resulting in no substantial decline in domestic support. The subsidies amount to US$ 50 billion for the U.S. and Euro 22 billion for the EU in the year 2000, and can and have been trade and production distorting.24 The classification of sensitive and special products is, by the nature of its provisions, highly ambiguous and open to abuse. Furthermore, developed countries are allowed to have “sensitive products” which can significantly vary from the formula cut by one to two-thirds. Admittedly, this is also the same for developing countries, although the benefit is foreseen to be more advantageous on the part of developed countries.25 On the matter of special products, the G33 developing countries had formerly argued that their SPs should not be subject to tariff cuts, or least be meted minimal cuts, in light of the continued market distortion by developed countries’ subsidies. The reduction was to support farmers’ livelihood concerns and promote their country’s food security. The G33 later amended this proposal to at least 20% of tariff lines to be self-designates as SPs, half of which should have zero cuts, and to allow for a 3-tier system of cuts – the zero cut tier, the 5% cut applied to a quarter of the lines as second tier, and the 10% cut applied to the remaining quarter as the third tier. The position was further modified to a “hybrid approach” wherein some lines should not need to show “guidance by indicators.” In mid-2008, further concessions were made by the G33 to accede to a 2-tier system (one tier with zero cut, the second with average 12% cut). The final Chair’s text, however, adopted the Lamy draft which specified a single tier, wherein only 12%26 of tariff lines can be designated SPs. Of the 12% tariff lines, 5% can have zero cut, but the entire 12% as a whole must have an average cut overall of 11%. This is seen to be highly disadvantageous to the developing nations, because inclusion of the entire 12% tariff lines in the average means that it will be more difficult to set zero cut products, since more zero cut products will necessitate more products rising above the 11% targeted average cut. This, together with the earlier mentioned significantly higher tariff rate cuts averaging 36%, is a difficult commitment for the developing states particularly since the developed states’ “Green Box” subsidies will continue.27 Trade Related Intellectual Property Agreement (TRIPs) and intellectual property rights TRIPs Provisions The issues pertaining to the TRIPs provisions are, like those of agriculture, sensitive matters that tend to divide developed and developing countries, although the discrimination is of a different nature. While the discussion on agricultural products dealt on tariff reductions and subsidies, the TRIPs issues revolves around the patent rights of countries originating the intellectual property (usually the advanced, developed countries) and the humanitarian considerations involved (usually in the poor and developing countries), particularly in research breakthroughs for pharmaceuticals and similar medical technologies. The realm of intellectual property has earlier been identified by Das28 as one of the areas of concerns encroached upon by the Uruguay Round under the WTO which was not traditionally included under the GATT. The WTO explains this encroachment in terms of the growing importance of ideas and knowledge in international trade. Products with a high element of “invention, innovation, research, design and testing” derive their value therefrom, such as the case of new medicines and high technology products. Other products such as films and music recordings, books, art works, and similar items are valued for the creativity, information and insight that are embodied in their making, not because of the materials they are made of per se. A third group is comprised of products that have a high value because of their level of design and invention, such as brand names and certain plant varieties.29 Creators are entitled to the right to protection of their inventions, creations or designs against unauthorized use, as well as the right to negotiate for remuneration in exchange for their use according to the terms specified by them. The rights to ensure this protection are known as intellectual property rights which come in the form of patents, copyrights, trademarks, service marks, and so forth. The protection of these rights is seen by legislators as an incentive to ensure that inventors and creators will continue to remain productive.30 Prior to the Uruguay Round, there had been wide discrepancies in the implementation of IPRs in different countries, with piracy being blindly tolerated in some countries. As IP products increase in volume in international trade, their protection progressively becomes a source of tension and a subject of dispute among countries. It is for this reason that the TRIPs Agreement was created, establishing a rule-based framework by which IPRs may be uniformly enforced. Basic principles in the WTO IPRs include non-discrimination features such as national treatment, where countries treat their own nationals and foreigners on equal footing, and the most-favoured-nation treatment, where nationals of all trading partners in the WTO are treated equally. TRIPs has an additional principle, that intellectual property protection must incorporate both technical innovation and technology transfer. Under this new principle, both producers and users should benefit from the invention or creation for which the creator enjoys protection.31 These traditional and new democratic principles are seen to be most vital in the matter of the research and development of new medicines and pharmaceutical products which could save lives and improve the quality of life for people regardless of race or nationality. More than any other IP product, there is a humanitarian aspect to making new medicines accessible and affordable particularly the people of the poor and developing countries, without the usual regard to the profit making motive of the multinational pharmaceutical companies which pioneered in their research and development. TRIPs provisions, consistent with other WTO provisions, were formulated with the intention to create an advantage for developing countries vis-a-vis developed countries. There are five substantive provisions in the TRIPs which impose a limitation on the enjoyment of exclusive IP rights to economic gain, in favour of a greater weight accorded to the public benefit and, therefore, to developing countries. These are the articles on patentable subject matter32, on exceptions to rights conferred33, on the situations when compulsory licenses can be granted even against the will of the creator34, and on the possible revocation or forfeiture of patents or rights already granted.35 The general rule is that licenses may be granted with the volition of the patent holder subject to payment of compensation. There are certain situations enumerated by Article 31 of TRIPs, however, where compulsory licenses are required to be granted, such as when an emergency or extreme urgency exists, or that the right shall be employed for a public, non-commercial use, or when the use shall not compete with that of the right holder, or when the use is pursuant to a dependent patent, or that the right is used to produce pharmaceutical products for export to eligible states only.36 Where the grant of compulsory licenses is not sufficient to address the abuse, then Article 5A(3) of the Paris Convention implicitly allows that revocation or forfeiture of a patent may be properly justified by the advancement or service of the public interest.37,38,39 The Paris Convention is applied in this case, because the TRIPs provides no definite round for either forfeiture or revocation, other than stating that revocation is prescribed when the conditions for granting the patent remained unfulfilled, and forfeiture is prescribed when patent rights have been abused or the patent holder fails to pay the patent fees.40 Aside from these provisions that limit the economic rights of the creator, other provisions create limits to the data exclusivity as applied to the pharmaceutical industry.41 Prior to TRIPs, most countries approved the application for generic equivalents based on prior approval of test data submitted by the originator. TRIPs put a stop to this by requiring original test data to be held in confidence by the regulating agency, and forcing competitor manufacturers to compile their own test data. However, the exclusivity requirement is time limited only to allow the developing company to recoup the cost of its investments, after which the data is allowed to be used for generic companies to acquire approval of their counterpart medicines.42,43 Reactions to TRIPs provisions There are several perceived disadvantages to developing countries posed by the TRIPs Agreement. Immediately, the concern arises that the amendment or development of new IPR legislation in the national laws of member countries – a requisite of the TRIPs – cannot be quickly undertaken because it requires seasoned expert knowledge in international and commercial law. This type of expertise, to the level required by TRIPs, is not normally available in developing and least developed countries.44 Another immediate concern is the substantial costs that are entailed in implementing the TRIPs provisions, which was determined by a 1996 UNCTAD study.45 Furthermore, there are risks and uncertainties in adopting new IPR regulations, particularly in the matter of parallel imports46 and compulsory licenses.47 These three reasons alone create a clear disadvantage when considering the implementation process. Eventually, the procedural issues raised may be resolved, the only material concern being the length of time it will be accomplished. The TRIPs Agreement specifies a period for compliance, with the duration specified for developing countries being longer than that of developed countries. Aside from these, however, there are the substantive issues which are not so quickly resolved. There are the possible market dislocations which could result from the strengthening of IPRs in certain locations. When the IPR is given a greater scope and coverage than it should, this tends to compromise the benefit to the mass of consumers, special interest groups, and local communities, who perceive the protections given to producers of pharmaceuticals, in particular, as responsible for windfall profits for the holder-company at the expense of human lives. Moreover, the patent system has not given adequate incentives to the development of medicines for those illnesses afflicting public health, neglected diseases, and orphan drugs, because they were commercially unattractive.48 More worrisome for developing nations is the abuse of parallel importation provisions. Parallel importation aims to create an alternative supply channel to third world countries that makes new medicines available to developing countries at a cheaper price. The holder-company is able to tolerate this price reduction only because the company earns higher rents in the developed countries, against which it offsets the foregone profits in parallel importation. In the case, however, where the opportunistic importer sells back to developed countries those medicines it acquires at a lower price, thereby competing with and most likely undercutting the patent holder, then customers in the developed country buy the lower-priced medicines, the patent holder loses its higher margins in that market, and is therefore forced to bring up its prices to the developing markets in order to recoup its losses. International Dispute Settlement DSU Provisions The prior two aspects of the WTO provisions – the tariffs and subsidies on Agricultural products, and the TRIPs – are shown to create substantive disadvantages for developing countries that developed countries are not susceptible to. A third aspect, that of dispute settlement, shall be shown to be a procedural matter in the WTO that is disadvantageous to developing countries. Known as the Dispute Settlement Understanding (DSU), these rules were intended to resolve the inconsistencies in the GATT on dispute settlement. Under the GATT, the contracting parties usually succeeded in evading their obligations to comply with WTO rulings, because of the lack of a mandatory procedure to compel compliance.49 Under the DSU, a quasi-judicial procedure is adopted before a dispute panel, with a judgement that has mandatory effect upon the contending parties. The dispute settlement procedure was comprised of five steps, namely: (1) consultation; (2) establishment of a dispute panel; (3) panel procedure; (4) appeals to the Appellate Body (i.e., the Dispute Settlement Board or DSB)50; and (5) response of country against whom the decision holds.51 This structure created an objective and time-limited framework by which countries may pursue their claims against other countries in a trade transaction in which they felt aggrieved. However, its effectiveness may only be deduced by its ability to impose its judgement against the non-compliant party, and compel it to abide by the agreement. Reactions to DSU In actuality, no member-country may be forced to abide by a WTO dispute settlement ruling that is adverse to it, but may instead “choose to comply, to compensate, or to stonewall and suffer retaliation against its exports.”52 The errant country thus has three alternatives: First, it may actually rescind the measure, or fulfil the omission, which became the subject of complaint, and thereby become fully compliant. Second, the country may choose to retain that measure without changes, but offer instead to extend compensatory benefits to the aggrieved member-countries, in order to restore the balance of negotiated concessions. Finally, the country ruled against may choose not to change the measure and remain in violation, at the same time refusing to extend compensation; in this case, it risks the possibility of a WTO-authorized retaliation against its exports, until the balance in negotiated concessions is again restored. The ultimate aim of all three alternatives is to restore balance among the member states. It is only by this means that the WTO Agreement retains its mandate and political support.53 It is easy to see that in the enforcement of the judgement, the developing country is at a disadvantage to the developed country. As the aggrieved party, the developing country runs the risk of compromising what may be a vital trade relation that may affect other products than that made the subject of complaint, with a country that may be its most advantageous trading partner, so retaliation seems to be more to its detriment than its benefit. As the errant party, the developing country has no choice but to take the first alternative and seek full compliance despite the national repercussions, because a developing country can ill afford to extend compensation, much less to risk being the target of a WTO-authorized retaliation. In the following table, statistics are presented which show that despite the overwhelming number of developing countries compared to developed countries, the complaints brought solely by industrialized country members is easily double that brought by developing country members, whether the respondent state is developed or not. The percentage of complaints brought by developing countries against developed countries is admittedly more than the complaints brought by developed countries against developing countries; however, the success rates are higher for industrialized countries against developing countries, than vice-versa.54 Statistics on Complaints by Developing and Developed Member States55 Source of Complaint Respondents Developed Developing No. % No. % Complaints by developed country members 66 46.8 26 18.4 Complaints by developing country members 31 22.0 12 8.5 Complaints by both developed and developing country members 6 4.3 0 0.0 Based on WTO DSU Case Summaries, 1995-2010 In appreciating the statistics here and in the appendix, it must be recalled that the oil-rich Middle East countries have also classified themselves as developing, and that several of the cases brought here are brought by the same emerging economies such as China, India, Korea and Brazil. Hardly any of the least developed countries are represented here. These data appear to corroborate the 2006 findings by Moon56 that developing countries appear as defendants more frequently, because in the overall assessment, provisions of the World Trade Organization agreements disfavour the poorer and less developed countries, and the newer provisions included after the Uruguay round are more often used as bases by the developing countries in laying claims against the poorer countries, rather than the revers.57 Conclusion The greatest benefit to developing countries is that regulations that are internationally binding tend to create restraints for larger, more developed countries than they do for less developed member-states. Furthermore, international regulations arrived at by multilateral agreements provide a faster means of achieving an international regime, rather than adapting independent national systems and then adjusting them to others through bilateral agreements.58 Another element in favour of the smaller countries is that in a venue such as the World Trade Organization, there are equal voting rights and each country is allocated a vote, whether they are large developed countries or small developing countries. The one-country-one-vote system is decidedly an advantage in favour of developing countries, because it presents the opportunity for developing countries to institutionalize in a common cause to serve their interests against developed countries, an initiative which they have still to take.59 Despite these, there appear to be more disadvantages than advantages created by global trade regulations relating to developing country participation. Page60 identifies some of these disadvantages: First, developing countries are not yet so much involved in global flows; as a consequence, there is a measure of inefficiency in complying with international regulations, or with maximizing potential advantages created by them. Second, the need or desire of developing countries for intervention to attain specific national goals, using national vis-a-vis international policies, is greater, a matter which could cause conflicts between the national and international regulatory frameworks. Third, intervention and regulation entail fixed costs, which are disproportionately higher for poorer countries than they are for developed countries (e.g., as a ratio to the developing country’s GDP). Fourth, developing countries face the risks of being subjected to undue pressures when making agreements with dominant trading partners. Fifth, there is a difference in the balance of costs and benefits incurred by developed countries, as against those of developing countries. Furthermore, this study has shown how substantive provisions in the TRIPs and the Tariff rules on Agriculture, while apparently providing leniency towards developing countries, are actually more restrictive against developing countries than developed countries. Examination of data provided by the WTO also shows that the dispute resolution mechanism works more towards the benefit of developed countries, both in their claims against other developed countries as well as developing countries, than for the benefit of developing countries in their claims against developed countries. References Aaronson, S A & Abouharb, M R 2011 Unexpected Bedfellows: The GATT, the WTO and Some Democratic Rights. 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Accessed 20 March 2012 from http://www.twnside.org.sg/title/td8.htm Watal, J. 1999 ‘Implementing the TRIPS Agreement on Patents: Optimal Legislative Strategies for Developing Countries’, in O. Lippert (ed.), Competitive Strategies for the Protection of Intellectual Property. Fraser Institute, Vancouver, pp. 105–23. World Health Organization 2005 ‘Access to Medicines’, WHO Drug Information, vol. 10, no. 3. Available at http://www.who.int/medicines/areas/policy/AccesstoMedicinesIPP.pdf. World Trade Organization 2009 Appellate Body Annual Report for 2008. WT/AB/11, 9 February. World Trade Organization 2011 Dispute Settlement: Legal Text - Understanding on Rules and Procedures Governing the Settlement of Disputes. Annex 2 of the WTO Agreement. Accessed 20 March 2012 from http://www.wto.org/english/tratop_e/dispu_e/dsu_e.htm World Trade Organization 2012 ‘Briefing notes: Agriculture’. Accessed 20 March 2012 from http://www.wto.org/english/tratop_e/dda_e/status_e/agric_e.htm World Trade Organization 2012 ‘Intellectual property: protection and enforcement.’ Accessed 20 March 2012 from http://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm7_e.htm World Trade Organization, 2012, ‘The Doha Round’. Accessed 20 March 2012 from http://www.wto.org/english/tratop_e/dda_e/dda_e.htm World Trade Organization 2011 ‘WTO and the TRIPS Agreement’ WTO Programmes and Projects. Available at http://www.who.int/medicines/areas/policy/wto_TRIPS/en/index.html WT/L/579 of 2nd August 2004 (http://www.wto.org/english/tratop_e/dda_e/ draft_text_gc_dg_31july04_e.htm) WTO DSU Case Summaries, 1995-2010 Appendices Appendix A Trade, Tariff and Subsidy in Agriculture HIGHLIGHTS DECEMBER 2008 DRAFT http://www.wto.org/english/tratop_e/dda_e/status_e/agric_e.htm Terms used here and more details are explained in the longer summary. DOMESTIC SUPPORT (Explanation of the “boxes” follows below.) Overall trade distorting domestic support (Amber + de minimis + Blue). EU to cut by 80%; US/Japan to cut by 70%; the rest to cut by 55%. “Downpayment” (immediate cut) of 33% for US, EU, Japan, 25% for the rest. Bigger cuts from some other developed countries, such as Japan, whose overall support is a larger % of production value. Cuts made over 5 years (developed countries) or 8 years (developing). Amber Box (AMS). Overall, EU to cut by 70%; US/Japan to cut by 60%; the rest to cut by 45%. Bigger cuts from some other developed countries whose AMS is larger % of production value. Also has downpayment. Per product Amber Box support: capped at average for notified support in 1995-2000 with some variation for the US and others. Countries' caps to be annexed to these “modalities” De minimis. Developed countries cut to 2.5% of production. Developing countries to make two-thirds of the cut over three years to 6-7% (no cuts if mainly for subsistence/resource-poor farmers, etc). (Applies to product-specific and non-product specific de minimis payments) Blue Box (including “new” type). Limited to 2.5% of production (developed), 5% (developing) with caps per product. Green Box. Revisions — particularly on income support, to ensure it really is “decoupled” (ie, separated) from production levels, and on developing countries’ food stockpiling — and tighter monitoring and surveillance. MARKET ACCESS Tariffs would mainly be cut according to a formula, which prescribes steeper cuts on higher tariffs. For developed countries the cuts would rise from 50% for tariffs below 20%, to 70% for tariffs above 75%, subject to a 54 % minimum average, with constraints on tariffs above 100%. (For developing countries the cuts in each tier would be two thirds of the equivalent tier for developed countries, subject to a maximum average of 36%.) Some products would have smaller cuts via a number of flexibilities designed to take into account various concerns. These include: sensitive products (available to all countries), the smaller cuts offset by tariff quotas allowing more access at lower tariffs; Special Products (SP, for developing countries, for specific vulnerabilities). Contingencies. Developed countries will scrap the old “special safeguard” (available for “tariffied” products). The option for them to keep some has been removed. More proposed details of the new “special safeguard mechanism” for developing countries are in an additional paper. EXPORT COMPETITION Export subsidies to be eliminated by end of 2013 (longer for developing countries). Half of this by end of 2010. Revised provisions on export credit, guarantees and insurance, international food aid (with a “safe box” for emergencies), and exporting state trading enterprises. DOMESTIC SUPPORT IN AGRICULTURE The boxes’ colours are based on traffic lights In WTO terminology, subsidies in general are identified by “boxes” which are given the colours of traffic lights: green (permitted), amber (slow down — i.e. be reduced), red (forbidden). In agriculture, things are, as usual, more complicated. The Agriculture Agreement has no red box, although domestic support exceeding the reduction commitment levels in the amber box is prohibited; and there is a blue box for subsidies that are tied to programmes that limit production. There are also exemptions for developing countries (sometimes called an “S&D box”, including provisions in Article 6.2 of the agreement). Appendix B Summary Table of Cases and Results Statistics drawn from WTO DSU Case Summaries, 1995-2010 Case Date Case Complainant Respondent Who won Devg Indusd 1 1995-96 Japan-Alcoholic Beverages II (DS8, DS10, DS11) Canada, EC, US Japan 2 1995-96 US - Gasoline (DS2) Brazil, Venezuela US 1 3 1997-98 Australia - Salmon (DS18) Canada Australia 4 1999-00 Australia-Salmon (Article 21.5) (DS18) Canada Australia 5 1996-97 Brazil - Desiccated Coconut (DS22) Philippines Brazil 6 1996-97 US - Underwear (DS24) Costa Rica US 1 7 1996-98 EC - Hormones US, Canada EC 8 1996-97 EC - Bananas US, Ecuador, Guatemala, Honduras, Mexico EC 9 1999-99 EC - Bananas (Art.21.5 - Ecuador) (DS27) Ecuador EC 10 2007-08 EC - Bananas (Art.21.5 - Ecuador, US) (DS27) Ecuador, US EC 11 1996-97 Canada - Periodicals (DS31) United States Canada 12 1996-97 US - Wool Shirts and Blouses India US 1 13 1998-99 Turkey - Textiles (DS34) India Turkey 14 1996-98 Japan - Film (DS44) US Japan 15 1998-99 Brazil - Aircraft (DS46) Canada Brazil 1 16 1999-00 Brazil - Aircraft (Article 21.5 - Canada) (DS46) Canada Brazil 1 17 2001-01 Brazil - Aircraft (Article 21.5 II) (DS46) Canada Brazil 1 18 1996-98 India - Patents (US) (DS50) United States India 1 19 1997-98 Indonesia - Autos (DS54, DS55, DS59, DS64) EC, Japan, US Indonesia 1 20 1997-98 Argentina - Textiles and Apparel (DS56) US Argentina 1 21 1997-98 US - Shrimp (DS58) India, Malaysia, Pakistan, Thai US 1 22 2000-01 US - Shrimp (Article 21.5 - Malaysia) (DS58) Malaysia US 1 23 1997-98 Guatemala - Cement (DS60) Mexico Guatemala 24 1997-98 EC - Computer Equipment (DS62, 67, 68) US EC 25 1997-98 EC - Poultry (DS69) Brazil EC 1 26 1998-99 Canada - Aircraft (DS70) Brazil Canada 1 27 1999-00 Canada - Aircraft (Article 21.5- Brazil) (DS70) Brazil Canada 1 28 1997-99 Korea - Alcoholic Beverages (DS75, 84) EC, US Korea 29 1997-99 Japan - Agricultural Products II (DS76) US Japan 30 1997-98 India - Patents (EC) (DS79) EC India 1 31 1998-00 Chile - Alcoholic Beverages (DS87, 110) EC Chile 1 32 1997-99 India - Quantitative Restrictions (DS90) US India 1 33 1998-00 Korea - Dairy (DS98) EC Korea 34 1998-99 US - DRAMS (DS99) Korea US 35 1998-99 Canada - Dairy (DS103, 113) US, NZ Canada 36 2001-01 Canada - Dairy (Article 21.5 -NZ, US) (DS103, 113) NZ, US Canada 37 2001-03 Canada - Dairy (Article 21.5 - NZ, US II) (DS103, 113) NZ, US Canada 38 1998-00 US - FSC (DS108) EC US 39 2000-02 US - FSC (Article 21.5 I) (DS108) EC US 40 2005-06 US - FSC (Article 21.5 II) (DS108) EC US 41 1999-00 Canada - Pharmaceutical Patents (DS114) EC Canada 42 1998-00 Argentina - Footwear (EC) (DS121) EC Argentina 1 43 1999-01 Thailand - H-Beams (DS122) Poland Thailand 1 44 1998-99 Australia - Automotive Leather II (DS126) US Australia 45 1999-00 Australia - Automotive Leather II (Art.21.5-US) (DS126) US Australia 46 1998-00 Mexico - Corn Syrup (DS132) US Mexico 1 47 2000-01 Mexico - Corn Syrup (Article 21.5- US) (DS132) US Mexico 1 48 1998-01 EC - Asbestos (DS135) Canada EC 49 1999-00 US - 1916 Act (DS136, 162) EC, Japan US 50 1999-00 US - Lead and Bismuth II (DS138) EC US 51 1999-00 Canada - Autos (DS139, 142) Japan, EC Canada 52 1999-01 EC - Bed Linen (DS141) India EC 1 53 2002-03 EC - Bed Linen (Article 21.5 - India) (DS141) India EC 1 54 2000-02 India - Autos (DS146, 175) US, EC India 1 55 1999-00 US - Section 301 Trade Act (DS152) EC US 56 1999-01 Argentina - Hides and Leather (DS155) EC Argentina 1 57 1999-00 Guatemala - Cement II (DS156) Mexico Guatemala 58 1999-00 US - Section 110(5) Copyright Act (DS160) EC US 59 1999-01 Korea - Various Measures on Beef (DS161-169) Australia, US Korea 60 1999-00 Korea - Procurement (DS163) US Korea 61 1999-01 US - Certain EC Products (DS165) EC US 62 1999-01 US - Wheat Gluten (DS166) EC US 63 1999-00 Canada - Patent Term (DS170) US Canada 64 2003-05 EC - Trademarks & Geographical Indicators (DS174, 290) US, Australia EC 65 2000-02 US - Section 211 Appropriations Act (DS176) EC US 66 1999-01 US - Lamb (DS177, 178) Australia, NZ US 67 1999-01 US - Stainless Steel (DS179) Korea US 68 2000-01 US - Hot Rolled Steel (DS184) Japan US 69 2000 -01 Argentina - Ceramic Tiles (DS189) EC Argentina 1 70 2000-01 US - Cotton Yarn (DS192) Pakistan US 1 71 2000-01 US - Export Restraints (DS194) Canada US 72 2000-02 US - Line Pipe (DS202) Korea US 73 2002-04 Mexico - Telecoms (DS204) US Mexico 1 74 2001-02 US - Steel Plate (DS206) India US 1 75 2001-02 Chile - Price Band System (DS207) Argentina Chile 76 2006-07 Chile - Price Band System (Article 21.5- Argentina) (DS207) Argentina Chile 77 2001-02 Egypt - Steel Rebar (DS211) Turkey Egypt 78 2001-03 US - Countervailing Measures on Certain EC Prod. (DS212) EC US 79 2004-05 US - Counter. Meas. on Certain EC Prod. (Art.21.5) (DS212) EC US 80 2001-02 US - Carbon Steel (DS213) EC US 81 2001-03 US - Offset Act (Byrd Amendment) (DS217, 234) Several US 82 2001-03 EC - Tube or Pipe Fittings (DS219) Brazil EC 1 83 2001-02 US - Section 129(C)(1) URAA (DS221) Canada US 84 2001-02 Canada - Aircraft Credits and Guarantees (DS222) Brazil Canada 1 85 2001-02 EC - Sardines (DS231) Peru EC 1 86 2001-02 US - Softwood Lumber III (DS236) Canada US 87 2002-03 Argentina - Preserved Peaches (DS238) Chile Argentina 88 2002-03 Argentina - Poultry Anti-Dumping Duties (DS241) Brazil Argentina 89 2002-03 US - Textiles Rules of Origin (DS243) India US 1 90 2002-04 US - Corrosion Resistant Steel Sunset Review (DS244) Japan US 91 2002-03 Japan - Apples (DS245) US Japan 92 2004-05 Japan - Apples (Article 21.5 - US) (DS245) US Japan 93 2003-04 EC - Tariff Preferences (DS246) India EC 1 94 2002-03 US - Steel Safeguards (DS248, 249, 251 - 254, 258, 259) Several US 95 2002-04 US - Softwood Lumber IV (DS257) Canada US 96 2005-05 US - Softwood Lumber IV (Article 21.5) (DS257) Canada US 97 2003-04 US - Softwood Lumber V (DS264) Canada US 98 2005-06 US - Softwood Lumber V (Article 21.5) (DS264) Canada US 99 2003-05 EC - Export Subsidies on Sugar (DS265, 266, 283) Aus, Brazil, Thai EC 100 2003-05 US - Upland Cotton (DS267) Brazil US 1 101 2006-08 US - Upland Cotton (Art. 21.5 - Brazil) (DS267) Brazil US 1 102 2003-04 US - Oil Country Tubular Goods Sunset Reviews (DS268) Argentina US 1 103 2006-07 US - Oil Coun Tubr Goods Sun Rev (Art.21,5) (WT/DS268) Argentina US 1 104 2003-05 EC - Chicken Cuts (DS269, 286) Brazil, Thailand EC 1 105 2003-05 Korea - Commercial Vessels (DS273) EC Korea 106 2003-04 Canada - Wheat Exports and Grain Imports (DS276) US Canada 107 2003-04 US - Softwood Lumber VI (DS277) Canada US 108 2005-06 US - Softwood Lumber VI (Article 21.5 - Canada) (DS277) Canada US 109 2003-05 US - Anti-Dumpg Meas on Oil Country Tub Goods (DS282) Mexico US 1 110 2003-05 US - Gambling (DS285) Antigua & Barbuda US 1 111 2006-07 US - Gambling (Art. 21.5 - Antigua & Barbuda) (DS285) Antigua & Barbuda US 1 112 2003-06 EC - Approval & Mktg of Biotech Prod (DS291, 292, 293) US, Canada, Argentina EC 113 2004-06 US - Zeroing (EC) (DS294) EC US 114 2007-09 US - Zeroing (EC) (Art. 21.5 - EC) (DS294) EC US 115 2003-05 Mexico - Anti-Dumping Measures on Rice (DS295) US Mexico 1 116 2004-05 US - Countervailing Duty Investigation on DRAMS (DS296) Korea US 117 2004-05 EC - Countervailing Duty Investigation on DRAMS (DS299) Korea EC 118 2004-05 EC - Commercial Vessels (DS301) Korea EC 119 2004-05 Dominican Republic - Import & Sale of Cigarettes (DS302) Honduras Domin. Rep. 120 2004-06 Mexico - Taxes on Soft Drinks (DS308) US Mexico 1 121 2004-05 Korea - Certain Paper (DS312) Indonesia Korea 1 122 2007-07 Korea - Certain Paper (Art 21.5 - Indonesia) (DS312) Indonesia Korea 1 123 2005-06 EC - Selected Customs Matters (DS315) US EC 124 2005-08 US-Continued Suspension; Canada-Cont Susp (DS320, 321) EC US, Canada 125 2005-07 US - Zeroing (Japan) (DS322) Japan US 126 2008-09 US - Zeroing (Japan) (Art.21.5 - Japan) (DS322) Japan US 127 2006-07 Mexico - Steel Pipes and Tubes (DS331) Guatemala Mexico 128 2005-07 Brazil - Retreaded Tyres (DS332) EC Brazil 1 129 2006-07 Turkey - Rice (DS334) US Turkey 1 130 2006-07 US - Shrimp (Ecuador) (DS335) Ecuador US 1 131 2006-07 Japan - DRAMS (Korea) (DS336) Korea Japan 132 2006-08 EC - Salmon (Norway) (DS337) Norway EC 133 2006-09 China - Auto Parts (DS339, 340, 342) US, EC, Canada China 1 134 2007-08 Mexico - Olive Oil (DS341) EC Mexico 1 135 2006-08 US - Shrimp (Thailand), US - Customs Bond Dir (DS343-45) Thailand, India US 1 136 2006-08 US - Stainless Steel (Mexico) (DS344) Mexico US 1 137 2007-09 US - Continued Zeroing, (DS350) EC US 138 2007-08 India - Additional import Duties (DS360) US India 1 139 2007-09 China - Intellectual Property Rights (DS362) US China 1 140 2007-10 China - Publications and Audiovisual products US China 1 141 2007-09 Colombia - Ports of Entry (DS366) Panama Colombia Cases won and corresponding success rates for cases by developing countries Agreement Total DC vs IC disputes Cases DC won Success Rate GATT 10 7 70% AA 3 2 67% ATC 3 3 100% ADA 12 7 58% ASCM 5 2 40% GATS 3 2 67% DSU 3 2 67% Cases won and corresponding success rates for cases by industrialized countries Agreement Total IC vs DC disputes Cases IC won Success Rate GATT 13 10 76.9% AA 3 2 66.7% TRIMS 2 2 100.0% ADA 5 3 60.0% Lic Ag 1 1 100.0% ASCM 5 4 80.0% SA 1 1 100.0% GATS 2 2 100.0% DSU 1 1 100.0% TRIPS 3 2 66.7% China's Accession Protocol 2 2 100.0% “Agreement” refers to the multilateral agreement on which the complaint is based. They are as follows: GATT General Agreement on Tariffs and Trade 1994 AA Agreement on Agriculture SPS Agreement on the Application of Sanitary and Phytosanitary Measures ATC Agreement on Textiles and Clothing TBT Agreement on Technical Barriers to Trade TRIMs Agreement on Trade-Related Investment Measures ADA Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 ROA Agreement on Rules of Origin Licensing Ag Agreement on Import Licensing Procedures ASCM Agreement on Subsidies and Countervailing Measures SA Agreement on Safeguards GATS General Agreement on Trade in Services TRIPS Agreement on Trade-Related Aspects of Intellectual Property Rights DSU Understanding on Rules and Procedures Governing the Settlement of Disputes VCLT Vienna Convention on the Law of Treaties Read More