1st July 2006
The Challenges of WTO Law: Strategies for Developing Country Adaptation
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With the creation of the World Trade Organization (”WTO”), an area of international law may have become more like law as we commonly perceive it. Yet it is not necessarily the neutral technocratic process some of its proponents make it to be. Whatever is one’s perspective on trade liberalization and its enforcement, developing countries and developing country constituents are at a disadvantage before the WTO’s dispute settlement system. If the United States and European Community (”EC”) have dozens of well-trained governmental lawyers and still frequently rely on assistance from private law firms, enterprises, and trade associations, how can developing countries manage?
Developing countries vary significantly in terms of the size of their economies and the role of law in their domestic systems. Nonetheless, they generally face three primary challenges if they are to participate effectively in the WTO dispute settlement system. These challenges are: (i) a relative lack of legal expertise in WTO law and the capacity to organize information concerning trade barriers and opportunities to challenge them; (ii) constrained financial resources, including for the hiring of outside legal counsel to effectively use the WTO legal system, which has become increasingly costly; and (iii) fear of political and economic pressure from members exercising market power, and in particular the United States and EC, undermining their ability to bring WTO claims. We can roughly categorize these challenges as constraints of legal knowledge, financial endowment, and political power, or, more simply, of law, money and politics.
This paper explores various strategies for responding to these three challenges, none of which involves a modification of the rules of the WTO’s Understanding on Rules and Procedures Governing the Settlement of Disputes (the DSU), or of WTO jurisprudence. WTO members have been discussing an amendment of the DSU through a special negotiating session since 1997, but without reaching any consensus.3 This paper does not address the challenges posed by WTOdispute settlement rules themselves, such as the system’s weak remedies which reduce the benefits of participation, nor does it address the impact of WTO jurisprudence on the costs of participation. These issues will be addressed in a separate study.4
In light of resource constraints, developing countries will obviously choose to dedicate more resources to other trade-related development initiatives than to WTO dispute settlement. Yet if the legal system is to work for them, they will need to examine cost-effective means to deploy it. While developing countries, and especially smaller ones, may not trade the volume or variety of products as large members, the trade barriers that they confront can often be of greater relative importance to their economies. That is, while they may have low absolute stakes in the trading system in relation to total world trade, they can have higher relative stakes in relation to their particular economies.5 There is thus a need to examine strategies for them to make better use of the current system
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