Bridges Weekly Trade News Digest • Volume 5 • Number 35 • 16th October 2001
General Council Takes On DSU Review, Iran Accession
At a time when feverish preparations for the 4th Ministerial Conference keep WTO Members’ delegates busy, the WTO General Council met on 10 October to address, inter alia, review of the Dispute Settlement Understanding, attendance of observers from intergovernmental organisations at the Ministerial Conference, and Iran’s accession process.
Dispute Settlement review
Despite a commitment to review the Dispute Settlement Understanding (DSU) by the end of 1999, discussions on this topic have been drifting since the last Ministerial Conference in Seattle in December 1999. Last week, Thailand and the Philippines submitted to the General Council two documents with the intent of jump-starting the debate. However, due to time constraints, the discussion did not develop further. The issue is scheduled back on the agenda for the forthcoming 23 October General Council.
The first text (WT/MIN(01)/W/3) is signed by both countries and is set to be submitted to the forthcoming Ministerial Conference. It proposes amendments to Article 22.7 of the DSU in order to ensure that any sanction authorised by the WTO is equivalent, "in law and in practice, to the level of the nullification or impairment of the complaining party in a given case" The two countries argued that such modification would assure fairness and credibility of the WTO dispute settlement system.
According to the proposal, in order to assess the appropriate level of retaliation, the arbitrator should first "determine the level of nullification or impairment of the benefits accruing to the complaining party under the WTO Agreements". Thereafter, the complaining party, which "shall provide sufficient trade information and data to enable the arbitrator to determine such level", should submit a detailed proposal containing a list of the concessions or other obligations it intends to suspend consistent with the level of nullification or impairment. The arbitrator can reject such a list if not found appropriate. The text points out that the complaining country "shall not suspend concessions or other obligations other than those contained in the list of concessions or other obligations". The proposal would effectively prevent countries such as the US from imposing any ‘carousel-style’ retaliation, such as that which took place in the US-EU banana case (see BRIDGES Weekly, 25 July 2001, ). In fact the list can be modified only under prior consensus of both the complaining parties.
Thailand presented a separate proposal (WT/MIN(01)/W/2) on increasing the number of WTO Appellate Body members in order to speed up the appeal system. Recent practice suggests that in at least five cases, delays in appeal proceedings resulted in the report being circulated more than 90 days after the date of the notice of appeal. The Appellate Body membership is currently made up of seven individuals (see BRIDGES Weekly, 2 October 2001). So far, three members of the court have been mandated to serve on each case, making the court capable of dealing with barely two cases at a time. Thailand proposes to increment membership up to 9- 11 judges in order do re-distribute the increasing workload of the court.
A new version of a proposal for DSU reform previously circulated in October 2000 by Japan and backed by Canada, Colombia, Costa Rica, Ecuador, Korea, New Zealand, Norway, Peru, Switzerland and Venezuela (WT/GC/W/410) is expected to be circulated shortly. Diplomats said the text would maintain the key provisions of the earlier draft, including a proposal to resolve the "sequencing" dispute which also erupted during the US-EU dispute over banana imports (see BRIDGES Weekly, 17 October 2000 ).
Dispute settlement reform is also mentioned in the Draft Ministerial Declaration. The preliminary text issued by General Council Chair Stuart Harbinson calls upon Members to negotiate possible amendments to the DSU no later than May 2003. Thus, such amendments might enter into force well before any other issue of discussion under the "future work programme" which would instead constitute a "single undertaking" at the end of the negotiation.
The Arab League not welcomed in Doha
Concerning point 5 of the GC agenda on "attendance of observers" at the Ministerial, the Chair communicated that two objections to the participation of the Arab League have been raised. "Everybody knows who they are," a trade source said, pointing to continued US and Israeli opposition. Conversely, a previous objection to OPEC attendance was rescinded, clearing the way for the oil cartel to be present at the forthcoming Ministerial.The GC did clear the way for other organisations that have recently sought accreditation, among them the UN Institute for Training and Research (UNITAR), the Inter-Parliamentary Union, and the Economic Community of West African States.
Third stop to Iranian accession
Iranian accession, under discussion at the General Council for the third time this year, was quickly sidelined at the 10 October meeting due to US objections around to engaging in negotiations with the Persian Gulf state.US diplomatic sources said the US was not at this stage in a position to consider the establishment of a Working Party that would open the process for Iran to join the WTO. However, he assured that a review underway in the US might solve the issue in the near future.Tehran filed its Membership request in September 1996 (WT/ACC/IRN/1).
"WTO Members Gear Up for Talks On Dispute Settlement Rules Reform," WTO, REPORTER, 11 October 2001; "Iran’s bid for WTO membership again stopped in tracks by US," AFP, 10 October 2001; ICTSD Internal Files.