Tài liệu Trade disputes pptx

Fulbright Economics Teaching Program
2006-2007
Trade: Institutions and impact
Ari Kokko 1
Lecture 7
Trade disputes
WTO dispute settlement procedures
Sanctions
Examples
Ari Kokko
What’s a trade dispute in WTO?
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One member government believes that
another member government is violating
an agreement or a commitment made to
the WTO
– “Unfair” antidumping levies
– Non-tariff barriers
– Administrative practices
Note: initial antidumping determination purely
national process
Fulbright Economics Teaching Program
2006-2007
Trade: Institutions and impact
Ari Kokko 2
Lecture 7
Ari Kokko
The WTO dispute settlement process
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Emphasis on consultations and
voluntary settlement of disputes

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Detailed schedules for formal dispute
settlement process
– complaint to Dispute Settlement Body
– expert panel
– report and proposed resolution
– process for appeals
Ari Kokko
The panel process
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Complaint and consultation
– 60 days for bilateral discussions
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Establishment of panel
– must be done within 45 days
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Final panel report to parties
– max 6 months after establishment of panel,
includes conclusions and recommendations
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Final panel report to all DSB members
– 3 weeks after parties have received it
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Report automatically adopted after 60 days if
there is no consensus against it
Fulbright Economics Teaching Program
2006-2007
Trade: Institutions and impact
Ari Kokko 3
Lecture 7

Ari Kokko
Appeals
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The panel’s ruling can be appealed by
either party
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Appeals examined by three person
group from permanent 7-member
Appellate Body
– Appellate Body report in 60-90 days
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New report accepted or rejected by
DSB within 30 days
– rejection requires consensus
Ari Kokko
After adoption of panel report
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Country at fault must reform its policy
according to recommendations
– statement of intent within 30 days
– compliance required within “reasonable” period of
time
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Alternative is to negotiate payment of
mutually acceptable compensation
– 20 days for negotiations
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Trade sanctions can be authorized by DSB if
compensation is not agreed upon
Fulbright Economics Teaching Program

2006-2007
Trade: Institutions and impact
Ari Kokko 4
Lecture 7
Ari Kokko
Sanctions
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Retaliatory action – suspension of
concession and obligations – should
primarily be in same sector
– some possibilities to retaliate in areas of
other WTO agreements
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Level of retaliation to match injury
– arbitration by original panel
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How effective is retaliation?
– How can small countries “hurt” the US?
Ari Kokko
WTO disputes 1995-2004 (Dec)
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324 cases reported to DSB
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103 panel reports
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64 appellate body decisions
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only 5 cases where retaliation has been
authorized
Fulbright Economics Teaching Program

2006-2007
Trade: Institutions and impact
Ari Kokko 5
Lecture 7
Ari Kokko
Retaliation authorized in 5 cases
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Foreign sales corporations
– EU complaint about tax benefits to exports.
Level of retaliation: USD 4,043 million.
Implemented from March 2004.
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US Antidumping Act of 1916
– EU request to adopt similar system with
“triple damages”.
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Airplane subsidies
– Canadian complaint about Brazilian
subsidies. Level of retaliation: CAD 344
million. Not yet implemented
Ari Kokko
Retaliation authorized in 4 cases
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Bananas
– Latin American countries and US complaint
about EU banana import regime. Value of
retaliation: USD 393 million. Withdrawn
after agreement.
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Hormones

– US and Canadian complaint about EU ban
of imports of hormone treated meat
products. Level of retaliation: USD 125
million. In force, but calls for removal after
EU rules revision in late 2003.