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Big emerging countries at the WTO dispute settlement system (DSS) Overview of disputes concerning BIC (Brazil, India, China) 26 March 2015
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I 26 March 2015 I 2 Contents 1.Participation of developing countries (“DCs”) at the WTO dispute settlement system (DSS)..………………. 3 2.Disputes of interest to BIC: important place..…………...5 3.Country based approach: similarities and differences …8 Conclusions …………………………………………………….11
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I 26 March 2015 I 3 1. Participation of developing countries (“DCs”) at the WTO dispute settlement system (DSS) Apparent imbalance Only around 26 DCs made use of a WTO judge or were brought before a WTO judge ―DCs represent more than 2/3 from 160 WTO members ―Total absence of African countries except for South Africa but in defence, in 4 cases concerning trade remedies but without going before a judge Latin America ―Brazil (27/15/89) and Mexico (23/14/74) take the lead: particularly active users ―Followed by Argentina (20/22/53) and Chile (10/13/39), then by Guatemala (9/2/34) and Honduras (8/-/26) Asia: South Korea (17/14/92) and Thailand (13/3/69) break away ―Indonesia (9/12/13), Philippines (5/6/14) and Turkey (2/9/66): participate much less actively Turkey last complaint in 2003, Philippines and Thailand - in 2008
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I 26 March 2015 I 4 Conclusion: –≈ 40 % of disputes concern DCs (respondents and complainants) –≈ 1/3 of which concern BIC 1. Participation of developing countries (“DCs”) at the WTO dispute settlement system (DSS) Apparent imbalance
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I 26 March 2015 I 5 2. Disputes of interest to BIC: important place General overview of participation of BIC at WTO DSS Balanced position ―more respondents – after China arrival Small number of reports ―Especially when BIC as respondents small number of mutually agreed solutions – abandon of complaints ? China active as a third party: ―Learning by doing
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I 26 March 2015 I 6 2. Disputes of interest to BIC: important place Evolution of participation in1995-2015 – BIC as complainants Most active around Doha Ministerial (2000-2002) ―Instrumentalization of DSS to influence on negotiations (systemic issues) GSP, agricultural subsidies, safeguards on steel products… After Cancun (2003) – discretion ( 1 complaint in 3 years) After 2005 – steady level of complaints (1-3 per year, 5 in 2012)
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I 26 March 2015 I 7 2. Disputes of interest to BIC: important place Evolution of participation in1995-2015 – BIC as respondents General tendency to reduction of the number of complaints until China joins WTO ―1997 peak is due to numerous complaints against the same measures After 2001 – number of complaints against Brazil and India is rather low 2004 – first complaint against China (US), the peak of 7 complaints in 2012
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I 26 March 2015 I 8 3. Country based approach: similarities and differences Activism and success of Brazilian strategy As complainant: –Most litigious amongst BICs (27/15) – Complaints targeted at : developed countries: US -10, EC – 7, Canada – 3 WTO incompatible regulations (systemic issues like agricultural subsidies) and trade remedies (US) As respondent: –Same as complainant (US and EU as major complainants, AD measures and trade regulations like embargo on retreated tyres ) BUT –the number of complaints is moderate (approx. 1/ year till 2001, after – 3 complaints only (2005, 2006 and 2013) Results: –14 reports + 3 reports under article 21.5 DSU (implementation) all in favor of Brazil but one exception Canada - Aircraft (but Brazil won in cross claim) Brazilian complaints are well grounded, mobilization of human resources (private sector)… –Brazil is a free trade player
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I 26 March 2015 I 9 3. Country based approach: similarities and differences A more fragile standing of India Similarities with Brazil: –active litigator (21 complaints compared to 27 Brazilian complaints) –same, or even more pronounced targeting of complaints: USA - 8 and EC – 7 –under scrutiny: systemic issues (GSP, public health) and trade remedies (AD measures) Differences with Brazil: –stands often as respondent… complaints against India ≈ complaints by India (21/22) –… mainly against EU (11 complaints, US - 4 complaints) –Indian measures challenged: trade measures in strategic sectors (patents, automobiles) and trade policies altogether (quota policy, tariff policy) Results of disputes are less favorable to India (≈ 15 reports): –Complaints brought by India are not systematically successful or success is rather formal or mixed lost particularly important case US – Rules of Origin for Textiles (DS243) mitigated result in EU – Tariff Preferences (DS246) and US – Shrimp (DS58) disputes –India systematically lose as respondent
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I 26 March 2015 I 10 3. Country based approach: similarities and differences A special case of China The most active user of DSS (in 2011 - 2015): –4 cases (3 reports) as complainant –and 9 cases (5 reports) as respondent Extremely defensive standing – 12 / 33 –all Chinese complaints are brought against US and EU –2/3 of 33 complaints against China from these countries China mainly wins as complainant and lose as respondent –won in 7 from 8 cases (with reports) – mainly challenging US trade remedies –large scope of Chinese protectionist measures challenged : services, IP, goods etc. - all sanctioned by the judge
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I 26 March 2015 I 11 Conclusions Classical liberal model of development by trade vs. Special and differential treatment –Ad hoc rules in favour of DCs = soft law = ineffective –complaints to dismantle the North's protectionist trade practices = success ≈ 12 cases : non tariff barriers (rules of origin, import licences) and safeguard measures in strategically important sectors such as textiles, steel, poultry, energy Exceptions (2 cases): US – Rules of Origin for Textiles (DS 243) and US – Tyres (DS 399) Brazil – a good student of the class – China and India are in a less comfortable position: the protectionist measures are systematically sanctioned when challenged EC - tariff preferences (DS 246): possibility of differentiation between developing countries acknowledged (e.g. if preferences are made available to all beneficiaries that share the same development, financial or trade need)
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I 26 March 2015 I 12 ALGIERS BEIJING BRUSSELS BUDAPEST CASABLANCA HANOI HO CHI MINH CITY HONG KONG ISTANBUL KYIV LONDON MOSCOW NEW YORK PARIS SHANGHAI TUNIS WARSAW Gide Loyrette Nouel 4 Volodymyrska St. 01001 Kyiv Ukraine tel. +38 (044) 206 09 80 ukraine@gide.com - gide.com Volodymyr Matenchuk Ph.D., Lawyer tel. +380-(0)44-206-09-80 volodymyr.matenchuk@gide.com Gide Loyrette Nouel Vostok 7 Petrovka St. 107031 Moscow Russian Federation tel. +7 (495) 258 31 00 russia@gide.com - gide.com
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