WTO NEWS: SPEECHES — DG PASCAL LAMY

The ACWL at ten — Looking back, looking forward

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Good morning and thank you very much for the invitation to speak at this event celebrating the 10th anniversary of the establishment of the Advisory Centre on WTO Law.

As you may recall, Frieder, in May 2006 I paid a visit to the Advisory Centre.  That occasion confirmed for me what I had been hearing from a variety of sources at the time — that the Advisory Centre had, in only five short years, acquired the authority and influence of a mature international organization.

I observed at the time that the Advisory Centre “provided a public good essential to the realisation of the purposes of the WTO,” and that “by ensuring that the legal benefits of the WTO were shared among all Members, the Advisory Centre contributes to the effectiveness of the WTO legal system, in particular its dispute settlement procedures, and to the realisation of the WTO’s development objectives.” These words are just as true today, five years on.  Because providing legal assistance to developing countries on WTO law in general, and in WTO disputes in particular, is the raison d’être of the Advisory Centre.

I take this opportunity to congratulate Frieder and his team, as well as the members of the Management Board, for making the Advisory Centre a true success story.  And I also take this opportunity to congratulate Claudia Orozco and Otto Genee who are known as the mother and father of the Centre.  “Chapeau” to them for their vision, their wisdom and their sheer drive, without which there would be no Advisory Centre. 

Indeed, Claudia’s and Otto’s foresight was truly remarkable; who would have imagined that, 10 years later, the Centre would have assisted developing and Least-developed Countries with some 40 WTO disputes, provided training to over 200 delegates, and responded to an ever-growing need for legal advice, issuing over 200 legal opinions last year alone, and a total of 900 since the Centre was established.

It is of course a truism that a rules-based trading system should not only be secure and predictable; it should also be fair and impartial.  Security, predictability, fairness, and impartiality are the hallmarks of the WTO dispute settlement system.  In ensuring that all Members — big and small, rich and poor — enjoy a system founded on rules rather than economic or political power, the dispute settlement is not — as Bob Hudec once said of the GATT dispute settlement system — “more responsive to the interests of the strong than the weak.”   

This is not a purely theoretical observation;  in practice, the WTO dispute settlement system has witnessed numerous examples of developing country Members prevailing in disputes over large trading nations — indeed this was so for the very first decision by the Appellate Body in the case known as Reformulated Gasoline.

However, it was evident to the architects of the DSU that, given limited economic and human resources, some developing countries, and LDCs in particular, would face difficulties in making use of the dispute settlement system, even one designed to treat all fairly.  They knew that the ability of Members to make effective use of this system is essential for them to be able to reap the full benefits to which they are entitled under the WTO Agreements.  And they were aware that possibility for all Members to participate fully is required in order for the dispute settlement system to attain its ultimate objective of being, as stated in Article 3.2 of the DSU, “a central element in providing security and predictability to the multilateral trading system.”

It is for these reasons that the DSU seeks to address the particular situation of developing country Members by providing for various rules on special and differential treatment and by mandating the Secretariat to make available a legally qualified person to assist developing countries which so request in dispute settlement. But the WTO Secretariat is bound by an obligation of neutrality. Any legal assistance it provides can only be very limited.  The existence of an independent organization such as the ACWL, whose mission it is to provide developing countries and LDCs with the legal capacity necessary to enable them to take full advantage of the opportunities offered by the WTO, is therefore essential.

Special provisions in the DSU will not, alone, eliminate or even necessarily mitigate the economic and human resource limitations faced by some developing countries in participating fully and effectively in WTO disputes.  The daunting volume of WTO rules coupled with the ever-increasing complexity of cases and the now-considerable body of case law often lead Members, even developed ones, to resort to specialised outside legal counsel.  Hiring private law firms, however, is not an option for many Members, especially the poorer ones. 

This is why some developing country Members have been floating the idea of establishing a special fund within the WTO to support developing countries’ participation in the dispute settlement system. But as noted earlier, the WTO Secretariat is bound by an obligation of neutrality and the procedures for allocating such funding would probably be complex to establish in order to avoid any conflict of interest. The best approach, in my view, would consist in reinforcing the ACWL, which has, since 2001, provided high-quality, affordable legal assistance to numerous developing countries involved in disputes, through its pool of talented trade lawyers and advisers.

Setting up an operation clearly distinct from the WTO is, I believe, the best way to avoid any suspicion about conflicting interests. If one looks at WTO Members, it is fair to say that participation by developing countries in the WTO dispute settlement system has been effective. In fact, in 2010, the majority of cases initiated were brought by developing countries.  And there were more developing countries than developed countries involved as third parties in disputes.  Developing countries continue to be active this year; examples include the ongoing dispute involving Costa Rica, El Salvador, Guatemala and Honduras against the Dominican Republic; the appeal in Thailand-Cigarettes, involving two developing Members from Asia; the case brought by Indonesia regarding Clove Cigarettes; Mexico’s case concerning Tuna Products; Viet Nam’s anti-dumping case on Shrimp, and the Philippines’ case regarding taxes on Distilled Spirits.  The Advisory Centre is present in many of these cases, as well as in disputes between developed countries when assisting developing countries who participate as third parties in such disputes. 

Of course, one could argue that the developing countries I just mentioned are not LDCs. Correct! In fact, only one LDC has so far been directly involved in DSU proceedings. The reasons for this are many, but I personally believe that it is for ACWL Members to face up to this reality and to work to improve it, including in reaching out to the LDC constituencies in the WTO.

I would be remiss if I did not also highlight the Centre’s substantial work in providing legal opinions, which assist developing countries to better understand and defend their rights, implement their obligations, and realize their trade policy objectives in a manner consistent with WTO law.  No doubt this service also contributes to the avoidance as well to as the resolution of disputes.  I had the opportunity to experience it myself, when I was asked to provide my good offices in the banana dispute. The ACWL, which was advising Latin American countries, did a remarkable job. The Centre’s extensive training activities and secondment program have also contributed to enhancing capacity in developing Members.  Perhaps some credit is due to the Centre for the fact that, since the inception of the WTO, about 50% of panelists have come from developing countries.

The Centre would not be able to do all of this fine work without the generous contributions of both developed and developing country members, including its newest member, Australia.  These invaluable contributions can only strengthen the multilateral trading system.  While I am pleased to note that resources should be sufficient to finance the operations of the ACWL for the period 2012-2016 — provided its key contributors continue to provide support — financing of the Center remains fragile. It depends on the support of a few countries, instead of being broad-based, secure, and predictable. Given the crucial role the ACWL plays in maintaining a viable and credible rules-based multilateral trading system, it is my hope that this situation can evolve. This is, of course, first and foremost, in the hands of the ACWL. But you know I am ready to help and make your case to potential donors.

But the Centre cannot afford to rest on its laurels.  As we learned at the WTO Public Forum two weeks ago, the capacity deficit for developing countries has shifted:  it is no longer simply a matter of participating effectively in WTO disputes.  True, this was a critical issue when the ACWL was created ten years ago.  But that low hanging fruit has now been picked.  Today, the Centre has to address less apparent, often more complex, issues related to developing country participation in the multilateral trading system as a whole.  These include issues such as the impact on Members’ WTO rights of participation in preference schemes, Regional Trade Agreements, and investment agreements that, some argue, might diminish WTO rights.  The Centre must find an effective way to provide legal advice to developing countries on such issues that may not immediately appear to be related to the WTO, or to the Centre’s mandate.   But this type of advice is critical for WTO Members who want to ensure that their WTO rights, including recourse to the WTO dispute settlement mechanism, are not inadvertently compromised. 

Let me in closing congratulate the Advisory Centre on its 10th anniversary for its valuable contribution to the effectiveness of the WTO dispute settlement system.  I have no doubt that in the years to come, the Centre will continue to play a central role in ensuring that all Members can benefit from one of the WTO’s most enduring achievements — a secure and predictable dispute settlement system.  I am also certain that the Centre is up to the task of helping developing countries address the many complex new problems appearing in the horizon.  This is because, as we have seen over the last ten years, the Centre has not only provided developing countries with bushels of fish; but more importantly, the Centre has taught developing countries, and continues to teach them, how to fish.  That is the key to the future.

Thank you for your attention.

 

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