DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 11

Developing countries in WTO dispute settlement

Previous chapters have addressed at least in part where the DSU specifically refers to developing country Members and provides for special rules applicable to disputes involving a developing country Member. Nevertheless, these rules providing special and differential treatment are the subject of this separate chapter in order to examine the subject in more detail. This chapter also addresses other aspects of the developing countries’ role in the dispute settlement system.

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11.1 Developing country Members in dispute settlement — theory and practice

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It is generally agreed that the very existence of a compulsory multilateral dispute settlement system is itself a particular benefit for developing country and small Members. Such a system, to which all Members have equal access and in which decisions are made on the basis of rules rather than on the basis of economic power, empowers developing countries and smaller economies by placing “the weak” on a more equal footing with “the strong”. In this sense, any judicial law enforcement system benefits the weak more than the strong because the strong would always have other means to defend and impose their interests in the absence of a law enforcement system.

Such a view has been challenged by some as being overly formal and theoretical. Nonetheless, it must be noted that, in practice, the (WTO) dispute settlement system has already offered many examples of developing country Members prevailing in dispute settlement over large trading nations, including the withdrawal of the WTO-inconsistent measures the developing country Member had challenged.

At the same time, it is clear that developing country Members wanting to avail themselves of the benefits of the dispute settlement system face considerable burdens. For example, developing countries, especially the smaller ones, often do not have a sufficient number of specialized human resources who are experts in the intricacies of the substance of WTO law or the dispute settlement procedure. The growing body of jurisprudence developed by panels and the Appellate Body makes it increasingly difficult for trade officials around the globe to master both the substance and the procedural aspects of WTO law, including the latest developments. In addition, it is often difficult for a small trade administration to be able to assign one of its few officials — who already face the challenge of keeping up with the whole breadth of WTO matters — to a dispute. A single dispute could well keep an official busy for large periods of time — up to two years. It may also be difficult for a developing country Member to endure the economic harm arising from another Member’s trade barrier for the entire period of the dispute settlement proceedings. If such a trade barrier undermines the export opportunities of the developing country and is found to be inconsistent with the WTO, its withdrawal may not occur until two or three years after the filing of a WTO dispute settlement complaint.

Despite these difficulties, developing country Members have been active participants in the dispute settlement system over the past eight years. Since 1995, they have been the complainants in over one third of all disputes1 and respondents in roughly two fifths of all cases. Developing countries initiate disputes against developed country Members as well as against other developing country Members. In one year, 2001, developing country Members accounted for 75% of all complaints. Least-developed country Members have so far been neither complainant nor respondent in any WTO dispute. Third party participation of developing country Members is quite frequent and provides a valuable experience for Members not regularly involved in dispute settlement proceedings.

On the other hand, it is true that in the majority of WTO disputes so far, the complainant has been a developed country Member, and the same is true as far as respondents are concerned. Taking account of the fact that the majority of WTO Members are developing countries, one could conclude that the developed countries make a disproportionate use of the dispute settlement system. Jumping to this conclusion, however, would disregard the fact that these Members, who are complainants and respondents in a majority of WTO disputes, account for most of world-wide trade. They often have trade relationships that are very broad (in all sectors of goods and services) and deep (in terms of the volume of trade in quantity or value). Such trade relationships significantly increase the probability of frictions arising as a result of trade barriers, which the exporting Member may be willing to challenge in dispute settlement.

This, in turn, reveals a problematic reality from the perspective of developing country Members. The moderate trade volume affected by a possibly WTO-incompatible trade barrier maintained by another Member might not always justify the considerable investment of time and money necessary for a WTO dispute. There is thus no question that developing country Members are in a special situation which, to some extent, the current dispute settlement system also addresses. There is also no question that the ability of developing country Members to make effective use of the dispute settlement system is essential for them to be able to reap the full benefits they are entitled to under the WTO Agreement. The tools to address the particular situation of developing country Members are the rules of special and differential treatment2 and legal assistance as elaborated in the following sections.

  

Notes:

1. Every case in which one Member addresses a formal request consultations for consultations to another Member (see the section on the Legal basis and requirements for a request for consultations) is counted as “dispute” in the sense of the DSU.  back to text

2. “Special and differential treatment” is a technical term used throughout the WTO Agreement to designate those provisions that are applicable only to developing country Members.  back to text

  

  

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