WTO and FISHERIES The Dispute Settlement Mechanism

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WTO and FISHERIESThe Dispute Settlement
Mechanism

• DR. AUDUN LEM
• FISHERY INDUSTRIES DIVISION, FAO
• NACA AQUAMARKETS
• June 2003
• Manila

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Dispute Settlement Mechanism

• A result of the Uruguay Round
• Frequently linked to
• Subsidies
• Anti-dumping
• Technical barriers to Trade (labeling)

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Anti-dumping

• If a company exports a product at a price lower
  than the price it normally charges on its own
  home market, it is said to be dumping the
  product. Is this unfair competition? The WTO
  agreement does not pass judgement. Its focus is
  on how governments can or cannot react to dumping
  it disciplines anti-dumping actions through the
  Anti-Dumping Agreement.

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Anti-dumping

• Agreement on Art. 6 of GATT 1994
• Company action
• WTO regulates how countries can react
• Proven injury to domestic industry
• Allows countries to act in a way that would
  normally break GATT rules on binding tariffs and
  non-discriminatory action

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How to determine dumping

• 1. Price comparisons
• 2. Calculation of costs and normal profits
• 3. Determine if domestic industry is hurt
• 4. Dumping margin must be gt 2
• 6. Exporter must have gt 3 of imports

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Dumping investigations

• Countries must notify WTO about investigations
• Countries must report regularly on findings
• Countries may use Dispute Settlement Mechanism

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Countervailing duties

• If dumping is proven
• If gt 3
• If domestic industry is hurt
• then import country can set special duty to
  compensate

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Anti-dumping vs Subsidies

• Similarities
• Many countries handle both issues in one law and
  have similar procedures
• Differences
• Anti-dumping Companies
• Subsidies Countries

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DISPUTE SETTLEMENT MECHANISM

• WTOS MOST IMPORTANT INDIVIDUAL CONTRIBUTION TO
  THE STABILITY OF THE GLOBAL ECONOMY. WITHOUT
  ENFORCEMENT, THE RULES-BASED SYSTEM WOULD BE
  WORTHLESS
• Renato Ruggiero, former DG of WTO

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HOW ARE DISPUTES SETTLED ?

• Responsibility of the Dispute Settlement Body
  (the General Council in another guise)

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Dispute Settlement Body

• sole authority to establish panels of experts
  to consider the case
• accepts or rejects the panels findings or the
  results of an appeal
• monitors the implementation of the rulings and
  recommendations,
• the power to authorise retaliation when a
  country does not comply with a ruling

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First stage consultation

• up to 60 days

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Second stage the Panel (if consultations fail)

• up to 45 days for a panel to be appointed
• plus 6 months for the panel to conclude
• the complaining country can ask for a panel to be
  appointed

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The Panel

• the panels report can only be rejected by
  consensus in the Dispute Settlement Body

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Some fisheries cases

• Salmon (import (prohibition/countervailing
  duties)
• Scallops (trade description)
• Sardines (trade description)
• Shrimp (shrimp-turtle import prohibition)
• Swordfish (transit and import measures)

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DOHA Development Agenda

• 2001 DOHA, WTO MINISTERIAL DECLARATION
• IMPROVEMENT OF DISPUTE SETTLEMENT UNDERSTANDING
  AND USE BY DEVELOPING COUNTRIES
• DEAD-LINE MAY 2003

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• THANK YOU