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22 - “Inducing compliance” in WTO dispute settlement

Published online by Cambridge University Press:  02 September 2009

David Palmeter
Affiliation:
Washington, DC
Stanimir A. Alexandrov
Affiliation:
Washington, DC
Daniel L. M. Kennedy
Affiliation:
University of Minnesota
James D. Southwick
Affiliation:
University of Minnesota
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Summary

Ultimately, I would favor a system in which sanctions would come for violating any provision of a trade agreement.

President William J. Clinton

Sanctioning authority is rarely granted by treaty, rarely used when granted, and likely to be ineffective when used.

Abram Chayes and Antonia Handler Chayes

When a Member of the World Trade Organization (WTO) fails to conform its practices to the rulings and recommendations contained in an adopted dispute settlement report, the prevailing party may be authorized by the WTO's Dispute Settlement Body (DSB) to take action against the WTO interests of the offending Member. Pursuant to the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes – the Dispute Settlement Understanding, or DSU – this action takes the form of the “suspension” “of concessions or other obligations.” In simple terms, this means that if the inconsistent measure is not brought into conformity, and if the parties cannot agree on compensation for this inconsistency, the prevailing Member may impose restrictions on the trade of the other Member. If the offending Member objects to the level of the suspension proposed by the prevailing Member, it may request binding arbitration.

Arbitration over the level of suspension of trade concessions occurred for the first time in the WTO in the Bananas dispute between the United States and the European Communities. In their decision, the arbitrators stated that “it is the purpose of countermeasures to induce compliance.”

Type
Chapter
Information
The Political Economy of International Trade Law
Essays in Honor of Robert E. Hudec
, pp. 646 - 666
Publisher: Cambridge University Press
Print publication year: 2002

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