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9 - Compensation and Retaliation: A Developing Country's Perspective

Published online by Cambridge University Press:  04 August 2010

George A. Bermann
Affiliation:
Columbia Law School, New York
Petros C. Mavroidis
Affiliation:
Columbia Law School, New York
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Summary

Note: The Mexican proposal to amend the DSU is twofold: (1) Document TN/DS/W/23 contains the concepts and explanations of the rationale behind the proposal (2). Document TN/DS/W/40 is an attempt to reflect its proposal in the text of the DSU, while at the same time incorporating improvements that resulted from the comments received when the Mexican proposal was first presented.

abstract: Retaliation is an unpopular remedy, and has often been criticised as being trade disruptive and one that affects the Member that exercises it in the first place. However, retaliation (or the threat thereof) is a key element for compliance or for reaching mutually acceptable solutions. In addition, it is the only tool for rebalancing the level of rights and obligations in the absence of compliance.

Section II discusses the Mexican proposal to amend the DSU. This proposal suggests four ways to solve what Mexico believes to be the central problem in the functioning of the DSU: the period of time during which a WTO-inconsistent-measure can be in place without consequences. Section III discusses how enhancing rules on retaliation would benefit developing countries above all and elaborate on how the Mexican proposal to amend the DSU might contribute to this end. Section IV enumerates a number of remaining aspects not discussed in the previous sections, such as whether retaliation is trade disruptive and the need to develop a common understanding on how to determine the level of nullification or impairment.

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Publisher: Cambridge University Press
Print publication year: 2007

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