2010/2011

Safiya Robl LLM

UNEQUAL ACCESS TO JUSTICE

TABLE OF CONTENTS

1 2

Introduction ..................................................................................................................................... 3 Developing countries and the DSU.................................................................................................. 4 2.1 2.2 Why developing countries do not participate......................................................................... 4 Constrains that may prevent greater participation................................................................. 5 Constraints of legal knowledge ....................................................................................... 6 Constrains of financial endowment ................................................................................. 6 Constrains of political power ........................................................................................... 7

2.2.1 2.2.2 2.2.3 3 3.1 3.2. 3.3. 4

Suggestion for improving developing countries access to the DSU ................................................ 8 Setting up fact-finding body at the WTO ................................................................................ 8 Formalization of a discovery process in the WTO dispute settlement ..................................... 8 Utilize linkages between the private sector and the government ............................................ 9

3.4 The introduction of a small claims.............................................................................................. 9 Conclusion ..................................................................................................................................... 10

1 Introduction
An international agreement has no value if it cannot be enforced and the rules could be ignored. The dispute settlement system of the WTO plays a very important role in clarifying and enforcing of the legal obligations in the WTO agreements, because an effective dispute settlement system is significant to the operation of the WTO. The dispute settlement understanding was created as part of the WTO agreement in the Uruguay round,1 which came to life by mean of through the understanding on the rules and procedures that governs the whole dispute settlement disputes. There is a discussion going on in the literature about whether the WTO dispute settlement has been a success. This paper addresses why developing countries participate less in the dispute settlement system and what could be done to improve the participation. This paper has three sections. Section 2 will discuss why developing countries participate less in the WTO dispute settlement system. Section 3 will outline what might be done to increase their participation in the WTO dispute settlement mechanism. Section 4 concludes.

World trade organization, A Handbook on the WTO Dispute Settlement System, Cambridge University, 2004, P. 1.

2
2.1

Developing countries and the DSU

Why developing countries do not participate

Although the dispute settlement mechanisms is a cornerstone of the WTO, the analyzed data shows that the participation of developing countries in the dispute settlement system is very stumpy. The collected data also shows that 80-90 developing countries have had no participation in the WTO dispute settlement mechanism, while the system is very important specially to small and developing countries, because it provides a legal context for solving disputes rather than having them subjected to negotiations and big-power politics. Some authors argued that the system works perfect, but that the problems is internal governance in developing countries, while others stated that the dispute settlement mechanism deters participation from developing countries as effective participation requires financial resources.2 The fact is that the trade performance of a country also have consequences for DSM participation, for instance the countries with a small amount of exports are less likely to come across disputes than countries exporting large volumes.3 To support developing countries participation in the system, there are special provisions in the dispute settlement understanding, which deviate from the general rules and was intended to encourage developing countries to use the system.4 These provisions provide special rights, which gives developed countries the possibility to treat developing countries more favorably than other WTO Members or countries to insist that, in cases between them and a developed country, at least one panelist be from a developing country. 5 The ACWL also provides legal training, support and advice on WTO law and dispute settlement procedures to developing countries, especially to the least developed among them.6 The statics show that the more advanced developing countries, such as Brazil and India, do use the dispute settlement system, but the least developed countries do not invoke the system at all.7 There are commentators who characterized this dilemma as simply a problem of mobilizing resources; while others stated that the problem is much greater as there are other barriers that developing countries face. The barriers that the developing states face, have been categorized as constraints of legal knowledge, financial endowment and political power or law, money, and politics.8 The problem is when resource constraints translate into a lack of access on the part of developing countries, there is a fairness problem. According to Bohl, the constraints of law, money, and politics must be boiled down and identified to the effects they have in practice, because when access to the dispute settlement system is unequal, the organizations legitimacy is endanger.

Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, p. 136. 3 Roderick Abbott, Are Developing Countries Deterred from Using the WTO Dispute Settlement System? Participation of Developing Countries in the DSM in the years 1995-2005, ECIPE Working Paper, NO. 01/2007, p. 1. 4 Article 27:2 and article 24 DSU. 5 Idem. 6 Article 2 of The Agreement establishing the Advisory Centre on WTO Law. 7 Chad P. Brown, Bernard M. Hoekman, WTO Dispute Settlement and the Missing Developing Country Cases: Engaging the Private Sector, Journal of International Economic Law, May 2005, p. 2. 8 GREGORY SHAFFER, The challenges of WTO law: strategies for developing country adaptation, World Trade Review (2006), p. 181.

2.2

Constrains that may prevent greater participation

The objectives of the DSU was to create equal opportunities and a fairer system, in order to avoid the power politics influence,9 but in practice there is nothing equal and fair about the DSU system, because the developing countries almost completely fail to engage in formal dispute settlement related to their market access interests.10 According to the statistics 72 percent of the cases initiated by developed countries result in appeals, while only 24 percent of the cases initiated by developing countries are appealed. The same statics also show that developing countries are more likely to use the DSM as a negotiating forum, while developed countries are more likely to use it as a judicial forum.11 Shaffer argued that there are three challenges that developing countries face if they are to participate effectively in the WTO dispute settlement system. He categorized these challenges as constrains of law, money and politics. These challenges are: (i) a relative lack of legal knowledge in the WTO law; (ii) constrained financial resources and (iii) and fear of political and economic pressure.12 Some of these constrains have been eliminated by the above mentioned ACWL, which was set up to deal with these kind of problems.13 These barriers will be elaborated below.
2.2.1 Constraints of legal knowledge

Most of the developed countries, for instance, the US and the EU have well-trained governmental lawyers and they still regularly rely on assistance from private law firms.14 Numerous developing countries missions suffer from a lack of national legal expertise in WTO matters, because diplomatic postings have usually been filled by non-lawyers, who do not master WTO legal matters or they have only one or two lawyers to address WTO matters. There is still one diplomatic mission who handles all the matters before the WTO, while these individuals may holds a lower level position in the government hierarchy and have no dispute settlement experience. The litigations of some developing countries has to also be authorized by the Attorney generals office, which may cause delays and by the time representatives receive the approval, the deadline for submissions may have passed. 15 This is because, WTO law has not traditionally been taught in many of the developing countries.16 The other major problem is that the representatives of the developing countries have to work in a foreign language in the proceedings, while they do not speak any of the official languages of the WTO and have to therefore wait for the translation, which is time consuming.17

Idem. Chad P. Brown, Bernard M. Hoekman, WTO Dispute Settlement and the Missing Developing Country Cases: Engaging the Private Sector, Journal of International Economic Law, May 2005, p. 24. 11 CHUCK GASTLE, SOURCES DEVELOPING COUNTRIES AND THE DSU, 25 November 2004, 41.
10 12 13

Id. at 179. Roderick Abbott, Are Developing Countries Deterred from Using the WTO Dispute Settlement System? Participation of Developing Countries in the DSM in the years 1995-2005, ECIPE Working Paper, NO. 01/2007, p. 21. 14 GREGORY SHAFFER, The challenges of WTO law: strategies for developing country adaptation, World Trade Review (2006), p. 197. 15 Id. at p. 180. 16 Id at p, 6. 17 Joseph Francois, Henrik Horn and Niklas Kaunitz, Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System, IFN Working Paper No. 730, 2008, p. 159.

2.2.2 Constrains of financial endowment

The second main challenge that developing countries face is that they have less resources to spend on legal assistance to protect their WTO rights. It has often been argued that the DSU works more in favour of the richer members who have resources an army of lawyers, who track trade problems, as this is costly and time consuming for the developing countries, is prevents them from using the system. In order to participate, the WTO dispute settlement, the members must develop cost-effective mechanisms to recognize injuries to its trading prospects identify who is to blame and organize resources to bring a legal claim or negotiate a favorable settlement, as the US and the EU did. These stages are referred to as naming, blaming and claiming.18 The costs of the WTO litigation process, also explains the reason why developing countries are often reluctant to bring a claim to the WTO. The developing countries are often reluctant to file legal claims, because of the high litigation costs. Unlike the developed countries, the foreign affairs ministries of these countries do not have financial support. In contrast to the US and EC, developing countries cannot even afford to fly in officials from the capital for specific WTO meetings.19 It is fair to argue that the system is all about money and whoever has the most wins. This also has effect on the WTO system as whole, because if the developing countries are unable to enforce to their existing market access rights, they will be less willing to live up their commitments.
2.2.3 Constrains of political power

Although there is no evidence that this happens, there is a risk that a complaint against a favorite donor could lead to the privileged access being withdrawn. This constrain covers the impact of possible retaliatory action and reprisals by major players, if their policies or measures were challenged in the WTO. 20 The developing countries often do not want to upset trade and aid friends by bringing a dispute to the WTO, because this may endanger the stability of its trading relationships between them and their richer aid friends. Often this happens when a developing country depends on the richer WTO member for a crucial trade relationship. Consequently, the developing countries often omit to enforce their rights at the WTO. Another factor could be uncertainty, because winning a case does not guarantee any beneficial trade results.21 It often happens that a developing country has a legitimate claim, but decides not to invoke DSU due to fear of retaliation and the fact that these countries depend on the richer WTO members for development assistance. This has also been called the glass house syndrome, which means that de developing countries fear counter claims by the developed countries, if they bring claims at the WTO.22

18

William Felstiner et al, The Emergence and Transformation of Disputes: Naming, Blaming and Claiming, 15 Law & Socy Rev. 631 (198081). 19 , p. 3. GREGORY SHAFFER, The challenges of WTO law: strategies for developing country adaptation, World Trade Review (2006 20 20 GREGORY SHAFFER, The challenges of WTO law: strategies for developing country adaptation, World Trade Review (2006), p. 176. 21 Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, 2009, p. 163. 22 Joseph Francois, Henrik Horn and Niklas Kaunitz, Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System, IFN Working Paper No. 730, 2008, p. 9.

2 Suggestion for improving developing countries access to the DSU

The problem of fact-finding frustrates developing countries participation in the WTO dispute settlement system, because of the technical evidence that plays an important role in dispute Settlement. The parties frequently formulate the basis of their arguments using economic analysis, which is tremendously complicated and therefore resides better within the scope of specialized experts.23 What would also facilitate developing countries greater participation in the system is the creation of rules which enable the panel to compel a party to produce evidence within its exclusive control. The adoption of legislation creating a formal petition instrument for private industries by the developing countries could also increase the system participation.24 It is also important to create a small claims court, in order to ensure that each and every WTO member has access to a suitable means of settling disputes between the parties to the WTO agreement. These suggestions will be elaborated below.

3.1

Setting up fact-finding body at the WTO

There are authors who argued that there has to be a standing agency to conduct fact-finding, in order to correct evidentiary deficiencies in submissions by members to panels during dispute settlement.25 The task of such a fact-finding agency would be to clarify existing facts as well as ascertain missing information helpful to the rendering of judgment. This standing agency could be created under DSU article 27.2 and its mandate would be to support developing countries engaging in fact-finding at both the pre-litigation and litigation stages. This will then also increase the WTO legitimacy in the eyes of the developing countries. 26

3.2. Formalization of a discovery process in the WTO dispute settlement

At present the DSU provides no rules of evidence for the parties or the panel to follow, even in the panel working procedures. There are, for instance, no rules in the DSU that might cover admissibility, production, or sufficiency of evidence.27 This avoids that the parties to the dispute will continue introducing new evidence as the dispute moves forward, because of the lack of formal discovery rules in the DSU. Currently the DSU provides no rules which enable the panel to compel a party to produce evidence within its exclusive control,28 creating such rules will facilitate the developing countries.

23

Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, 2009, p. 133. 24 Id. at 175. 25 David Collins, Institutionalized Fact-Finding at the WTO, 27 U. PA. J. INTL ECON. L, 2006, p. 367. 26 Id. at 368. 27 Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, 2009, p. 170. 28 Id. at 171.

3.3. Utilize linkages between the private sector and the government The barrier for developing countries access, is the communication breakdown between the industry and government and this is a major hinder for developing countries from participating in WTO dispute settlement. The developing countries could remedy this inadequacy by adopting legislation creating a formal petition instrument for private industries.29 3.4 The introduction of a small claims court The existing DSU is furthermore too technical, expensive and therefore hinders developing countries from participating, because these countries lack the resources to secure quality representation and cannot afford the time required by the mechanism.30 To avoid that the WTO dispute settlement system becomes a wealthy nations system, a small claims court has to be created, which will have to ensure that all WTO members have access to suitable means of settling disputes between the parties to the WTO agreement.31

Conclusion

Something happened on the way to heaven, because large developed countries are much better-positioned to take advantage of the WTO dispute settlement legalized system, while numerous developing countries do not participate in the system at all, because of the significant costs of the WTO litigation and entirely lacking in dispute settlement experience of the developing countries. The WTO litigation fact-finding is very expensive and these countries struggle to finance trade initiatives. The other challenge that developing countries face is WTO proceedings is complex and requiring a legal capacity that these countries do not have. The power politics also hinders these countries from participating in the WTO dispute settlement system. There are different possible solutions to these problems, such as formalization of a discovery process, establishing small claim court or creating a formal petition instrument for private industries by the developed countries.

29 30

Id. at 175. Lead Institution Centre for Global Studies, University of Victoria, WTO Small Claims court, A case for Developing countries, August 23-24, 2001, p. 2. 31 Id. at p. 4.

Bibliography
World trade organization, A Handbook on the WTO Dispute Settlement System, Cambridge University, 2004, P. 1. Gregory Shaffer, How to make the WTO Dispute Settlement system work for developing countries: some proactive developing countries strategies, March 2003, p. 5. Roderick Abbott, Are Developing Countries Deterred from Using the WTO Dispute Settlement System? Participation of Developing Countries in the DSM in the years 19952005, ECIPE Working Paper, NO. 01/2007, p. 1. Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, p. 136. Article 27:2, article 24 DSU. GREGORY SHAFFER, The challenges of WTO law: strategies for developing country adaptation, World Trade Review (2006), p. 181. CHUCK GASTLE, SOURCES DEVELOPING COUNTRIES AND THE DSU, 25 November 2004, 41. Roderick Abbott, Are Developing Countries Deterred from Using the WTO Dispute Settlement System? Participation of Developing Countries in the DSM in the years 19952005, ECIPE Working Paper, NO. 01/2007, p. 21. GREGORY SHAFFER, The challenges of WTO law: strategies for developing country adaptation, World Trade Review (2006), p. 197. Joseph Francois, Henrik Horn and Niklas Kaunitz, Trading Profiles and Developing Country Participation in the WTO Dispute Settlement System, IFN Working Paper No. 730, 2008, p. 159. William Felstiner et al, The Emergence and Transformation of Disputes: Naming, Blaming and Claiming, 15 Law & Socy Rev. 631 (198081). Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, 2009, p. 133. David Collins, Institutionalized Fact-Finding at the WTO, 27 U. PA. J. INTL ECON. L, 2006, p. 367. Kristin Bohl, PROBLEMS OF DEVELOPING COUNTRY ACCESS TO WTO DISPUTE SETTLEMENT, Chicago-Kent Journal of International & Comparative Law, 2009, p. 170. Lead Institution Centre for Global Studies, University of Victoria, WTO Small Claims court, A case for Developing countries, August 23-24, 2001, p. 2. The Agreement establishing the Advisory Centre on WTO Law, article 2. Chad P. Brown, Bernard M. Hoekman, WTO Dispute Settlement and the Missing Developing Country Cases: Engaging the Private Sector, Journal of International Economic Law, May 2005, p. 24.