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Challenges in Enforcement of WTO Decision: Proposition of Reformation to Ensure Sustainability in the World Trade System

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Introduction:

As a single International Organization, World Trade Organization (WTO) tries to work as a media where the member states negotiate regarding trade issues. By setting the rules of International trade, this organization overview each member state’s domestic trade policies and ensures transparency. Moreover, it works as a comfortable zone for developing and under developed countries which is really praiseworthy in the era of globalization. The negotiation process especially the dispute settlement system plays an important role here as it is the main concern of WTO to resolve the problem and to develop a sustainable phase in trading system.

The Dispute Settlement System under WTO:

The nature of WTO is to rely on voluntary compliance as it has no jailhouse, no bail bondsmen, no blue helmets, no truncheons, or tear gas.[1] Nevertheless, it has enforcement mechanism. Obviously, the dispute settlement system plays an important role for enforcement. Mainly, bilateral consultations and adjudication by panels are the two ways to settle a dispute. In case of Dispute Settlement understanding the dispute, delegation process is being started through the initiative of Dispute Settlement Body (DSB). The first stage is the informal consultation between two parties which is mainly the negotiation process. A friendly consultation between them results in a successful ending process. However, if it fails to dissolve through negotiation, then it goes to the Investigation Panel. This process starts through oral and written submission of all necessary issues. Through the report and recommendations of Investigation panel the process comes to an end.

It is easier to describe the process in a nutshell. But it is not at all because things are not that much easy as we think. Failure of the first stage accelerates the process of Appellate Body which is also essential to resolve a disputed issue. Here the appellate review is given by Appellate Body. The report is adopted by DSB without any amendment. An important matter here we observe is the Arbitration Process in the interim period if parties agree. Specialized Dispute Settlement Procedures has been introduced in a new dimension in Marrakesh Agreement. But this specialized process can be taken into consideration for certain disputes not for all.

We can say, the dispute settlement process is a systematic way to ensure an equitable trading policy between the parties which originates through a nature of conflict.

The Mischievous Nature of Powerful State in World Trade:

The member states are bound by the decision of WTO. In the era of globalization, a lot of critics thought the International Trade as a form of cultural imperialism. The powerful states always try to vitiate the process. A lot of debate was found in the decision regarding US-Section 211 Appropriations Act[2], US-Gambling[3], or US-Hot Rolled Steel case[4]. The power politics of United States (US) tries to ignore the controversial issues. The dominance regarding trade policy and behavior to other member states create an unpleasant impact on world trading system. They try to manipulate the decision of WTO, and in some instances, they totally neglect the decisions. It can be said that- “political power, properly so-called is merely the organized power of one class for oppressing another.”[5]

In many disputes, US acted as interest group and influenced over there. This situation sometimes turns into cold war between the parties and creates obstacles of WTO in enforcing their decision.

Challenges Regarding Dispute Settlement System and Concern of WTO:

The Doha Development Round which focused on reducing trade barriers in different sectors like agriculture, industrial goods, services etc. is one of the challenging issues under WTO. Moreover, the economic growth of large developing countries has fabricated new set of challenges for the WTO. In the era of Forth Industrial Revolution, the cold war between the US and China regarding trade is common concern for all. The restrictions of Chinese products by the US is a frustrating situation for China. Also, the imitative nature of China in their production and their artificial policy is actually the Intellectual property theft which has turned into the prior concern for the US policymakers. And through their policy China has turned into the Second largest economy in the world. Now for China it has turned into a fact according to that- “The expectation that you bring with you in trading is often the greatest obstacle you will encounter.”[6]

US tried to push China to change their present policies and also imposed anti-dumping and countervailing duties upon Chinese goods which is really a bad impact on their products. This situation also creates complexity for others in global market.

Moreover, there are also some other variables which are challenging for WTO like-

  1. The structure of domestic compliance
  2. Influence of interest groups
  3. Economic differences
  4. The dispute between US and UK
  5. Tariff and non-tariff barriers
  6. Agricultural disputes

If we look through the dispute settlement mechanism, it is not designed to resolve the issues that should be the prior concern of international negotiation. Sometimes, their so-called peace clause bound the member state to accept decision which is politically unsustainable.

The Amicable Manner of WTO in Resolving Disputes:

From those observation it may be seemed- “The methods by which a trade union can alone act, are necessarily destructive, its organization is necessarily tyrannical.”[7] It is not true at all actually. If we observe in a deeper sense, a clear congenial situation is observed in several disputes like The Cleaner Case, The Beef Hormone Case[8], The Shrimp Turtle Case[9], The Caribbean Banana Case[10] etc. which are successfully dissolved by WTO. In the US-Shrimp Case[11] a lot of importance was given for the preservation of environmental issues. Even we can notice a remarkable situation when the problem raised regarding Rahim Afroz Company and India[12]. The pressure that was given by WTO to India, bound them to resolve the dispute in a suitable way.

The benefits which are provided to developed and under-developed countries by WTO is really praiseworthy. The mandate of Equitable Right to all of WTO always tries to ensure a durable and suitable world trade for all.

Proposition of Sustainable Nature regarding World Trade:

Challenges always come to make us better, not bitter. It is quite tough to ensure a sustainable and durable place in the competitive trading policy. Many difficulties will come in the trading system and WTO must have the capacity to deal that problems in various ways like-

  1. New policy, new formula and progressive system need to be developed to face these new challenges towards the global world.
  2. Initiatives must be taken to liberalization of trade policy and to expand new agenda for the development of this sector.
  3. Moreover, institutional reformation, adoption of regional and multilateral trading systems are necessary to build up new policy for WTO.
  4. More and more research-based work should be done by policy makers to understand the policy properly to ensure a suitable regulation-based policy.
  5. WTO must have to ensure successful negotiation process by concerning the prioritization of developed and underdeveloped member states to develop transparency in the trading system.

Conclusion:

“When we last expect it, life sets us a challenge to test our courage and willingness to change”[13] Running away from the problem only increases the distance from the solution. When WTO can be able to meet the expectations, it can be able to solve the problem in a progressive way. Ensuring of a sustainable, durable and more viable environment is the prior criteria to develop an eco-friendly suitable trading policy for the member states of WTO. We must change the incentives to change the behavior of the nation. A combine policy analysis by academics, International Policy Makers will create the best system of Dispute Settlement Body of WTO for future sustainable policy for all. Lastly, cooperation among member states can ensure a comfortable and suitable arena for International trading system throughout the whole world.

Writer: Tamanna-E-Nur, LL.B (Hons’), LL.M, Jahangirnagar University.

Endnote:

[1] John H. Jackson, ‘The WTO Dispute Settlement Understanding-Misunderstanding on the Nature of Legal Obligation’ (1997) Vol-91 No-01 The American Journal of International Law, Cambridge University Press

[2] United States-Section 211 Omnibus Appropriations Act, 1988

[3] Appellate Body Report, US-Gambling, 2003

[4]Appellate Body Report, US-Hot Rolled Steel, 2001

[5] Quoted by Karl Marx.

[6] Quoted by Yvan Byeajee

[7] Quoted by Henry George

[8] Appellate Body Report, EC-Hormones, 1998

[9] Appellate Body Report, The Shrimp-Turtle Case, 1998

[10] Patric Barkham, ‘European Union the Banana Wars Explained’, (The Guardian, Mar 5, 1999) < https://www.theguardian.com/world/1999/mar/05/eu.wto3> accessed 29 October, 2021

[11] Panel report, US-Shrimp, 1998

[12] Md Anwarul Hakim, ‘Bangladesh-India Lead Acid Battery Case: Importance of WTO’s Settlement Mechanism and Lesson for LCD’s’ (2021) Vol-9 No-3 Global Journal of Politics and Law research

[13] Quoted by Paulo Coelho

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