Tài liệu Trade disputes pptx

Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 1 Lecture 7 Trade disputes WTO dispute settlement procedures Sanctions Examples Ari Kokko What’s a trade dispute in WTO?  One member government believes that another member government is violating an agreement or a commitment made to the WTO – “Unfair” antidumping levies – Non-tariff barriers – Administrative practices Note: initial antidumping determination purely national process Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 2 Lecture 7 Ari Kokko The WTO dispute settlement process  Emphasis on consultations and voluntary settlement of disputes  Detailed schedules for formal dispute settlement process – complaint to Dispute Settlement Body – expert panel – report and proposed resolution – process for appeals Ari Kokko The panel process  Complaint and consultation – 60 days for bilateral discussions  Establishment of panel – must be done within 45 days  Final panel report to parties – max 6 months after establishment of panel, includes conclusions and recommendations  Final panel report to all DSB members – 3 weeks after parties have received it  Report automatically adopted after 60 days if there is no consensus against it Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 3 Lecture 7 Ari Kokko Appeals  The panel’s ruling can be appealed by either party  Appeals examined by three person group from permanent 7-member Appellate Body – Appellate Body report in 60-90 days  New report accepted or rejected by DSB within 30 days – rejection requires consensus Ari Kokko After adoption of panel report  Country at fault must reform its policy according to recommendations – statement of intent within 30 days – compliance required within “reasonable” period of time  Alternative is to negotiate payment of mutually acceptable compensation – 20 days for negotiations  Trade sanctions can be authorized by DSB if compensation is not agreed upon Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 4 Lecture 7 Ari Kokko Sanctions  Retaliatory action – suspension of concession and obligations – should primarily be in same sector – some possibilities to retaliate in areas of other WTO agreements  Level of retaliation to match injury – arbitration by original panel  How effective is retaliation? – How can small countries “hurt” the US? Ari Kokko WTO disputes 1995-2004 (Dec)  324 cases reported to DSB  103 panel reports  64 appellate body decisions  only 5 cases where retaliation has been authorized Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 5 Lecture 7 Ari Kokko Retaliation authorized in 5 cases  Foreign sales corporations – EU complaint about tax benefits to exports. Level of retaliation: USD 4,043 million. Implemented from March 2004.  US Antidumping Act of 1916 – EU request to adopt similar system with “triple damages”.  Airplane subsidies – Canadian complaint about Brazilian subsidies. Level of retaliation: CAD 344 million. Not yet implemented Ari Kokko Retaliation authorized in 4 cases  Bananas – Latin American countries and US complaint about EU banana import regime. Value of retaliation: USD 393 million. Withdrawn after agreement.  Hormones – US and Canadian complaint about EU ban of imports of hormone treated meat products. Level of retaliation: USD 125 million. In force, but calls for removal after EU rules revision in late 2003. Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 6 Lecture 7 Ari Kokko The Banana case  The establishment of the Single Market 1992 required unified banana policy – widely different national policies  Distinct interest groups – protection of EU producers – support to former colonies – support to EU distributors – consumer interest for cheap bananas  Heavy lobbying of EU decision makers – effective alliance in favor of protection Ari Kokko EU:s 1993 banana policy  Tariff free quotas for ACP bananas – based on “best” year before 1991  More restrictive tariff quotas for dollar bananas  Quota licensing system for dollar bananas included shares reserved for ACP banana importers Fulbright Economics Teaching Program 2006-2007 Trade: Institutions and impact Ari Kokko 7 Lecture 7 Ari Kokko WTO dispute settlement  Ecuador, Guatemala, Honduras, Mexico, and Panama file complaint with WTO in 1996 – joined by US, to defend interests of US banana companies  Support for complaint from WTO panel and Appellate Body – but EU unwilling to change until sanctions were imposed Any similarities with Catfish case? Ari Kokko GM: next big case? Genetically Modified (GM) food products  EU unwilling to allow imports of GM foods – health / safety: GM food may affect human genes – discussion about labeling and tracing GM  US strongly opposed to import restrictions  Unwillingness to take problem to WTO – US would probably win case, but lose publicity war – standing of WTO may weaken if it makes unpopular decisions . 2006-2007 Trade: Institutions and impact Ari Kokko 1 Lecture 7 Trade disputes WTO dispute settlement procedures Sanctions Examples Ari Kokko What’s a trade. negotiations  Trade sanctions can be authorized by DSB if compensation is not agreed upon Fulbright Economics Teaching Program 2006-2007 Trade: Institutions