DISPUTE RESOLUTION and FTAsDISPUTE RESOLUTION and FTAs

Peter Drahos, Asian Regional Workshop Peter Drahos, Asian Regional Workshop on Bilateral FTAs, KL, Malaysia,on Bilateral FTAs, KL, Malaysia,

26-28 August 200526-28 August 2005

Choice of Forum ProvisionChoice of Forum ProvisionUS-ChileUS-Chile

Article 22.3: Choice of ForumArticle 22.3: Choice of Forum1. Where a dispute regarding any matter arises 1. Where a dispute regarding any matter arises under this Agreement and under anotherunder this Agreement and under anotherfree trade agreement to which both Parties are free trade agreement to which both Parties are party or the WTO Agreement, theparty or the WTO Agreement, thecomplaining Party may select the forum in which complaining Party may select the forum in which to settle the dispute.to settle the dispute.2. Once the complaining Party has requested a 2. Once the complaining Party has requested a panel under an agreement referred to inpanel under an agreement referred to inparagraph 1, the forum selected shall be used to paragraph 1, the forum selected shall be used to the exclusion of the others.the exclusion of the others.

Choice of Forum in US FTAsChoice of Forum in US FTAs

US-Israel (1985)US-Israel (1985) No provisionNo provision

NAFTA (1994)NAFTA (1994) Article 2005 (qualified)Article 2005 (qualified)

US-Jordan (2001) US-Jordan (2001) Articles 17.1.(e) and 17.4 Articles 17.1.(e) and 17.4 (qualified) (qualified)

US-Chile (2004) US-Chile (2004) Article 22.3 Article 22.3

US-Singapore (2004) US-Singapore (2004) Article 20.4.3 Article 20.4.3

US-Morocco (2004)US-Morocco (2004) Article 20.4 Article 20.4

US-Australia (2005) US-Australia (2005) Article 21.4Article 21.4

US-CAFTA (2005)US-CAFTA (2005) Article 20.3Article 20.3

US-BahrainUS-Bahrain Article 19.4 Article 19.4

Disadvantages of Choice of Forum in FTAsDisadvantages of Choice of Forum in FTAs

1. where the US exercises choice of forum 1. where the US exercises choice of forum in favor of the bilateral forum, the weaker in favor of the bilateral forum, the weaker state will not be able to use the WTO to state will not be able to use the WTO to defend the case against the US.defend the case against the US.

Disadvantages of Choice of Forum in FTAsDisadvantages of Choice of Forum in FTAs

2. Where a state wishes to bring a WTO 2. Where a state wishes to bring a WTO action against the US, the fact that the US action against the US, the fact that the US has signed so many FTAs with other has signed so many FTAs with other states may mean reduced coalition-states may mean reduced coalition-building opportunities for that state. building opportunities for that state.

Disadvantages of Choice of Forum in FTAsDisadvantages of Choice of Forum in FTAs

3. Where a weaker state has a FTA with 3. Where a weaker state has a FTA with the US it may inhibit its participation in the US it may inhibit its participation in WTO dispute settlement processes. WTO dispute settlement processes.

CONCLUSIONCONCLUSIONThe overall effect of this bilateral web will The overall effect of this bilateral web will be to reduce the effectiveness of the WTO be to reduce the effectiveness of the WTO as a means for weaker actors to defend as a means for weaker actors to defend their interests in trade disputes. their interests in trade disputes.

The Bilateral Web – FTAs and TIFAsThe Bilateral Web – FTAs and TIFAs

““Any potential FTA partner must be a Any potential FTA partner must be a WTO member and have a TIFA with the WTO member and have a TIFA with the United States. The United States now has United States. The United States now has TIFAs with TIFAs with Indonesia, Philippines, Indonesia, Philippines, Thailand, Brunei Darussalam and Thailand, Brunei Darussalam and Malaysia.Malaysia. The U.S. goal is to create a The U.S. goal is to create a network of bilateral FTAs with ASEAN network of bilateral FTAs with ASEAN countries”. countries”.

EU’s ApproachEU’s Approach

Article 189.4.(c) of the EU-Chile FTA. Article 189.4.(c) of the EU-Chile FTA.

Where a party seeks redress for breach of Where a party seeks redress for breach of an obligation that is also a breach of a an obligation that is also a breach of a WTO obligation, that party “shall have WTO obligation, that party “shall have recourse” to the WTO (unless both parties recourse” to the WTO (unless both parties otherwise agree). otherwise agree).

Non-violation Complaints in FTAsNon-violation Complaints in FTAs(US-Singapore)(US-Singapore)

ARTICLE 20.4 : ADDITIONAL DISPUTE SETTLEMENT PROCEDURES1. Except as otherwise provided in this Agreement or as the Parties otherwise agree, the provisions of this Article shall apply wherever a Party considers that:

(c) a benefit the Party could reasonably have expected to accrue to it under Chapters 2 (National Treatment and Market Access for Goods), 3 (Rules of Origin), Chapter 8 (Cross Border Trade in Services),

or Chapter 16 (Intellectual Property Rights)

is being nullified or impaired as a result of a measure that is not inconsistent with this Agreement.

US Position on Non Violation US Position on Non Violation

“the period for discussion of views on scope and modalities of non-violation complaints has passed and

that no purpose will be served in continuing discussions”.See, Communication from the United States, Scope and Modalities of Non-Violation Complaints Under the TRIPS Agreement, (IP/C/W/194).

Countries that have agreed to Non-Violation Countries that have agreed to Non-Violation in the context of IP Chapterin the context of IP Chapter

US-Chile (2004) US-Chile (2004)

US-Singapore (2004) US-Singapore (2004)

US-Morocco (2004)US-Morocco (2004)

US-Australia (2005) US-Australia (2005)

US-CAFTA (2005)US-CAFTA (2005)

US-BahrainUS-Bahrain

State Practice and IPState Practice and IP

Countries that have FTAs with US or are NegotiatingCountries that have FTAs with US or are Negotiating

Colombia, Peru, Ecuador, Bolivia, Australia, Bahrain, Chile, Colombia, Peru, Ecuador, Bolivia, Australia, Bahrain, Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Jordan, Morocco, Panama, Singapore, Honduras, Nicaragua, Jordan, Morocco, Panama, Singapore, South Africa, Botswana, Lesotho, Namibia, Swaziland, South Africa, Botswana, Lesotho, Namibia, Swaziland, ThailandThailand

TOTAL 24TOTAL 24

Countries that have TIFAs with USCountries that have TIFAs with US

Algeria, Kuwait, Qatar, Saudia Arabia, United Arab Emirates, Algeria, Kuwait, Qatar, Saudia Arabia, United Arab Emirates, Yemen, Indonesia, Philippines, Brunei Darussalam, MalaysiaYemen, Indonesia, Philippines, Brunei Darussalam, Malaysia

TOTAL 10TOTAL 10