WTO and FISHERIESWTO and FISHERIESThe Dispute Settlement The Dispute Settlement

MechanismMechanism

DR. AUDUN LEMDR. AUDUN LEM

FISHERY INDUSTRIES DIVISION, FAO FISHERY INDUSTRIES DIVISION, FAO

NACA AQUAMARKETSJune 2003

Manila

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Dispute Settlement Dispute Settlement MechanismMechanism

A result of the Uruguay Round

Frequently linked to:

Subsidies

Anti-dumping

Technical barriers to Trade (labeling)

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Anti-dumpingAnti-dumping

If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product. Is this unfair competition? The WTO agreement does not pass judgement. Its focus is on how governments can or cannot react to dumping — it disciplines anti-dumping actions through the “Anti-Dumping Agreement”.

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Anti-dumpingAnti-dumping

Agreement on Art. 6 of GATT 1994 Company action WTO regulates how countries can

react Proven injury to domestic industry Allows countries to act in a way that

would normally break GATT rules on binding tariffs and non-discriminatory action

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How to determine How to determine dumpingdumping

1. Price comparisons 2. Calculation of costs and normal

profits 3. Determine if domestic industry is

hurt 4. Dumping margin must be > 2 % 6. Exporter must have > 3 % of

imports

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Dumping investigationsDumping investigations

Countries must notify WTO about investigations

Countries must report regularly on findings

Countries may use Dispute Settlement Mechanism

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Countervailing dutiesCountervailing duties

If dumping is proven

If > 3 %

If domestic industry is hurt:• then import country can set special

duty to compensate

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Anti-dumping vs SubsidiesAnti-dumping vs Subsidies

Similarities:

Many countries handle both issues in one law and have similar procedures

Differences:

Anti-dumping: Companies

Subsidies: Countries

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DISPUTE SETTLEMENT DISPUTE SETTLEMENT MECHANISMMECHANISM

“WTO’S MOST IMPORTANT INDIVIDUAL CONTRIBUTION TO THE STABILITY OF THE GLOBAL ECONOMY. WITHOUT ENFORCEMENT, THE RULES-BASED SYSTEM WOULD BE WORTHLESS”• Renato Ruggiero, former DG of WTO

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Responsibility of the Dispute Settlement Body (the General Council in another guise)

HOW ARE DISPUTES HOW ARE DISPUTES SETTLEDSETTLED ? ?

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• sole authority to establish “panels” of experts to consider the case

• accepts or rejects the panels’ findings or the results of an appeal

• monitors the implementation of the rulings and recommendations,

• the power to authorise retaliation when a country does not comply with a ruling

Dispute Settlement Body:Dispute Settlement Body:

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up to 60 days

First stage: First stage: consultationconsultation

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Second stage: the Second stage: the PanelPanel (if consultations fail)(if consultations fail) up to 45 days for a panel to be

appointed

plus 6 months for the panel to conclude

the complaining country can ask for a panel to be appointed

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The PanelThe Panel

the panel’s report can only be rejected by consensus in the Dispute Settlement Body

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Some fisheries casesSome fisheries cases

Salmon (import (prohibition/countervailing duties)

Scallops (trade description) Sardines (trade description) Shrimp (shrimp-turtle import

prohibition) Swordfish (transit and import

measures)

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DOHA Development AgendaDOHA Development Agenda

2001 DOHA, WTO MINISTERIAL DECLARATION:

IMPROVEMENT OF DISPUTE SETTLEMENT UNDERSTANDING AND USE BY DEVELOPING COUNTRIES

DEAD-LINE: MAY 2003

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