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REMARKS BY
FRIEDER ROESSLER*
* Executive Director, Advisory Centre on WTO Law. The views expressed in this paper
are the personal views of the author.
Special and Differential Treatment of Developing Countries under the WTO Dispute Settlement System
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Developing countries have not been able to reap fully the benefits of the dispute
settlement procedures of the GATT and the WTO. Professor Hudec, who prepared a
detailed statistical analysis of all GATT dispute settlement cases between 1948 and 1989,
concluded:
1
Robert E. Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal
System, Butterworth Legal Publishers, page 353.
Special and Differential Treatment of Developing Countries under the WTO Dispute Settlement System
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negotiation; and by adding a potential of two years to the
defendants’ legally permissible delays in complying with
adverse rulings, the WTO reforms have raised the hurdles
facing [developing countries] contemplating litigation.2
The various proposals that have been made to strengthen the provisions of the
DSU that accord special and differential treatment to developing countries are therefore
reactions to serious problems that developing countries have encountered. However, will
they contribute to the resolution of these problems or would other approaches be more
effective?
The first category consists of the DSU provisions that state how generally-
applicable principles should be implemented in cases involving developing countries.
The right of developing countries to request that at least one panelist come from a
developing country (Article 8.10) can be seen as a specific application of the general
principle that panel members should be selected with a view to ensuring a "sufficiently
diverse background and a wide spectrum of experience" (Article 8.2). The duty of a
panel to indicate explicitly in its report how it took into account provisions on special and
differential treatment in a covered agreement invoked by a developing country
(Article 12.11) is nothing but a specific application of the general obligation of panels to
present in their reports an objective assessment of the matter before them (Article 11).
2
Marc L Busch and Eric Reinhardt, Testing International Trade Law: Empirical Studies of
GATT/WTO Dispute Settlement (Paper presented at the University of Minnesota Law School Conference on
the Political Economy of International Trade Law, 15 – 16 September 2000)
Special and Differential Treatment of Developing Countries under the WTO Dispute Settlement System
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The second category of DSU provisions concerning developing countries consists
of the provisions that set out criteria and procedures applicable exclusively to developing
countries. One such provision is Article 3.12, according to which developing countries
are given the right to request in disputes brought against developed countries the resort to
the good offices of the Director-General and the application of expedited panel
procedures in accordance with a decision adopted by the CONTRACTING PARTIES to
the GATT 1947 in 1966. Under the GATT 1947, developing countries resorted to the
good offices procedures six times;3 however, none resorted to the expedited panel
procedures. The developing countries nevertheless insisted that the right to resort to these
procedures be reaffirmed in the 1979 Understanding on Notification, Consultation,
Dispute Settlement and Surveillance,4 in the 1989 Improvements to the GATT Dispute
Settlement Rules and Procedures5 and in the DSU. No developing country has invoked
so far the 1966 procedures in a dispute under the DSU.
3
Good offices under the 1966 Decision were invoked in 6 instances and, at least in one (involving
India and Japan), led to a mutually agreed solution; see, WTO, Guide to GATT Law and Practice, Volume
2, page 765.
4
BISD 26S/210.
5
BISD 36S/61 and WTO, Guide to GATT Law and Practice, Volume 2, pages 764-765.
6
Arbitration under Article 21.3(c) of the DSU, Chile – Taxes on Alcoholic Beverages,
WT/DS887/15-WT/DS110/14, para. 45 and Arbitration under Article 21.3(c) of the DSU, Argentina –
Measures Affecting the Export of Bovine Hides and the Import of Finished Leather, WT/DS155/10, para.
51.
7
Arbitration under Article 21.3(c) of the DSU, Indonesia – Certain Measures Affecting the
Automobile Industry, WT/DS54/15- WT/DS55/14- WT/DS59/13- WT/DS64/12, para. 24.
Special and Differential Treatment of Developing Countries under the WTO Dispute Settlement System
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privileges are Articles 21.7 and 21.8, according to which the DSB shall take into account
the interests of developing countries in its task of surveying the implementation of
recommendations and rulings. The DSB has never applied these provisions and was
never requested to do so.
This brief review of the operation of the DSU provisions on special and
differential treatment permits the following conclusions: The provisions that are designed
to ensure that a generally applicable principle is also applied to developing countries have
been effective. However, there is a reluctance of developing countries to invoke the DSU
provisions according them special privileges and of the judicial organs to give effect to
those provisions. My personal experience is that developing countries wish to face in
legal proceedings developed countries as equals and are therefore hesitant to invoke
procedural privileges that their opponents do not enjoy. Moreover, they also fear that the
application of procedural provisions biased in their favour may detract from the
legitimacy of the result of the procedures and hence reduce the normative force of the
rulings they are seeking.
There is for these reasons a certain divergence between what developing countries
sought in negotiations on new dispute settlement rules and what they subsequently did
when they were engaged in a proceeding under those rules. In the negotiations, they
tended to seek procedural privileges; in dispute settlement practice, their aim was to
secure formal equality. There is therefore the distinct risk that, in the DSU review,
developing countries will use their diplomatic resources to obtain privileges that they will
subsequently not invoke.
Developing countries have therefore no option but to turn for legal assistance in
WTO proceedings to sources outside the WTO. There is an increasing number of law
firms able to give legal advice on WTO law, in particular in the field of trade remedies.
Special and Differential Treatment of Developing Countries under the WTO Dispute Settlement System
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However, the cost of such advice is prohibitive for many developing countries. In
July 2001 the Advisory Centre on WTO Law was therefore created as an
intergovernmental organisation independent from the WTO, to provide advice and
training on WTO law to developing countries and countries with economies in
transition.8 In an informal paper distributed recently by the Africa Group in the WTO, it
is recognised that the provisions on special and differential treatment in the DSU have
“not fully and coherently addressed the core difficulties developing country Members
face in seeking to use the WTO dispute settlement system”. In the view of the Africa
Group, “the difficulties relate to lack of shortage of human and financial resources”. It
therefore proposes that the activities of the Advisory Centre be supplemented by the
establishment of a permanent fund financed by the WTO membership to help developing
countries overcome the institutional and human constraint they face in using the complex
DSU procedures.9
8
For more information on the Advisory Centre on WTO Law se the website www.acwl.ch.
9
Paper entitled “Negotiations on the Dispute settlement Understanding: Proposal of the Africa
Group in the WTO”, distributed in September 2002.