Using dispute settlement partnerships for capacity building. Bangladesh’s triumphant experience at WTO DSU

Author:Amrita Bahri, Toufiq Ali
Position:ITAM University, Mexico City, Mexico and WTO Chair Program
Pages:19-38
SUMMARY

Purpose World Trade Organisation grants rights to its members, and WTO Dispute Settlement Understanding (DSU) provides a rule-oriented consultative and judicial mechanism to protect these rights in cases of WTO-incompatible trade infringements. However, the DSU participation benefits come at a cost. These costs are acutely formidable for least developing countries (LDCs) which have small... (see full summary)

 
FREE EXCERPT
Using dispute settlement
partnerships for capacity building
Bangladeshs triumphant experience at
WTO DSU
Amrita Bahri
ITAM University, Mexico City, Mexico and WTO Chair Program, and
Toufiq Ali
Bangaldesh Permanent Mission to WTO and
Bangladesh Foreign Service Academy, Dhaka, Bangladesh
Abstract
Purpose World Trade Organisation grants rights to its members, and WTO Dispute Settlement
Understanding (DSU) providesa rule-oriented consultative and judicial mechanism to protect these rights in
cases of WTO-incompatible trade infringements. However, the DSU participation benets come at a cost.
These costs are acutely formidable for least developingcountries (LDCs) which have small market size and
trading stakes.No LDC has ever led a WTO compliant, with the only exception of India-Batterydispute led
by Bangladesh against India.This paper aims to look at the experience of how Bangladesh so far the only
LDC member that has led a formal WTO complaint persuaded India to withdraw anti-dumping duties
India had imposedon the import of acid battery from Bangladesh.
Design/methodology/approach The investigation is grounded on practically informed ndings
gathered throughauthorswork experience and several semi-structuredinterviews and discussions which the
authors have conducted with government representatives from Bangladesh, government and industry
representatives from other developing countries, trade lawyers and ofcials based in Geneva and Brussels,
and civil societyorganisations.
Findings The discussion provides a sound indication of the participation impediments that LDCs
can face at WTO DSU and the ways in which such challenges can be overcome with the help of
resources available at the domestic level. It also exemplies how domestic laws and practices can
respond to international legal instruments and impact the performance of an LDC at an international
adjudicatory forum.
Originality/value Except one book chapter and a workingpaper, there is no literature available on this
matter. This investigation is grounded on practically informed ndings gathered with the help of original
empiricalresearch conducted by the authors.
Keywords Bangladesh, Capacity building, Least developed countries, Dispute settlement,
World trade organization
Paper type Research paper
1. Introduction
The World Trade Organisation Dispute Settlement Understanding (WTO DSU) is seen as
the central pillar of the multilateral trading system. Trade disputes are led by member
governments if they have reasonsto believe that another member government is violating a
WTO agreement or a commitment it has undertaken as part of the WTO. Since1995, WTO
Members have led over500 complaints with the cause of actions arising from severalWTO
Agreements. Dispute Settlement Body (DSB) has issued rulings in over 350 of these
Dispute
settlement
partnerships
19
Received16 July 2018
Revised21 September 2018
Accepted26 October 2018
Journalof International Trade
Lawand Policy
Vol.18 No. 1, 2019
pp. 19-38
© Emerald Publishing Limited
1477-0024
DOI 10.1108/JITLP-07-2018-0028
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1477-0024.htm
complaints, while most of the others were resolved bilaterally between the complainant(s)
and respondent(s)[1]. The average time taken by the Panels to issue reports has centred
around 14 months. From January 1995 to January 2018, Appellate Body has issued 144
Reports within an average time-span of three months, which together with Panel Reports
have contributed to the signicant development of jurisprudence, clarication of issues and
interpretation oflaws. This makes the WTO dispute settlement system the most active and
the fastest international adjudicatory authority with an appellate jurisdiction in the world.
However, resolving trade disputes through the DSU provisions have signicant cost
repercussions,and these costs maynot be equally affordableby all WTO members.
With the complex and rule-oriented system of WTO DSU, and with its ever-increasing
jurisprudence, the Member States require higher relative capacity to use the adjudicatory
mechanism than they required under the previous trading regime, i.e. they require more
resources to monitor and enforce their international trade rights. Busch and Reinhardt observe
that, to participate effectively at WTO DSU, WTO Member States require experienced trade
lawyers to litigate a case,seasoned politicians and bureaucrats to decide whether it is worth
litigating a case,staff to monitor trade practices abroad,domesticinstitutions necessary to
participate in international negotiationsand sufcient market power to ensure compliance
and threaten retaliation in cases of non-compliance (Busch and Reinhardt, 2004). This demand
for greater resources has impeded developing countriesaccess to WTO DSM.
In the words of Shaffer, the impediments that developing countries face at WTO DSU
can broadly be categorised as [...] constraints of legal knowledge, nancial endowment,
and political power, or,more simply, of law, money, and politics(Shaffer et al.,2009). These
impediments become acutely formidable for least developing countries (LDC) which have
small market size and absolute trading stakes[2]. This is because they generally face a
signicant cost of mobilising resources for strengthening their DSU participation[3]
(Bossche and Gathii, 2013;Shaffer,2009). Their low volumes of trade and low prot margins
may not justify the non-economic (i.e. litigation) costs they are required to incur for
maintaining or enforcing market accessrights, mainly because the WTO litigation cost is
insensitive to the economic stakes involved in a dispute (Shaffer, 2006). The high cost of
WTO litigation can signicantly reduce the anticipated economic benets which an
industry can receive from the removal of a trade barrier. Moreover, low retaliation capacity
and negotiating clout can further dilute the benetsan affected industry based in LDCs can
attain from WTO litigation[4].
With low level of development, small market size, low aggregate trading stakes and
poor institutional capacity to litigate and defend trade interests at WTO, LDCs are less
likely to le complaints at WTO against trade infringements. Due to low DSU
participation rate and high cost of DSU participation (which may be even higher for
LDCs due to poor economies of scale), these countries generally have little future
incentive to develop their dispute settlement capacity or resort to DSU provisions for
resolving their trade problems.
No LDC has ever led a WTO compliant, with the only exception of India-Battery
dispute led by Bangladesh against India[5]. This article looks at the experience of how
Bangladesh the rst and so far the only LDC member that has led a formal WTO
complaint persuaded India to withdraw the anti-dumping duties India had imposed
on the import of all lead acid battery from Bangladesh. A close look at Bangladeshs
unique experiment of resolving a trade dispute with India is important for several
reasons. As LDC with small volume of exports and imports in absolute terms, it has
experienced high rates of economic growth and social transformations over the past
few decades. It has gone through rapid integration into the global economy, with trade
JITLP
18,1
20

To continue reading

REQUEST YOUR TRIAL