EVALUATING THE ENFORCEMENT OF THE DECISIONS OF WTO DISPUTE SETTLEMENT SYSTEM: THE COMPLY OR NOT TO COMPLY CONSIDERATIONS

ABSTRACT

This paper evaluate the structure for dispute adjudication under the World Trade Organization (WTO) Dispute Settlement System (DSS). An analysis of the legal nature of WTO obligations is carried out to ascertain how it influences members when deciding whether to comply or not with the outcome of a WTO dispute. The paper examines the two broad models from which scholars and even countries have tried to understand their WTO's legal obligations. In addition, the paper make the case that in reality WTO obligations are the products of a hybrid of the two dominant models or theories. Further, it is posited that the analysis and evaluation of WTO DSS should be restructured taking into account that despite the legalization of the WTO DSS and its enforcement mechanism, it is constrained by international legal discourse and politics. Finally, there are suggestions on possible ways of improving the remedy system, which would effectively incentivise countries to comply with their WTO obligations.

INTRODUCTION

Prior to the establishment of the World Trade Organization (WTO), the General Agreement on Tariffs and Trade (GATT) did deploy a political-diplomatic settlement regime for the resolution of disputes arising from international trade between countries.[1] However, since the establishment of the WTO in 1995, the dispute resolution regime under the GATT has been replaced with a legalized dispute settlement model.[2]

Under the legalized dispute resolution model of the WTO, a report of the Panel or the Appellate Body is adopted automatically unless WTO members, including the prevailing member, decide by consensus to block it.[3] The process of blocking the adoption of a report is known or referred to as "negative consensus". It is important to note that the shortcomings of the GATT dispute resolution process necessitated the change towards a more legalized approach. These shortcomings were evidenced in the formation of the GATT panels and the panel process, the blocking of the adoption of panel reports in the GATT Council and the delay in the implementation of Council recommendations. Further, the shortcomings were addressed in the dispute settlement regime of the WTO.[4] Supporters of the legalized dispute resolution regime of the WTO have emphasized its legitimizing capacity and potential to constrain powerful WTO members from engaging in unilateral or rule-breaking behaviour.[5]

Judging by the frequency with which members resort to WTO Dispute Settlement System (DSS), the new mechanism has been described as a stunning success.[6] In the first eight years of its establishment, members filed nearly 300 disputes with the WTO. Most of these cases were resolved before reaching the enforcement stage. However, the WTO did authorized retaliation in seven disputes, three of them high-profile controversies between the United States and the European Community. Still, just like any other international law regime, the WTO DSS has drawn great criticisms, much of whom are focused on the WTO enforcement mechanism.[7]

Commentators have suggested that the most noteworthy characteristic of WTO DSS, in its early years was the large number of very controversial cases involving systemic issues.[8] Examples of such cases include the EC-Bananas case, the EC-Hormones case, the Japan-Film case, the US-shrimp case, the US-Helms-Burton case, the Turkey-Textiles case, the India-Quantitative Restriction case, the US-Section 3012 case and the US-FSC case. Overall, the WTO DSS seemed to survive these controversial cases reasonably well. It should be noted that some of the WTO members directly involved in the specific cases were somewhat embittered at certain results or outcomes.[9] However, it is important to point out that victories in these cases have been used by the victorious members to improve their negotiating position, a development that has been considered not unanticipated.[10]

Another type of controversial cases that became significant at the end of the first decade of the formation of the WTO DSS, were those involving challenges mainly by developing countries, to certain policies of the US and the EC. Examples of these challenges are India's somewhat successful challenge to the EC's Globalised Scheme of Preference (GSP), a multiparty challenge led by Brazil to the EC sugar program, a Brazilian challenge to US cotton subsidies and a challenge by the US and others to the EC's biotech approval regime.[11]

The prevailing critique of WTO regime, just like any other international law regime, is its lack of direct enforcement mechanism.[12] Some critics have claimed that the fact that a wining party has to make recourse to "retaliation" as a means of enforcing a WTO decision clearly illuminates the deficit implicit in the WTO regime. This deficit according to scholars has rendered the WTO regime a weaker form of law or legal obligation, if it is "law" at all.[13]There is an assumption that because the WTO relies on the instrumentality of "retaliation" to enforce its DSB decisions, it clearly lacks a direct enforcement mechanism and therefore does not serve as a truly robust or effective adjudicatory function. All of these have led critics to advocate for a reform that would make the enforcement mechanism more rigorous such as authorizing collective retaliation against offending members, or granting WTO rules direct effect in domestic courts.[14] It is however important to note that there are critics who are of the opinion that the current regime is inflexible and coercive. They strongly contend that DSB decisions are intrusive and that they usually unravel or repeal laws that have been enacted by a democratically elected government. Most importantly, they argue that the "retaliation" remedy undercuts the WTO's own principles by creating a situation, where the parties involved in the dispute depart from the free trade commitments.[15]

In this paper, the aim is to evaluate the structure for dispute adjudication under the DSS. Further an analysis of the legal nature of WTO obligations to ascertain how it influences members when deciding whether to comply or not the outcome of a WTO dispute. I examined the two broad models from which scholars and even countries have tried to understand their WTO's legal obligations. Further, I argue that in reality WTO obligations are the products of a hybrid of the two dominant models or theories. Further, I posit that the analysis and evaluation of WTO DSS should be restructured taking into account that despite the legalization of the WTO DSS and its enforcement mechanism, it is constrained by international legal discourse and politics. Finally, there are suggestions on possible ways of improving the remedy system that would effectively incentivize countries to comply with their WTO obligations.

The paper is divided into five parts. Part I serves as the introduction. Part II discusses the WTO DSS and its enforcement mechanism. This is done through an examination of the role played by the constituent units of the DSS i.e. the Panel, Appellate Body and Dispute Settlement Body (DSB) and the interrelation of these units in the enforcement of any given WTO decision. Part III considers the various theories under which WTO obligations have been classified or conceptualized and the implication of this theories or models for the enforcement mechanism. Part IV evaluates the various incentives and disincentives for compliance and how WTO members balance these competing interests when faced with an adverse WTO decision. Part V concludes with a verdict on the state of the enforcement mechanism and how best to strengthen it assuming there is a need for that.

II· THE WTO DSS AND ITS ENFORCEMENT MECHANISM

The WTO DSS is built on the pre-existing GATT regime. The document establishing the new system is the Uruguay Round Understanding on the Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding or DSU).[16] The DSU creates three institutions to administer WTO DSS. The first is the Dispute Settlement Body established under Article 2 of the DSU for the purpose of administering rules and procedures as set out in the DSU, subject to the exception as provided in the Covered Agreements. The DSB has power to establish panels, adopt panel reports and appellate reports etc. The General Council of the WTO serves as the DSB, but the DSB has its own chairman and follow separate procedure from those of the General Council.[17]

The DSU creates an Appellate body to review panel decisions or rulings.[18] The Appellate Body is a standing institution made up of seven persons appointed by the DSB for four-year terms.[19] The members of the Appellate Body must be persons with demonstrated expertise in law and international trade who are not affiliated with any government. The Appellate Body members hear cases in divisions of three, but each member is required to 'stay abreast' of the dispute settlement activities of the WTO. However, it should be noted that, the WTO DSS system continued the panel system of GATT 1947. Under the new system, the Panels are composed of three (exceptionally five) persons, well-qualified government and/or non-government individuals, selected from a roaster of persons suggested by the WTO members. Panel members serve in their individual capacity and not as a representative of any WTO member.[20]

The Appellate Body has been said to be the most noteworthy single development of the WTO DSS.[21] The unique role it was designed to play in the WTO system was quickly put to the test as the first 12 panel reports were appealed. From the outset, the Appellate Body established itself as an activist tribunal.[22] It modified 10 of the reports, effectively reversing one of them. In its review of panel reports, the Appellate Body did not focus on whether it approved of the result in general terms as some appellate tribunal do, but rather it closely examined the reasoning and wordings with which it disagreed.[23]

A thorough examination or reading of the DSU shows that the WTO DSS stands out by the virtue of the broad scope of its jurisdiction as well as the compulsory, exclusive and contentious nature of that jurisdiction.[24] Article 23.1 of the DSU provides that members shall have recourse to the rules and procedure of the understanding to resolve disputes, arising from the violation of obligations or other nullification or impairment of benefits under the Cover Agreement or an impediment to the attainment of any objective of the Covered Agreements. Unlike other international dispute settlement systems that require consent for the exercise of jurisdiction, membership of the WTO constitutes consent to and acceptance of the compulsory jurisdiction of the WTO Dispute Settlement System. Article 23.2(a) of the DSU provides for exclusive jurisdiction by prohibiting members from making a determination to the effect that a violation have occurred, that benefit have been nullified etc. except through recourse to dispute settlement in accordance with the DSU.

As to the methods of dispute settlement, the DSU provides for more than one method to settle dispute between WTO members. In fact, the DSU provides for:

a) Consultation or negotiations;[25] (b) Adjudication by panels and the Appellate Body[26];

(c) Arbitration;[27] and (d) Good offices, conciliation and mediation[28]

It should be noted that the dispute settlement methods provided in paragraphs (a) and (b), are by all standards the methods most frequently used. However, the DSU also provides for expeditious arbitration as an alternative means of dispute settlement.[29]

The DSU[30] provides for or sets out a hierarchy of remedies available to a Contracting Party, it encourages in descending order of preference (i) bilateral settlement; (ii) withdrawal by the defendant of the WTO inconsistent measures (iii) compensation and as 'last resort' retaliation. The provision of Article 3.7 of the DSU clearly prefers a solution mutually acceptable to the parties to a dispute and one consistent with the Covered Agreements. In the absence of such mutual agreed solution, the first objective is usually to secure the withdrawal of the measures.[31]

Article 19 of the DSU provides that when a Panel or the Appellate Body concludes that a measure is inconsistent with a Covered Agreement, it shall recommended that members concerned bring the measure into conformity with the agreement. Once the Dispute Settlement Board (DSB) adopts this recommendation, it becomes legally binding on the member concerned. Members are obligated to expeditiously comply with the recommendation or ruling of the DSB to ensure the effective resolution of dispute to the benefit of all members.[32]However, if it is impracticable to comply immediately with the recommendations and rulings, and this may often be the case, the member concerned has a reasonable period in which to do so.[33]The reasonable period for implementation may be decided by the DSB, agreed by the parties to the dispute;[34] or determined through binding arbitration at the request of either party.[35]

It is pertinent to point out, that only the withdrawal of the WTO-inconsistent measure constitutes a final remedy for breach of WTO obligation. If a member has not withdrawn or amended the WTO-inconsistent measure by the end of the reasonable period for implementation, the DSU provides for the possibility of recourse to temporary remedies: compensation or suspension of concession or other obligations. Compensation within the meaning of Article 22 of the DSU is voluntary, forward looking or prospective i.e. both parties have to agree on the compensation and the compensation concerns only futuristic damages and must be consistent with the Covered Agreements.[36]

On the other hand, suspension of concession or other obligations commonly referred to as 'retaliation' is very different in nature from compensation. There is no need for parties to agree. When the reasonable period for implementation has expired and the parties have not been able to agree on compensation, the injured party may request authorization from the DSB to retaliate against the offending party by suspending concession or other obligations with respect to that offending party. Since the DSB decides on such a request by reverse consensus, the granting of authorization is automatic.[37]

These remedies available under the WTO law have been criticized[38] as having two major problems. The first being the issue of voluntary compliance and the second being that the remedies do not provide for actual reparation for damages caused by another member's non-compliance. As a result of this, many have called for a revision of WTO remedies to allow for institutional assessment of a form of financial reparation.[39] Apart from the above problems, it has been argued that there are other significant flaws in the existing remedies available in the system namely (i) the existing remedies are theoretical or counterproductive (ii) the existing remedies offer no relief to those actually damaged (iii) it damage innocent bystanders and (iv) existing remedies are unwieldy.[40]

Despite the criticisms against WTO remedies, the enforcement of these remedies under the WTO Dispute Settlement System is still considered one of the prized achievements of the DSU, especially when compared with other institutionalized international law regimes. Advocates of this new mechanism stress the unprecedented nature of countermeasures in the DSU, compared to the highly political, power-oriented, decentralized and discriminatory countermeasures available under public international law. The DSS has also been able to provide for rule-based, automatic enforcement of the WTO remedies, irrespective of the huge imbalance among the members thereby creating a level playing field for all the WTO membership, including the smallest economies among them.[41]

Article 21 of the DSU provides an elaborate mechanism of surveillance of implementation of recommendation and ruling of Panels and Appellate Body reports. Once the report is accepted, the DSB is empowered to monitor whether or not its recommendation have been implemented. The DSB is further empowered to keep vigil in respect of measures, which a losing party has to take to remedy a violation of GATT or the covered Multilateral Agreement in pursuance of the recommendations of the panel with thirty days of the adoption of the Panel or Appellate Body report.[42]

Evaluating the efficacy of the DSS, R.Rajesh Babu has opined that the final aspect of an effective remedial mechanism is its enforcement in the event of non-compliance. In other words, the effectiveness of the remedial mechanism depends on the ability to enforce decisions,[43] the DSU for this purpose provides a hierarchy of response and step-by-step processes. Article 21.6 of the DSU provides for the reporting on the status of implementation of the recommendation and ruling of the DSB at each DSB meeting. According to Pelzman and Shoham[44] under the WTO DSU, the member is left with two possible procedural recourses if the losing party fails to comply fully. These procedural recourses are provided for in Article 21.5 and 22 of the DSU. However, the DSU fails to specify the relationship between the two procedures.[45]

Article 21.5 provides for the deciding of dispute through recourse to the dispute settlement procedure under the DSU, if there is disagreement with respect to measures taken to comply with the recommendations and rulings. However, pursuant to Article 22.6, authorization for retaliation (suspension of concession or other obligations) must be granted by the DSB within twenty days of the expiry of the reasonable period of the losing party's failure to implement the decision or negotiate mutually accepted compensation. This inconsistent led to a serious institutional crisis brought about by the EC - Banana III dispute.[46] The Bananas case presented the most difficult implementation problem because of a US-EC dispute over how to interpret the DSU. In the case, the EC (the offending Respondent) argued that Article 21.5 compliance review should be resorted to before requesting the DSB for suspension of concession as per Article 22. The US (the complainant) countered that it can request authorization to suspend concessions within 20 days after the end of the compliance period, without resorting to Article 21.5 compliance review.

Though this problem of the relationship between the two procedures (often referred to as sequencing issue) remains, and one which requires a change to the DSU to resolve. In the meantime, parties commonly agree on an ad hoc basis that the procedure of examining the WTO consistency of the implementing measures will need to be terminated before the authorization for retaliatory measure may be granted. However, it is pertinent to note that the ambiguity that exists in the DSU does need to be clarified to ensure certainty and predictability of the system for all its members.

In the event of retaliation, if the non-complying member objects to the level of suspension proposed, or claims that the principles and procedures for suspension have not been followed, the matter may be referred to arbitration before the DSB takes a decision.[47]

Article 22.6 of the DSU, provides that if the losing party fails to implement the recommendations and rulings adopted by the DSB correctly within the reasonable period of time agreed by the parties or determined by an arbitrator, the losing party will at the request of the complainant enter into negotiations in order to come to an agreement on mutual compensation. The arbitrators are, if possible, the members of the original panel. If this solution is impossible, it is the Director - General of the WTO who will appoint the substitute arbitrator(s). The arbitration must be completed within sixty days of expiry of the reasonable period [48]and a second arbitration or appeal is not possible.[49] The DSB is informed of the decision of the arbitrator and it approves or grants by consensus the request authorization to suspend concessions and other obligations, where the request is consistent with the decision of the arbitrator.[50]

The above analysis lays out the DSS and how its various constituent units interact to bring about the adjudication and enforcement of a WTO decision. Based on the above background, I will proceed to examine the nature of the WTO obligations and the various models under which it has been classified. Further attempts will now be made at showing the implications or consequences of a failure to comply from the standpoint of these models, this will enable us have a holistic conceptualization of WTO legal obligations.

III· NATURE OF WTO OBLIGATIONS AND THE DSU ENFORCEMENT MECHANISM

Typically, two main conceptual frameworks are used in the understanding of the nature of WTO obligations in current academic literature. In an unresolved debate between the two broad divides, the concerns remain whether the WTO regime is a "constitutional" regime, with obligations that cannot be derogated from through separate agreements or whether the WTO is a "contractual" regime, in which member states are permitted to make agreements with other states that alter or limits their WTO obligations. However, there is a third evolving school of thought, which queries whether the WTO is a hybrid of constitutional/contractual structures that exhibits elements of the traditional characterization or conceptualization models.

Based on a constitutional conceptualization of WTO obligations, Scholars have argued that WTO obligations are constitutional. This in the sense that, it provides the overarching structure for the global trading system; others argue that the presence of the well-entrenched system of judicial review and the judicial law-making activities of the DSS in its bid to ensure compliance with the regime's basic law and norms, supports the constitutionality of the regime. Further, proponents suggest that the binding commitment of WTO members to a higher form of law, which supersedes all other domestic laws, evinces attributes of constitutionalism.

The much acclaimed constitutionalism theorist, Ernst-Ulrich Petersmann, argues that we should understand the legal obligation of WTO as constitutional in the sense of being a "higher" form of law that cannot be varied or violated.[51] In this sense, the WTO is "above" politics. Governments and their domestic institutions are bound across board. WTO law is therefore non-derogable, by it constitutional binding nature, parties should not be able to vary their obligations under it and it should apply equally to all states.[52] According to him, this clearly establishes a vertical or hierarchical legal regime with WTO obligations trumping other regional or domestic legal trade obligations. Therefore, WTO obligations should be difficult or impossible to vary or opt out of. It is very important to point out that one of the bases upon which Petersmann anchors; his constitutionalism postulation is Article XVI (3) of the WTO Agreement.[53] This conflict of laws rule, he argues are of "constitutional significance" and establish a formal hierarchy ordering international law vis-a-vis national trade obligations.[54] Most importantly, he argues that we should understand the WTO as constitutional in nature because of its capacity for judicial review and its structure of the dispute settlement system.[55] The system, he concludes ensures that parties comply with their WTO duties and that they have a remedy when their 'constitutional' rights are violated.[56]

Another constitutional theorist is John Jackson, who emphasizes the institutional/structural aspect of the constitutional analogy. He argues that the WTO is "constitutional" in the sense that it constitutes the architecture of the global trading system.[57]

Evaluating the above arguments in support of the constitutional nature of WTO obligations, it is conceded that to the extent that WTO obligations exude overriding elements, which implicate other regional or domestic trade law obligations and the institutionalization of its judicial review process, which creates legal norms that are binding on member countries: WTO obligations can be categorized as constitutional. However, such an analysis or evaluation in the author's view would be myopic or very limiting in its scope or coverage and it may even be said that it fails to take into consideration the practical realities confronting the regime. In fact an erudite professor of law,[58] had while arguing against a constitutional analysis of WTO obligations, contended that as a normative matter, understanding the WTO as a constitution makes the individual elements of the regime less contestable, less democratically entrenched, and less legitimate.

It is established that, while the DSU requires member states to comply with Panel or Appellate Body Reports or DSS decisions as the case may be, it also expressly recognised the right of parties in the dispute to resolve their dispute through bilateral settlement.[59] This provision seems to have a "dilutive" or "chilling" effect on the whole argument for the strict constitutional nature of WTO obligations. Relying on the logic of the constitutional theorists, the question one could ask is can it really be argued or said that the DSU grants WTO member countries the right or leeway to undermine or vary the very "immutable" WTO obligations that the system seeks to create or entrench.[60] Further, the outcome of some WTO disputes now very much calls to question the absolute validity or acceptance of a constitutional explanation for WTO obligations. For instance, in the United States - Section 110(5) of the US Copyright Act case[61] where the US and the EC informed the DSB of a mutually satisfactory temporary arrangement. Such temporary arrangement did cover the period through to 20 December 2004. Subsequently, the United States presented status reports to the DSB, informing it that the US Administration will work closely with the US Congress and will continue to confer with the European Union in order to reach a mutually satisfactory resolution of the dispute. These above identified concerns show that there is the need to analyse or evaluate other possible legal justifications or supports for WTO obligations.

Another attempt to conceptualize the nature of WTO obligations is that proposed or advanced by the contractual model theorists. This conceptual explanation of WTO obligations is analogous to a contract in domestic law regime, which is understood as an agreement or promise between two or more private parties creating binding obligations and one wherein parties are permitted to agree to anything within the bounds of the law, and may set any term they wish. They may vary or change their obligation when they see fit by amending the contract. Nevertheless, of great importance is the fact that the overarching legal paraphernalia of the state provides a legitimizing support for this private arrangement between its subjects.

This contractual explanation of WTO obligations arose out of criticisms of the constitutional approach of Petersmann and other constitutional theorists.[62] Some scholars have in fact totally denied and questioned the empirical basis for describing the WTO as a constitutional system and its lack of constitutional features.[63] Joost Pauwelyn, a strong proponent of the contractual regime, has argued that WTO obligations are anchored on series of bilateral agreements between the parties, and any one of the obligations could be altered by a few of the parties without affecting the other states that are part of the WTO.[64] He further argued that the WTO legal obligation is not a higher form of law meant to bind governments over time but a negotiating ground where parties can work out agreements regulating their relationships. While some treaties are collective because they are designed to protect the interest of the collectivity (like the UN Charter and most human rights treaties), other multilateral treaties (like the WTO or the Washington (ICSID) Convention) give rise to a bundle of bilateral obligations that are distinct and separate from one another.[65]

Further, Pauwelyn examine the object and purpose of WTO obligations and determines that they are bilateral in nature. Trade, he claims, is about market access between countries. Breaches of WTO obligations that deny market access only affect the rights of parties to the breach. "[n]ot all breaches of WTO obligations necessarily affect the right of all other WTO members." In addition, Pauwelyn claims that the WTO's enforcement mechanism itself illustrates the bilateral character of its obligations. He further asserted that WTO dispute settlement provides redress not for breaches of obligations, but instead "nullification of benefits that accrue to a particular member." Dispute settlement works in a purely bilateral fashion, with one member alleging a violation against another.[66]

Still on the contractual conceptualization of WTO obligations, the Appellate Body in Japan-Alcoholic Beverages[67] observed that "[T]he WTO Agreement is a treaty - the international equivalent of a contract". Further, Chi Carmody opines that more generally, the language of "contractualism" is never far from description and discussion of WTO law and that the contractualism's dualism nature seems to accord well with the cognitive framework used in relation to WTO law, with the binary nature of trade negotiations, WTO dispute settlement, and retaliation.[68]

Despite the elements of validity or accuracy in the arguments by Pauwelyn and other proponents of the contractual conceptualization of WTO obligations, a holistic examination of the principles and practices governing WTO obligations will reveal the inherent limitation in their theory. Admittedly, WTO members often relate on a bilateral or multilateral (contractual) basis with each other, possessing the power to agree on how best to enhance market access and the free movement of goods and services. Nevertheless, numerous WTO Panel and Appellate Body decisions have constantly found that such arrangements must be validated by the overarching principles contained in the various constituent documents of the WTO and where there exist any inconsistency; the bilateral or multilateral arrangement shall to the extent of its inconsistency with the WTO Cover Agreements or obligation, be void.

Having succinctly outlined the two broad conceptualizations of WTO obligation, one cannot help but identify some limitations to these approaches. The above constitutional and contractual conceptualizations of the nature of WTO obligation were largely developed without reference to some elements of both theories common to WTO. One agrees with scholars who suggest that there are both constitutional and contractual elements to the WTO.[69] There are certain core obligations that WTO law has sought to assert as non-derogable, while in other instance permitting parties to contract out or bilaterally settle an obligation imposed by a DSS Report. Parties are thus able to alter their WTO obligations on a bilateral basis on issues.[70] This shows that WTO obligations are neither purely constitutional nor purely contractual rather they incorporate elements of both theories. The failure of the constitutional and contractual theorists to accord recognition to the above fundamental elements shows the inherent flaws in their analysis.

To further re-enforce the constitutional-contractual hybrid of WTO obligations, there is the need to carry out the analysis from the general public-private law classification of legal obligations. In a typical constitutional or administrative legal structure, it will be considered a legal "taboo" and totally impermissible for citizens or members of the society to bilaterally or multilaterally settle or contract out of any obligation imposed on them by the constitution or any statute. In contrast, under the same legal system, its contractual or commercial legal norms would grant parties the liberty to freely set, change or vary their obligation.[71] This analysis supports the view that legal regimes can be much more complicated, one to which the WTO is not an exception. It is further argued that they can contain elements of both public-style (constitutional and administrative) regime and private-style (contractual and commercial) regimes.[72]

The fact that WTO obligations are neither constitutional nor purely contractual regime, rather a hybrid of both regimes has important implication for the evaluation of the enforcement mechanism and the factors member states take into consideration when deciding whether to comply or not to comply with WTO obligations. It provides explanation for the way WTO member countries react to DSS decisions. While members may fully appreciate or even relate within the hybrid nature of the WTO regime, most of them have strongly favoured and pushed for the tilting of the scale toward the contractual theory. This approach according to them provides the leeway for resolution of trade dispute through negotiations (bilateral and multilateral) and ultimately it reduces the unravelling effect that the compliance with a DSB decision would have on the internal political, economic and legal system of any member country.

In fact, current realities have shown that member countries, particularly the powerful developed countries have protested at what they consider as "judicial activism" in the DSS.[73] This protest usually concerns Panel and Appellate Body's decisions that find that domestic measures contravene WTO obligations or the DSS fidelity to some posited, deduced or constructed intent of those who negotiated a substantive provision of a given WTO agreement.[74] This has led to suggestions that the alleged intrusive nature of WTO obligations might trigger an extreme policy response, such as threatening unilateral U.S. and other developed countries withdrawal from the WTO.[75] However other countries, especially the less developed countries do consider the DSS and its enforcement mechanism as a means of limiting or curtailing U.S unilateralism (that is action pursuant to section 301) by effectively forcing the United States to seek and await the decision of the DSB before imposing sanctions for alleged non-compliance with WTO obligations.

IV· INCENTIVES AND DISINCENTIVES FOR COMPLIANCE

It is pertinent to point out that upon the reaching of a decision by the DSB. Almost all members declared their intention to comply with the ruling and most do so within a reasonable time.

According to John Magnus,[76] it is easy enough to identify factors that pushes a losing defendant toward complying, and these are mainly due to concerns about the "three Rs" of reputation (desire not to be seen as a scofflaw), retaliation (authorized by the DSB), and possible role reversal (i.e., ability to demand implementation as a victorious complainant in future cases). It has been argued that members would usually comply with WTO rules, giving that a breach of WTO obligations by one member is likely to affect, directly or indirectly, the economic and free access to market interest of many, sometimes all, other WTO members.[77] Further, it will not be out of place to say that ceteris paribus in the absence of the disincentives to compliance, a member country would generally not bother about carrying out the balancing of opposing considerations to determine which of them to favour.

It should be noted that reputational consideration as an incentive for compliance with WTO obligations is not unique or peculiar to the WTO DSS. In fact, under the GATT system of diplomacy, members respected most of their commitments. According to a leading commentator Alan Sykes,[78] commitments and obligations where respected for two reasons. First, it is in the interest of nations to seek international cooperation on trade (and other matters) to demonstrate their reliability to other nations by adhering to their commitments. Nations that fail to do so, at least with sufficient frequency, will be deemed unreliable and other nations will not cooperate with them in the future. In economic parlance, nations adhere to commitments because it is in their interest to develop a reputation for cooperative behaviour.[79]

The prevalence of reputational consideration as an incentive for compliance under the GATT was not changed or altered by the institutionalization of dispute settlement, which the WTO introduced.[80] However, its effectiveness has been called into question, if not almost overshadowed. For instance, reputational concerns were at best an imperfect constraint on unilateral sanctions, because it was difficult for other nations to observe when sanctions were "excessive". Further member states have in some instances or cases placed more premiums on other domestic considerations rather than on how other countries perceive them vis-a-vis compliance with their trade obligations.

Further, in relation to retaliation as an incentive for compliance with WTO obligations, this usually involves a situation where a complaining member based on a DSB authorization, is allowed to suspend concessions granted a defaulting member who has failed to comply with trade obligations it owes the complaining member[81]. Retaliation does not only serve as the most viable existing WTO remedy today, fear of its resultant effect on the economy has often served as an incentive to motivate an erring member to comply with the obligation it owes the complaining member. However, while the application of retaliatory measure have forced compliance in some instance,[82] in other instances, the fear of or even the application of a retaliatory measure did not necessarily serve as an incentive for a losing member to comply with WTO obligations.[83] The strongest of reservations about the application or enforcement of retaliatory or countermeasures is the counterproductive effect it may have in certain instance, especially when a developing economy is involved. It has been said that in such a case the prevailing member with a less developed economy is not helped but further harmed by retaliation.[84]

The issue of role reversal serving as an incentive for compliance is usually a complimentary incentive to the reputational consideration. This is due to the fact that, while a member would be inclined to comply with WTO obligation in order to avoid being considered a 'scofflaw' there is also the further consideration of not finding itself in a reversed of role should it be victorious in future cases. It is however important to point out that role reversal as a consideration for compliance is usually a potent weapon or consideration when the dispute is between countries of relative economic strengthen and with a high volume of trade between each other. The picture will however not be the same when the dispute involves parties with wide disparities in their economic strengthen or trade volume; in such a scenario the member with the weaker economy, though the victorious party will stand to lose more. This is usually not the case with the stronger and more powerful members, who will definite place less premium on any non-compliance or potential backlash should there be a role reversal in future cases.[85]

After a discussion of the incentives that could generally prompt a member country to comply with its WTO obligation, there is a need to consider those factors that have prompted or led to non-compliance. It is important to note that, the DSS has experienced a fair share of challenges and non-compliance with it decisions and had on some occasion-authorized retaliation as a means of enforcement. According to Bercero and Garzotti,[86] as at 2006, it appears that there have been only eight cases in which compliance has been a "problem": four cases involving the US (FSC, 1916 Anti-dumping Act, Section 110 Copyright Act, Byrd Amendment), two cases involving the EU (bananas and hormones), and one case each involving Canada and Brazil (export subsidies on aircraft).

There have been genuine concerns that members overburden and thus undermine the DSS as result of their inability to agree on rules governing politically sensitive issues concerning international trade.[87] It will be observed that from the above list of cases of non-compliance, the factual evidence suggest the following - that all the cases of non-compliance have involved a major trader as a defendant (US, EU, Canada, Brazil). However, for the same reason, all the cases have also involved at least one major trader as a complainant. There is no suggestion; that "asymmetry" is a factor in non-compliance. (For instance, the EU complied within the timeframe in all the cases it has lost where the sole complainant was a developing country.[88]

In most cases of non-compliance, there is usually the requirement of some of reactionary or correctional steps to be taken by the legislative branch of government which suggest that, while the executive branch has a strong incentive to comply for "reputational" reasons, the main challenge it would face is usually to persuade legislators that domestic rules need to be changed as result of a ruling by distant adjudicators in Geneva.[89] Apart from the issue of persuading legislators to change domestic rules as result of a ruling by distant adjudicators in Geneva; it has been further explained that non-compliance by a losing party might be as result of some other factors which might be a member country's attachment to the measure, its disagreement with the adopted decision, informational gap and systemic concerns.[90]

On the issue of a member country's to attachment to a particular trade measure, it should be noted that a losing defendant might prefer to compensate or accept suspension of concessions given strong attachment to the measure found to be WTO-inconsistent. This factor as a disincentive to compliance with WTO obligation was evident in the EC-Hormones case, where the EC despite several suspension of concession meted out by the US, insisted on its ban of hormone treated meat from the US because there are general studies, which do indeed show the existence of a general risk of cancer. Also, in the Section 110 (5) (b) case, the US rather than comply with the DSB recommendations, chose to settle the case through the payment of compensation. The outcome of these cases clearly shows that defaulting members i.e. the EC and the US, place more premium or stronger attachment on their respective measures, rather than the backlash they suffered from the retaliatory measures that resulted for their non-compliance.

In addition, a disagreement with adopted decision may potentially lead to non-compliance by the affected member. A losing defendant's senior officials or government might consider the adverse decision to be poorly reasoned or unpersuasive - particularly if the decision featured "gap-filling" by the WTO Panel or Appellate Body. Judicial law-making at the WTO has generated several complaints about legalization and activism. For instance, some commentators are concerned that expansive judicial law-making might diminish US or developed countries sovereignty[91] or subvert the will of Congress.[92] Further, others have argued that generative law-making by the dispute settlement system would be undemocratic, given the limited transparency and insularity of the process. Still others have suggested that overtly expansive judicial law-making might undermine the political support of powerful states for the WTO.[93] This outcome would be politically devastating, as it is well established that multilateral organizations that are not supported by the World's most powerful states will either collapse or become irrelevant.[94]

Another consideration that serves as a disincentive for WTO members is "Information gap." The losing defendant's political authorities might lack certain information relevant to a decision on whether to seek to comply - particularly information about the offending measure's trade effects, which could significantly influence a cost-benefit analysis. It should be point out that, information gap as a consideration operates in both cases of compliance with an obligation and those involving the imposition of countermeasure or the suspension of trade concessions. For instance in the EC-Hormones case due to the need to provide an improved scientific risk assessment report to justify its ban on hormone treated beef from the US and Canada, the EC had to delay its compliance with the DSB recommendation. In relation to retaliatory measures, the EC in the US-Foreign Sales Corporations (FSC) case had to be very thorough and did carry out open consultation in order to generate sufficient information on the list of potential products for the imposition of sanctions.[95]

Systemic concerns also throw up one of the strongest, if not the strongest disincentives for complying with a WTO Obligation. Challenging measures that cannot readily be shown to affect trade is arguably a misuse of the WTO dispute settlement system, even if permitted by DSU rules. A losing defendant may balk at rewarding such behaviour out of concern about encouraging more of it. With a potential retaliation "price tag" of zero, the cost of keeping a WTO-inconsistent measure is mainly reputational, which may not be decisive in a cost-benefit analysis or may be outweighed by the desire to send a message that dispute settlement proceedings should be reserved for matters fundamental interest with a significant effect on current trade flows.

CONCLUSION

The above discuss exposes certain conceptual issues on the part of the WTO as an institution and that of its member countries. The primary aim the WTO seeks and one to which every member that ascends to its constituent agreements seek is trade liberalization and access to market and the willingness of all other members to corporate and work towards the actualization of this set goal. However, practical realities show a perceptual dilemma mostly on the part of members, who based on political and internal economic considerations fail to abide or comply with their international WTO obligations. The above discussion exposes certain conceptual issues on the part of the WTO as an institution and that of its member countries. This has thrown up cases of non-compliance with WTO obligations.

Despite the fact that cases of non-compliance are few, there is an increasing strong concern about the future of the WTO DSS. This is ever more present given the strong critique (conceptual and practical) its investment counterpart ICSID is experiencing. However, some have argued that these few cases of non-compliance do not necessarily show or evince the presence of a compliance crisis[96] and that if the system is not broken, don't fix it.[97]

Based on the conceptual and practical issues affecting the enforcement of WTO obligations, as identified in this paper, the author is of the view that there is a need to stabilize if not strengthen the existing WTO DSS enforcement regime. This would not only afford the opportunity to correct structural deficiency, it will also allow for a timorous nipping in the bud of any potential crisis that may fester due to non-compliance and might eventual erode the system or lead to the withdrawal of some member countries.

One agrees with the proposal by Simon A.B Schropp, which advocates for the reorganization of the WTO enforcement regime by regulating DSU Art. 22.[98] Effectively the said article could be remodelled so as to establish a two-tier system of enforcement. Tier one, an inner protective belt which effective allows for dealing with welfare-enhancing good faith trade disputes (that emerge due to contractual infringements and at solving them in an amicable way. Remedies at this stage are strictly commensurate to the damages caused. Tier two, the outer layer of protection, mandates collective punishment by all WTO members. This second approach will accord more validity to the public law (constitutional) element of WTO obligation due to the fact that a failure to comply with an obligation would be considered to be not just a wrong against the complaining member, it will be considered to be an infringement of the WTO constituent documents or [A]greements. This second tier approach will eliminate the efficient safety valve in place for benevolent injurers, which currently exist, thanks to the sole presence of default rules and the present form of enforcement.

*Author - Mr. Ikemefuna Stephen Nwoye

                   Principal Chief Counsel - NWOYE (Barrister and Solicitor)

*The first version of this article was presented as a paper in the International Trade Law class at NYU Law in 2014. 

[1] General Agreement on Tariffs and Trade, Oct 30, 1947, TIAS NO. 1700 55 UNTS 1994

[2] Marrakesh Agreement Establishing the World Trade Organization [WTO Agreement], Apr. 15, 1994 in World Trade Organization, The Legal Text: the Result of the Uruguay Round of Multilateral Trade Negotiations (1999), www.wto.org.

[3] Understanding on Rules and Procedures Governing the Settlement of Disputes [hereinafter DSU], Apr 15, 1994, WTO Agreement, Annex 2, in The Legal Texts, supra note 2.

[4] Matsushita et.al " The World Trade Organization Law, Practice and Policy" (2nd Ed) 1

[5] Richard H. Steinberg, "Judicial Law-making at the WTO: Discursive, Constitutional, and Political Constraints" The American Journal of International Law, Vol. 98, No. 2 (Apr., 2004), pp. 247 -2755 at 247

[6] Mark L. Movsesian, Enforcement of WTO Ruling: An Interest Group Analysis, 2 HOSTRA L.R 32.1 (Oct 2013).

[7] Ibid, at 2.

[8] John H. Jackson, William J. Davey and Alan O. Sykes, Jr., Legal Problems of International Economic Relations Cases, Materials and Text (2013) 297.

[9]Ibid.

[10] Ibid.

[11] Ibid.

[12] Contrast with the view of scholars who have argued that the WTO is a hard law regime because it has the much-touted dispute settlement system with legally binding obligations imposed on members and given that, hard law regimes are notable for their ability to ensure compliance with legal obligations through coercive legal rules. See Jose E. Alvarez, International Organizations as Law-Makers (2005) 232; See Kenneth W. Abbott & Duncan Snidal, Hard and Soft Law in International Governance, in Legalization and World Politics 37 (Judith L. Goldstein et.al eds. 2001)

[13] On the question of whether international law is law? see John Austin, Lectures on Jurisprudence 121 (Robert Campbell ed., 1875); see also Jack & Daryl Levinson, Law for States: International Law, Constitutional Law; Public Law, 122 Harv.L.Rev 1791, 1822(2009) ("The principal objection made by critics of international law is that international law cannot be real law because it cannot matter in the way that real law must matter. In particular, [scholars] argue that international law cannot matter in the way it must to be law because it lack mechanism of coercive settlement."). Contrast Joanna Langille, Neither Constitution Nor Contract: Understanding the WTO By Examining The Legal Limits on Contracting Out Through Regional Trade Agreements. 86 New York Uni. L. Rev 1482, 1483 (2011). It was argued that WTO legal obligations can be considered as hard law regime due to the fact that the obligations that WTO member states undertake are formally legally binding and are enforced through the WTO's dispute settlement procedure, in which one country can take another country to "court" for violating its WTO duties.

[14] See Joost Pauwelyn, Enforcement and Countermeasures in the WTO: Rules are Rules-Towards a More Collective Approach, 94 AM J.INT'L. 335, 338 (2000); see also Arvind Subramanian & Jayashree Watal, Can TRIPS serve as an Enforcement Device for Developing Countries in the WTO? 3 J. INT'L Econ. L.403, 403-04

[15]Ibid.

[16] Mark L. Movsesian, supra note 6 at 108.

[17] WTO Agreement, Article IV:3

[18] DSU Art .17.

[19] Ibid.

[20] Ibid.

[21] John H. Jackson et.al, supra note 8 at 300.

[22] Ibid.

[23] Ibid.

[24] For instance in the Argentina - Poultry case WT/DS241/R (2003), the Panel had rejected an argument that the MERCOSUR judgment could estop the claim before the DSS Panel, it further held that "the fact that Brazil chose not to invoke its WTO dispute settlement rights after previous MERCOSUR dispute settlement proceedings does not, in our view, mean that Brazil implicitly waived it rights under the [Uruguay Round Understanding on Rules and Procedures Governing the Settlement of Dispute (DSU)]". Further, the Panel scathingly noted that "we are not even bound to follow rulings contained in adopted WTO panel reports, so we see no reason at all why we should be bound by the ruling of non WTO dispute settlement bodies." It will be recalled that in this case Brazil had previously unsuccessfully brought the case in MERCOSUR proceedings and Argentina relied on a MERCOSUR choice of forum provision (which specified that bring the dispute in the RTA exhausted WTO options and vice versa) that was not yet in force to argue that Brazil was stopped from bring the claim; See Article XVI (3) of the WTO Agreement.

[25] Article 4

[26] Articles 6 to 20

[27] Article 25

[28] Article 5

[29] Peter Van den Bossche, "The Law and Policy of the World Trade Organization" p. 186 (Cambridge University Press)

[30] Article 3.7

[31] R. Rajesh Babu, "Remedies under the WTO Legal System" Martinus Nijhoff Publishers p. 131.

[32] Article 21.1

[33] Article 21.3

[34] E.g., see the Canada-Periodicals Panel Report, Canada - certain Measures Concerning Periodicals, WT/DS31/R and Corr.1 adopted 30 July 1997, as modified by the Appellate Body Report.

[35] E.g., see the Arbitrator's decision in EC- Hormones case para. 25, where it was decided that when the implementation of the DSB decision does not require changes in legislation, but can be effected by administrative means, the reasonable period of time should be considerably less than 15 months.

[36] Peter Van den Bossche, supra note 29 at p. 221

[37] Peter Van den Bossche, supra note 29 p. 221

[38] Marco Bronckers and Naboth van dan Broek, "Financial Compensation in the WTO: Improving Remedies in WTO Dispute Settlement" p. 43 in Reform and Development of the WTO Dispute Settlement System Edited by Dencho Georgiev and kin van der Borght.

[39] See Geraldo Vidigal, "Re-assessing WTO Remedies: The Prospective and The Retrospective" Journal of International Economic Law 16 (3) p. 517.

[40] See supra note 14 p. 45 - 49 for a more detailed discussion of these flaws

[41] R. Rajesh Babu, supra note 31 at p.217.

[42] Autar Krishen Koul, "Guide to the WTO and GATT Economic, Law, and Politic" Kluwer Law int'l. p. 60

[43] supra note 31 at 12.

[44] Joseph Pelzman and Amir Shoham, WTO DSU - Enforcement Issues, 383 in Trade Disputes and the Dispute Settlement Understanding of the WTO 63 (James C. Hartigan 2009); see also supra note 32 at 280.

[45] Ibid. at 383.

[46] Ibid. at 383.

[47] Article 22.6 of the DSU

[48] Ibid.

[49] Article 22.7

[50] Note that the decision of the Arbitrators under Article 22.6 is notified to the DSB but it is not adopted by it.

[51] Ernst-Ulrich Petersmann, The GATT/WTO Dispute Settlement System: International Law, International Organizations and Dispute Settlement 47 (1997)

[52] Ibid. at 47.

[53] See the Marrakesh Agreement establishing the World Trade Organization art. XVI(3) the Article provides that, "in the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreement, the provision of this Agreement shall prevail to the extent of the conflict."

[54] Petersmann, supra note 51.

[55] See Ernst-Ulrich Petermanns, The WTO Constitution and Human rights, 3 J. Int'l Econ. L. 19, 20 (2000); see also Ernst-Ulrich Petersmann, How to Promote the International Rule of Law? Contributions by the World Trade Organization Appellate Review System, 1 J.Int'l Econ. L. 25, 33-48 both referenced in Joanna Langille supra note 13 at 1494. Compare with Deborah Z. Cass, The Constitutionalization of International Trade Law: Judicial Norm-Generation as the Engine of Constitutional Development in International Trade, 12 Euro. J. Int'l L. 39, 42 (2001) where it was argued that, the WTO is like a domestic constitutional regime because of the existence of judicial review, which assures compliance with the regime's basic law and norms.

[56] One practical limitation to this hierarchical arrangement or argument is the situation in the EC, where WTO law or obligation does not enjoy direct internal effect in the EC's legal order. See Article 288 of EC Treaty.

[57] John H. Jackson, The Perils of Globalization and the World Trading System, 24 Fordham Int'l L.J. 371, 375 (2000); see also John H. Jackson, The WTO Constitution and Proposed Reforms: Seven "Mantras" Revisited in John H. Jackson, William J. Davey and Alan O. Sykes, Jr., Legal Problems of International Economic Relations Cases, Materials and Text (2013).

[58] Robert Howse, The WTO System: Law, Politics & Legitimacy 249 (2007)

[59] Article 3.7 of the DSU provide among several other considerations, the possibility for parties to resolve their dispute through a means mutually acceptable to the parties consistent and one, which is consistent with the Covered Agreement. This has been referred to as "Bilateral Settlement" of disputes.

[60] See pages 8-9 supra for the argument by Petersmann, which is to the effect that WTO obligations are impossible to vary or opt out from.

[61] See Dispute DS 160 - available at https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds160_e.htm. It will be recalled that in this case the EC had on 26 January 1999, requested consultations with the United States in respect of Section 110(5) of the US Copyright Act, as amended by the Fairness in Music Licensing Act, which was enacted on 27 October 1998. The EC contended that the Section 110(5) of the US Copyright Act permits, under certain conditions, the playing of radio and television music in public places (bars, shops, restaurants, etc) without the payment of a royalty fee. The EC considered that this statute is inconsistent with US obligations under Article 9(1) of the TRIPS Agreement, which requires Members to comply with Article 1-21 of the Berne Convention. The Adopted Panel Report held found that the "business" exemption provided for in sub-paragraph (B) of Section 110(5) of the US Copyright Act did not meet the requirements of Article 13 of the TRIPS Agreement and was thus inconsistent with Article 11 bis(1) (iii) and 11(1)(ii) of the Berne Convention (1971) as incorporated into the TRIPS Agreement by Article 9.1 of that Agreement. The Panel noted, inter alia, that a substantial majority of eating and drinking establishments and close to half of retail establishments were covered by the business exemption. Rather than comply with the Report within a reasonable period of time, the US rather paid money to settle the case, compensating in the crassest possible fashion.

[62] See Joanna Langille supra note 13 at 1494.

[63] See Jeffrey L. Dunoff, Why Constitutionalism Now? Text, Context and Historical Contingency of Ideas, 1 J.Int'l L. & Int'l Rel. 191, 194-96 (2005).

[64] Joost Pauwelyn, A Typology of Multilateral Treaty Obligations: Are WTO Obligations Bilateral or Collective in Nature?, 14 Euro. J.Int'l L. 907, 937 (2003).

[65] Ibid. at 908.

[66] Ibid. at 935

[67] WT/DS8/AB/R p. 14 (Oct 4, 1996)

[68] See Chi Carmody, Rights and Obligations in WTO Law, 3 (WTO Scholars' Forum, 2010) available at https://www.ucl.ac.uk/laws/wto-forum/docs/Rights-and-ObligationsWTO-Law.pdf

[69] Ibid. at 3; see also Joanna Langille, supra note 13 at 1517.

[70] Ibid.; see also Art. 3.7 of DSU.

[71] See Challenging the Public/Private Divide (Susan B. Boyd ed., 1997); see also The Public-Private Law Divide: Potential for Transformation? (Mathias Ruffert ed., 2009).

[72] Joanna Langille, supra note 13 at 1517.

[73] For Instance, Senator Max Baucus stated that WTO panels are "making up rules that the US never negotiated, that Congress never approved, and I suspect, that Congress would never approve." US DSU Proposal Receives Mixed Reactions, Bridges Wlky. Trade News Dig, Dec 20, 2012 at https://www.ictsd.org/weekly/02-12-20/wtoinbrief.htm.

[74] Richard H. Steinberg, supra note 5 at 248

[75] See Pauwelyn supra note 64

[76] John Magnus, Compliance with WTO Dispute Settlement Decisions: Is there a Crisis? (Oct.2.2013) https://www.tradewinsllc.net/publi/DS%20Book%20Chapter%2010-05.pdf

[77] See the Jean Monnet Center for International and Regional Economic Law & Justice, WTO Obligations are bilateral obligations (Oct.2.2013). https://centers.law.nyu.edu/jeanmonnet/archive/papers/02/020101-01.html

[78] Alan O Sykes, Optimal Sanctions in the WTO: The Case for Decoupling (and the Uneasy Case for the Status Quo) at p.5 available at https://media.law.stanford.edu/publications/archive/pdf/Sykes%20Optimal%20Sanctions.pdf

[79]Andrew Guzman, How International Law Works: A Rational Choice Theory (Oxford University Press 2008)

[80] Sykes, supra note 78, at 6.

[81] Article 22.2 of the DSU.

[82] In the EC- Bananas case, it has been argued that the imposition of 100 percent tariffs on nine-agricultural products, which lead to a drastic loss of revenue for EC exporters, contributed to the EC entering into an agreement in April 2001 with the United States.

[83] In the EC-Hormones case, despite the imposition of sanctions by the U.S on EC exports, which resulted in an enormous loss of revenue by EC exporters, the EC was not incentivized to comply with the obligation, which the US claimed it breached. In justifying the stand of the EC in this case, it was suggested that at some point, an administration cannot do much more than it has done: namely, when it has taken a measure which it considers in good faith achieves WTO-compliance. When sanctions continue, they will not only constitute a breach of the ban on unilateralism stipulated in Article 23 of the DSU, but they also will not press the implementing member to do more than it has already done before there is a compliance ruling from the WTO. See Lothar Ehring, The European Community's Experience and Practice in Suspending WTO obligations in The Law, Economics and Politics of Retaliation in WTO Dispute Settlement.( Chad P. Brown and Joost Pauwelyn eds.,2010)

[84] Asim Imdad Ali, Non-compliance and Ultimate Remedies under the WTO Dispute Settlement System 13 https://www.princeton.edu/jpia/past-issues-1/2003/1.pdf.

[85] For instance in a study conducted by the World Bank, it was concluded that, "there is then a strong presumption that countries that are 'strong', are better off in such a system. Again, developing countries are at a disadvantage, when considering the trade arena. These countries are often dependent on the countries to which they export for foreign aid, and are politically and sometimes militarily dependent on them. Finally, there is yet another common asymmetry between developed and developing countries, which is the fact that the latter often receive tariff preference from developed countries; it might appear as if they could be a source of leverage for the latter. See Horn, Henrik and Petros C. Mavroidis, Remedies in the WTO Dispute Settlement System and developing country interests. Available at https://www1.worldbank.org/wbiep/trade/papers_2000/BPdisput.PDF

[86] I. Garcia Bercero and P. Garzotti, Dispute Reform: What are the Underlying Issues? In Reform and Development of the WTO Dispute Settlement System 137 (Dencho Georgiev and Kin Van Der Borght ed.2006). However, they did qualified that the list does not include cases in which the parties have agreed to extend the reasonable period of time for compliance or on which there are ongoing Article 21.5 proceedings.

[87]Peter Van den Bossche, supra note 28 at 298.

[88] I.G Bercero et.al, supra note 86, at 187.

[89] Ibid. at 138.

[90] See John Magnus, supra note 76. It should be noted that these factors have been distilled from cases of non-compliance involving member countries.

[91]Claude E. Barfield, Free Trade, Sovereignty, Democracy: The Future of the World Trade Organization (2001)

[92]Supra note 73.

[93] See Richard H. Steinberg, supra note 5; see also Judith Goldstein & Lisa L. Martin, Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note 54 Int'l Org. 603, 603-32

[94]Steinberg, ibid. at 257; Stephen D. Krasner, Structural Causes and Regime Consequences: regimes as Intervening Variables, in International Regimes (Stephen D. Krasner ed., 1983)

[95] See Notice No. 2002/C 217/02 relating to the WTO dispute settlement proceeding concerning the US tax treatment of Foreign Sales Corporations (FSC), 'Invitation for Comments on the List of Products that could be Subject to Countermeasures', Official Journal of the European Communities, No. C217, 13 September 2002.

[96] Magnus supra note 76.

[97] Sykes, supra note 78.

[98] See Simon A.B. Schropp, Trade Policy Flexibility and Enforcement in the WTO: A law and Economics Analysis 20 (Cambridge University Press, 2009).