| | The Remedy Gap: Institutional Design, Retaliation, and Trade Law Enforcement | |
By Rachel Brewster | |
One of the major innovations of the World Trade Organization’s
(“WTO”) Dispute Settlement Understanding (“DSU”) is the regulation of
sanctions in response to violations of trade law. The DSU requires governments
to receive multilateral approval before suspending trade concessions
and limits the extent of retaliation to prospective damages. In addition, the
DSU permits governments to impose only conditional sanctions: sanctions for
violations that continue after the dispute resolution process is complete. This
enforcement regime creates a remedy gap: governments cannot respond, even
to obvious breaches, until the end of the dispute resolution process (and then
only to the extent of prospective damages). This gap might not be particularly
important if the dispute resolution process were short. In practice, however,
the WTO dispute resolution process has proven increasingly time consuming.
This Article explores the growth of delays in the WTO dispute resolution process
and the increasing significance of the remedy gap. It highlights how the
DSU system essentially provides respondent states with an option to violate
trade rules for several years without facing trade retaliation. The remedy gap
also has counterproductive effects on settlement negotiations: the system gives
respondent states few reasons to settle before the end of dispute resolution
unless the states are compensated for doing so. Finally, this system may lead
frustrated complaining states to subvert the DSU regime by acting outside of
the legal framework. This Article discusses several solutions to the remedy
gap, most notably creating a procedure where WTO panels can issue preliminary
injunctions.
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| | | | Keywords: Brewster, World Trade Organization, Dispute Settlement Understanding, trade law, dispute resolution | | Content Type: Article | | Media Type: Print | | Author: Rachel Brewster | | Publish Date: November 2011 |
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