WTO and FISHERIES The Dispute Settlement Mechanism DR. AUDUN LEM FISHERY INDUSTRIES DIVISION, FAO NACA AQUAMARKETS June 2003 Manila

2 Dispute Settlement Mechanism A result of the Uruguay Round Frequently linked to: Subsidies Anti-dumping Technical barriers to Trade (labeling)

3 Anti-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”.

4 Anti-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

5 How to determine dumping 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

6 Dumping investigations Countries must notify WTO about investigations Countries must report regularly on findings Countries may use Dispute Settlement Mechanism

7 Countervailing duties If dumping is proven If > 3 % If domestic industry is hurt: then import country can set special duty to compensate

8 Anti-dumping vs Subsidies Similarities: Many countries handle both issues in one law and have similar procedures Differences: Anti-dumping: Companies Subsidies: Countries

9 DISPUTE SETTLEMENT MECHANISM “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

10 Responsibility of the Dispute Settlement Body (the General Council in another guise) HOW ARE DISPUTES SETTLED ?

11 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:

12 up to 60 days First stage: consultation

13 Second stage: the Panel (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

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

15 Some fisheries cases Salmon (import (prohibition/countervailing duties) Scallops (trade description) Sardines (trade description) Shrimp (shrimp-turtle import prohibition) Swordfish (transit and import measures)

16 DOHA Development Agenda 2001 DOHA, WTO MINISTERIAL DECLARATION: IMPROVEMENT OF DISPUTE SETTLEMENT UNDERSTANDING AND USE BY DEVELOPING COUNTRIES DEAD-LINE: MAY 2003

17 THANK YOU