The literature on the role and success of developing countries in the dispute settlement mechanism of the World Trade Organization is vast. Broadly speaking, one can distinguish two strands of enquiry. The first emphasizes economic realities behind WTO dispute settlement, analyzes the role of developing countries through the prism of their economic significance and their commercial/trading interests, and tends to apply quantitative analytical tools. The second strand focuses on the lack of legal capacity in developing countries, the absence of cooperation between the private and public sectors, other shortcomings in the national trade policy infrastructure, and tends to be more qualitative and empirical in its approach. Needless to say, many studies and scholars straddle these two strands – economists recognize and attempt to quantify the significance of non-economic, qualitative factors; empiricists acknowledge that limited economic size and small shares of global trade partly explain the limited developing country participation in WTO litigation. In fact, many publications differ only in the degree of emphasis they attach to particular factors; there is broad consensus on a catalogue of factors that are acknowledged by virtually everyone to play some role.
The second, qualitative-empirical, approach counts Gregory Shaffer as one of its foremost representatives. Shaffer (2003) has contributed much to the trade community's attention to domestic governance and the significance of so-called ‘public − private networks’ – structures for formal and informal communication and cooperation between the government and the private sector – for effective participation in WTO litigation. Shaffer‘s work reflects insights from extensive interviews of government officials of developed and developing WTO Member governments, both in capitals and in Geneva, as well as interviews with private practitioners, panelists, WTO Secretariat officials, and staff of multinational corporations, industry associations and NGOs. His systematic research of real-world capacity constraints, both within governments as well as in the broader policy community, has helped to shape our understanding of the practical functioning of the WTO dispute settlement regime.
Shaffer has explored these issues in numerous publications, many of which were generated under the auspices of the International Centre for Trade and Sustainable Development (ICTSD). The ICTSD is presided over by Ricardo Meléndez-Ortiz, who is also one of the ICTSD co-founders. The work of the ICTSD has been invaluable in elucidating how the dispute settlement system works in practice, in inspiring new thinking about how the system could be modified to address challenges facing smaller developing countries, and in identifying strategies for developing countries to confront these challenges.
Shaffer and Meléndez-Ortiz's recently edited volume is intended to build on this line of existing research. The 355 page volume contains case studies of nine developing countries, from Latin America, Asia and Africa, and their respective experiences with the WTO dispute settlement regime. This group of nine countries includes some of the most active WTO litigants (such as Brazil and India), medium-scale users of the system (such as Thailand) as well as those who have used the system rarely or never (Bangladesh and African WTO Members). The book's objective is to provide a genuine developing country ‘bottom − up’ empirical perspective on the system and to compare different national strategies and experiences. The authors include academics, policy makers, and government officials − almost all of whom hail from the countries examined.
For people familiar with Shaffer and Meléndez-Ortiz's research, and more broadly with the literature on the legal capacity of developing countries, this book does not present revolutionary new insights. The focal points of the analysis are the ‘usual suspects’ found in the qualitative-empirical branch of this academic field: lack of in-house legal capacity, inability to retain expensive external legal counsel, absence of private − public networks that would ensure both monitoring of foreign trade barriers and communication and coordination between the government and the private sector, limited interest among the academic community and civil society, and concerns about political consequences of filing complaints against development assistance donors. Rather, the value added of this book resides with how precisely it examines these factors playing out in the practical realities of each country. The book thus enables a more nuanced analysis of why some developing WTO Members have been more frequent and more successful litigators than others and how the specific challenges differ from one country to the next. The book reveals some striking examples of domestic governance challenges and failures, sending a clear signal as to which direction most efforts at improving developing country participation in WTO litigation should be focused.
The volume opens with its most comprehensive essay, focusing on Brazil as the ‘star’ among developing country litigants. The essay traces that country's remarkable success in developing and diffusing WTO legal capacity within the government, the private sector, the academic establishment, and private practice. Authored by Geoffrey Shaffer, Michelle Ratton Sanchez Badin, and Barbara Rosenberg, the chapter reflects extensive interview-based empirical research and examines the evolution in Brazil's trade and development policy; the early WTO disputes brought against Brazil; the reorganization of governmental structures to address these defensive challenges; the deliberate efforts to mobilize the private sector and diffuse knowledge of WTO law; the anchoring of international economic law in legal education; as well as the creation of trade law study networks amongst universities, research institutes, think tanks, and centers for international trade law and policy. The title of the Brazil essay captures the essence of this process, namely ‘The development of a trade policy community’. It is indeed a ‘community’ that appears to have evolved in Brazil over the years, comprising a multitude of players and consolidating Brazil's rise to one of the key WTO members in both dispute settlement and the WTO at large.
José L. Pérez Gabilondo's essay on Argentina follows a similar pattern, describing Argentina's experience under the GATT 1947 through the changes in policy and governmental structures during the early years of the WTO. In particular, after a number of WTO disputes as respondent, the chapter describes the interaction between the government and the private sector during Argentina's move from defending disputes to actively challenging trade barriers in export markets. Gabilondo concludes that a more formalized and institutionalized framework for handling WTO disputes would increase the government's capacity (e.g., by creating a legal procedure similar to Section 301 in the United States and the Trade Barriers Regulation in the European Union); that the private sector and academia should assist the government in particular by supplying technical information and economic/econometric studies; and that greater training of government officials, along with diffusion of WTO expertise through academic institutions and commercial law firms, would enable Argentina to operate more effectively in WTO litigation.
A particularly interesting point in both the Brazil and Argentina case studies is the ‘capacity building’ or ‘catalyzing’ effect of defensive cases during the early WTO years. Both governments responded to complaints brought against their countries by reorganizing governmental institutions and marshalling resources for effective defense, including by engaging the private sector. Subsequently, these newly built up resources were available for the launching of offensive cases. The initial defensive experience was thus, as it were, a ‘blessing in disguise’, in that it obliged the government to reorganize itself and reconsider its previous approach to WTO litigation. Interestingly, this point is a reminder of the many ways in which economic size matters for active WTO dispute settlement participation. Generally speaking, larger WTO members (whether developed or developing) are more likely to participate in the dispute settlement system than smaller ones because they have greater absolute volumes of trade, diversified over a greater number of products and trading partners. They also make for more likely targets of complaints by other WTO Members, because their domestic markets are commercially more significant and more sophisticated. Thus, the ‘catalyzing’ effect of defensive challenges is more likely to accrue to countries with smaller markets than Brazil and Argentina.Footnote 1
Next, Han Liyu's and Henry Gao's excellent essay narrates China's WTO dispute settlement experience, tracing the evolution of China's foreign trade policy, the government's capacity building efforts via government-sponsored legal training, research and teaching in universities, and the mobilization by the government of industry associations and chambers of commerce. They also describe the role of private law firms and municipal government WTO centres; China's experience in the WTO as a complainant and defendant and its systematic participation as third party in a capacity-building exercise; and the challenges still confronting the Chinese government, such as inadequate intergovernmental coordination mechanisms, lack of cooperation with the private sector, and human resource constraints. Liyu and Gao also argue that Chinese litigation culture also acts as a constraint. Although the initial Chinese perception of international litigation as an unfriendly diplomatic act and the traditional Confucianist aversion to litigation are gradually disappearing (at least in the WTO context), Chinese lawyers, according to Liyu and Gao, continue to be trained in a different litigation style, which places them at a disadvantage vis-à-vis Western (especially common law-trained) lawyers.
Biswajit Dhar and Abhik Majumdar's study of India focuses on the EC–Tariff Preferences dispute.Footnote 2 Apart from a few systemic observations about stakeholders in Indian trade policy, the essay consists of a detailed account of the genesis of the EC–Tariff Preferences dispute, the legal details of the dispute, and the resulting panel and Appellate Body reports (e.g., the relationship between Article I of the GATT 1994 and the Enabling Clause, and the notorious burden of proof-blunder by the Appellate Body). Extrapolating from the dispute, the authors conclude that India's trade policy and participation in WTO litigation are largely shaped by the government without much private sector input. Indeed, the private sector often remains unaware of the government's actions. This is best epitomized by the striking anecdote that, in the EC–Tariff Preferences dispute, an Indian textile industry association lobbied the government to take WTO action against the EU's GSP scheme – four months after the Indian government had initiated the dispute!
The Thailand essay also uses a dispute (the EC − Sugar case)Footnote 3 as a starting point for analyzing the governmental structures in Thailand for handling WTO disputes. Pornchai Danvivathana casts a spotlight on the significance of in-house lawyers at the Thai mission in Geneva as well as the assistance provided to Thailand by the Advisory Centre on WTO Law (ACWL). He also analyzes the cooperation and communication between the government and the private sector, the role of civil society, and regional networking between academics and scholars. He identifies limited WTO litigation experience, litigation costs, a limited number of in-house international lawyers, and difficulties in the panel selection process as the key legal obstacles experienced by Thailand in the EC–Sugar dispute. He acknowledges that there is ‘no formal channel of communication between the private sector and the government through which the private sector's concerns can be heard’ (p. 216), and that, although the ACWL was actively involved, no private sector representatives were included in the Thai delegation at the panel and Appellate Body hearings. However, his call for intensifying and communication between the government and the private sector, as a capacity-enhancing tool in the Thai context, appears to be less pronounced than that of other authors.
The case of Bangladesh, written by Mohammad Ali Taslim, provides a compelling account of the travails of a least-developed country without WTO litigation experience, and of the psychologically and institutionally demanding step to initiate consultations with its principal and powerful trading partner (India). Taslim eloquently describes the domestic decision-making at the highest political level, the (according to him) indispensable assistance by the ACWL on concessionary terms, and the importance of the ‘dogged’ persistence of the private enterprise affected by the anti-dumping duties at issue.
Arguably, the case of Bangladesh demonstrates another constraint common to many developing and least-developed countries, especially to those that have never initiated a dispute. Standardized, established internal decision-making procedures for initiating a WTO dispute are non-existent, and therefore decisions may have to be made by some of the most senior government officials, including ministers or, as in the case of Bangladesh, even the head of state. In these circumstances, disputes may frequently not be brought because senior policy makers inaccurately perceive WTO litigation as an unfriendly diplomatic act, especially if no prior experience with WTO litigation exists. Moreover, if decisions have to be taken by individual senior government officials (or senior civil servants), these individuals may be unwilling to risk staining their professional careers by a potentially adverse outcome of a dispute that they personally authorized. In contrast, where decisions are taken via an institutionalized, well-established interagency process, which diffuses individual responsibility, decisions to initiate a dispute will be taken much more smoothly and without overblown fears of a diplomatic fall-out. Moreover, experience with WTO litigation reinforces the perception of WTO litigation as a largely technical exercise and not an unfriendly diplomatic act, which in turn further reduces resistance to WTO litigation. In short, experience and established decision-making procedures matter a great deal – another factor that puts small developing WTO members (and here especially LDCs) at a disadvantage.
The three case studies from Africa cover Egypt (by Magda Shahin), South Africa (by Gustav Brink), and Kenya (by David Ouma Ochieng and David S. Majanja). The participation of African countries in WTO litigation has been and remains particularly unsatisfactory; the editors' choice to include three African countries in the volume was therefore very fortunate.
Brink's piece on South Africa's experience with WTO dispute settlement examines South Africa's institutional structure and procedures in the light of WTO disputes in which South Africa has been involved as a defendant. The essay highlights the poor coordination between the departments in the Ministry of Trade and Industry responsible for, respectively, WTO matters (ITEDD) and domestic trade remedy administration (ITAC). Strikingly, ITEDD was not involved in any of the five instances in which (formal or informal) WTO consultations were requested with South Africa as a respondent, and in the one instance when South Africa had been requested by the EU to participate as third party in a dispute between the EU and US. This was entirely contrary to the intra-ministerial allocation of responsibilities. Brink's explanation for this extraordinary fact is that due to the subject matter – trade remedies – these disputes naturally gravitated towards the trade remedies department; however, according to Brink, ITEDD should have nevertheless taken the lead, because ITAC's responsibility over domestic trade remedy determinations does not extend to international litigation concerning these determinations. Brink furthermore refers to ‘internal political differences’ (p. 263) between the two departments and also implicitly hints at ITAC's frustration with ITEDD's internal procedures when the Geneva mission failed to inform the ITEDD of an official WTO consultations request; ultimately, it was a Brussels-based private practitioner who alerted ITAC of the consultations request two weeks later! The lack of technical expertise in the government also results from the departure of key personnel, some of which had received specialized training in WTO dispute settlement courses. While technical expertise is also lacking in the South African corporate sector, Brink identifies a significant pool of knowledge and talent in academia and private practice and suggests that the government should take advantage of this resource.
Shahin's essay on Egypt makes a number of systemic arguments at the outset, advocating the strengthening of special and differential (‘S&D’) dispute settlement provisions in the DSU and making retaliation more effective for developing countries. She examines the US–Cotton dispute,Footnote 4 and argues that the reticence of African countries to initiate disputes is regrettable because large WTO members such as the United States are much more likely to change their policy in response to litigation, rather than negotiation. Shahin then highlights the successful defense by Egypt of an anti-dumping determination in the Egypt–Rebar dispute, initiated by Turkey. The three key reasons for the absence of offensive cases brought by Egypt, as identified by Shahin, are: the unwarranted perception that initiating disputes will have negative repercussions on the overall diplomatic relationships with the target country; the fact that a large portion of Egypt's trade with the EU and the US is covered by unilateral preferences; and, finally, the fact that oil is an important component of trade. Shahin's recommendations include ‘substantial reform of the DSU’, building up domestic capacity in Egypt (e.g., by creating training opportunities for private practitioners, rather than only government officials), sharing the cost of litigation between government and private sector, using the services of the ACWL, and increasing participation as a third party.
Finally, the chapter from Ochieng and Majanja examines the full range of external as well as domestic governance factors to evaluate Kenya's approach to WTO dispute settlement. The contribution identifies the capacity and institutional problems that the reader has, by now, learned to expect – lack of WTO legal expertise, insufficient monitoring of foreign trade practices, lack of private sector awareness of WTO rules, as well as insufficient coordination between the private and public sector, also due to the private sector's lack of faith in the government's capacity to effectively address foreign trade barriers. Ochieng and Majanja also attach great significance to political constraints, e.g. the fact that (as in the case of Egypt) Kenya's major trading partner – the EU – is a major provider of development support, which makes bringing a WTO dispute against the EU politically problematic.
Overall, the volume is an excellent addition to the literature on developing countries in WTO dispute settlement. Even experienced WTO lawyers and diligent readers of scholarly writing will benefit as the book teems with interesting observations and striking anecdotes that highlight existing systemic, structural challenges in developing countries, and provides inspiration for further analysis. Despite common themes, it also highlights the differences between individual countries and makes clear that no one-size-fits-all approach is possible when developing strategies to enhance capacity.
Would there have been any room of improvement for this excellent volume? Perhaps the Indian case-study could have discussed the key topics of the book – governmental structures for handling WTO disputes, public − private cooperation and communication, etc. – in more detail. The vast majority of the essay is spent on the legal minutiae of the EC–Tariff Preferences case and on the competition between India and Pakistan in the textile sector. These may be interesting topics in and of themselves, and the authors describe them very ably, however the legal intricacies of the Enabling Clause shed no light on the Indian governmental structures for handling WTO disputes, which is of course the subject matter of the book. Despite the systemic importance of India, as one of the key developing WTO Members and one of the top litigants, the reader learns significantly less about India's structures for handling WTO disputes than about the structures in other countries. Other essays succeed better at using experience in one particular dispute so as to highlight general structures and procedures within the government and the broader trade community.
Another point that could be teased out in greater detail in future work is how the Brazilian success story could be replicated. The Brazil chapter – which covers more than 25% of the entire book – is a very able description of the successful Brazilian strategy in enhancing domestic legal capacity and creating a broader trade community. The logical question is – how far is the Brazilian story replicable in other countries? What were the attributes and conditions in Brazil that enabled this story (was it perhaps the size of its domestic market and sophisticated trade portfolio that provided the backdrop to successful institution- and network-building?) and that are more universally shared by all or most other developing countries? What, in contrast, were the unique attributes of Brazil that other countries do not share? Are there any natural limits, perhaps conditioned by the size of the domestic market, to how developing countries can enhance their domestic WTO capacity?
The overall conclusions and recommendations put forward by the authors seem eminently reasonable. More weight is put on domestic governance factors, and less on multilateral mechanisms, such as modifying the DSU to improve procedures, in particular to reform the retaliation system. Of the recommendations listed by Shaffer and David Evans in the concluding chapter, the vast majority pertain to domestic governance. These include fostering public − private partnerships, establishing dedicated trade law units in the relevant ministries and ensuring sound interdepartmental and interministerial coordination, establishing a central government contact point for dispute settlement, developing capacity to monitor foreign trade barriers, and fostering a broader trade policy community (including academic institutions and civil society groups). Other recommendations include taking greater advantage of the ACWL (a recommendation that, in this author's (perhaps subjective) view, features insufficiently prominently in most essays) and enhancing third-party participation in WTO procedures. Given the serious domestic governance shortcomings in most of the countries examined – which virtually certainly also exist in other countries – and given the extreme political difficulties of changing retaliation rules, the focus on domestic governance and improved operation within the existing system is not only a sound one, but also the only realistic one. The book deserves credit for the clarity with which it makes this general point, all the while permitting a nuanced, country-specific analysis that does justice to the peculiarities and specific challenges of each of the examined countries.
