Settlement Mechanism and Compliance: Is WTO an Effective Organization?

Topics: World Trade Organization, International trade, Developing country Pages: 11 (3305 words) Published: April 2, 2013
Is WTO an effective organization? Discuss in reference to Dispute

Settlement Mechanism and compliance

In this essay I will be addressing whether or not the World Trade Organization (WTO) is an effective organization, and whether the Dispute Settlement Mechanism is a success story. It is likely most scholars hold a positive opinion about these issues, this essay aims to move beyond this understanding (Western and USA) and measure its performance through its capacity to serve as a forum for settling trade disputes and compliance of its members within the rules. The focus is on the areas where the effectiveness of the WTO dispute settlement system can be questioned - the areas of compliance within rules, the question of the DSU system as equally accessible to developed and developing countries and the areas of remedy and sanctions.

The corner stone of this essay will be Rorden Wilkinson’s words: “…if WTO performance is measured as the institution’s capacity to act as a strategic device to maintain and exacerbate the advantages of a group of industrial states over their less powerful and developing counterparts… then it has actually been quite successful, albeit undesirably so.”

In the following sections, bearing equality between developed and developing countries in mind, I will (I) conduct a general overview of the WTO Dispute Settlement Understanding, (II) attempt to grasp the actual conditions in which the effectiveness of the system can be questioned, and provide some key cases and following the line of these two points (III) I will also attempt to review some of the suggestions that have been offered to improve the effectiveness of WTO in order to show that if the reforms are need it, then something in the effectiveness of WTO is not working properly. Finally, I will make a general summary and identify if the WTO is an effective organization and to what extent.

At the outset it should be noted that the WTO, created in 1995, is a fairly new institutional and organizational mechanism for implementation of all agreements and understandings of the Uruguay Round, this is based on the agreement reached to establish a new contractual legal system, that regulates international trade relations between member states of the agreement. But it is not an instrument of free trade, even though it allows the use of tariffs and conditions, and other forms of protection. It is more correct to say that the WTO is a system of rules and regulations designed to promote open and fair competition (John Ravenhill, 2011). But despite these years of work and existence of the WTO, it is difficult to say efforts to liberalize trade relations between countries, in order to increase profitability and the level of life, is equal for all parties involved. This is identifiable in the context of on-going negotiations of the Uruguay Round of GATT in the early 90s, which urges industrial countries to provide greater access to their markets for products from developing countries. But many provisions of the WTO led to the opening of markets for exports from industrial countries to developing nations, but still lumbered the less wealthy nations with high rates of tax and other trade barriers.

The Mozambique sugar industry, as one good example, has been mutilated in this way. Thousands of tons of cheap EU beet were dumped in developing countries and small farmers (which produce domestic beet), were deprived of any fair chance to sell their products.

The previous and the following example demonstrate the inequality and the double standards, which developed countries present. Using, different regulations, for instance, concerning some ecological problems, developed countries are trying to protect their domestic market by showing this double standard- as in the case between Mexico and US.

The dispute between the United States and several countries complaining of eco-blackmail sides, regarding the inflicting of lesions on the dolphins from...

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Gupta, M. (2012) Effectiveness of dispute settlement mechanism in WTO – Some issues.
McRae, D. (2008) Measuring the Effectiveness of the WTO dispute settlement system. Asian Journal of WTO & International Health Law and Policy, Vol. 3 (No. 1).
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