Today only three SCOOs are imposed – two by the United States against the European Communities (the Bananas and Meat Hormones cases), and one by Canada against the Community (Meat Hormones). In three examples, the transmitter government imposed a 100 percent ad valorem tariff on some imports from the Community. None of the three cases induced near-term compliance. The sanctions in the Meat Hormones debate are still being set. The Bananas sanctions were moved as part of a settlement in which the Community complied in 2006.
The usefulness of WTO sanctions seems to contradict the myth of a powerful WTO compulsion system with “teeth. ” To evaluate the usefulness of a sanction mechanism is complex. Possibly the prospect of a sanction is so effective that the sanction itself seldom needs to be used. The following is the WTO record (World Trade Report 2003): as of 1 August 2003, 69 disputes have been fully adjudicated in the WTO. Of those, a violation was found in 59 cases (86 percent). In some instances, these violations were corrected.
In others, the disputing parties settled, perhaps with less than full compliance. In many others, the complaining government continues to wait for compliance. In 11 of the 59 findings of violation (19 percent), the complaining government filed a follow-up (DSU Article 21. 5) complaint that the defendant government did not comply during the prescribed period. Of those 11 complaints, non-compliance was found in 9 (82 percent). Out of those 9 cases, the complaining parties have sought authority to SCOO in 4 (44 percent), but may do so in others in the future.
Seven authorizations to SCOO have been granted to governments in 5 separate disputes, and this authority has been used three times. Of the 7 examples in which authority to SCOO has been given, none have ended with a resolution of entire compliance. If to look at this data another way, of the 59 cases with violations, the SCOO has been practised in only 2 (twice in Meat Hormones and once in Bananas). After analyzing these date different conclusions are probable about the efficacy of WTO dispute settlement, and about the usefulness of the SCOO.
The first conclusion is that the SCOO plays only a minimal role, and its use does not seem to induce compliance. Another deduction is that the SCOO would work better if it were practised more often. The third conclusion is that the all compliance picture would be much worse without the SCOO. To target trade sanctions is not easy matter. Trade sanctions must be targeted against the party whose policies conflict with the basic principles of the international community. In the WTO case, this raises a threshold question.
Do WTO rules fallow these necessary tenets? Mostly, WTO controversies are not about accepting the WTO rule. The dispute is about the interpretation of an often ambiguous rule. After the problem has been resolved, a losing government does have an duty to fulfill. However, compliance becomes slow as governments work through parliamentary processes to mend basic policy into the four corners of WTO rules. Then these sanctions will not make much sense. Yet there is deference between targeting, for example, dictators, warlords, etc.
, and individuals in a democratic polity who are representative, administrator, judge, or just ordinary rent-seeker. The question is would it be right for the WTO to endorse a proposed SCOO that targets the main employer in the constituency of the chair of the responsible parliamentary committee? (Lacarte-Muro and Gappah 45) This question is just beginning to be asked, and it is difficult to find right answer. In accordance with WTO rules, the Dispute Settlement Body cannot foresee the products transferred from the country that the complaining government proposes to sanction.
As a consequence, the sending government can intent to target the chair's district. Till now, such special trade sanctions have not been employed, but they have been considered. In the above examples, Canada and the United States practiced prohibitive tariffs, yet a SCOO can assume other forms also. Consider, foe instance, a dispute concerning the WTO's intellectual property rules, a complaining party could ask the WTO to use the abolition of some copyrights or trademarks. The leading principle for the WTO will be “eye for eye, tooth for tooth” (Cleveland 78).
Considering the globalization of modern economies, any SCOO is likely to make some economic damage, and cause innocent victims, such as working men, providers, and consumers. When not guilty bystanders are receiving the penalty together with the intended victims, the sanctions practised can hardly be called “smart. ” One more problem with WTO sanctions is inequality. The matter is that smaller countries would have big difficulties using sanctions against bigger countries. Such disbalances of economic power are widespread of course, but they are much deeper in the WTO than in, for example, the Security Council.
If the Security Council consents to a trade sanction, then all UN member countries ought to participate, and then all countries have economic power. If to say about the WTO, the only country that can impose the sanction is one lodging the dispute (Cleveland 199). Above we have already considered whether WTO sanctions are useful. The next question is – could they be useful to other international organizations? The compulsory jurisdiction, the rapid timetable for decisions, the possibility of appeal, and the compliance review process are all features that ought to be copied (Cleveland 89).
The same is with trade sanctions. They can be copied, and would maybe be more morally justified in other institutions. Eventually, the only current use of trade sanctions in the WTO is the Hormones case. Copying WTO-style compulsion into other organs can cause a legal problem however. Practicing a trade sanction outside the WTO can break the rules of WTO. Whether some exceptions in WTO rules could be made to permit trade sanctions to be imposed by other international organizations has been a theme of international law research.
Today, no agreement is in sight. Any attempt to follow the WTO's practice in another organization would certainly meet the oppositions that such actions are illegal under WTO rules.
Works Cited “Rethinking WTO Trade Sanctions, ” American Journal of International Law, Vol. 95, 2003, pp. 792, 803-805, available at http://www. asil. org/ajil/v95792. pdf “The WTO's Problematic 'Last Resort' Against Noncompliance, ” Swiss Review of International Economic Relations, December 2004, pp. 409, 412, available at