Preventing Opportunistic Uncompliance by WTO Members

David J. Townsend and Steve Charnovitz

Journal of International Economic Law, 2011, vol. 14, issue 2, 437-468

Abstract: The World Trade Organization's (WTO) Dispute Settlement Understanding is silent on the consequences for members if they comply with trade obligations, but later uncomply, resulting in similar violations as those giving rise to the original dispute. This article shows that WTO members can uncomply without facing economic consequences because the arbitrators that authorize the suspension of WTO concessions have a limited jurisdiction relative to compliance panels and because the DSU does not provide sanctions for past (in contrast to ongoing) violations. Members may thus delay compliance until immediately before panels assess their compliance record and then may uncomply because arbitrators cannot authorize the suspension of concessions for the measure to uncomply. Cases of uncompliance allow members to commit repeated violations with impunity. This contrasts with cases of non-compliance, where trade disputes eventually result in implementation of recommendations, compensation to the aggrieved member, or the suspension of concessions against the violating member. We identify the ongoing US -- Upland Cotton dispute as a potential case of uncompliance. WTO members have an opportunity to protect themselves from delayed compliance and uncompliance by seeking authorization to suspend concessions where the violating member has not taken measures within the timeframe given to comply. We show that because Brazil forfeited its rights to do so in the US -- Upland Cotton dispute through a sequencing agreement, the United States may have uncomplied without facing a countermeasure for certain cotton subsidies. Oxford University Press 2011, all rights reserved, Oxford University Press.

Date: 2011
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