PROPOSAL
ON AFRICA AND THE WTO DISPUTE SETTLEMENT MECHANISM: UNDERLYING CHALLENGES AND
REFORM PROPOSALS
African Group of Negotiators
– AGN
African Group – AG
Appellate Body – AB
Dispute Settlement Mechanism
– DSM
Dispute Settlement
Understanding – DSU
Economic Partnership
Agreements – EPAs
International Court of
Justice – ICJ
Lomé Convention - LC
Least Developed Countries –
LDCs
General Agreements on Tariffs
and Trade – GATT
Marrakesh Agreement – MA
Special and Differential
Treatment – SDT
World Trade Organization –
WTO
1.1 BACKGROUND TO THE STUDY
At the
inception of the GATT as a predecessor to the WTO regime, there were countless
promises of prosperity to the world, particularly the developing world were to
expect socio-economic transformation as the wealthy nations embarked on
lowering and eventually eliminating tariffs on exports from poorer nations.
However, the GATT/WTO regime has failed these nations with the existing legal
regime, governance structures, mechanisms, and the decision-making processes.
The first is that obstacles exist Will participate
both in terms of agenda-setting in relation to negotiations/rule-making
processes and accessing developed nations' markets even after they have agreed
to the already skewed rules under the WTO regime. The second level of the
obstacles are embedded in the inaccessible and ineffective dispute settlement
mechanism for poorer countries whenever they would have needed to seek a recourse.
PURPOSE
The purpose of
this study is to examine in detail certain challenges that have inhibited the
participation of African countries under the WTO dispute settlement mechanism. Therefore the current study will investigate the possible
solutions such as assisting African countries to come up with advanced
trade-policy infrastructures, amend the rules and regulation of DSB/DSU and
others which would address the barriers inhibiting African countries
participation under the WTO rules.
Several dispute
cases with regard to WTO regime has been recorded chronologically of which some
of them include measures concerning the imported products in general, Safeguard
measures on certain steel products, Measures relating to Raw Materials,
Measures related to exportation of products and technology, Anti-dumping
measures on Steel pipes, Measures concerning imported spirits, Provisional
Anti-dumping duties, and so forth. The current study includes 1420 participants
that include respondents, complainants and 3rd Party from African countries who
are aware of WTO’s DSM. These cases will be examined as
part of the study to see whether or not common threads /themes emerge.
Table showing lists of African nations who participated as 3rd
Parties in the WTO’s DSM (1995 – 2020).
Country |
Dispute (participation at panel or appellate level) |
Total number of African participants |
Cameroun, Cote d’Ivoire,
Ghana, Senegal |
European Communities – Regime for
the Importation, Sale and Distribution of Bananas (WT/DS27/R/) (Panel and
Appellate Body) |
4 |
Nigeria & Senegal |
United States –
Import Prohibition of Certain Shrimp and Shrimp Products (WT/DS58/R) (Panel
& Appellate Body) |
2 |
Cameroun, Cote d’Ivoire
& Mauritius |
European
Communities – Regime for the Importation, Sale and Distribution of Bananas
(WT/DS27/RWE/EEC) (Panel) |
3 |
Mauritius |
Mexico –
Anti-Dumping Investigation of High Fructose Com Syrup (HFCS) from the United
States (WT/DS132/R) (Panel) |
1 |
Egypt |
European
Communities – Antidumping Duties on the imports of Bed Linen from India |
1 |
Table
showing lists of African nations who participated as 3rd Party
Respondents in the WTO’s DSM (1995 – 2020).
Country |
Dispute (participation at panel or appellate level) |
Total number of African participants |
Egypt |
Egypt – Anti-dumping
Duties on Matches on Pakistan (WT/DS327) |
1 |
Egypt |
Egypt-Measures
Affecting Imports of Textile and Apparel Products from USA (WT/DS305) |
1 |
Egypt |
Egypt-Definitive
Anti-dumping Measures on Steel Rebar from Turkey (WT/DS211) |
1 |
Egypt |
Egypt – Import
Prohibition on Canned Tuna with Soybean Oil from Thailand (WT/DS205) |
1 |
|
|
|
South Africa |
South Africa –
Anti-dumping Duties on Certain Pharmaceutical Products from India (WT/DS168) |
1 |
South Africa |
South Africa –
Definitive Anti-dumping Measures on Blanketing from Turkey (WT/DS288) |
1 |
Zimbabwe |
European Communities –
Measures Affecting Asbestos and Asbestos-Containing Products (WT/DS135/R)
(Panel & Appellate Body) |
1 |
1.2 PROBLEM STATEMENT
Of
all African nations, it is observed that some of them do not actively take
participation in the proceedings of the DSB in comparison to the industrialized
countries’. This is one of the contentious issues for people working on trade related
issues, particularly in African development discourse and diplomatic circles.
Since the inception of the WTO dispute settlement system, its proceedings are
the main mechanism for settlement of disputes arising amongst the WTO
membership be it global north or south. However, developing countries have a
number of challenges that have limited their ability to participate in the DSB
proceedings. Since those challenges came to light, many studies have examined
the impacts of the WTO’s DSU to settle the disputes as well as how the disputes
and settlement proceedings under the WTO regime stifles Africa’s participation.
This paper will examine several of these studies to
support its findings,
These
challenges were part of the African Group proposals for better innovation,
improvement, and the development of the WTO’s DSU. Therefore,
this research would identify the most
essential obstacles that are inhibiting the African and other third world
countries under the WTO regime and how third world nations deal with those
constraints such as lack of financial and legal resources as well as
enforcement capacity for DSU rulings and compensation.
This study
will also examine the protectionist exclusion clauses (WTO, 2010) under the WTO
rules and the barriers to participation under the DSU and whether they have
achieved the goal of settling disputes fairly.
1.3 RESEARCH QUESTIONS
In view of the
above challenges, this study will explore the answers to the following
questions:
1. What are the challenges
confronting African countries under the WTO disputes settlement mechanisms? Specifically:
(a). Whether
or not ,are the litigation cost and duration so expensive (prohibitive)
for African countries under (to participate in )
the dispute settlement proceedings?
(b). Whether
or not, Do the legal precedent DSB rulings (from the DSB) deterrent
enough to impede African countries’ participation in the dispute settlement
proceedings?
(c). Do the DSB have the power and
incentives to enforce its own decisions with limitations?
(d). Whether
or not Are the retaliatory rules in the DSU mechanism considered to be
inefficient?
2. Whether or not What are the specific
provisions of the WTO legal infrastructure regime
that pose as barriers to African nations?
3. Whether or not Are they biased provisions
against African and developing countries under the WTO’s DSU/DSB mechanisms?
4. Which provisions under the
WTO regime and the DSB mechanism are/should be sources of concerns for African
and third world nations?
1.4 HYPOTHESIS OF THE STUDY
The hypothesis of the thesis
include:
H1: The litigation cost
and duration is expensive for African countries under the dispute settlement
proceedings
H01: The litigation cost
and duration is not so expensive for African countries under the dispute
settlement proceedings
H2: DSB have the power and
incentives to enforce its own decisions in the WTO DSM proceedings for African
nations
H02: DSB does not have the
power and incentives to enforce its own decisions in the WTO DSM proceedings
for African nations
H3: DSB deterrent enough
to limit African countries’ participation in the dispute settlement proceedings
H03: DSB not deterrent
enough to limit African countries’ participation in the dispute settlement
proceedings
H4: The specific
provisions of the WTO legal regime pose as barriers to African nations.
H04: The specific
provisions of the WTO legal regime do not pose as barriers to African nations.
1.5 RESEARCH OBJECTIVES
The overall
goal of this research is to examine the participation of African countries in
WTO dispute settlement mechanisms. Thus, the study is seeking
(i). To
examine the extent to which African nations are required to settle their
disputes under the DSB/DSU proceedings and the overall WTO regime.
(ii). To
identify and examine the level of African countries’ participation in the DSB
proceedings.
(iii). To
ascertain those factors that serve as barriers to African countries’
participation in the DSB proceedings.
(iv). To
ascertain whether the WTO provisions (either in parts or in a whole) and its
institutional structure impacts on the participation of African nations in
those proceedings.
(v). To
highlight any other finding(s) that may impact the subject of the participation
of African countries in the DSB proceedings.
(vi). To
provide strategic framework and propose recommendations that can be envisaged
by African countries to ensure greater participation of developing countries in
the WTO proceedings.
(vii). To look
at alternatives to the current dispute settlement mechanisms for African
nations whiles waiting on the outcome and possible reforms from the ongoing WTO
negotiation rounds.
1.6 SIGNIFICANCE OF THE STUDY (can we
strengthen this section with more evidence based materials.. Citations)
Although the
advent of the WTO regime has provided significant opportunities and prosperity
for developing and developed countries alike, many third world nations are
still impoverished as they are unable to tap into the promised prosperity of
free trade (Buyonge and Kireeva, 2008). Several studies have discussed the WTO
Dispute Settlement Mechanism with respect to international trade and their
agreements (Alavi, 2007; Busch et.al, 2003; Bown et.al, 2005). Hence, the
findings of this study will add to the body of knowledge and comprehension of
the participation of African countries and other poorer nations in the DSB
mechanism and how to enhance the WTO system to deal with them. The significance
of this study will address the following:
- Identify the conceptual framework of the existing WTO
regime and how it deals with African nations and the other developing
countries.
- Contribute to the ongoing efforts to reform the existing
legal framework and mechanisms of the WTO in the negotiating rounds.
- Contribute to the useful and difficult knowledge on the
factors that are/could impact the successful participation of developing
countries under the WTO regime.
- To draw
the attention of African Group of Negotiators and the other developing
nations to the reforms process from the DSU and the other WTO rules,
particularly the cultural exclusion clauses which are possible new legal
barriers to market access that has not yet been raised by the African
Group and the developing world in the negotiating rounds.
All in all,
the study will contribute to the emerging body of literature that examines the
obstacles confronting third world nations in their ability to seek recourse for
protectionist trade practices against them under the WTO dispute settlement
mechanisms.
1.7 THEORETICAL FRAMEWORK OF THE STUDY
The
current thesis is structured at three levels. In the first level, the study
will provide a background study that supports the topic and central argument of
the study as well. Later, secondary literature is reviewed and analyzed in
detail. In the third level, the study comes up with its own hypothesis
testifies and then draw possible conclusions form the data collected.
1.8 RESEARCH METHODOLOGY
This thesis adopts a mixed
methods approach in response to its research questions. It combines
comparative, empirical, doctrinal and historical methods to provide a deep
examination of all pertinent dimensions of the research problem stated. The
current study is mixed in nature and hence collects the primary data and
secondary data. The primary data is collected with the help of questionnaire
survey. A questionnaire is developed considering the constraints and later
distributed among the participants selected for the study thorough survey
monkey. The sampling methods employed in the current study is convenience
sampling method. The instrument used in the study to collect the data is
questionnaire. Later, the data gathered is tested using statistic tools and
discuss the results analyzing the data and results of statistics.
This thesis has adopted a
qualitative empirical approach to fill in the gap. The empirical component of
this thesis consisted of a questionnaire survey conducted in Africa for 25
years till date(today??). The participants
included from different sectors were chosen taking into account their
backgrounds, experiences, roles with regard to WTO DSM. The monkey survey
questionnaire included open-ended questions, rather than closed-ended questions
that are normally answered by a simple ‘Yes’ or ‘No’ responses, with the
purpose of ensuring sufficient flexibility to allow and encourage the
participants to respond in more depth, exploring fully the themes, the key
topic and issues during the survey.
Apart
from the survey,
the doctrinal research method is described as locating the law or
sources of law and analyzing the text, in order to reach a tentative
conclusion, predicated on solving a specific legal problem, or envisaging a
future development. In order to answer the research questions, and to
comprehensively cover the themes of the current study, this study also included
a limited doctrinal component. Most importantly, the current study undergoes a
historical research that implies the better understanding of the past for a
better future. Thus, the study adopts a historical method to identify and
discuss the challenges that have inhibited the participation of African
countries under the WTO dispute settlement mechanism. The thesis provides a
historical insight into the challenges African countries have been facing to
participate in WHO DSM.
The current thesis also
analyses the credibility and validity of the research by evaluating the factors
such as integrity, competence, sound judgement, relational sensitivity,
trustworthiness, reliability, transparency, replicability of outcome, and legal
authority. In other words, the purpose of the study is to analyze the
credibility and validity of the above discussed factors with regard to the
challenges faced by African countries in WTO DSM.
The study
would cover the twenty-five years of existence of the WTO dispute settlement
architecture from 1995 to 2020.
The study will
not delve into all the possible factors accountable for African nations’
inability to participate in the dispute settlement mechanism. Thus, the study
is limited to the organizational structures and functioning of the DSB/DSU as
well as the cultural exclusion clauses. It would also consider the very few or
little participation by the African nations either as plaintiffs, respondents,
or as third-party involvements. Equally, the study will analyze the proposals
by Africa nations (2002/03/05 and the least developed countries (2002/03)
negotiation rounds.
The major
limitations of the research have been the effect of the Covid-19 pandemic which
is impacting on many levels. First, the study will be hampered by the
unavailability and inability to access hard copy literatures, particularly
exclusively reference materials and publications, textbooks and journals in
most libraries that were previously opened for in-person services to the
public.
Second, the
pandemic is negatively impacting researcher’s ability to consider and conduct
interviews from trade departments and industrial sector experts in selected
African countries who would have enriched the outputs of the research. But this
is become impossible due to Covid-19 induced governmental and societal
restrictions, time, and resource constraints.
Third, and
finally, the research would have been enriched had they been enough legal
precedents from the panel and appellate bodies of the WTO’s dispute settlement
system involving African nations beyond the very few ones or peripheral
involvements.
1.10 CHAPTERIZATION
Layout of the proposed
chapters for the whole study is given below. Chapter 1 provides background to
the study and an introduction to WTO regime in African country. Chapter 2 will
contextualize the WTO DSM in general across the world. All the possible
challenges that have inhibited the participation of African countries under the
WTO dispute settlement mechanism will be discussed in this chapter. The chapter
will also discuss the importance of the WTO DSM for developing countries. It
will contextualize African countries dispute in the WTO DSM by describing: (1)
a short overview of its trading profile, economy and development, and the
importance of Africa’s participation in the WTO DSM, (2) Africa’s early
engagement in the GATT, (3) Africa’s accession to the WTO. The chapter also
will provide arguments and evaluate the possible solutions that would address
the barriers which are inhibiting African countries’ participation under the
WTO rules and DSU/DSB. Chapter 3 will provide literature review relevant to the
current study. Chapter 4 provides detailed research methodology, research
process, research design followed in the current thesis. Chapter 5 testifies
hypothesis and discusses the results of the current thesis along with
implications of the current thesis. Chapter 6 is conclusion chapter that
discusses results of the study and future scope of the research.
1.11 LITERATURE REVIEW
There is substantial
body of available literature on Africa and other third world nations’
participation in the WTO’s dispute settlement system. This study would lean on
the works by Amin Alavi (1), Busch and Reinhardt(2) to your references etc,
Clement Ng’ong’ola, Edwini Kessie and Kofi Addo, and Susan Esserman and Robert Howse and
several others to demonstrate that despite the usual challenges that are
inhibiting Africa’s participation, there are other numerous problems confronting
Africa under the DSB/DSU.
Several other
literatures in this subject area are consulted along in the progression of this
study.
To begin with,
Amin Alavi (2007) examines the position of African countries in relation to the
WTO’s Dispute Settlement Mechanism (DSM), particularly as participants in the
ongoing review of the WTO rules under the DSU. Whiles he posits that the
challenges facing sub-Saharan African countries (SSA) in seeking recourse under
the DSM are akin to those other third world nations, he contends that these
problems are even more difficult to overcome. Amin concurs with the African
Group’s conception of the obstacles to their own participation in the DSM –
high entry barriers, lack of credible retaliatory system/power, etc. (Supra
note 28, p. 1). Also, he advances his own reasons for Africa’s minimal role in
the WTO, which includes low level of development and insignificant stake in
international trade that in turn undermines their ability to build a pool of
experts who can negotiate the best possible deals individually and for the
whole continent.
He equally
asserts that the WTO’s and its legal framework seem to alienate African and
other third world nations because those rules were drafted without due
considerations to their concerns and realities. Alavi further frowns on the
retaliatory provision under the WTO rules because African countries barely have
the power to retaliate against industrialized nations when the recourse to
their complaints from the DSU/DSB is retaliation. Therefore, he recommends that
African countries build alliances with other nations with similar interest like
the collaborative support to the G-20’s negotiation position on agriculture
during the Hong Kong Ministerial in 2005.
Much as Alavi
identifies the specific challenges confronting African nations participation
under the WTO’s DSM, he has failed in identifying possible solutions like
third-party party participation, which can enable State parties to join a
principal party in case before the DSB and/or its Appellate Body as an interested party in the possible
outcome of the case (Zunckel, 2005, p. 20). This was demonstrated in the Upland
Cotton precedent where Benin and Chad joined Brazil as third parties in the
case against the US. Alavi equally failed in recognizing other possible
solutions to the participation challenges such as private counsels and academic
research organizations and think tanks whose research works can help poorer
countries to maximize their resources.
Besides, Busch
and Reinhardt (2003) sought to explore whether developing countries have
derived better outcomes for themselves under the WTO DSM than they had under
the previous GATT regime. They aver that capacity and development constraints
influences a poor country’s determination to initiate a trade dispute or
otherwise. They go on to demonstrate that industrialized countries who are
plaintiffs are more likely to be able to leverage their power to extract
concessions from defendants at the pre-panel phase than third world nations who
are complainants.
Thus, the
authors also assert that “the move has not actually reduced a poor
complainant’s prospects of inducing concessions from a [vulnerable] defendant;
it has merely left behind the poorest complainants” (Busch & Reinhardt, 2003, p. 723).
But as much as
these views are credibly persuasive, the authors flounder in addressing the
challenges inherently embedded in the nature of the DSM - DSB/DSU. They
overlooked the fact that the remedies under the existing DSM does not reinstate
full benefits to the injured party up to pre-violation levels. The DSM also
lacks financial compensation commiserate to the overall economic losses
incurred by a vulnerable respondent, which is further exacerbated by the
inability of weaker winning parties like African nations to retaliate.
In addition,
Clement Ng’ong’ola (2009) sets out to investigate some stated proposals pushed
forward by negotiators of the African countries at the Doha Ministerial
conference that was supposed to review the DSU. He takes note of the lack of
progress and breakthrough since the beginning of the DSU review processes. He
asserts that Africa’s major obstacle in the negotiations is how to support
nuanced reform proposals in respect of offensive African participation under
the WTO’s DSM. Clement observes that factors such as third-party rights, panel
compositions, special and differential treatment provisions, sequencing and
post retaliation and others are being negotiated in a bottom-up approach by
State parties to the WTO regime.
Furthermore,
he argues that proposals such as a dedicated fund to financing the DSM, hosting
the DSM processes in capital cities of third world nations as part of the
special and differential treatment provisions, and collective retaliatory
measures against one industrialized respondent would amount to nothing or very
little effect addressing African countries’ lack of participation. Thus,
developing countries should look for major reforms beyond these ill-conceived
proposals which basically amounts to tokenism with little impact on African participation
in the DSM process.
Clement posits
that the negotiations are likely to yield no positive outcome for Africa if
they do not focus on addressing their insignificant share of international
trade, and advocate for stronger third-party participatory rights. While Clement is urging African countries to
continue to engage in subsequent negotiations with the view to influencing the
evolutionary trends in the DSM, he is especially disappointed and cynical about
the African Group’s proposals and the overall DSM review process at the Doha
Round.
In view of the
above, it is very clear that the WTO’s DSM must undergo some organizational and
institutional reforms before it can attempt at addressing the needs of African
or least developed countries. If African countries who constitute the majority
of the WTO membership are largely absent or cannot access the DSM, then the
overall goal of ensuring the predictability and security of the multilateral
trading system remains a mere theoretical endeavour.
Edwini Kessie
and Kofi Addo in recognizing the uniqueness of the WTO’s DSM process in
comparison to the GATT, noted that the system is being assessed on the basis of
the frequency of access to the DSM. They observed that it is mostly the leading
industrialized nations who are making use of the DSM than even the African
countries and the other developing nations, which is not different from the
experience under the GATT as third world nations accounted for only 10% of the
initiated cases under that previous GATT regime. According to the authors,
Africa’s lack of participation in the WTO’s DSM process is due to their
insignificant share of global trade and lack of expertise in the WTO matters,
which they further argue has consequences for the development of legal precedents
in the DSM and jurisprudence in the area of international trade law. They
review the African Group’s proposals at the Doha Round and correctly predicted
the rejection of those overambitious proposals by the industrialized world.
Edwin and
Kofi, therefore, admonished African nations to amongst others, adopt certain
proposals that could enhance their participation: third party participation and
involvement of institutions like UNCTAD in the DSM process, and addressing the
supply-side constraints which obstructed their abilities to diversify their
efforts. Despite the efforts in
providing new alternative proposals to the African Group’s proposals, the
authors failed to recognize that the factors that constitute majority stake
amongst the barriers to the non/little participation by African countries is
the DSU itself.
Susan Esserman
and Robert Howse acknowledges the compulsory and binding nature of the DSM, and
suggest that compiling a more comprehensive history of the WTO’s negotiation
rounds would be resourceful to guiding the DSB and the Appellate Body’s
interpretation of the texts of the
ambiguous treaty provisions in the DSU. They describe the consultative
phase of the DSM as superficially ineffective and goes onto suggest the
involvement of professionally trained facilitators with expertise in
alternative dispute resolution as a recourse to addressing these shortcomings.
Whiles the authors are quick to point to
the fact that much of the reliefs under the DSU are ineffective, they suggest
that those ineffectual WTO rules remain because they represents the most
essential pillars of the global economic order that releases the
socio-political and economic pressures, which otherwise could have threaten the
WTO’s mission for free multilateral trade regime.
THESIS TIMELINE CHECKLIST
That the
indicators below should be presented in a Gant Chart………………..
Stages of Research |
Aug - Oct 2020 |
Nov - Dec 2020 |
Jan – Feb 2021 |
Mar 2021 |
Apr 2021 |
Preparing thesis
proposal |
|
|
|
|
|
Seeking ethics approval |
|
|
|
|
|
Preparation, testing and
modification of the survey questionnaire |
|
|
|
|
|
Embarking on actual data
collection |
|
|
|
|
|
Data entry and cleaning |
|
|
|
|
|
Data Analysis |
|
|
|
|
|
Progress Report Writing |
|
|
|
|
|
Pre-Defence Final Thesis |
|
|
|
|
|
|
|
|
|
|
|
Thesis Oral Public
Defence |
|
|
|
|
|
Post-Defence Final
Thesis |
|
|
|
|
|
Publication of
Post-Defence Final Thesis |
|
|
|
|
|
Conclusion
This study will be the
initial phase of a much comprehensive study on the participation of developing countries
under the existing dispute settlement system that will contribute to understand
the magnitude of the institutional factors that impacts that participation. It
is my fervent hope that the study’s outcome will contribute to the enhancement
of the knowledge and academic discourses around the subject.
References
Alavi, Amin. (2007). African
countries and the WTO's Dispute Settlement Mechanism. Development Policy Review, 25(1),
25-42.
Busch, M. L., & Reinhardt, E.
(2003). Developing countries and general agreement on tariffs and trade/world
trade organization dispute settlement. J.
World Trade, 37(4), 719 -
735.
Buyonge, C. and Kieeva, I. (2008). Trade Facilitation in Africa:
Challenges and Possible Solutions. World Customs Journal 2(1), pp. 41-54.
Esserman, S., & Howse, R.
(2003). The WTO on Trial. Foreign
Affairs, 82(1),
130-140.
https://www.jstor.org/stable/20033434
Footer, M. E. (2001). Developing
Country Practice in the Matter of WTO Dispute. J. World Trade, 35(1),
pp. 5-98.
Kessie, E., & Addo, K.
(2007). African countries and the
WTO negotiations on the dispute settlement understanding. International
Centre for Trade and Sustainable Development (ICTSD).
Ng’ong’ola, C. (2005). African Member States and the Negotiations
on Dispute Settlement Reform in the World Trade Organization (No. 11).
Tralac Working Paper.
The World Trade Organization: The WTO, available from: https://www.wto.org/index.htm [accessed on June 13,
2020].
The World Trade Organization: Dispute Settlement, Rules of Conduct for
the Understanding on Rules and Procedures Governing the Settlement of Disputes,
accessed from: https://www.wto.org/english/tratop_e/dispu_e/rc_e.htm [accessed on May 19,
2020).
Zunckel, H. E. (2005). African
Awakening in United States-Upland Cotton, The. J. World Trade, 39,
1071.
World Trade Organization. WTO Dispute Settlement: One-page case
summaries. World Trade Organization, 2010.