Reconsidering Financial Remedies in WTO Dispute Settlement
16 Journal of International Economic Law 2 (2013)
24 Pages Posted: 8 Apr 2013 Last revised: 15 Mar 2015
Date Written: April 30, 2013
Remedies in international law present an intriguing challenge: what happens if a sovereign state refuses to comply with its obligations, even after an international adjudicatory body has ruled in its disfavour? The absence of compulsory enforcement arguably means that international law as a system lacks binding effect. The solution offered under the WTO system has been to authorize the prevailing Member in the settlement of a dispute to retaliate, if and when the respondent Member fails to implement a panel or Appellate Body ruling. Such retaliation can take the form of additional restrictions on imports of goods or services, or suspensions of intellectual property rights.
Our paper examines whether fairer and more effective means of ensuring compliance could be inserted into the WTO system. First, existing remedy systems are outlined, comparing general public international law with the current WTO system, after which the ‘efficient breach’ theory and the EU compliance regime are analysed. This is followed by an examination of the advantages of introducing financial remedies in WTO dispute settlement as well as a refutation of potential objections. The main elements of the subsequent proposal relate to the calculation, term, retro-activity and beneficiary of financial payments as a remedy.
Keywords: WTO, compensation, financial payments, remedies, compliance, enforcement, international dispute settlement, efficient breach
JEL Classification: F13, K32, K33, K40, K41, K42
Suggested Citation: Suggested Citation