Global Policy Forum

By Mike Moore

WHAT do Costa Rican underwear makers, Peruvian scallop exporters and Indian rice farmers have in common? Their governments have all complained to the World Trade Organisation over abuses of universally agreed trade rules by rich countries.

These cases are not unique. Developing nations are making increasing use of the WTO's impartial dispute settlement system to air their grievances and protect the rights of their exporters from violations of trade laws. As a group, they have launched more than 25 percent of the 202 disputes brought to the WTO's attention during its five and a half year lifespan. The WTO's predecessor, the General Agreement on Tariffs and Trade, handled 300 disputes throughout its 47-year existence.

The heavy demand for the WTO's dispute solving service is a ringing endorsement by all member governments in the organisation's ability to ensure countries respect their commitments. The dispute settlement system underpins the widely held conviction that detailed and mutually agreed trade rules are of only limited use without an in-built mechanism to ensure compliance.

Developing countries, as much as wealthier ones, are aided by the WTO's emergence as an arbiter of trade disputes.

Through binding dispute settlement, governments can insure that the crucial principles of the global treaty system, Most Favoured Nation (MFN) and National Treatment, are preserved MFN obliges member governments to treat all trading nations equally without awarding better terms to any single partner, while National treatment requires that governments do not privilege domestically produced goods and services over imports.

The WTO's dispute settlement arm is the only system of its kind which offers developing countries a chance to protect their trading rights.

It underpins the three main WTO accords covering trade in goods, services and intellectual property rights, which each member's national parliament has ratified.

Panel and appellate body reports, which contain the results of investigations carried out by independent experts, have specifically singled out member governments for failure to apply MFN and National Treatment principles. Exposing unlawful use of anti-dumping measures, and the use of illegal subsidies are other areas that have occupied the system.

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