By Radhika Sharma
The WTO Dispute Settlement Understanding (DSU) is a central element in providing security and predictability to the multilateral trading system created under the WTO. Keeping in mind the value that the DSU adds to the WTO mechanism, it was realized that constant reforms need to be carried out in the text of the DSU keeping in mind the interests of member countries.
In the Doha Round, it was decided that the reform of the dispute settlement procedures would be taken up separately from the rest of the negotiations. Though the deadline of 2003 Doha mandate for the negotiations on improvements and clarifications of the DSU has elapsed and the negotiations have so far remained inconclusive, various amendments proposed in the text are well explained in the Report by the Chairman, to the Trade Negotiations Committee Ambassador Ronald Saborío Soto [see end note 1].
The main topics which are being discussed at DSU negotiations include Third Party Rights, Strictly Confidential Information, Agreement by Mutual Consent, Developing Countries issues, Sequencing, Post-Retaliations, Remand procedure, Transparency, Compliance and Surveillance, Flexibility and Member Control, Amicus Curiae Briefs and Time frames and Time-savings.
One of the important topics from India’s perspective in the negotiations is the discussion around enhanced Third Party Rights and how the proposed amendment will impact India’s interests. Issues have been considered for extension of third party rights, keeping in view various disputes where extension to third party right has been granted for eg. EC-Bananas
[see end note 2], and EC- Export Subsidies on Sugar
[see end note 3],and where as extensions have been denied [see end note 4], which has made a significant difference.
Current provision and amendments proposed for third party rights
Third party rights have been granted in the present DSU starting from consultation stage under Article 4.11 of DSU, which gives rights to parties which have substantial trade interest in the matter by notifying the consulting members and the DSB within 10 days from the request for consultations being made. Proposed amendment to this Article 4.11 is merely technical. Request to join consultation should be made in writing [see end note 5] and if the consulting member has an objection to such joining, it has to revert back in 7 days of such request being made or else the request will be accepted per se
[see end note 6]. This amendment will serve the purpose of automatic addition of the third party in absence of timely objection by the consulting members.
Participation under panel proceeding is currently provided under Article 10.2, 10.3 and Appendix 3 para 6 where any party with substantial interest can request to join a panel proceeding. The present proposed amendment as provided in the Chairman’s report [see end note 7] is that the third party wishing to join shall request not later than 10 days to the DSB and the parties to the dispute. However, even after the passage of 10 days, such a request may be considered. The proposed amendments relate to right of the third parties to-
i Be present in all substantive meetings;
ii Make written submissions prior to first substantive meeting;
iii Make oral statement and respond to questions in first/each substantive meeting;
iv Be granted additional rights after agreement by the parties to the dispute.
However, additional rights to the third parties have been granted in past disputes, as discussed above [see end note 8].In respect of submissions by third parties, this has been a matter of practice which is proposed to be laid down in words. Parties to the dispute are supposed to provide copies of the submission to all third parties and all third parties are supposed to provide submissions to all parties to the dispute, at both appellate [see end note 9]and panel stages.
One of the amendments in the panel proceeding is that all third parties may notify their “interests” which at present is required to be a “substantial interest”. However, there are no clear terms provided in the proposed amendment in respect of what kind of interest may be considered for making such a request, as “interest” may vary from member to member. Also, submissions by third parties in all substantive meeting may increase the burden on panels and may make it difficult for the panel to meet its deadlines.
Currently, provisions for third party rights at the appellate stage are very limited. Article 17.4 provides that only parties to disputes and not third parties may appeal and only the parties which have previously participated at the panel stage and made submissions therein can participate in the Appellate Body proceeding. The proposed amendment to Article 17.4 is that any third party notifying its interest can join even at appellate stage, notifying its interest not later than 5 days [see end note 10] of the filing of the Appeal. Also, right to be heard and to make written submission even during appellate stage is being proposed.
The proposal for a right to be heard before the Appellate Body without having been heard or having participated before the Panel is not very appealing. While it is true that this may give the Appellate Body a wider perspective and more legal substance for the interpretation of the ongoing dispute, however, it may also increase the workload and hinder the speedy redressal of the dispute. Further, given the strictures of the Appellate Body timelines, this may not always be feasible.
Lastly, the participation of third parties at the arbitration stage is not covered under the present text of the DSU but has been proposed for inclusion in Article 22.6. It is proposed that a third party may request for a right to join in arbitration by notifying to the DSB no later than 10 days after the initiation of the arbitration.
Enhanced third parties rights, as discussed in the foregoing paragraphs, will be beneficial to developing countries. It will provide an opportunity to the parties who cannot initiate disputes due to financial constraints to join as third parties and ensure that their systemic interests are also taken care of. It is also an opportunity for parties unfamiliar with WTO proceedings and the procedure of the panel and appellate stages to participate by way of enhanced third party rights and obtain exposure and garner experience from the same. At the same time, one should note that even today, some of the developed countries such as the United States and the European Union join as third parties in almost all the disputes and try to put on record their views. Enhanced third party rights would give them more leeway in expressing their opinions in a more structured manner in every case. Whether such a course of action is in the best interests of developing countries is a question to be examined separately. In so far as India is concerned, it has participated in 108 disputes as third party. No doubt, India has gained significant exposure to DSB practices through such participation.
However, in contrast, enhanced third party rights may not always be useful considering time obligations imposed with respect to dispute proceedings. While allowing every party to make submissions and to hear would be time consuming, it may also not provide sufficient opportunity to a Panel and the Appellate Body to study, scrutinize and analyze the submissions made by each and every party and include it in its report as all submissions may not be as relevant as the disputing parties’ submissions and at the same time they may not be less important to be ignored. While deciding on the revisions to the text of DSU, Members should also keep in mind that a WTO dispute need not necessarily be a multilateral exercise in which everyone should be given full rights of participation. There is a strong case to maintain a balance between the rights of third parties to participate in a dispute and the need to dispose the disputes in a time bound manner. .
[The author is an Associate, International Trade Team, Lakshmikumaran & Sridharan, New Delhi]
TN/DS/25, dated 21 April 2011. Chairman Report.
Panel Report WT/DS27/ECU, adopted on 22/05/1997; Appellate BodyReport WT/DS27/AB/R, 5/09/19997.
EC- Export subsidies on Sugar (WT/DS/283/R, WT/DS/266/R, WT/DS265/).
Australia - Measures Affecting Importation of Salmon - Report of the Panel WT/DS18/R
2013-JOB/DS/14.( Dispute Settlement Body - Special session - Compilation of recent draft legal text)
TN/DS/26 and JOB/DS/14 as referred under Chairman report.
TN/DS/25 ( Dispute Settlement Body - Special session - Report by the Chairman, Ambassador Ronald Saborío Soto, to the Trade Negotiations Committee)
EC- Banana III, EC-Trade Preference, EC- Export subsidies on Sugar (WT/DS/283/R, WT/DS/266/R, WT/DS265/), EC-Hormones)
Proposed amendment to article 17 .4.