Latin American Countries in the WTO Dispute Settlement System

December 6, 2017

Two out of eleven WTO Ministerial Conferences have taken place (or wil do so) in a country of Latin America (Mexico and Argentina). In this scenario, we consider that a quick overview of the participation of Latin American countries (LACs) in the dispute settlement system (DSS) is relevant.

Nowadays, the WTO system comprehends not only the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) and the special rules in certain covered agreements, but also the panel and Appellate Body reports – the jurisprudence – and the practice. LACs have played an important role in the development of the DSS.

The Use of the DDS by LACs

The main tool to enforce WTO rights and obligations available to Members is the DSS. It is not the only one, but it is the last and most effective resort.

Fron 1995 through 3 December 2017, 534 requests for consultations have been filed [1]. 133 out of 534 requests were filed by LACs, which represent 24.90 percent of the total number of requests i.e. approximately 1 out of 4 requests are coming from LACs. 95 out of 534 were filed against LACs, which represent 17.79 percent of the total.

The participation of LACs as most frequent users (top ten) is the following [2]:

As complainants, there are three LACs: 4th Brazil (31 cases), 5th Mexico (24), and 7th Argentina (20).

As respondents, there are four LACs: 5th Argentina (22), 7th Brazil (16), 9th Mexico (14), and 10th Chile (13).

As complainants and respondents, there are four LACs: 5th Brazil (47), 6th Argentina (42), 7th Mexico (38), and 10th Chile (23).

As third parties, complainants and respondents: there are only two LACs: 7th Brazil (160), and 10th Mexico (121).

In the top 15, as complainants there are also some LACs (Chile, Guatemala, Honduras and Panama), which is evidence of high participation in the DSS.

It is remarkable that through 3 December 2017, 21 decisions related to suspension of concessions were issued, nine out of those 21 involved LACs as complainants, and in contrast in only one case a LAC was respondent. On the one hand, this fact could show that LACs are able to battle until the end, and also that violating measures affected those countries for a long time. On the other hand, this could be seen as a proof that LACs normally comply quite quickly.

Participation of Individuals of LACs in WTO bodies

An important body in the system is the DSB, which is chaired by individuals designated under a “practice” of rotation and geographical representation. To date the following four Latin American individuals have chaired the DSB:

1996 - Celso Lafer (Brazil)

2002 - Carlos Pérez del Castillo (Uruguay)

2008 - Mario Matus (Chile)

2014 - Fernando de Mateo (Mexico)

Chairpersons play an important role in DSB meetings, which take place at least once a month. Even if their work could be seen as routine or minute tasks, they also always have to face legal challenges regarding the proper functioning of the DSB.

The Latin American region has also contributed to the dispute settlement system as they provide several panelists, four LACs are in the top ten in such role: 5th Chile (28), 7th Brazil (26), 8th Mexico (22), and 10th Uruguay (19) [].  

At the appeal stage, the participation of individuals of LACs is numerically less active. The DSU Article 17.3 provides “that Appellate Body membership shall be broadly representative of membership in the WTO”, and the current non-written practice is that Latin America has a seat at the Appellate Body. Until 3 December 2017 the following nationals have represented the region:

Julio Lacarte Muró (1995-2001)

Luiz Olavo Baptista (2001-2009)

Ricardo Ramírez Hernández (2009-2017)

Right now, there are two vacancies at the Appellate Body, but the process to select the new members are in an impasse.

DSU Negotiations

In the DSU negotiations, LACs have been participating very actively, not only in discussions and negotiations, but also through tabling proposals, individually or as a group. To illustrate such participation here is the list of countries that have submitted communications:

Brazil, Argentina and Mexico as part of a broader group (G7) on remand and third-party rights,

Chile on flexibility and Member control,

Costa Rica on third-party rights,

Cuba and Honduras, among others, on special and differential treatment for developing countries,

Ecuador on surveillance of implementation of recommendations and rulings,

Mexico on compliance.

Final remarks

Notwithstanding a number of challenges, three LACs are in the top ten of the most frequent users of the DSS, and others – considered as “small economies” – are nonetheless active participants. This remarkable participation is a sign that LACs trust and rely on the WTO to solve their disputes.

 

[1] We use the DS number assigned to each request for consultations a one case, despite the fact that some cases consolidate in one DS number more than one case e.g. EC — Bananas III or US — Offset Act (Byrd Amendment).

[2] World Trade Organization, Disputes by Country/Territory, https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm. Accessed 3 December 2017.

[3] WorldTradeLaw.net, Count of WTO Panelists, by country, Accessed 3 December 2017.

 

* The opinions of this article are only of the author and do not bind any of the institutions with which he is affiliated.

Hugo Romero is Deputy-Director General Counsel for International Trade, Secretary of Economy, Mexico. Since 2004, he has been working for the Secretary of Economy as part of the teams of negotiations and of Mexico’s defense in international trade disputes. From 2012 to 2017 he was Legal Counsellor at the Permanent Mission of Mexico to the World Trade Organization. He holds the Chair of International Trade Law and North American Free Trade Agreement at the Law School of the National Autonomous University of Mexico (UNAM). He holds a Master of Laws and law degrees (UNAM). He is a member of the roster of panelists of the Secretariat of Central American Economic Integration (SIECA).

 

Topics: WORLD TRADE ORGANIZATION (WTO)

Regions: LATIN AMERICA AND THE CARIBBEAN (LAC)

Authors: HUGO ROMERO

RTA

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