Reforming WTO Conflict Management Why and How to Improve the Use of “Specific Trade Concerns”. Bertelsmann Working Paper 24/02/2020

Wolfe, Robert (2020) Reforming WTO Conflict Management Why and How to Improve the Use of “Specific Trade Concerns”. Bertelsmann Working Paper 24/02/2020. [Working Paper]

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Abstract

The World Trade Organization (WTO) needs reform to strengthen its vital role in mitigating commercial conflict, notably its procedures for discussing trade concerns. As Committees do not need permission to improve their own procedures this might be a logical starting point, but General Council guidance and a central decision on ad-ditional funding can help Officials need to keep each other informed about implementation of WTO rules, and they do in thousands of so-called notifications through the WTO every year. Knowing what is going on is the first step in managing conflict. Officials also need to be able to talk to each other about implementation, which they do in dozens of committee meetings every year. In those meetings they often raise “specific trade concerns” (STCs) on behalf of their firms. Most often those concerns about laws, regulations, or practices are addressed by their trading partners. A relative handful cannot be resolved this way and are raised as formal disputes. The Sanitary and Phytosanitary Measures (SPS) and Technical Barriers to Trade (TBT) committees are a bench-mark showing the place of STCs in the great pyramid of the WTO legal order. I draw three implications from the pyramid in SPS and TBT: 1. Only a small fraction of the huge number of SPS and TBT notifications ever become a source of con-flict leading to a dispute. From 1995 until early 2019, there were 34,000 TBT notifications, 580 STCs and only 6 disputes with Appellate Body reports. 2. One reason is that discussion of STCs can mitigate some sources of friction, sometimes by modifica-tion or withdrawal of a measure. 3. Dispute settlement is at the tip of the pyramid. There are probably many more enquiry point com-ments than STCs, and there are certainly many more STCs than disputes. The committees do not settle formal disputes, but they have demonstrably served to diffuse trade conflict in their respective areas.

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