Copyright c 2007 Minnesota Journal of International Law Minnesota Journal of International Law Winter 2007 16 Minn J Int l L 1 LENGTH 20115 words The Robert E Hudec Article on Global Trade Choice of Jurisdiction in International Trade Disputes Going Regional or Global NAME Rafael Leal Arcas BIO Lecturer in Law Centre for Commercial Law Studies Queen Mary University of London UK Formerly Visiting Researcher at the European Law Research Center Harvard Law School and Fellow at the Real Colegio Complutense Harvard University Emile Noel Fellow 2004 2005 at the Jean Monnet Center for International and Regional Economic Law and Justice New York University School of Law Visiting Scholar during the fall of 2003 at the Institute for Legal Studies University of Wisconsin Madison Law School Ph D candidate LL M European University Institute Florence Italy J S M Stanford Law School LL M Columbia Law School M Phil London School of Economics and Political Science B A J D Granada University Spain The author has formerly served in various capacities at the World Trade Organization Secretariat legal affairs division The United States Court of International Trade Chambers of Judge Pogue European Court of Justice of the European Communities Chambers of Advocate General Kokott Court of First Instance of the European Communities Chambers of Judge Lindh Delegation of the European Commission to the United Nations United Nations Secretariat economic and social council European Commission Secretariat General forward studies unit Council of Ministers of the European Union legal service s external relations team European Parliament Secretariat DirectorateGeneral for research The author has previously taught at the National Law School of India University Bangalore India where he was POROS Chair in European Union law and the Law School of the Universidade Federal Minas Gerais Belo Horizonte Brazil The author is most grateful to Professors Angel Sainz Badillos and David Kennedy for their generosity in providing him with excellent means for work while he was at the Real Colegio Complutense of Harvard University SUMMARY The General Agreement on Tariffs and Trade GATT reformulated and institutionalized as the World Trade Organization WTO in 1994 has provided much of the framework through which international trade has flourished for over fifty years The WTO Dispute Settlement system has its roots in the 1947 General Agreement on Tariffs and Trade GATT which provided a procedural platform for dispute settlement and established guiding principles for periodic multilateral negotiations on a product by product basis And finally if any of the disputing parties believe that the level of benefits suspended is manifestly excessive the party has the right to request the Commission to establish a panel which needs to present its determination within sixty days after the last panelist is selected or by which time the parties stipulate Thus Mexican trade officials indicated that Mexico would not seek to retaliate right away if the U S did not bring itself into full compliance with the panel s finding after 30 days as would be Mexico s right under NAFTA dispute settlement procedures Second apart from the good faith requirement the ambiguous nature of the thirty days for implementation could also be advantageous to the losing party If the dollar amounts are very high the WTO might be the better forum while in the NAFTA retaliation measures are capped by WTO obligations TEXT 2 INTRODUCTION The General Agreement on Tariffs and Trade GATT n1 reformulated and institutionalized as the World Trade Organization WTO n2 in 1994 has provided much of the 3 framework through which international trade has flourished for over fifty years The post war philosophy of trade liberalization has also paved the way to the creation of regional trade agreements n3 Regional and multilateral n4 trade arrangements have 4 promoted this growth in trade with the creation of institutions and procedures particularly dispute settlement systems through which signatories can ensure and enforce predictable and stable business environments for their citizens During negotiations state actors formulate institutions and structures within the agreements to enable the dispute settlement processes which may be most effective in resolving these disputes The primary purpose of dispute settlement systems in international trade agreements is to guarantee respect for the agreement s in responding to violations and legitimate expectations under such agreements n5 The existence of rules however is not the only factor determining whether a dispute settlement system is effective The political will a calculus of the numerous domestic and international interests of states to undertake the legal obligations of a trading system determines the effectiveness of the institutions created Furthermore although the political will of the states may support the institutional framework that has been negotiated the political will to resolve any particular dispute determines whether and how it will be resolved The available data thus seems to support Robert Hudec s proposition regarding the importance of political will in determining the effectiveness of international legal systems derived from the GATT experience n6 He has stated that political will is really more important than rigorously binding procedures that strong procedures by themselves are not likely to make a legal system very effective if they do not have sufficient political will behind them n7 The importance of political will to the effectiveness of the dispute settlement rules of the WTO and Chapter 20 of the North American Free Trade Agreement NAFTA n8 will be 5 examined in this article n9 In the WTO where the dispute settlement procedures appear to be rule oriented n10 as displayed in the Understanding on Rules and Procedures Governing the Settlement of Disputes DSU n11 there has been an effective compliance record overall However in politically sensitive cases compliance has been slow or nonexistent and there has 6 been a growing use of Article 21 5 n12 Panels n13 The NAFTA Chapter 20 the sole government to government dispute settlement mechanism in the NAFTA is geared to bilateral negotiated resolutions as there are fewer detailed rules governing the procedures and implementations of rulings n14 7 Until 2001 there were only three completed cases pursuant to the NAFTA Chapter 20 n15 a fourth had begun soon thereafter n16 two
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