US DSU PROPOSAL RECEIVES MIXED REACTIONS

At a 16-18 December negotiating session of the WTO Dispute Settlement Body (DSB), the US and Chile submitted a joint proposal aimed at providing parties to a WTO dispute with more flexibility and control over the process. The proposal would allow members more control of the content of Appellate Body (AB) reports as well as the course of the dispute settlement proceedings. Trading partners Malaysia and India expressed their support for the US position. However, Brazil, Canada, the EU, Korea and Switzerland criticised the US's proposal, cautioning that it would undermine the independence of the AB, transform the WTO dispute settlement system from litigation towards bilateral settlements, and subvert the predictability and security of the multilateral trading system. The US-Chilean paper sets out six options for improving the rules of the WTO Dispute Settlement Understanding (DSU), including: introducing confidential interim reports to be circulated by the AB to parties prior to issuing the final report; allowing parties to "delete by mutual agreement findings in the report that are not helpful or necessary to resolving the dispute"; allowing the DSB to only partially adopt a report; providing parties with a right to suspend panel or AB proceedings for further negotiations; and providing "some form of additional guidance to WTO judicative bodies" concerning the application and interpretation of WTO law. Sources commented that the new US stance -- which partly contradicts its earlier standpoint on dispute settlement -- results from a recent US Congress drive for change. In the words of US Senate Finance Committee Chair Max Baucus (D-Mont.), WTO panels are "making up rules that the US never negotiated, that Congress never approved, and I suspect, that Congress would never approve." Intra-US criticism had e.g. been sparked by a WTO ruling against the US in the foreign sales corporation (FCS) case with the EU (see BRIDGES Weekly, 13 September 2002) allowing the latter to impose trade sanctions to the amount of some US$ 4 billion per year on US imports. Members are currently negotiating on the clarification of the DSU, with a 31 May 2003 deadline (Doha Declaration paragraph 30).

"Dispute Settlement: US Proposal On Dispute Settlement Reform Gets Mixed Reaction from WTO Delegations," WTO REPORTER, 20 December 2002; "Dispute Settlement: US, Chile Unveil Proposal For Increasing 'Member Control' Of WTO Dispute Procedures," WTO REPORTER, 17 December 2002.

WTO Members and Russia have agreed on a new, accelerated schedule for Russia’s WTO accession negotiations. A number of meetings will be held during the first quarter of 2003, prompting some observers to speculate on whether Russia might become a member by the fifth Ministerial Conference to be held in Cancun, Mexico in September 2003. Russian finance minister Aleksei Kudrin's participation in the WTO working party on the accession of Russia, which met from 16-18 December, indicated that Russia's seriousness about accelerating the negotiations. The main stumbling blocks on the way relate to agriculture and services, and to the requisite termination of more than 50 bilateral trading agreements with current WTO Members.
"Russia, WTO Members Agree On Accelerated Schedule of Negotiations," WTO REPORTER, 19 December 2002.