Collective retaliation and the WTO dispute settlement system

Abstract

Article 22 of the Dispute Settlement Understanding (DSU) of the WTO offers, as last resort countermeasures, withdrawal of the concessions the state parties had agreed to in their schedules of commitments. The problem is that such a withdrawal of concessions would have very little impact on the economy and consequently on the behaviour of the respondent state if that party happened to be a developed state vis-à-vis a small, developing country. To deal with this situation a remedy of “collective countermeasures”, contained in Article 54 of the Draft Articles on State Responsibility of the International Law Commission (ILC), has been proposed; it has been argued that this remedy should apply, as a general principle of public international law, as a last resort in WTO disputes. The counter-arguments are, first, that the WTO regime is a self-contained regime and therefore the general principles of international law do not apply in this case, and, second, that the WTO legal system is based on a distinct idea of “compliance” with WTO rules as a primary remedy, as opposed to reparative and punitive justice. The concept of “compliance” with WTO rules is akin to the concept of “liberalization”, which is a linchpin of the WTO multilateral system. Therefore the idea of “collective countermeasures” or, in other words, “collective punishment” is repugnant to the principles of WTO law, and it is argued that the present remedies under Article 22 of the DSU are adequate.