Simon Evenett and Alejandro Jara have a piece at vox criticizing the "settlements" in U.S. - Cotton Subsidies and U.S. - Clove Cigarettes. Here's an excerpt:
During October 2014 two WTO disputes were settled in an extraordinary manner:
- A complaint by Indonesia against the US ban on clove cigarettes, and
- A complaint by Brazil against the US regarding subsidies on Upland Cotton.
In both cases the US largely lost and the winning parties came close to retaliating against US commercial interests. In both cases the upshot is that offending measures have been maintained, albeit with some limitations.
...
The settlement of both the Upland cotton and the clove-flavoured cigarettes disputes are suboptimal insofar as the measures found in breach are not corrected, and the offending country pays or removes the threat of bringing a dispute against the complaining party. Everyone is worse off except the stakeholders that continue to benefit from a protection or a subsidy. This surely is not what the drafters of the Dispute Settlement Understanding intended.
...
The settlement of these two disputes between larger trading nations calls for a re-examination of how WTO Dispute Settlement works in practice. When the Dispute Settlement Understanding was created, Jackson noted that many diplomats were worried about leaving state-to-state disputes in the hands of lawyers (Jackson 1997). Do these two settlements presage a shift in the balance between law and diplomacy in the resolution of trade disputes? Moreover, is the system less rules-based than it is characterised, with large players negotiating around trade rules while smaller players are compelled to comply with them?
Furthermore, if settlements such as these are allowed to stand, then to what extent can the WTO rules been seen as self-enforcing, or just the pretext for further deal-making that can come at the expense of third parties or compliance with other WTO rules? Much is at stake for the WTO – both in theory and in practice.
I think they are right to be critical, but I'm more resigned when it comes to this sort of behavior. The WTO dispute system can never deal with all violations of obligations. Many cases will never be brought; some cases will be settled before there is a ruling; some rulings will be negotiated away; and some rulings will be ignored. But none of that changes the fact that when complainants really want to push a complaint, they will probably get some degree of implementation. Here, the complainants could of pushed harder. For reasons that seemed convincing to them, they chose not to, and we end up with an unsatisfying result.
