Todd Tucker has been blogging about the recently circulated Argentina - Financial Services (DS453) panel report (see here, here, and here), based on a claim by Panama against Argentina, and he has some good general background and some exploration of the nuances.
There's lots to talk about in this case. I'm going to start with this from the Panel's examination of Panama's GATS MFN claim:
7.189. One of Argentina's principal arguments regarding the "treatment no less favourable" element of Article II:1 of the GATS concerns the status of the complainant as a cooperative country. Argentina argues that Panama has not established a prima facie case that services and service suppliers of non-cooperative countries receive less favourable treatment since Panama enjoys cooperative country status. According to Argentina, this status as a cooperative country means that Panama receives the most favourable treatment.
In other words, with regard to the two categories of treatment (cooperative and non-cooperative countries), Panama is a cooperative country and thus gets the more favorable treatment. Therefore, Argentina says, Panama's MFN claim should be rejected.
The Panel responded as follows:
7.192. In our view, determining the existence of less favourable treatment does not necessarily imply comparing the treatment given to services and service suppliers of the complaining Member. Although it is true that in most disputes the complaining Member is the Member affected by the allegedly less favourable treatment accorded by the respondent, we recall that in EC – Bananas III the Appellate Body determined that no provision of the DSU contains any requirement on the need for the complainant to have a "legal interest or right", as shown below:
We agree with the Panel that "neither Article 3.3 nor 3.7 of the DSU nor any other provision of the DSU contain any explicit requirement that a Member must have a 'legal interest' as a prerequisite for requesting a panel". We do not accept that the need for a "legal interest" is implied in the DSU or in any other provision of the WTO Agreement. It is true that under Article 4.11 of the DSU, a Member wishing to join in multiple consultations must have "a substantial trade interest", and that under Article 10.2 of the DSU, a third party must have "a substantial interest" in the matter before a panel. But neither of these provisions in the DSU, nor anything else in the WTO Agreement, provides a basis for asserting that parties to the dispute have to meet any similar standard.370
7.193. The Appellate Body also indicated that Members have broad discretion in deciding whether to bring a case against another Member under the DSU and they have to judge whether such action would be fruitful.371
7.194. The Appellate Body's statement in Canada – Autos also appears relevant to us in respect of the comparison required under Article II:1 of the GATS. The Appellate Body held that "[t]he text of Article II:1 requires, in essence, that treatment by one Member of 'services and services suppliers' of any other Member be compared with treatment of 'like' services and service suppliers of 'any other country'".372
However, it's worth noting that things were not quite that simple in this case:
7.195. In the dispute before us, we note that Panama currently has cooperative status. Panama nonetheless indicates that when it requested the establishment of a panel it had the status of a non-cooperative country373 and it was only after the establishment of this Panel that Argentina changed its status to that of a cooperative jurisdiction.374 Taking into account the Appellate Body's case law in EC – Bananas III, we do not consider that that change in Panama's status affects its right to bring a complaint under the DSU. At the same time, we do not consider that we should interfere in the broad discretion enjoyed by Panama to decide whether to bring a complaint against another Member under the DSU and whether such complaint would be fruitful for it.
So Panama currently gets the most favorable treatment, but at the time of the panel request, it was getting the less favorable treatment.
Here's how the Panel concluded:
7.196. Bearing in mind the foregoing, we conclude that the submission of claims under Article II:1 of the GATS does not require that the allegedly less favourable treatment that is the subject of the complaint must refer to the complaining party in this dispute, i.e. Panama.
You wouldn't think there would be too many complaints brought by one country regarding discrimination against other countries, but when they do come up, panels seem unlikely to reject the complaint on the basis that only other countries suffered the harm.
