I recently participated in an ICTSD event on RTA disputes, and my assignment was to look at how compliance went in cases in which there was a panel ruling. I did my best to dig up information, but it's hard to find it for many cases. Luckily, there were some government officials there, and they have information that none of us civilians have. For the benefit of the rest of us, here is something Luis Fernandez of Costa Rica provided me with regard to the El Salvador - Tariff Treatment CAFTA dispute:
Enforcement of the award in the case El Salvador – Tariff treatment to goods originated from Costa Rica (CAFTA-DR/ARB/2014/CR-ES/18)
- On the 18th of November of 2014, the arbitral panel in the case El Salvador – Tariff treatment to goods originated from Costa Rica (CAFTA-DR/ARB/2014/CR-ES/18), issued its final report.
- Costa Rica activated the dispute settlement provisions of DR-CAFTA on September 2013 given the denial of preferential treatment by El Salvador to costarrican exports under DR-CAFTA.
- Among other things, the arbitral panel concluded that the omission by El Salvador to apply the preferential tariff treatment of DR-CAFTA to goods originated in Costa Rica, including those ones produced under special export regimes, violated articles 3.3.2 and 4.1 as well as Anexes 3.3 and 4.1.
- Given its conclusions, the arbitral panel recommended to the disputing parties to take the appropriate actions towards a prompt resolution of the controversy, including the possibility to explore the plan of action mentioned in article 20.15.3 of DR-CAFTA that says:
"Where appropriate, the disputing Parties may agree on a mutually satisfactory action plan to resolve the dispute, which normally shall conform with the determinations and recommendations, if any, of the panel. If the disputing Parties agree on such an action plan, a complaining Party may have recourse to Article 20.16.2 or Article 20.17.1, as the case may be, only if it considers that the Party complained against has failed to carry out the action plan.”
- Based on the recommendations of the arbitral panel and considering the possibility established in article 20.15.3 of DR-CAFTA, the disputing parties in this case (Costa Rica and El Salvador) elaborated an action plan to allow El Salvador to implement all necessary measures to secure tariff treatment application to goods originated from Costa Rica under DR-CAFTA. The action plan included interim and final measures through a transition period of 6 months, after which all necessary measures would be needed to be implemented. Conversations between both parties were amicable and under a spirit of collaboration, which allowed to reach the agreement after just two meetings (one of them via videoconference).
- This positive result would have not be obtained without a provision as the one set in article 20.15.3, quoted above.
- The possibility to secure an action plan is beneficial to both parties.
- For the complaining party, it allows legal certainty on the time frame and type of measures that the respondent Party is going to undertake to secure compliance of the ruling of the arbitral panel, measures that were even designed with the complaining Party's participation.
- To the respondent, is also an incentive to include the complaining party in this process since it gives it certainty that the complaining Party would only be able to suspend benefits if the respondent failed to carry out the action plan, which ultimately depends on the respondent’s implementation efforts.
- In a way, the action plan acts as an interim phase between the final ruling of the arbitral panel and the suspension of benefits phase, and incentives both parties to negotiate the best way to implement the ruling and settle the dispute.