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1 [1] (July 18, 2016)

handle is hein.crs/crsmthmbdvk0001 and id is 1 raw text is: Ii o g the leg slat've debaN s nce 1914 Congressional Research Service July 18, 2016 Dispute Settlement in the World Trade Organization: Key Legal Concepts The World Trade Organization (WTO) agreements set forth rules for government practices that affect international trade in goods and services. The agreements address import tariffs on products, as well as nontariff trade barriers such as product standards and subsidies. The WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (Dispute Settlement Understanding or DSU) provides a means for WTO Members to resolve disputes arising under the WTO agreements. The United States is a Member of the WTO. This In Focus summarizes key legal principles that often arise in dispute settlement cases. For more on WTO dispute settlement generally, see CRS Report RS20088, Dispute Settlement in the World Trade Organization (WTO): An Overview. For more on the WTO generally, see CRS In Focus IF10002, The World Trade Organization, by Ian F. Fergusson and Rachel F. Fefer. Standing to Bring a Dispute In the legal context, the concept of standing generally refers to a party's legal right to bring a dispute before a court or other tribunal for possible resolution of the issues in the party's complaint. Various legal instruments governing a tribunal's powers (e.g., constitutional provisions or prudential concerns incorporated into judge- made law) may establish requirements that a party must meet in order to have standing before that tribunal. For example, a key element of standing doctrine in U.S. law holds that in order to maintain a lawsuit in federal court, a party must have suffered some type of injury to a legally protected interest. U.S. Const. Art. III, § 2; Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). However, the concept of standing differs in WTO dispute settlement, which involves state-to-state disputes between WTO Member countries brought before international tribunals. WTO jurisprudence suggests that a WTO Member could potentially maintain a dispute settlement case without having suffered direct economic injury to its trade interests. In European Communities Regime for the Importation, Sale and Distribution of Bananas, the Appellate Body noted that nothing in the WTO agreements requires a Member to have a legal interest in a dispute in order to bring that dispute before a WTO panel. WT/DS27/AB/R, 132. Although the Appellate Body did not specifically hold that a WTO Member may bring a complaint without having suffered any injury to its economic interests, it did suggest that the WTO Agreements may allow a WTO Member to bring a dispute settlement complaint against another Member even when its legal interest in the case is remote or indirect. Id. at 132-38. In addition, a provision in the General Agreement on Tariffs and Trade (GATT) suggests that there are some circumstances in which a WTO Member could bring a case without having suffered direct economic injury. The provision allows a WTO Member to bring a non-violation claim against a Member that has not violated the GATT if application of one of that Member's measures (e.g., a law or regulation) has nullified or impaired benefits accruing to the complaining Member or impeded the attainment of GATT objectives. GATT Art. XXIII: 1 (b). However, the Appellate Body has stated that this remedy should be approached with caution and should remain an exceptional remedy. See European Communities Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/AB/R, 186. De Jure vs. De Facto Discrimination A key WTO principle is the concept of nondiscrimination. Several provisions in the agreements prohibit a WTO Member from discriminating against an imported product, service, or service supplier based on its foreign (WTO Member) origin. E.g., GATT Art. III; Agreement on Technical Barriers to Trade Art 2.1; General Agreement on Trade in Services (GATS) Arts. II, XVII. WTO jurisprudence holds that a law or other measure may violate the WTO agreements not only when it facially discriminates against imported products based on origin (de jure discrimination) but also when an origin-neutral law nevertheless discriminates in effect against imported products of WTO Member origin (de facto discrimination). A WTO panel's decision in the Canada Autos dispute illustrates this principle. In that case, Canada exempted from import duties automobiles brought into the country by a select group of eligible importers. WT/DS 139/R, 10.43, 10.45-.50. Although this group could theoretically import cars originating in any WTO Member country, the group of Canadian importers in practice imported cars mostly from those WTO member countries that hosted car manufacturers affiliated with the importers. Consequently, the WTO panel determined that the duty exemption conferred an advantage on products (i.e., cars) of the WTO Members that hosted the importer-affiliated manufacturers. Moreover, this advantage was not accorded to like products of other WTO Members that did not host importer-affiliated companies. Thus, the measure violated GATT Article 1: 1. Although the Canada Autos case concerned the GATT's most-favored nation (MFN) treatment provision, the Appellate Body has recognized that de facto discrimination may also occur under other WTO nondiscrimination provisions, such as the MFN provision in the GATS. EC- Bananas JJJ, 233-34. www crsgov 1 7-5700 0

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