Recent EU Trade Sanctions on the US to Induce Compliance with the WTO Ruling in the Foreign Sales Corporations Case: Its Policy Contradiction Revisited

摘要

The WTO justifies its existence by serving its proclaimed objective of promoting trade liberalization through the progressive eradication of barriers. To this end, it has created a regime of obligations for members under its various Uruguay Round agreements and understandings. The need for a credible and reliable dispute settlement system became central to the effective performance of WTO obligations. It is these expectations and euphoria that persuaded WTO members, specially developing and the least-developed, to agree with WTO agreements. Prompt, predictable and positive settlement of disputes through specific performance and compliance with DSB recommendations and rulings are the basic goals of the DSU (Arts. 3.3, 3.7 and 21.1). It is of paramount importance for the ongoing legitimacy of the system so that those who submit to it receive justice. The DSB, by appearance, provides one of the best international dispute resolution mechanisms. But when it comes to the implementation or enforcement, the system does not seem to have the best arrangement and punitive remedies for inducing compliance should its settlement fail or rulings go unheeded. Functionally, the enforcement of DSB rulings remains a by-product of pragmatism and permissiveness, a reconciliatory rather than an adjudicative process. Its powerful members can still exercise their dominant bargaining status under the protective shadow of the law, which circumvents the development of a uniform standard of compliance. In principle, its provision for reciprocal retaliatory trade sanctions against the non-complying member raises the fundamental question as to why the WTO authorizes measures that are the very antithesis of the basic tenet of the multilateral free trading system.