Submitted By: N. Anushea Thomas
Vth year, B.B.A L.L.B., (Hons)
The Tamilnadu Dr. Ambedkar Law University, Chennai.
School of Excellence in Law.
Non-violation remedy is a dispute settlement method accepted by WTO/GATT but still it has been made with wariness when coming into practical application. It is a remedy which is used when the benefits which has to accrue on the basis of a WTO agreement has been “nullified or impaired”. This controversial concept has not been used very often.
The enunciated remedy has been controversy right from the inception of GATT. A detailed justification for this concept has not been made and was not yet accepted by many of the WTO members and legal scholars. The relative paucity of GATT/WTO on the non-violation claim in which the DSB has ruled on is only 8 percent and this would also shrink to under 5 percent if it were limited to panel rulings.
In this paper I have addressed the issue on non-violation complaints and put forth the contention that lead to the predictability that extension of the moratorium will benefit the developing countries to achieve market access, non-tariffs and subsidies and also develop the integration among the member countries.
RELEVANCY WITH THE PROVISIONS OF OTHER AGREEMENTS:
The remedy of non-violation complaint is not the sole corpus of the International Law as such, but it is a part of GATT agreement. This concept has stemmed its origin from the bilateral trade which had given its inception later into Article XXIII of GATT in which the contracting parties can challenge before the DSB whenever the agreed terms of the agreement has been violated (violation complaints), rather the parties can make an application whether or not the provisions of the agreement is complied with, which is known as non-violation complaints.
Article 26(1) of WTO Understanding on Dispute Settlement (DSU) establishes the procedure and the method in which the non-violation complaints has to be set up before the board. The party having substantial interest and having affected by way of the rules of non-violation then in such a matter the party shall submit a “detailed justification in support of their claim”. Later panel shall assist the contracting parties to settle in a mutual understanding without nullifying or impairing the agreement and determined the benefits. The panel shall make a detailed report based on complaint made.
As far as Article 26(2) is considered the situation complaint has been adjudged by only giving a detailed report on an case to case analysis. The parties are not required to bind by the decision of the panel on providing compensation or to arrive at an mutual understanding.
As referred to in Article 64 of TRIPS Agreement in which a moratorium on the application of non-violation remedy an it has assigned to it members to make a study on the discrepancies that avail in the application of the non-violation remedy. Thus the moratorium has been extended for a term of five years from the date of force of WTO Agreement.
The meeting held on November 1983 by the Committee on Custom Valuation, notes that:
“Responding to a query regarding the significance of the reference to GATT Article XXIII in Article 20. II of the Code, the Director of the Office of Legal Affairs said that this Article stipulated that the parties should use the dispute settlement procedures under the agreement before availing themselves of any rights which they had under the GATT. It was thus recognised in the provision that there might not be any rights being invoked under the GATT; this would apply in the case of a dispute involving a country which, like Botswana, was neither a GATT contracting party nor had provisionally acceded to the GATT”.
Thus all the above said provisions are dealing with the non-violation complaints.
COMPLICATIONS IN APPLYING THE NON-VIOLATION COMPLAINTS
The contracting parties shall bind by the agreement which has been made by them in a way of bilateral trade in which the non-violation complaints owe its origin. The parties to the agreement in any case due to any inconvenience violate any of the terms of the agreement tem the affected party has to be compensated. Whether or not the norms of the said agreement has been violated may also give way to a non-violation complaint which has not been justified in its practical sense. The scholars of various department has suggested that, the enforcement of this may affect the trade since the reason for the evolution of this concept was to provide an ease for tariffs and grant of subsidies, which after the growth of the multilateral trade there has been a wide interpretation and implementation of rules regarding to the reduction of tariffs and subsidies. So the need for non-violation complaint was not felt further by the members of WTO.
Thus the principle of pacta sunt servanda as under Article 26 of the Vienna Convention expresses that the parties to a treaty must adhere to it and it binds upon the parties hence the parties must perform it in good faith. Thus any party who seek the redress for the non-violation complaint shall approach through the DSU without excluding any of the provisions of i
In Fuji Film, the panel made a vague statement that the non-violation complaint on nullification or impairment must be treated as an exceptional case and has to be given caution wile deciding upon it, the same opinion was given in the EC-Asbestos by the appellate body that any matter with this issue has to be treated with caution.
• Undermine sovereign rights: The application of this complaint would provide for a new cause of action with no relevance to the abided agreement which in go beyond the powers of the regulatory authorities. Moreover it curtails the parties from involving or investing for new concerns for the growth of the welfare of the countries. It will later lead to the filing of more non-violation complaints with no justifiable reasons.
• Unilateral Pressure: It encourages the more protection for any intellectual property aspect, which is already at a low level for patent to pharmaceuticals. On the other hand it discourages members who are not enhances with all such sources.
• No Equal Concern: It does not provide with equal exchange of rights and duties between all the parties. The private property rights are not protected as such the others are. Hence this application provides for discrepancies between all the member countries and also within the country. Thus the basic need for which this concept would be adopted shall not serve its purpose.
• Lack of Guidance: Under Article 26 of DSU the procedure as to the application for such complaints was not clear. The panel shall not end up in a proper conclusion, as of now only few cases were considered to be non-violation complaint, hence it would not result in a proper surveillance.
• Practical Challenges: The developing countries have not yet has access to the non-violation complaint which would curtail its growth further and exaggerate the problems faced by them. This would increase the number of cases unnecessary pending before the international forum.
These challenges may lead to frustration among the member countries and complicate the existing agreements between them.
The non-violation complaint has been in existence for nearly half a century but the application of it by the member countries has been very low in number which by itself shows the trust the members have towards this concept. In the light of the occurrence of these events have resulted in the inequality among the member countries which has also evaded the systematic concern and the cumulative action by its members. The concern relating the tariff and subsidies has been met by many other underlying principled and rules evolved.
Thus the core idea of tariff concession, increase competitiveness, and provide equality among its members has remained a legal fantasies in this international aspect.
From the above discussed context the non-violation complaint has been inappropriate in its application, hence I suggest to make a detailed report on the basis of the recommendation of each parties and to have more concern towards it and improve the procedure for its application to an greater extent and to make an clear idea of its application. Make a record of all the merits and demerits of the member and extend the moratorium on the application of the non-violation complaint.