The first five articles in this issue are revised versions of papers presented at the Dartmouth–Tuck Forum on International Trade and Business Managing Global Trade: The WTO – Trade Remedies and Dispute Settlement, held in Washington, DC on 16–17 May 2003. The Forum was organized by Joseph Massey, Director of the Center for International Business at the Tuck School of Business, and Douglas Irwin, Professor of Economics at Dartmouth College. Funding for the Forum was provided by the Center for International Business at Dartmouth's Tuck School (www.tuck.dartmouth.edu/cib). All of the articles went through the World Trade Review's standard refereeing process.

Bob Hudec passed away on 12 March at the age of 68. In the world of GATT and WTO legal scholarship he was a towering intellectual figure of his generation.

Trade and environment constitute regimes in international relations: they are vehicles for cooperation between nation states that permit governments to address various subjects such as commercial non-discrimination, reduction of pollution, reciprocity and sustainable development. The issues of food safety and agricultural biotechnology (i.e., genetically modified organisms or GMOs) have been raised in both regimes, and have been managed in different and arguably inconsistent manners. In the trade regime, food safety and ag-biotech are mainly subject to the US-backed principle of ‘scientific risk assessment’ established in the WTO's Sanitary and Phytosanitary Agreement, while in the environment regime they would likely be addressed through the more politically based ‘precautionary principle’, promoted by the EU and represented in the Cartagena Protocol on Biosafety. Both the trade and environment regimes are rules-based, but conflict between them diminishes the force of precision and obligation needed to make rules effective. Furthermore, there is a danger that regime conflict could expand, thereby reducing the opportunity to promote an optimal relationship between science and society in the future.

Trade liberalization, particularly QR elimination, enhances border-to-domestic price transmission. A political obstacle to further liberalization (and to exposure to greater price transmission) in developing countries is fear of extended ‘low price’ periods in import-competing sectors. World commodity prices show shock persistence and asymmetry, with short-duration spikes and longer-duration troughs. Developing countries are unlikely to adopt fiscally burdensome domestic programs to compensate for persistent low-price episodes, making border measures attractive. WTO Special Safeguards could address low price problems, but present rules exclude their use by most developing countries. A possible modification of the Special Safeguard Clause could encourage reduction of overall protection. World price characteristics and the implications of low price periods for import-competing farmers are reviewed. To manage low-price risk under WTO commitments a restricted price floor policy could be implemented through a Special Safeguard Mechanism. An example illustrates the levels, frequency and duration of such a price-floor-based surcharge.

The tension in the WTO between adaptation to globalization and integration of developing countries is illustrated by one of the central norms of the regime, transparency. Experts believe democratic governance and efficient markets are both enhanced when autonomous administrative agencies are open about what they doing. WTO requirements for regulatory transparency may prove to be more straightforward for OECD countries than developing countries. The future of the WTO as a legitimate and effective international organization depends on finding modes of regulation accessible to all its Members. A review of how Canada, Brazil, South Africa, Thailand, and Uganda implement the transparency requirements of the agreements on basic telecommunications, and sanitary and phytosantitary measures found that regulatory independence and transparency are increasingly prevalent in telecommunications, but much less so in food safety. Transparency between countries appears easier than transparency within countries, and economic regulation seems easier to adapt to international norms than social regulation.

The creation of the WTO revived the use of ‘safeguard’ measures to protect troubled industries against surges in import competition. Many of these measures have now been challenged in the WTO dispute resolution process, and in each case the process has found the challenged measure to be a violation of WTO law. This paper examines the WTO rules on safeguards from an economic perspective. Among other things, it argues that the textual preconditions for the use of safeguards in the treaty text are incoherent, and that the Appellate Body has compounded the problem through a series of dubious and unhelpful rulings. The result is a situation in which nations cannot use safeguards without facing a near certainty that they will be found invalid. Those who believe that safeguard measures are wasteful protectionism may welcome these developments, but it is by no means clear that the trading system will benefit in the long run.

A WTO member state whose legislation is alleged to have infringed WTO rules often invokes the mandatory/discretionary distinction, which states that only legislation mandating actions inconsistent with WTO rules can be challenged; legislation merely granting the discretion to do so cannot be challenged. This article highlights the treatment of this distinction by the Panel and the Appellate Body in recent decisions, in particular, United States–Section 211 Omnibus Appropriation Act of 1998 (‘US–Section 211’), and United States – Countervailing Measures Concerning Certain Products from the European Communities (‘US–Countervailing Measures’). The reasoning and analysis in these cases extended beyond the characterization of the form of the legislation to an examination of the effect of the legislation, and may portend a reconsideration of the mandatory/discretionary distinction and a reformulation of the test for reviewing a state's legislation for WTO-compliance.

This article focuses on the interpretation and application of law in WTO dispute settlement from the angle of legal certainty and predictability. An analysis of the interpretation of WTO law shows that in general it does not differ from the interpretation of other public international law as interpretative rules well known in international law are applied. This together with the consistence provided by the respect of earlier panel and Appellate Body reports safeguard legal certainty. Furthermore, legal certainty and predictability requires clarity in the law applicable in WTO dispute settlement, in particular as regards non-WTO law. It will be shown that apart from peremptory norms of public international law (ius cogens), the relevance of international law outside WTO law is limited. Non-WTO treaty law must not be applied except if referred to by WTO law or incorporated therein. Apart from that international law of any kind can only be considered when interpreting WTO law. In certain circumstances this applies even to non-WTO treaty law to which not all WTO members are parties. Due to the as yet limited importance of non-WTO law, legal certainty and predictability also depend on the issue of conflict of norms, which also is relevant as far as the interrelationship of the different WTO agreements is concerned. In this regard predictability and legal certainty cannot be fully reached.

US safeguard actions have run into problems with the WTO's panel and Appellate Body reviews for failing to ensure that injury caused by non-import factors is not attributed to imports. This paper reviews the subtle legal and economic differences between US trade law (Section 201) and the WTO's Agreement on Safeguards on the non-attribution issue. The paper then resurrects the Kelly (1988) method of attributing injury to various factors as a potential method by which the ITC can ensure that future decisions conform with the Safeguards Agreement. The method is shown to yield results that are consistent with recent ITC safeguard decisions.

Most-favored-nation treatment, i.e., nondiscrimination among trading partners, is a fundamental principle of the GATT/WTO system. The WTO Agreement on Safeguards has thus been seen as encouraging use of a preferred form of contingent protection relative to antidumping and other inherently discriminatory measures. In practice, however, safeguard protection may also incorporate discriminatory elements. This paper focuses on three ways that policies conforming to the Agreement on Safeguards may nonetheless discriminate explicitly or implicitly among trading partners. First, the form of the safeguard policy matters: quantitative restrictions discriminate among foreign suppliers by preserving historical market shares more than a safeguard implemented as a tariff. Second, safeguard measures discriminate against faster-growing exporters and new entrants in import markets. Third, formal exemptions for partners in preferential trade agreements and for small developing-country suppliers allow these countries to gain market share at the expense of non-exempted exporters. We provide evidence of these discriminatory effects in actual cases of safeguard protection.

This paper analyses how trade affects women's job opportunities and earnings through five case studies: Mauritius, Mexico, Peru, the Philippines and Sri Lanka. Women's share of the labour force has increased over time and the wage gap between men and women has narrowed. A positive and statistically significant correlation between exports and women's share of employment is found while there is a statistically significant and negative correlation between women's share in employment and imports. The correlations stem from variation between sectors rather than within sectors over time, indicating that export-competing industries tend to employ women while import-competing industries tend to employ men. Trade liberalization is likely to create jobs for women and over time increase their relative wages.

This paper investigates how the Appellate Body has coped with its precarious position in the WTO. It must rely on decentralized enforcement of its rulings; interpret new regulatory rules that are complex and contested; hear and resolve all disputes; and deal with governments litigating issues on which they fail to achieve consensus in negotiations. In this setting, the Appellate Body cannot easily promote both its reputation for coherence and its record of compliance – the dual underpinnings of its perceived authority. In response, it has crafted an activist and politically sophisticated approach to several procedural issues. Despite underlying disagreements among member states, the Appellate Body has seized chances to enact procedural reforms that encourage consensus rulings, improve its access to information, and expand its judicial discretion. While no guarantee of success, these procedures should enhance the Appellate Body's ability to reduce the intrinsic political risks of WTO adjudication.

Some cases attain “landmark” status because they constitute a jurisprudential paradigm shift. Others attain such status because in them a decisor, usually a supreme jurisdiction, renders a definitive, “canonical,” ruling. Sometimes it is both reasons. Sometimes, rarely, it is neither. EC – Asbestos is such a rare case. It may well qualify as a landmark. It has, justifiably, attracted huge attention and, understandably, considerable controversy. Its reasoning, however, is so decidedly non-definitive that it is not, consequently, possible to say whether it represents a veritable paradigm shift or is just a badly reasoned case by the Appellate Body (AB), albeit with a non controversial result.

This article evaluates the extent to which the establishment of the Andean Free Trade Zone (AFTZ) has led to an improvement of intra-regional trade, as promised by open regionalism, without reducing extra-regional trade. Open regionalism is a dynamic process in which economic agreements serve as intermediate steps towards integration with the world economy. The calculations of ex post income elasticities of import demand show that the establishment of the AFTZ in 1993 led to an increase in Andean Community trade, and not to a contraction of extra-regional trade. The intensity of trade index and the propensity to export intra- and extra-regionally confirm this finding. The article discusses these results in the context of the multilateral trading system and the trade relations between the Andean Community and the rest of the world.

This dispute between the European Communities and the United States originated when the United States amended its copyright law in a way that nullified and impaired certain benefits promised to the European Communities under the Agreement on Trade Related Aspects of Intellectual Property (TRIPs). Article 9.1 of TRIPs requires all WTO members to comply with Articles 1 through 21 of the Berne Convention of 1971. Among the provisions of the Berne Convention thus incorporated into the TRIPs Agreement is one that grants to authors of literary and artistic works the exclusive right to authorize ‘the public communication by loudspeaker or any analogous instrument transmitting, by signs, sounds or images, the broadcast of the work’, and another that grants to authors of dramatic and musical works the exclusive right to authorize ‘any communication to the public of the performance of these works’.

This paper examines recent trends in the US antidumping process. We trace the experience of different groups of countries at each stage of the investigation process and through follow-up activity in disputes initiated at the GATT/WTO. The data reveal that lower income developing countries are more likely to be targeted, less likely to settle cases, more likely to confront high dumping duties, and less likely to bring cases to the WTO. We argue that differences in administrative and institutional ‘capacity’ may be a contributing factor that explains the observed bias facing developing countries, in addition to the other hypotheses that have been offered in the literature, such as higher protection and limited retaliatory ability.

This study discusses the ruling of the Appellate Body (AB) in the recourse to Article 21.5 of the DSU by Malaysia in the context of the US import prohibition of certain shrimp and shrimp products from a legal and economic perspective. The first part of the chapter (section 2) discusses the background of the case, and, in particular, presents the main issues at stake in the Panel and AB decisions in the original case as well as their main findings. Section 3 discusses the key elements of the compliance panel and its subsequent appeal and identifies a few issues that are discussed in further detail. In section 4, in the context of a simple model, we first consider the consequences of making imports contingent on the adoption of environmental measures in exporting countries. We find that the attractiveness of such measures depends heavily on the characteristics of abatement technology and the range of policies available in the exporting countries. Finally, section 5 briefly discusses the trade-off between flexibility in the imposition of environmental standards and the enforcement of dispute settlements’ rulings.