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The Arbitration on the Level of Retaliation under the WTO Dispute Settlement Mechanism

Author: YangNa
Tutor: WenShuYing;JiangChen
School: Shanxi University
Course: Legal
Keywords: WTO the Level of Retaliation Arbitration
CLC: D996.1
Type: Master's thesis
Year: 2011
Downloads: 68
Quote: 1
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As the last and the most powerful measure, retaliation plays a very important role in the WTO dispute settlement implementation procedure, not only strengthens the WTO enforcement and implementation mechanism, but also greatly improves the validity and reliability of implementation mechanism, and the interests of members have also been rebalanced, too. However, the retaliation must be limited within a certain range that the level of retaliation should be equivalent with the level of damage which is caused by illegal measures. In practice, because the disputes about the level of retaliation often happened between the WTO members, they resort to the arbitration on the level of retaliation under the WTO system. On the other hand, since the principle regulations of the WTO relevant provisions, there are generated a lot of differences in understanding and difficulties in applying when argument arisen. Therefore, it is important to have a specialized research about the arbitration for the level of retaliation based on the relevant cases, which is also useful to resolve international trade disputes, stabilize the economic order and maintain China’s legitimate rights in international trade.Through case analysis, literature research and comparative study, this paper researches the procedural issues and substantive issues that exist in the arbitration on the level of retaliation under the WTO dispute settlement mechanism, in order to provide theoretical guidance for making adequate and rational use of the WTO dispute settlement mechanism in China.Besides the preface and conclusion, the paper is divided into three parts.Firstly, this paper analyzes the characteristics and the significance of the retaliation measure under WTO system. WTO retaliation has temporary, final, non-punitive, statutory and other characteristics. Implementing the retaliation measure should meet two requirements, which are the sequence of departments and the extent of retaliation. As far as the sequence of departments, the retaliation measure implementing should be in accordance with the sequence of departments that is same department, same agreement, a different agreement. As far as the level of retaliation, it should be equivalent with the level of damage that is caused by the defendant. The implementation of retaliation plays an important role that improves the efficiency and strengthens the intensity of the WTO implementation. At the same time, the arbitration on the level of retaliation has its own unique characteristics, which is that it exists only in the WTO implementation stage and it also has three other features:temporary, specificity, mandatory.Secondly, based on the in-depth research about the DSU Article 22.6 and 22.7, and combined the arbitrator’s interpretation of specific case in practice, this paper fully elaborates the procedural issues of the arbitration for the level of retaliation under the WTO system. Including specifically:application of the arbitration, selection of arbitrators, mandate of arbitrator, burden of proof, the third-party rights, suspension of the arbitration procedure, "sequence problem" between the DSU Article 21.5 and Article 22.Thirdly, this paper expounds the substantive issues of the arbitration on the lever of retaliation under the WTO system, including the starting-point and the calculation method of the level of retaliation. As far as the starting-point of the level of retaliation, it isn’t made any specific provision in the DSU and it often relies on the arbitrators’decisions that synthesize various factors in the practice of the arbitration on the level of retaliation. Considering the reform proposals about the starting-point of the level of retaliation by the WTO members, the author finds that the start-point is the date that the report of panel and appellate is adopted by the DSB. About the calculation for the level of retaliation, it is only made a provision of principle in the DSU, which could be served as guides. On the ground of summarizing five methods of calculation in the practice of dispute settlement, which is Actual/Counterfactual Method, Equivalent Method, Analogy Method, Economic Modeling Method, "Mirror" Regulation Method, the author indicates that when doing calculation, arbitrators and members in the disputes should select the appropriate method of calculation according to the specific circumstances of cases.

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