Problems with the compliance structure of the WTO
dispute resolution process*
GARY N. HORLICK
The crown jewel of the Uruguay Round is the Dispute Settlement Understanding (DSU). The DSU, it is generally argued, brings quasi-juridical order to the General Agreement on Tariffs and Trade (GATT)1 regime maintenance system. Several recent World Trade Organization (WTO) dispute settlement cases, however, have highlighted structural tensions within this dispute settlement system____________________
A few months later, two related issues were rather forcefully brought to my attention while I was international trade counsel for the US Senate Finance Committee: US concerns about Canada's National Energy Program which attempted to set the price of oil for Canadian industry at 15 percent below the price in the United States, and EU complaints about low fixed natural gas prices in the United States. Fortunately, the two issues looked like ones that could be studied further. Unfortunately, the eventual study was severely cut back. The Probable Impact on the U. S. Petrochemical Industry of the Expanding Petrochemical Industries in the Conventional-Energy-Rich Nations, Inv. No. 332–137, United States International Trade Commission (April 1983).
Then, in 1982, a countervailing duty (CVD) petition was filed against imports of fresh asparagus from Mexico, alleging that the availability of cheap irrigation water–available to all crops– was a subsidy. The argument against cheap irrigation water was soon followed by CVD petitions claiming that everything from road building to Canadian provincial forest management practices to the racist apartheid system then in effect in South Africa was a subsidy. The “specificity” rule, enunciatedin 1982 by the US Commerce Department, see GaryN. Horlick, Introductory Note–United States: Court of Appeal for the Federal Circuit Opinion in PPG Industries, Inc. v. United States, 30 I. L. M. 1179 (1991), and adopted in the WTO Agreement on Subsidies and Countervailing Measures, see Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, April 15, 1994, Agreement on Subsidies and Countervailing Duty Measures, Art. 2, was squarely based on Bob's reasoning that widely distributed government benefits do not cause a distortion within the economy and are not a subsidy, but government conferral of benefits limited in law or in fact to specific industries are countervailable subsidies if not otherwise exempted.