“Inducing compliance” in WTO dispute settlement*
DAVID PALMETER AND STANIMIR A. ALEXANDROV
Ultimately, I would favor a system in which sanctions would come for violating any provision of a trade agreement.
President William J. Clinton1
Sanctioning authority is rarely granted by treaty, rarely used when granted, and likely to be ineffective when used.
Abram Chayes and Antonia Handler Chayes2
When a Member of the World Trade Organization (WTO) fails to conform its practices to the rulings and recommendations contained in an adopted dispute settlement report, the prevailing party may be authorized by the WTO's Dispute Settlement Body (DSB) to take action against the WTO interests of the offending Member. Pursuant to the WTO's Understanding on Rules and Procedures Governing the Settlement of Disputes–the Dispute Settlement Understanding, or DSU–this action takestheformofthe “suspension” “ofconcessionsorotherobligations. ” Insimple terms, this means that if the inconsistent measure is not brought into conformity, and if the parties cannot agree on compensation for this inconsistency, the prevailing Member may impose restrictions on the trade of the other Member. If the offending Member objects to the level of the suspension proposed by the prevailing Member, it may request binding arbitration.3
Arbitration over the level of suspension of trade concessions occurred for the first time in the WTO in the Bananas dispute between the United States and the____________________