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Anna Kvinge, Political Science - summa cum laude

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Anna Kvinge, Political Science - summa cum laude

  1. 1. A n n a K v i n g e | 1 Norway’s Internationalism: Third Party Participation, Advocacy, and the Role of Advanced Small Markets in the World Trade Organization. by Anna Kvinge I. Introduction Third party participation is not a new concept under the World Trade Organization (WTO). It was already established and used under the General Agreement on Tariffs and Trade. However, under the WTO, the practice of third party participation, which is when a WTO Member1 is neither the complainant nor the defendant in a case but presents its views and arguments in favor of one of the disputing parties, has been questioned. The concerns are about whether or not it is beneficial for members to participate as third parties or if it helps the party who initiated the dispute. Certain Members such as the United States or the European Union, have participated as a third party in over 130 cases, while other countries, such as the Republic of Korea, China, Canada and India among others, have participated in over 100 cases as a third party. Given that some scholars state that third party participation does not necessarily help the case when it is brought up to the Dispute Settlement Body (DSB),2 it begs the question of why there are still so many Members exercising their third-party rights when a case proceeds into the panel hearing within the WTO Dispute Settlement process. Therefore, in what follows I 1 On both the official World Trade Organization and in the majority of the documents written by the World Trade Organization, Members and scholars, the word “member(s)” is written with capital m, which is why I will also be writing member(s) with a capital m. I will follow their lead and capitalize Member(s) throughout this paper. 2 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." In Ernst- Ulrich Petersmann and Mark A. Pollack (eds.), Transatlantic Economic Disputes: The EU, the US, and the WTO. Oxford: Oxford University Press, 2003. Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." In Chantal Thomas and Joel P. Trachtman (eds.), Developing Countries in the WTO Legal System. New York: Oxford, 2009 pg. 21, 23
  2. 2. A n n a K v i n g e | 2 ask:“Why do Members choose to be a third party to some cases and not others?” and “How do Members decide in which disputes to be part of?” The DSB hears cases on a range of issues from cereals to renewable energy. I will be focusing my research on anti-dumping and dumping calculations. Since the World Trade Organization was established in 1995, eighteen cases have been brought to the WTO Dispute Settlement that focus on the zeroing methodology used in calculating the dumping rates with regards to foreign export goods. Dumping is when a company exports a product at a lower price than the same product costs in its own home market. Zeroing is a calculation device used to establish the anti-dumping duty that a country has to pay, a method that increases (often substantially) the margin of dumping of the exporter, and thus increases the amount of anti- dumping duty that the exporter has to pay.3 Governments take action in order to protect the country’s own domestic industry from the “dumping” of a product. The imports, which are priced lower abroad than they are in the home market of the product, are then taken into account and calculated under the zeroing formula.4 Given that every country has a right to impose anti- dumping duties on products from foreign markets that enter the domestic market at a lower price than valued on the foreign market, there has been a lot of controversy and discussion regarding the fairness of zeroing as a method of calculating. Out of the eighteen cases that were brought up to the WTO Dispute Settlement with regards to zeroing, sixteen cases have been filed against the United States in the span of fourteen years,5 whereas the other two cases were against the European Communities (EC).6 In the cases 3 “What is Zeroing?” Pg. 1 4 I will be explaining the zeroing formula in Part III when addressing the zeroing cases. 5 The first case was brought up in 1999 and the latest case began in 2013. 6 The first case was brought up in 1998 and the second in 2000.
  3. 3. A n n a K v i n g e | 3 against the United States, there have been twenty-three Members who have participated in these cases as third party.7 For the cases brought against the United States, Norway has participated as a third party in six of these sixteen cases, a high number for such a small Member state. This number is almost on the same high level to countries such as India, Brazil and Mexico, all of which are significantly larger countries.8 Further, Norway’s overall participation as a third party in the DSB is extremely frequent; as of April 2016 the country has been a third party in a total of seventy two cases. This significant number is similar to that of Turkey, Mexico, Australia, or Thailand, and exceeds other countries that are bigger than Norway, such as Argentina and Chile. Therefore, I focus on Norway, an advanced small market nation, as a case study in order to examine why smaller Members of the WTO continue to join cases as third parties and to discern how they chose cases to (not) support. Within this paper I use the term “advanced small markets” to describe developed countries that have strong but small economies. I focus on Norway’s participation as a third party in four of the sixteen cases against the United States, and I also consider one case in which Norway did not participate as third party. I then use the oral statements and the written submissions Norway submitted as a third party in these cases, together with Norway’s Trade Policy Reviews (1996-2012) to answer my research questions. FIGURE 1: Cases Under Consideration: Complainant Case topic Norway as 3rd party DS294 European Communities Zeroing (general - 21cases, most products steel) Yes DS322 Japan Zeroing (general + Sunset Review) Yes DS350 European Communities Continued Zeroing Yes DS404 Viet Nam Shrimp No DS429 Viet Nam Shrimp II Yes 7 It is twenty-three Members because I am counting the European Communities and the European Union as one Member. 8 India has been a third party in 116 cases, Brazil in 99 cases and Mexico in 75 cases, as of 30 April 2016. “DISPUTE SETTLEMENT: THE DISPUTE Disputes by country/territory.”
  4. 4. A n n a K v i n g e | 4 In addition to reviewing documents Norway submitted as a third party in disputes and Norway’s Trade Policy Reviews, I conducted an interview with two lawyers, Linn Edvartsen and Camilla Høvding Blom, from the department on the European Economic Area (EEA)- and trade law in the Norwegian Ministry of Foreign Affairs in August 2015. The lawyers stated that Norway has participated as a third party in so many disputes at the DSB because that is the only way other WTO Members have access to the documents of the disputes. Therefore, Norway’s participation as a third party is only to get access to the dispute documents – in order to stay on top of international trade. I, however, argue that advanced small market choose to participate as a third party for a variety of reasons. These reasons include: a) they have a strong (trade/economic) connection to the complainant of the case; b) the case topic is generally broad and therefore is applicable to various Members and other cases; c) the third party Member is using the DSU to advocate for greater support and involvement of smaller, perhaps developing, countries in the process and procedures of the WTO; or d) push for legal precedent to be followed by all WTO Members in international trade. The two final reasons – suggests countries like Norway may be acting out of a kind of benevolent internationalism – contradicts assumptions about the fundamentally selfish economic motivations behind WTO Member actions. By using Norway as a case study, we can better understand the decisions taken by advanced small markets to participate as third parties in disputes at the DSU. A close analysis of Norway as a third party participant in the Zeroing cases against the United States provides us with further information on how an advanced small market Member expands on the use of the WTO Dispute Settlement. I argue further that by choosing to participate in dispute cases as a third party Norway’s government is not being manipulated by industries in Norway or domestic politics. Rather, the
  5. 5. A n n a K v i n g e | 5 small group of people working in the Ministry of Foreign Affairs (MFA) in the department of the European Economic Area (EEA)- and trade law are, through Norway’s participation as third party in dispute cases at the WTO, working toward a vision of a more equitable world. This small group of people is acting as internationalists, which I define as a group of people working in their own legal capacity with little or no EEA-influence of domestic politics, with a goal of promoting greater cooperation among nations and peoples. These internationalists do this in order to improve the process of the World Trade Organization and to defend the place of the smaller (and weaker/less developed) nations in the WTO and the Dispute Settlement process. In addition, I argue that the internationalists of Norway focus on the legal precedent made in the cases brought to the Dispute Settlement, where they argue for every country to be held responsible by the WTO to the precedent set by Panels and the Appellate Body of the World Trade Organization, so that all countries are in line with international rules. II. Roadmap In order to examine third party participation by advanced small markets in the World Trade Organization, I begin this paper by providing a historical background on the General Agreement on Tariffs and Trade (GATT) before moving on to the historical background of the World Trade Organization. Together with the general background on the creation of the General Agreement on Tariffs and Trade I will explain the Dispute Settlement Procedure and third party participation under GATT, as well as explain Norway’s role in the General Agreement on Tariffs and Trade. During the background on the World Trade Organization I will also explore the role of third party participation in the Dispute Settlement Body of the WTO, before I will tackle Norway’s overall participation in the World Trade Organization.
  6. 6. A n n a K v i n g e | 6 In section IV I provide information on anti-dumping and the zeroing methodology, before I move on to section V where I explain my research methods and how I chose Norway as my special case for this paper. After that, I move into my case study – Norway, where I examine four arguments of the paper for why advanced small markets participate as third parties in the Dispute Settlement, before I conclude the paper in section VII. III. Historical background i. General Agreement on Tariffs and Trade The focus of my paper, third party participation in the World Trade Organization was born in the precursor to the WTO, the General Agreement on Tariffs and Trade (GATT). The General Agreement on Tariffs and Trade (GATT), a multilateral trading system, was one of three established international institutions after the end of World War II. These institutions were established at the Bretton Woods monetary conference held in New Hampshire in July 1944. Together with the establishment of GATT, the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (currently the World Bank) were established.9 GATT was the outcome of failed negotiations under the United Nations Conference on Trade and Employment for the creation of the International Trade Organization (ITO),10 which extended beyond trade disciplines to include “rules on employment, commodity agreements, restrictive business practices, international investment, and services”.11 GATT was envisioned to be neither a treaty nor an organization, rather a mere trade agreement put into place by executive order, which meant that the participants of GATT were not members but 9 Irwin, Douglas A., Petros C. Mavroidis, and A. O. Sykes. The Genesis of the GATT. American Law Institute Reporters' Studies on WTO Law. New York: Cambridge University Press, 2008. Pg. 65 10 From GATT to the WTO and Beyond Research Guide: History and Basic Information. 11 GATT: ‘provisional’ for almost half a century.
  7. 7. A n n a K v i n g e | 7 contracting parties.12 Therefore GATT had a “de facto” status as an international organization before the creation of the World Trade Organization, because the nations of the original signatory expected that the agreement signed would eventually become part of the permanent ITO Charter.13 The General Agreement was signed on October 30th 1947 by twenty-three nations in Geneva at the Palais des Nations,14 and began full operation from Geneva in 1948.15 The founding parties to GATT were members of the Preparatory Committee which was created to draft the charter of the International Trade Organization by the United Nations Economic and Social Council in 1946, where a delegation of fifty-six nations met in Havana, Cuba for the UN Conference on Trade and Employment in 1947 to look over and sign the final draft of the ITO as a whole.16 Fifty-three of those nations signed the Final Act in March 1948 authenticating the text of the Havana Charter, but without any commitment from governments to ratification of the text, the ITO is believed to have been stillborn.17 All of the negotiations for lowering tariffs in trade between nations during the GATT years were conducted during what is known as rounds of multilateral trade negotiations (MTNs), of which there were eight completed rounds.18 The first round of multilateral trade negotiations began before the signing of the General Agreement, but finished in Geneva during the signing of GATT along with 123 agreements which covered 45 000 tariff items “related to about one-half of the value of world trade.”19 The basic legal principles of GATT remained much the same for almost half a century, where continuous efforts to reduce tariffs continued through the trade 12 Irwin, Douglas A.,. Pg. 145 13 From GATT to the WTO and Beyond Research Guide: History and Basic Information. 14 The 23 founding members were: Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the United States. 15 WTO/GATT –Chronology of Achievements 16 GATT: ‘provisional’ for almost half a century. 17 WTO/GATT –Chronology of Achievements 18 From GATT to the WTO and Beyond Research Guide: History and Basic Agreement. 19 Irwin, Douglas A., Pg. 141
  8. 8. A n n a K v i n g e | 8 rounds, all of which have lasted from five months (Annecy and Geneva II rounds), to the Uruguay round which lasted eighty-seven months. This round was not only the longest, but also the final round of GATT.20 Up until the Kennedy Round which was signed by fifty participating countries accounting for seventy-five per cent of world trade, the negotiation rounds focused mostly on lowering tariffs.21 However, the Kennedy Round brought an Anti-Dumping Agreement (ADA) to the table along with a section on development. From there on, the negotiations began to move away from general tariffs and focus on tackling major trade barriers in order to improve the system, such as cuts in customs duties.22 The eight round, which lasted from 1986 to 1994 was the most extensive of the multilateral trade negotiation rounds and led to the establishment of the World Trade Organization and with it a new set of agreements.23 General Agreement on Tariffs and Trade 1994 was the new and updated version of GATT 1947 and implemented substantial changes which were negotiated during the Uruguay Round and are still an integral part of the WTO.24 ii. GATT: Dispute Settlement Procedure With the main focus of GATT concentrated on lowering the tariffs, there was little attempt to develop a serious and effective system of mechanism that would monitor the obligations that the nations signed onto. There was an early draft of dispute settlement procedures that was incorporated in GATT, but it neither had teeth nor was it seen as a force to 20 WTO/GATT –Chronology of Achievements 21 GATT: ‘provisional’ for almost half a century. 22 GATT: ‘provisional’ for almost half a century. 23 The Uruguay Round which led to the establishment of the World Trade Organization is an extensive negotiation round which took several years. Given that the concentration of my paper is not on the transition from GATT into the WTO and that it would take an extensive amount in my paper to describe the details of the transition, I refer anyone interested in this topic to: Reshaping the World Trading System: A History of the Uruguay Round by John Croome (1999) Second and Revised Edition. 24 WTO/GATT –Chronology of Achievements
  9. 9. A n n a K v i n g e | 9 be reckoned with since GATT was considered by the parties to the agreement to be self- enforcing.25 The goal of the GATT Dispute Settlement Procedure (DSP) contained two types of disputes. The first type was to settle claims made by one party of GATT assessing that another party had violated the provisions of the General Agreement, while the second type of dispute was an objection produced by one party to the practices of another party, practices that are not prohibited by the GATT, but practices that still have adverse effects on the objecting party.26 The GATT Dispute Settlement Procedure is believed to have been successful during the first decade of GATT’s existence, after which the effectiveness of the DSP began its decline. As a result of the growing membership over a period of time and the rapid expansion of the world economy, the system became overwhelmed and then fell into disrepute and disuse.27 The DSP was already seen by its members as weak or lacking force. After the initial peak of the DSP the system was barely used, and was implemented approximately once a year, with the majority of the complaints brought by the United States.28 However, nations still used the system and over two-hundred cases were initiated under the GATT Dispute Settlement Procedure over the entire course of GATTs career.29 As with other parts of GATT, the DSP was expanded throughout the negotiation rounds. However, it was not until the Tokyo Round which began in 1973 and finished in 1979 that the type of issues considered by the dispute settlement panels was significantly expanded.30 What was lacking even after these changes were made was a rule- oriented approach (‘legalistic approach’) to the disputes processed under GATT which would put 25 DeKieffer, Donald E. "GATT Dispute Settlements: A New Beginning in International and U.S. Trade Law." Northwestern Journal of International Law & Business 2, no. 2 (1980): 317-33. Pg. 317 26 Davey, William J. "Dispute Settlement in GATT." Fordham International Law Journal 11, no. 1 (1987): 51-109. Pg. 67 27 Davey, William J. Pg. 62 28 Davey, William J. Pg. 63 29 Kovenock, Dan, and Marie Thursby. "GATT, DISPUTE SETTLEMENT AND COOPERATION*." Economics & Politics 4, no. 2 (1992): 151-70. Pg. 1 30 DeKieffer, Donald E. pg. 318
  10. 10. A n n a K v i n g e | 10 more pressure on the dispute settlement and GATT itself.31 Other problems that still existed after the Tokyo Round included the possibility of one party blocking the adaptation of the dispute settlement panel’s decision, the inefficiency of the system because of the long delays, and the inability to ensure the implementation of the DSP’s decision together with the lack of retaliatory measures for non-compliance with the decisions.32 33 The Tokyo Round only partially improved the DSP. iii. GATT: Third Party Participation Among the several rounds of negotiations for the improvement of the DSP, third party rights were also included. These provisions for the practice of third party participation were made during the Uruguay Round.34 The opportunity to be heard before the panel as well as to make a written submission with regards to a case was presented after the Uruguay Round.35 If a Member has substantial interest in the matter it would notify the Council of the substantial interest in order to participate as a third party.36 Nonetheless, third parties did matter before this negotiating round even if it was less clearly stated. Before GATT’s dispute settlement system became more judicialized in October 1952, there was a system of “working parties,” an informal system which came together to examine particular disputes over the interpretation of GATT.37 During this informal time, there would be one or two countries supporting each side and a couple of neutral countries.38 In this informal time third parties “played an important role in helping to 31 Davey, William J. Pg.53, 78 32 Davey, William J. Pg.65 33 Castel, Jg. "THE URUGUAY ROUND AND THE IMPROVEMENTS TO THE GATT DISPUTE SETTLEMENT RULES AND PROCEDURES." International And Comparative Law Quarterly 38 (1989): 834-49. Pg. 836, 841 34 Castel, Jg. Pg. 846 35 Castel, Jg. Pg. 846 36 Castel, Jg. Pg. 846 37 Carmody, Chi. "Of Substantial Interest: Third Parties under GATT." Michigan Journal of International Law 18, no. 4 (1997): 615-657. Pg. 625 38 Carmody, Chi. Pg. 624
  11. 11. A n n a K v i n g e | 11 generate a consensus that became the basis for many decisions.”39 The change from working parties to panel proceedings under the dispute settlement changed the role of third parties. Third parties came to have a separate status and distinct interests at stake instead of being presumptive equals who came up with suggestions for the collective good.40 Further, after the more institutional establishment of the dispute settlement came the hierarchy of the system with regards to the interest of a nation to a case, ranging from ‘interest’ to ‘substantial interest’ and in some cases going to ‘principal supplying interest’. After the Tokyo Round, ‘substantial interest’ not only assumed formal importance which it still holds today under the WTO, but third parties no longer had any right to intervene in pre-hearing consultations.41 In addition, access to settlement information and the entitlement to receive the submissions of the litigant before the hearing became restricted.42 Even thought ‘substantial interest’ holds merit during today’s participation of third parties under the WTO, under GATT the meaning was not always considered a necessary condition while at other times it lost all qualification.43 iv. GATT: The Kingdom of Norway Norway was among the twenty-three countries to sign the General Agreement in Geneva in 1947, and was present during the Havana Charter for an International Trade Organization.44 It has been said that the dispute settlement system was widely tested by a variety of nations under GATT, even though the United States along with the European Communities and Canada has made the most extensive use of the system.45 From the research I’ve conducted it is unclear whether or not Norway has been a third party to any of the cases brought under the DSP. Still, 39 Carmody, Chi. Pg. 624 40 Carmody, Chi. Pg. 625 41 Carmody, Chi. Pg. 627 42 Carmody, Chi. Pg. 627 43 Carmody, Chi. Pg. 630-31 44 “United Nations Conference on Trade and Employment.” 45 “Davey, William J. Pg. 82-83
  12. 12. A n n a K v i n g e | 12 because Norway was among the nations that was a respondent under the GATT Dispute Settlement Procedure,46 it is likely that Norway has also been a participant in the DSP. Since Norway was a respondent in cases under the DSP we see that the country was already a strong user of the Dispute Settlement Procedure, even then. v. The World Trade Organization The World Trade Organization was established on January 1st in 1995 through the negotiations of the Uruguay Round.47 A particularly strong focus has been on whether the change from GATT to the WTO has been successful and whether or not the change has produced more successful outcomes to all countries in trade agreements. Mike Moore, former Director- General of the World Trade Organization, wrote the book, “A World Without Walls: Freedom, Development, Free Trade and Global Governance” in order to evaluate the changes that the WTO provided, coming from GATT. 48 He emphasizes how these changes created better confidence in the system through the various improvements, and how the system has been an upgrade from GATT. General Agreement on Tariffs and Trade started off in 1947 with twenty- three countries and has now expanded to one hundred and sixty two members in November 2015 in the WTO.49 Moore writes that the most crucial aspect to this international organization is that the membership is not imposed on the countries.50 Instead the nations choose to belong to this organization.51 Having played a significant role in the WTO by having been the Director-General for three years, he had seen first-hand that it has been in the interest of almost every country in 46 Davey, William J. Pg. 83 47 The Uruguay Round negotiations lasted from 1986 until 1994. 48 Moore is a former Prime Minister of New Zealand, who served as the Director-General of the World Trade Organization from 1999 until 2002. 49 “WTO | Understanding the WTO - Members,” 50 Moore, Mike. A World Without Walls: Freedom, Development, Free Trade and Global Governance (Cambridge, United Kingdom: Cambridge University Press, 2003). Pg. 103 51 Moore, Mike Pg. 103
  13. 13. A n n a K v i n g e | 13 the world to participate “in an open, rules-based multilateral trading system” because otherwise the countries face an uncertain and less prosperous participation in the world economy.52 Not only has the membership of the WTO widened, but also the focus of the system’s body of rules has deepened to not only focus on trading in goods, but also services, intellectual property, subsidies, textiles and agriculture. The expansion with regards to industrial goods, services and agriculture occurred during the November 2001 Doha Agenda.53 54 Moore believes that the WTO is unique in the international sphere of trade and negotiations because it is “the binding nature of its disputes mechanism.”55 One of the two fundamental concepts of the WTO that connect to the dispute settlement within the organization is the principle of non-discrimination, which ensures in theory that all members of the WTO are treated equally no matter who they are, or how strong or small they are. Still, because there are often no significant consequences for the discrimination, we cannot be certain that there is none.56 Under the non-discrimination principle there are two rules that are at the core of the WTO, the ‘most favoured nation’, “which prevents WTO Members from treating products from one WTO Member better than those from another” and the ‘National Treatment’ rule, “which obliges governments to treat like goods from foreign and domestic sources equally.”57 Mike Moore states that it is good for nations to bring new cases to the Dispute Settlement, because, according to him, one of the major flaws of the WTO is that in order to 52 Moore, Mike Pg. 103 53 Moore, Mike Pg. 103 54 The Doha Development Round or Doha Development Agenda (DDA) is the latest trade negotiation among the WTO members which officially launched in November, 2001 in order to reform the system through lower trade barriers and revised trade rules, which covers twenty areas of trade. Part of the objective is to improve the system of trading for developing countries, however through many meeting in various parts of the world the negotiations broke down in 2008 and as of 2014 the future of this agenda is uncertain. “WTO | The Doha Round,” World Trade Organization, 55 Moore, Mike. Pg. 101 56 The second concept being the “Consensus decision-making.” 57 Moore, Mike. Pg. 104
  14. 14. A n n a K v i n g e | 14 create new rules or to clarify existing ones the WTO system relies on a new major negotiation round. 58 This system makes it difficult to change something within the Dispute System without Members pushing for new negotiation rounds, which take years and are not always successful. Even though only a small fraction of all world trade is affected by disputes, Moore points out that when the system is utilized, the rules are enforced by both big and small Members, which builds not only the credibility of the WTO, but also the prosperity of each of the countries. Therefore with the development and move from GATT to the WTO, there was also an extensive improvement in the Dispute Settlement of the organization. It has been stated by scholars that the “GATT dispute settlement lacked not only ‘teeth,’ but also a consistent set of rules more generally,” which explains to us why there was a need for a change as well as why so many governments and scholars are overjoyed over the new system, even though it may have its own flaws.59 According to Busch and Reinhardt the greater clarity of law, together with a stricter timeline, the right to a panel, automatic adoptions of reports and the review by a permanently- constituted Appellate Body are the improvements of the Dispute Settlement that need to be praised.60 vi. WTO: Dispute Settlement Body During GATT and before the 1995 change into the WTO, disputes between nations were not settled in a manner that explicitly stated strength or created credibility. The panels which met to examine the complaints from Member states published a report that was not binding, and therefore did not hold anyone accountable.61 Likewise, the rulings were inconsistent 58 Moore, Mike Pg. 106 59 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." In Ernst- Ulrich Petersmann and Mark A. Pollack (eds.), Transatlantic Economic Disputes: The EU, the US, and the WTO. Oxford: Oxford University Press, 2003. Pg. 466 60 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 467 61 Moore, Mike. Pg. 106
  15. 15. A n n a K v i n g e | 15 throughout.62 Scholars have stated that “it is not possible to approach dispute settlement in the WTO in the same way that it was approached under the GATT,” because of its new and fundamentally different system for the settlement of international trade disputes.63 Other scholars say that the best kept secret in the WTO is that the dispute settlement still works as it did under GATT where the bedrock of the system are the consultations.64 Currently the ruling of the WTO panel is binding in that unless both parties come to an agreement, the WTO allows for retaliations for violations of WTO rules against politically sensitive industries and regions.65 This is described as a more ‘legalized’ system of the dispute settlement under the WTO whereas the old system under GATT could only be described as a more ‘political’ system.66 The permanent Appellate Body holds not only compulsory jurisdiction, but has additional enforcement jurisdiction for its cases.67 However, research conducted by the International Centre for Trade and Sustainable Development (ICTSD) has shown that retaliation options available are more focused on re-balancing the level of concessions and not as much on inducing compliance with Member obligations. The opportunities to find a significant retaliatory target which will not affect the domestic economy are extremely slim for economies with a more narrow trading profile of a country.68 In “Dispute Settlement in the WTO: the developing country experience,” the authors state right away that the system does not have adequate opportunity or incentive for 62 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 467 63 Shaffer, Gregory and Melende-Ortiz, Ricardo. Dispute Settlement at the WTO: The Developing Country Experience (Cambridge University Press, 2010) Pg. 344 64 Busch, March and Reinhardt, Eric. "Fixing What Ain't Broke? Third Party Rights, Consultations, and the DSU." In Kim Van der Borght and Dencho Georgiev, (eds.), WTO Dispute Settlement Reform. London: Cameron May, 2006. Pg. 9 65 Alter, Karen J. The New Terrain of International Law : Courts, Politics, Rights. Princeton, New Jersey: Princeton University Press, 2014. Pg 21 66 Shaffer, Gregory and Melende-Ortiz, Ricardo. Dispute Settlement at the WTO: The Developing Country Experience Pg. 342 67 Alter, Karen J. The New Terrain of International Law : Courts, Politics, Rights. Princeton, New Jersey: Princeton University Press, 2014. Pg.169 68 Shaffer, Gregory and Melende-Ortiz, Ricardo. Dispute Settlement at the WTO: The Developing Country Experience (Cambridge University Press, 2010) Pg. xii
  16. 16. A n n a K v i n g e | 16 the disputing parties “to agree to meaningful compensation,” where the only economies who have a position to impose ‘effective’ retaliation are those of larger economies.69 The new system under the WTO Dispute Settlement however is constructed through three main procedures, namely consultation, formal litigation, and implementation. These proceedings are part of a stronger push for adopting the outcomes of the Dispute Settlement.70 71 Even though we cannot say with complete certainty that the new system is one hundred percent binding, through the automatic adoption of the reports by the panel, there is more pressure on the countries to adopt the decision made.72 A request for consultation is the first step in the Dispute Settlement which is brought by the complainant, the Member government bringing the case to the Dispute Settlement against the defendant. The complainant claims the defendant has failed to live up to their trade obligations. The next sixty days are set aside for consultation and negations between the two sides, with the goal in mind of finding a mutually satisfactory solution for both parties. In the 2004 publication, Busch and Reinhardt write that forty-six percent of the disputes end at the consultation stage and that three-quarters of them end up with partial concessions from the defendant.73 For the rest of the cases, the complainant has the ability to request a panel proceeding, which is an independent panel, consistent of three to five people who have a strong background in trade law and are all agreed to by the member states on a case-by-case basis.74 69 Dispute settlement at the WTO: the developing country experience” Gregory C. Shaffer and Ricardo Melendez- Ortiz pg. xii 70 The consultation stage consists of ‘consolations,’ the formal litigation state consists of ‘panel proceedings’ and the ‘appellate body,’ and the Implementation stage consists of a ‘compliance panel’ and an ‘arbitration panel.’ 71 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg. 1 72 Petersmann and Pollack, Transatlantic Economic Disputes. Pg.467-468 73 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg. 2 74 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg.2
  17. 17. A n n a K v i n g e | 17 This second step in the dispute settlement is said by Moore to be one of the ways in which the WTO has progressed. The independent panel usually listens to two rounds of testimony, which can and in most of the cases includes third parties. For each dispute that requires an independent panel a different panel is composed ad hoc, because there are no permanent panels or panelists in the WTO.75 Further, the panel produces an “interim report” of the case which includes all of the information on the case together with the conclusion, recommendations and suggestions for implementations made by the panel. At this point, both parties to the dispute can negotiate a settlement, where thirteen percent of the cases do.76 However, if they choose not to, the panel issues a final report which is adopted by the World Trade Organization unless both sides agree not to adopt the report, (something that has yet to happen) or one of the sides decides to appeal the report. The appeal of the final report of the interdependent panel is a frequent occurrence and happens in seventy-three percent of the cases, where the case is then transferred to the Appellate Body. According to Moore, this is the second important new aspect to the Dispute Settlement change from GATT to WTO. 77 The Appellate Body is a standing body of jurists, “designed to ensure greater consistency across its rulings” and has to hear testimonies from both parties as well as any third parties interested in participating.78 The decision of the Appellate Body is final, and they can either uphold or overturn the independent panel in whole or in part. The case usually ends if the verdict favors the defendant, while if the verdict favors the complainant, the dispute will proceed to the 75 “DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: Chapter 6 The process — Stages in a typical WTO dispute settlement case,” World Trade Organization, accessed January 28, 2016, https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s3p2_e.htm 76 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg. 2 77 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg. 2 78 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg.2
  18. 18. A n n a K v i n g e | 18 implementation stage.79 If the defendant has not taken measures to comply with the obligations put in place by the Appellate Body, there is a possibility for the complainant to request a “compliance” panel which would make certain that all of the obligations are met and then also request an “arbitration” panel if there is a need for retaliation by the complainant against the defendant. However, two-thirds of the disputes brought to the Dispute Settlement “are resolved to the full satisfaction of the complainant.”80 For some countries, the DSB has been extremely effective, while for others it has been fairly insignificant in terms of gaining power. There has been an unusual interest in considering how the Dispute Settlement affects specific nations.81 With this in mind there has been an interest in looking into disputes between specific nations to determine the effectiveness and, in some cases, lack of importance of the DSB for various countries. In their paper, “Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement”, published in 2003, Busch and Reinhardt argue that the superior record of resolving the United States-European Communities disputes since 1995 to 2002 should not be attributed to the dispute settlement reforms, but rather to the “expansion of the WTO’s scope in new areas, notably intellectual property (IP) and traded services.” 82 83 They argue that in high stakes cases with big nation players like the United States and the European Union, the WTO has not improved in term of resolving transatlantic disputes than the predecessor, GATT. In this paper, Busch and Reinhardt argue that there is even more focus on early settlement in the Dispute Settlement under 79 The members of the Appellate Body need to have an extensive expertise in international trade, law and the subject-matter of the agreements covered, as well as not to be affiliated with any government. Even though nationalities of the members are heavy weighted on certain countries such as the United States and Japan, there is representation from various parts of the world such as Uruguay, South Africa and Korea among others. “WTO | Dispute Settlement - Appellate Body Members,” 80 Busch and Reinhardt, “The WTO Dispute Settlement Mechanism and Developing Countries.” Pg.3 81 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 465-66 82 From now on referred to as US-EC 83 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 466
  19. 19. A n n a K v i n g e | 19 the WTO, which for some cases can come out as problematic because a defendant who is determined to not be held accountable “can wring at least three years of delays from the system before facing definitive legal condemnation.”84 This means that those who want and have sufficient funds have the power to delay the dispute from steadily processing through the three main stages of the dispute settlement.85 This can often create enough time for the defendant to change their policy rulings or put in place measures that will weaken or possibly destroy the entire argument of the complainant. For member states such as the United States or the European Union, it is easier to use their massive resources in order to wiggle out of a dispute, or rather to slow the process down in order to change the aspects affected by the dispute. Busch and Reinhardt do however believe that there are two aspects which are exceptions to this, namely intellectual protection and traded services, because these areas did not previously exist under GATT and therefore they expect the WTO dispute settlement to produce clearer decisions under these areas.86 Under their research of US-EC dispute outcomes between GATT and the WTO, Busch and Reinhardt found a statistical significance where both the US and EC have made more concessions under the WTO Dispute Settlement to each other in these areas. This indicates that the improvement to the dispute settlement has created favorable outcomes, but the outcomes have not been as large as the system hoped for when it was created.87 In “The Evolution of GATT/WTO Dispute Settlement” Busch and Reinhardt state that many observers see favourable results achieved by a greater variety of members, particularly developing countries under the Dispute Settlement “due to the reforms introduced with the DSU 84 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 468 85 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 468 86 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 469 87 Busch, March and Reinhardt, Eric."Transatlantic Trade Conflicts and GATT/WTO Dispute Settlement." Pg. 475
  20. 20. A n n a K v i n g e | 20 [Dispute Settlement Understanding] and the WTO’s greater clarity of law.”88 The understanding that the improvements from GATT to the WTO are really significant in the Dispute Settlement can be understood because of the increased amount of concessions made by the defendant to some or perhaps all of the demands made by the complainant. According to Busch and Reinhardt the concession number rose from three-fifths under GATT to four-fifths (of at least partial concessions) under the World Trade Organization.89 However, the complainants from poor or developing countries have not received a lot of concessions from the defendants in contrast to the higher amount of concessions that rich and developed nations have received under the WTO.90 Therefore there is an indication that the improvements from GATT to WTO have only benefitted a certain part of the Members of the WTO. vii. WTO: Third Party Participation Third parties are not specifically defined under the World Trade Organization, nor are they explicitly defined under international law in general. But in over sixty percent of the disputes brought under the DSB there is third party involvement.91 Christine Chinkin defines third parties as “those outside a bilateral relationship, whether formally creates, for example by treaty or the commencement of proceedings, or occurring through events such as the outbreak of armed conflict,” where she goes on to further explore that with regards to international adjudication third parties are “all States other than the applicant or respondent.”92 Nonetheless, with this definition in mind only WTO Member governments have “direct access to the dispute settlement system” either as parties or as third parties, where access means that the party has the 88 Busch, March and Reinhardt, Eric. "The Evolution of GATT/WTO Dispute Settlement." Pg. 143 89 Busch, March and Reinhardt, Eric. "The Evolution of GATT/WTO Dispute Settlement." Pg. 154 90 Busch, March and Reinhardt, Eric. "The Evolution of GATT/WTO Dispute Settlement." Pg.160-161 91 Johns, Leslie and Pelc, J. Krzysztof. On the strategic Manipulation of Audiences in WTO Dispute Settlement. (23 June 2011) Pg. 5 92 Chinkin, Christine. Third Parties in International Law. (Oxford: Clarendon Press/New York: Oxford University Press, 1993). Pg. 7-9
  21. 21. A n n a K v i n g e | 21 ability to participate in a dispute either as the complainant, defendant or third party.93 No non- governmental actors have the ability to bring disputes to the table at the WTO, neither as private individuals or companies nor as non-governmental organizations (NGOs).94 However, even with divergent views on whether or not NGOs should have this opportunity, they are able to file amicus curiae submissions with the DSB bodies. The panels and the Appellate Body have the “discretion to accept or reject,” but are under no obligation to consider these submissions.95 Chinkin writes that while third parties to both treaties and international proceedings may be readily identified, she states that “it may be more complex to identify the parties to a conflict or dispute.”96 As known from both GATT and the WTO, disputes may not be bilateral in nature, which complicates the interests of possible third parties where it can range in not only intensity but also directness.97 The intensity and range of the interest of a third party in a dispute can create complications for the case itself, which can be considered to be one of the reasons there is a possible restriction of how a case is filed under the DSB to whether or not third parties are allowed to join a case. If the complainant invokes (sues under) Article XXII:1 of GATT 1994, the responsibility admitting any interested third parties is in the hands of the respondent of the case.98 However, if the complainant chooses to file the dispute under Article XXIII:1 of GATS99 the complainant has the full ability to prevent any legal involvement of a third party under the 93 9.1 Parties and third parties and principle of confidentiality https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c9s1p1_e.htm 94 1.4 Participants in the dispute settlement system https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c1s4p1_e.htm 95 1.4 Participants in the dispute settlement system https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c1s4p1_e.htm 96 Chinkin, Christine. Pg. 15 97 Chinkin, Christine. Pg. 16-18 98 6.2 Consultations https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s2p1_e.htm 99 General Agreement on Trade in Services (GATS) is a treaty in the WTO that entered into force in 1995 under the establishment of the WTO.
  22. 22. A n n a K v i n g e | 22 consultations of the DSB.100 Under Article XXII third party participation is easier and is said to average three participants per case over an average of less than one half of third party participants for Article XXIII, which is traditionally used for private consultations and makes it extremely difficult for third parties to participate.101 Nonetheless, in Busch and Reinhardt’s study of third party participation in the WTO from 1995 until 2002102 where they observed that third parties were present in almost every case and only nineteen of the five hundred and seven that requested to join the consultations were rejected.103 This not only portrays that third party participation is viewed as critical in the function of the WTO, but that there seems to be little objection to countries reserving their third party rights. The third parties are not only allowed to make written submissions to assist the case they are party to, but also have the opportunity to be heard by the panels when they present their opinion with regards to the case.104 The written submissions will be reflected in the panel report as well as provided to both parties in the dispute.105 However, they do not receive the interim report like the main parties do, even though third party views are presented in both the interim report and the final report of the panel.106 Busch and Reinhardt wrote that third parties not only participate in the majority of the WTO dispute settlement cases, but that they also typically 100 6.2 Consultations https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c6s2p1_e.htm 101 “On the Strategic Manipulation of Audiences in WTO Dispute Settlement” Leslie Johns and Krzysztof J. Pelc Pg. 3 102 I understand that the study is old, going only until 2002, which ended fourteen years ago. However, this study has not been updated yet by neither the authors nor other scholars. Therefore I am using this research, which still explains certain aspects of third party participation. 103 Busch, March and Reinhardt, Eric. "Three's a Crowd: Third Parties and WTO Dispute Settlement." Pg. 446,451 104 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case 105 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case 106 Busch, March and Reinhardt, Eric. "Fixing What Ain't Broke? Third Party Rights, Consultations, and the DSU." Pg. 3
  23. 23. A n n a K v i n g e | 23 outnumber both the complainant(s) and the defendant by a substantial margin.107 This shows that third party participation in the WTO is significant. To become a third party in a WTO dispute settlement case and have the ability to participate in the panel procedures, a nation member must have considerable interest in the matter of the dispute. The nation must notify the Dispute Settlement Body of their substantial interest through the WTO Secretariat within a ten- day deadline from when the panel was established for the Members to reserve their rights as third parties in the case.108 For third parties to be part of the consultations under the dispute the Members must have “substantial trade interest,” which is different from the “substantial interest” that a Member as a third party must have in order to stand before the panel.109 Third parties who join the main litigants in consultations under the DSU 4.11 are referred to by Busch and Reinhardt as informal third parties, where nearly every formal third party began as an informal.110 Unless the respondent in the dispute case accepts the nation as a third party, it is not possible for that Member to join the consultations. However, officially the World Trade Organization writes that “any Member who invokes a systemic interest, in practice, is admitted to a panel procedure as a third party without any scrutiny whether the interest truly is “substantial”.”111 Then during the first substantive meeting the third parties receive the complainant and the defendant’s first 107 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." In Chantal Thomas and Joel P. Trachtman (eds.), Developing Countries in the WTO Legal System. New York: Oxford, 2009. Pg 1 108 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case 109 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case 110 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 5 111 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case
  24. 24. A n n a K v i n g e | 24 written submission to the panel and present their views to the panel through an Oral Statement.112 Technically third parties do not have any more rights beyond these, however, a panel can extend the rights of third parties in some individual cases, which the panel often does.113 Conventional wisdom says that by offering a broader perspective on a dispute third parties influence the verdicts. However, Busch and Reinhardt in their paper “With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation,” argue that conventional wisdom misses the real action. The authors state that even though third parties have an influence on rulings in disputes, the third parties first undermine the early settlement and prolong the dispute between the complainant and the defendant. Third parties in the dispute settlement make negotiations more transparent which, according to Busch and Reinhardt motivates the protagonist to stand still.114 As James Fearon argues, an audience for negotiations makes the states more prone to dig in their heels and to not move from their position.115 Busch and Reinhardt argue that third parties damage the cases because disputes which have third parties present have much smaller chances of ending in early settlement.116 This is even more damaging when the complainant is a poor nation, because their chance of reaching early settlement is worse than for developed nations who have third party presence.117 Furthermore, mixed testimony for both sides in a dispute washes out the influence that third parties have on a case.118 Nonetheless, 112 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case 113 DISPUTE SETTLEMENT SYSTEM TRAINING MODULE: CHAPTER 6 The process — Stages in a typical WTO dispute settlement case 114 Fearon, James “Signaling Foreign Policy Interests: Tying Hands Versus Sinking Costs” (1998) Journal of Conflict Resolution. Pg. 69, 73, 87 115 Fearon, James Pg. 69, 73, 87 116 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 10, 18 117 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 10, 18 118 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 19
  25. 25. A n n a K v i n g e | 25 there are those who argue that the presence of third parties during a dispute ensure that the settlements are consistent with the WTO rules.119 Developing countries, on the other hand, are in favor of higher and stronger participation of third parties, in consultations as well.120 Japan proposed that “submissions be shared with all Members so that this information can be used to help interpret decisions, and be used by others in deciding whether to file their own disputes,” which will allow for greater transparency and perhaps reduce the need to reserve third party rights.121 Johns and Pelc’s study on the use of audience in the DSB suggests that there is merit in the fact that third parties also play the role of insurance in the WTO disputes “by insuring states against the adverse consequences of failure,” where Members of the WTO manipulate the size of the audience depending on the case at hand.122 Further, they argue that third parties reduce the force of panel rulings by lowering the winner’s payoffs and raising the loser’s payoffs compared to cases with no expressed views of third parties. By generating a cost in the case of success and a benefit in the case of failure, third parties participate with their own views and expressions and thus serve as insurance of reduced risk for the overall dispute. 123 This being the view of some scholars, others empirical records suggest that third parties have little influence over the direction of the panel or Appellate Body rulings where the complainant wins sixty percent of the rulings no matter which side receives the majority of third party support or any support at all, and that 119 “On the strategic Manipulation of Audiences in WTO Dispute Settlement.” Leslie Johns and Krzysztof J. Pelc (23 June 2011) Pg. 1 120 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 23 121 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 22,23 122 Johns, Leslie and Pelc, J. Krzysztof. On the strategic Manipulation of Audiences in WTO Dispute Settlement. (23 June 2011) Pg. 4-5 123 Johns, Leslie and Pelc, J. Krzysztof. Pg. 11
  26. 26. A n n a K v i n g e | 26 third party participation rather serves to “bolster the credibility of the institution [the WTO Dispute Settlement].”124 Evans and Shaffer write that, “participating as a third party in disputes of systemic interest can be a useful way to increase understanding of DSB procedures and style, and substantive issues of WTO treaty interpretation,” which they go on to describe as being a “relatively simple and low-cost way to develop capacity.”125 They do state that some legal capacity is needed in order to have a meaningful input as a third party, but their main focus is on developing capacity through this kind of participation. Bown writes that, “the resource costs of merely initiating or participating in a case as either a complainant or an interested third party (or reserving third party rights) are not large,”126 which is big reason why even developing countries are able to reserve their third party rights. When a country reserves their third party rights, there is no need to have an entire delegation present to fully participate. The only opportunities given to third parties is either to present before the panel or the Appellate Body or submit a written statement presenting their stance on the issues, or to do both. If a country with limited resources wanted to participate, they would only need one member in Geneva before the panel or Appellate Body to present their view, and given that the World Trade Organization has resources for poor countries who have trouble affording to send a delegate or those who do not even have delegates present at all times, the opportunity for a country to be part of the DSB to a case as a third party are fully possible. 124 Busch, March and Reinhardt, Eric. "Fixing What Ain't Broke? Third Party Rights, Consultations, and the DSU." Pg. 7-8, 15 125 Shaffer, Gregory and Melende-Ortiz, Ricardo. Dispute Settlement at the WTO: The Developing Country Experience (Cambridge University Press, 2010) Pg. 346-47 126 Bown, Chad. "Participation in WTO Dispute Settlement: Complainants; Interested Parties; and Free Riders." World Bank Economic Review 19, no. 2 (2005): 287-310.Pg. 12
  27. 27. A n n a K v i n g e | 27 When it comes to the use of a county’s third party rights in a WTO dispute, most of the conversation has been focused on developing countries and how a considerable number of developing or even least developing countries have been more and more involved in the DSB as third parties. Unless the literature focuses on how much influence third parties yield in disputes or how they sabotage the possibility of settling the disputes, most of the literature is simply focused on statements such as “how third party rights can be improved in a way that serves the interests of the developing members.”127 However, even though the participation of developing nations in the DSB as third parties grows, the other significant portion of the third party participants are developed countries. The role has not only evolved for developing nations, but that is has also done so for advanced small markets that are not on the same playing field as the United States, Japan or the European Union. Further, it is not possible to influence the shaping of policies that might affect a country’s interests in the long run, unless a Member participates in the Dispute Settlement. The United States has full capacity to file disputes in the DSB as a complainant, but chooses to not always do that. The US has participated in one hundred and thirty cases as a third party, twenty-one cases more than they has brought up as a complainant.128 Scholars have noticed that the European Union and the United States do not miss the opportunity to be third parties, which is why they register their third party rights in all cases where they are not the complainant or the respondent.129 They want to be informed and be part of the system, especially at the Appellate 127 A S A Albashar, Faisal, and Afm Maniruzzaman. "Reforming the WTO Dispute Settlement System: A Rethink of the Third Party Right of Access to Panel and Appeal Processes from Developing Countries' Perspectives." The Journal of World Investment & Trade 11, no. 3 (2010): Vii-373. Pg. 313 128 Disputes by Country/Territory https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm 129 Shaffer, Shaffer. How to make the WTO Dispute Settlement System Work for Developing Countries. (March 2003). International Centre for Trade and Sustainable Development. Pg. 10-11
  28. 28. A n n a K v i n g e | 28 stage which is where, “the effect on interpreting WTO rules is the greatest.”130 Shaffer writes that the U.S. and the E.U. participate in every part of the DSB in order to have a say on the development of the WTO law, which is strategically smart.131 What other way to know how to improve the system and the WTO law than to partake in it. Other nations ought to only learn from them. The United States, the European Union and Japan take part in cases as third parties even if they do not have direct interest in the dispute.132 viii. WTO: The Kingdom of Norway With the transition from GATT to the WTO, Norway officially became a member of the World Trade Organization on January 1st 1995 and has since then had an active role in the organization.133 On December 16th 2015 the Norwegian Minister of Foreign Affairs handed over the instrument of acceptance for the ratification of the Trade Facilitation Agreement (TFA)134 to the Director-General, becoming one of sixty-three nations to have formally accepted the TFA.135 This recent ratification of TFA and the donation of NOK 58.5 million to trade-related programs for developing countries,136 in particular least-developed countries (LDCs), which Norway 130 A S A Albashar, Faisal, and Afm Maniruzzaman. Pg. 317 131 A S A Albashar, Faisal, and Afm Maniruzzaman. Pg. 322 132 Manduna, Calvin. Daring to Dispute: Are there shifting trends in African participation in WTO Dispute Settlement? (tralac Trade Brief, No 3, June 2005). Pg. 5 133 Member Information: Norway and the WTO. https://www.wto.org/english/thewto_e/countries_e/norway_e.htm 134 The Trade Facilitation Agreement focuses on expediting the movement, release and clearance of goods, including those in transit. It contains provisions for technical assistance and capacity building in this area of trade, as well as sets out measures for effective cooperation between customs and other appropriate authorities on customs compliance issues and trade facilitation. Trade Facilitation. https://www.wto.org/english/tratop_e/tradfa_e/tradfa_e.htm 135 WTO receives six additional ratifications for Trade Facilitation Agreement. https://www.wto.org/english/news_e/news15_e/fac_17dec15_e.htm 136 Since 2001, Norway has donated NOK 300,044,180 to WTO trust funds.
  29. 29. A n n a K v i n g e | 29 pledged on November 11th 2015 portrays Norway’s continuous interest in participating as well as aiding trade negotiations and development.137 Norway is a strong participant in the World Trade Organization, not only based on ratified agreements and donations made, but in particularly in the dispute settlement of the WTO. There has not been one case where Norway has been the respondent to a dispute, but there have been four cases where Norway was the complainant – three of which have been against the European Communities138 and one of which was against the United States.139 However, the major Norwegian participation in the WTO Dispute Settlement has been as a third party in seventy two cases from 1995 to present day.140 Currently Norway is a third party in over eighteen ongoing cases at the dispute settlement.141 When it comes to representation in third party participation at the WTO Dispute Settlement, Busch and Reinhardt have written that the economic superpowers are not only well represented, but are frequent participants. Countries such as the United States, the European Union and Japan,142 have each taken part in well over one hundred cases as a third party with the EU and Japan being the only two WTO Members to go beyond one hundred and fifty cases each.143 Busch and Reinhardt write that developing 137 Norway donates NOK 58.5 million to boost trading capacity of developing countries and LDCs https://www.wto.org/english/news_e/pres15_e/pr758_e.htm 138 The European Union (EU) was until November 30 th 2009 officially known in the World Trade Organization for legal reasons as the European Communities (EC). In the older documents of the WTO the EU was formerly known and referred to as the EC. Therefore throughout this paper I will be using these two names interchangeably, and use EC to refer to text and documents in which the correct name was the European Communities, and the same will be used for the European Union. Member information: The European Union and the WTO. https://www.wto.org/english/thewto_e/countries_e/european_communities_e.htm 139 Disputes by country/territory. https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm 140 Disputes by country/territory. https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm 141 Verserande WTO-tvistesaker kor Noreg er tredjepart. https://www.regjeringen.no/no/tema/naringsliv/handel/ud---innsiktsartikler/noreg_tredjepart/id2414548/ 142 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 12 143 Disputes by country/territory. https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm
  30. 30. A n n a K v i n g e | 30 countries “account for 52% of all third parties,”144 with the most frequent third parties being Canada, Brazil, Chile, Australia, India, Korea, Mexico, Switzerland, China, Chinese Taipei and Norway.145 Furthermore, Norway also participates at the WTO Dispute Settlement in the capacity of panelists for the various disputes. With the surge of third party participation in the DSB at the beginning of the World Trade Organization’s establishment, the Council to the Appellate Body of the WTO, Debra Steger, discussed how the increased third party participation has a possibility of hindering the system from finding panelists for the disputes.146 Among Switzerland and New Zealand, Norway was a particularly popular choice in the use of panelists for disputes because of the country’s position as one of the few nations not a European Union member.147 Norway’s engagement in the World Trade Organization is not only broad but also extensive. Norway is a small nation with a strong economy, and was ranked number twenty-six in the 2014 GDP ranking done by the World Bank,148 significantly lower than countries and economic superpowers such as the United States, Canada, China, Japan, Brazil, India, Korea, Mexico and others.149 Nonetheless, Norway’s participation as a third party in the WTO is on the same level as most of these nations – which is interesting. IV. Zeroing methodology in Anti-dumping150 Anti-dumping is measurement taken by countries to protect their own industries from foreign markets. A company is said to be “dumping” a product if it exports the product at a lower 144 Busch, March and Reinhardt, Eric. "With a Little Help From Our Friends? Developing Country Complaints and Third Party Participation." Pg. 12 145 Disputes by country/territory. Last accessed 22 March 2016 https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm 146 Carmody, Chi. Pg 641 147 Carmody, Chi. Pg 641 148 “Data: Norway.” http://data.worldbank.org/country/norway 149 “Gross domestic product 2014.” World Development Indicators database, World Bank, 29 December 2015 150 More information (and calculation of zeroing) can be found in the Appendix.
  31. 31. A n n a K v i n g e | 31 price than the price the company normally charges in its own home market,151 meaning that the firm sells the exported product at unfairly low prices outside its home market.152 Through the practice of dumping the domestic industry of the host country suffers material injury when a product is dumped in its own market.153 According to the World Trade Organization every country has a right to apply anti-dumping duties on products from foreign markets that enter their host market at a lower price than it originally costs in its domestic market.154 This protection is intended to remedy when foreign firms sell their products at prices below the ‘normal’155 value in the host country.156 Some imports which are priced at a lower level than in the products home market are taken into account under the zeroing formula. Zeroing is a methodology used to calculate anti- dumping rates, more accurately the calculation of foreign exporter dumping margins.157 ‘Zeroing’ is used to calculate whether or not imports are being sold in the country at less than ‘normal’ value.158 This antidumping calculation is used by the United States, where the U.S. 151 Anti-dumping. World Trade Organization. Retrieved from https://www.wto.org/english/tratop_e/adp_e/adp_e.htm 152 Reynolds, Neal J. "Between a Rock and a Hard Place: The Role of the U.S. Courts in Resolving Conflicts between U.S. Law and WTO Dispute Settlement Reports in the Antidumping and Countervailing Duty Area." Tulane Journal of International and Comparative Law 21, no. 2 (2013): 273-90. Pg. 276 153 “Evolving Discretionary Practices of U.S. Antidumping activity.” Bruce A. Blonigen (2006) pg. 874-75 154 What is Zeroing? http://trade.ec.europa.eu/doclib/docs/2012/february/tradoc_149065.pdf Pg. 1 Understanding the WTO: the Agreements. World Trade Organization. https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm8_e.htm Blonigen, Bruce A. "Evolving Discretionary Practices of U.S. Antidumping Activity." Canadian Journal of Economics/Revue Canadienne D'économique 39, no. 3 (2006): 874-900. Pg. 875 155 Normal value is defined as “the average of a set of observations of sales of the product in the home market.” “The implications of ‘zeroing’ for enforcement of US antidumping laws.” William W. Nye (4 December 2009) Journal of Economic Policy Reform Pg. 264 156 Blonigen, Bruce A. Pg. 874-75 157 What is Zeroing? Pg. 1 158 “A WTO Panel Openly Rejects the Appellate Body's "Zeroing" Case Law.” Sungjoon Cho (11 March 2008) American Society of International Law Last accessed 30 April 2016 Last Accessed 29 April 2016 https://www.asil.org/insights/volume/12/issue/3/wto-panel-openly-rejects-appellate-bodys-zeroing-case-law
  32. 32. A n n a K v i n g e | 32 enforces its own antidumping laws differently than other nations.159 For the past decade the Appellate Body of the WTO has been consistent in condemning the practice of zeroing as unfair, and deemed the practice prohibited.160 Those that look at the antidumping laws see them as safeguards which countries apply in order to favour domestic producers over foreign firms, and not to protect the competitive process.161 In 1991, Barcelo wrote that these laws were funded on an unfounded fear of predatory dumping, but currently function as quasi-safeguard laws.162 The United States has been practicing the methodology of zeroing for a long time, and has not let the World Trade Organization stop the country from using the methodology. The U.S. has argued over the years against the WTO antidumping laws. They have argued as follows; first, the panelists that sit on WTO disputes are often not judges, do not have extensive experience in appellate review, and follow WTO principles over US Law;163 second, US courts should not give significant weight to WTO reports in the antidumping area because the Federal Circuit has noted that the final WTO report is not binding on the members involved in the dispute;164 and finally, decisions made by the WTO panels may conflict with US statutes and/or judicial precedent.165 China, the European Union, Mexico and Japan have filed WTO disputes regarding the country’s practicing of zeroing, stating that the methodology is unfair.166 Other countries (see 159 “The implications of ‘zeroing’ for enforcement of US antidumping laws.” William W. Nye (4 December 2009) Journal of Economic Policy Reform Pg. 263-64 160 What is Zeroing? (2012, February 6). European Commission: Trade. Retrieved from http://trade.ec.europa.eu/doclib/docs/2012/february/tradoc_149065.pdf Pg. 1 “Between a Rock and a Hard Palce: The role of the US courts in resolving conflicts between US law and WTO dispute settlement reports in the antidumping and countervailing duty area.” Neal J. Reynolds (2013) Pg. 274 161 “A history of GATT unfair trade remedy law -- confusion of purposes.” John J, Barcelo III (1991) Pg. 313 162 “A history of GATT unfair trade remedy law -- confusion of purposes.” John J, Barcelo III (1991) Pg. 332 163 Reynolds, Neal J. Pg. 278 164 Reynolds, Neal J. Pg. 283 165 Reynolds, Neal J. Pg. 285 166 Robertson, Scott. (2009, August 24). Views mixed on WTO ‘zeroing’ ruling. Metal Bulletin Daily: Iron and Steel General.
  33. 33. A n n a K v i n g e | 33 Figure 2) have also filed cases against the United States use of zeroing. Even though in February 2012 the United States together with Japan and the European Union announced that they had reached an agreement on settling their zeroing disputes, the United States has not conformed with the Appellate Body decisions on cases from other WTO Members.167 Therefore we are still seeing cases brought up to the Dispute Settlement Body against the US with regards to zeroing. V. Research Methods Third party participation in the World Trade Organization has grown since the creation of the WTO in 1995. Almost every case disputed at the Dispute Settlement has at least one and often several WTO Members as a third party. The enormity of these numbers make it difficult for me to study every single one of them in order to better understand why certain nations continuously employ the Dispute Settlement Body through third party participation. Therefore, I study a special case, Norway’s participation as a third party in the DSB which I apply to the general use of third party participation by advanced small markets in the Dispute Settlement. The disputes brought to the World Trade Organization vary not only in the size of the dispute, but also in topic, with everything from wine to aircraft to ceramic floor tiles.168 I have chosen anti-dumping, a topic that has been a big issue in the WTO. Over one hundred anti- dumping cases have been taken to the DSB with regards to anti-dumping.169 This is a large sum of cases, a number that would not allow me for an in-depth study of each of the cases in this research project. Therefore I have chosen to focus on a selected part of anti-dumping, namely the use of zeroing as an anti-dumping calculation measurement. There have only been eighteen 167 “No More Zeroing?: The United States Changes its Antidumping Policy to Comply with the WTO.” Sungjoon Cho (9 March 2012) American Society of International Law Last accessed 30 April 2016 https://www.asil.org/insights/volume/16/issue/8/no-more-zeroing-united-states-changes-its-antidumping-policy- comply-wto 168 “DISPUTE SETTLEMENT: THE DISPUTES Find disputes cases.” 169 “DISPUTE SETTLEMENT: THE DISPUTES Chronological list of disputes cases.”
  34. 34. A n n a K v i n g e | 34 disputes taken to the DSB with regards to zeroing as a measurement of antidumping, of which sixteen were brought up against the United States. This narrows my research and allows me to look deeper into the documents I study. I focus on what makes a country decide to take part in some disputes as a third party, but not others. Therefore I have chosen one advanced small market nation as my case study. Norway, a country with few disputes filed as a complainant, but with more than seventy taken part in as a third party is a good choice for my research. In the sixteen cases which have been brought up to the DSB against the United States, Norway has been a third party participant in six of them (see Figure 2). Out of these six cases I use four of them for my research. The European Communities were the complainant in two of the cases and the other two were brought up to the DSB by Japan and Viet Nam. The fifth, supplementary case I look into is another brought by Viet Nam during which Norway was not a third party participant. This will allow me to understand why a country takes party in some disputes and not others (given that there have been several zeroing disputes brought against the United States with regards to shrimp, and Norway decided to participate as a third party in only one of them). I am not studying every part of the cases I have selected, but concentrate on the five cases I have chosen through Norway’s perspective. In order to do this I utilize Oral Statements and Written Submissions which were given by Norway for the cases during which Norway was a third party. This allows me to study the Norwegian arguments and focus for choosing to be part of these cases as a third party. In addition to examining the Oral Statements and Written Submissions, I am supplementing my arguments with Trade Policy Reviews. These are papers published by the Norwegian government every four years since 1996 (except for the 2016 one which have not yet been published). The Trade Policy Reviews are part of the Uruguay Round
  35. 35. A n n a K v i n g e | 35 agreement and focus on the Members own trade practices and policies, which result in enabling “outsiders to understand a country’s policies and circumstances.”170 These additional reviews allow me to examine whether or not the exact same argument presented by Norway in the cases as a third party are reflected in other documents. In addition to the Oral Statements, Written Submissions and the Trade Policy Reviews that I examine for my research, I conducted an interview with two lawyers, Linn Edvartsen and Camilla Høvding Blom, from the department on the European Economic Area (EEA)- and trade law in the Norwegian Ministry of Foreign Affairs in August 2015. This interview I have used as supplementary documentation throughout this research paper for information on Norway’s participation in the World Trade Organization, in particularly the Dispute Settlement Body. FIGURE 2: Case Division for Zeroing Norway not Third Party Complainant Case topic DS179 Korea Stainless Steel DS264 Canada Softwood Lumber DS335 Ecuador Shrimp DS343 Thailand Shrimp DS344 Mexico Stainless Steel DS382 Brazil Orange Juice DS383 Thailand PET Bags DS402 Korea Products (stainless steel+, diamond sawblades+) DS404 Viet Nam Shrimp DS422 China Shrimp, Diamond Sawblades Norway as Third Party Complainant Case topic DS294 European Communities Zeroing (general - 21cases, most products steel) DS322 Japan Zeroing (general + Sunset Review) DS350 European Communities Continued Zeroing DS420 Korea Carbon Steel DS429 Viet Nam Shrimp II DS471 China Anti-Dumping Methodology 170 Trade policy reviews: ensuring transparency. https://www.wto.org/english/thewto_e/whatis_e/tif_e/agrm11_e.htm
  36. 36. A n n a K v i n g e | 36 VI. Advanced small markets in the Dispute Settlement Beginning my research, I expected to see that part of Norway’s motivation for third party participation in the Dispute Settlement would be because of the Norwegian industry. However, that is far away the case. As I learned from my interview with the lawyers from the Ministry of Foreign Affairs (MFA), they are not being manipulated by the Norwegian industry in bringing up cases to the WTO. Camilla Bloom told me that it is the nature of the case that makes Norway be the complainant in a dispute at the WTO and the few times that Norway has taken up a case to the DSB, then the case has been very serious. As they pointed out, Norway has a very high threshold for taking a case to the Dispute Settlement, and that the Norwegian government relies on settling all of its potential disputes in WTO committees or in bilateral conversations. As Linn explained, there is of course a dialog, as in any country, that the MFA has with the Norwegian industry and business together with various government departments. It is the government that decides which cases to take up in the Dispute Settlement and the industry is not as involved as it is in the United States or even Canada. Camilla said that in Norway the industry does not have a tradition to be “hands on deck,” rather it depends on how the society functions. In Norway, the society is very different from other places. There was one case which Norway took up to the DSB that had a different ring to it, than it usually functions in Norway, namely the salmon case, DS337.171 The salmon case, according to Camilla, was very well known in the Norway through the media. There were a lot of different opinions, in the Norwegian salmon and fish industry as well, whether or not it was the right 171 DS337 – The DSB received request for consultations on 17 March 2006. The case, which has six Members as third party, was about anti-dumping duty on imports of farmed salmon originating in Norway. “DISPUTE SETTLEMENT: DISPUTE DS337 European Communities — Anti-Dumping Measure on Farmed Salmon from Norway.” https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds337_e.htm
  37. 37. A n n a K v i n g e | 37 decision to take the case up against the European Union in the WTO Dispute Settlement. As the MFA lawyers explained to me, there had been problems between Norway and the European Union regarding anti-dumping duties on salmon for twenty years before Norway finally decided to take the case up to the DSB. Even then, as Linn pointed out, the case was not urgent and some people who work at the Ministry of Foreign Affairs have said that Norway could have waited longer before taking up the case through the World Trade Organization. Other than the salmon case, I have not found any evidence of lobbying in Norway for taking up cases to the Dispute Settlement. The last case Norway was a complainant in began in 2009 and even then172 , the seal case was pushed forward by Canada and the Canadian industry. As Camilla pointed out, the society is different and lobbying as it is known and understood in the United States and other countries is not part of the Norwegian government. Therefore, there are other reasons as to why Norway continues to be a frequent third party participant in the Dispute Settlement Body of the World Trade Organization, which I explore in the rest of this paper. a. Strong economic/trade connection to the complainant The first reason why advanced small markets choose to participate as third parties in the WTO disputes is because the nation has a strong connection to the complainant of the case through economy or trade, or both. In this section I show how Norway’s strong trade connections to a WTO Member affect which cases Norway participates in as a third party. I begin by discussing i) Norway’s focus on still being an influence in the international trade system before I shift to show how Norway’s strong trade connections with WTO Members draw Norway into disputes as a third part in order to show support for the complainants through ii) the European Communities. 172 DS401 - Measures Prohibiting the Importation and Marketing of Seal Products. https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds401_e.htm
  38. 38. A n n a K v i n g e | 38 i. Influence on the international trade system One of the main reasons that Norway consistently participates in the World Trade Organization, specifically as a third party in the Dispute Settlement, is the Norwegian commitment to open international trade and a transparent global economy. Though the cases Norway chooses to participate in are not always directly related to country itself, the Ministry of Foreign Affairs (MFA) considers their involvement crucial for creating a more equitable global economy. These cases are critical for understanding how and why Norwegian internationalists see the WTO as a vehicle through which to achieve their goal of reforming the ethics of international trade and the way the global economy functions.173 In the 2014-15 report to the Parliament,174 the Norwegian Ministry of Foreign Affairs explicitly states that there is a growing risk that the Norwegian influence in international trade has been reduced and will continue to decline in the future, while the rest of the international community is becoming more closely integrated in international trade. The fear of being blocked from shaping international trade explains why the Norwegian government will take any possible part in international trade in order to hold its current position – as an influencer and a country others come to for advice. The ministry states in the report that not only does Norway lack free trade agreements with six of the ten largest economies in the world, but that Norway is not party to any of the negotiations with regards to the Pacific and the Atlantic trade agreements.175 This means that Norway has no way to influence these negotiations whereas the Transatlantic Trade and Investment Partnership (TTIP)176 will have a great impact on Norway.177 Given that eighty 173 “Globalisation and trade: Trade policy challenges and opportunities for Norway.” Norwegian Ministry of Foreign Affairs. Report to the Storting (white paper) summary. (2014-2015) pg. 3 174 In the sources it says “report to the Storting,” where Storting is Norwegian for the Parliament. 175 Report to the Storting (white paper) summary. (2014-2015) pg. 4 176 The Transatlantic Trade and Investment Partnership (TTIP) is high-standard trade and investment agreement being negotiated between the United States and the European Union.
  39. 39. A n n a K v i n g e | 39 percent of Norway’s exports go to the European Union and sixty-five percent of Norway’s imports come from the European Union, the TTIP will have an immense impact on the Norwegian economy.178 One of the strategies the Norwegian government employs to be present in international trade is to participate as third parties in the Dispute Settlement Body. Norway’s trade expansion into new markets is a reason as to why Norway has over the past years been increasing their participation as a third party in the DSB. Trade expansion into new markets is difficult when the markets Norway is trying to enter still have trade barriers in place.179 Given that the Norwegian government states that protectionist measures makes Norway’s dependence on trade vulnerable, the governments participation in WTO disputes helps Norway be part of the conversation in shaping trade and the future of trade in these regions. And as stated by the Ministry, “Norway … is best served by being part of a system based on common rules that are observed.”180 Furthermore, the Ministry stated in the report to the Parliament that, “export interests of many developing countries have received too little attention in negotiations.”181 This shows that the Norwegian government is interested in working with developing Members and assists other nations in their growth, which is why Norway has a comprehensive system of generalized preferences for imports from developing nations. According to the World Bank data there are over twenty developing nations in the region of East Asia and Pacific,182 an area where Norway’s trade is expanding to. Therefore, Norway’s expansion into these markets together with the 177 “About TTIP.” European Commission on Trade. http://ec.europa.eu/trade/policy/in-focus/ttip/about-ttip/ Report to the Storting (white paper) summary. (2014-2015) pg. 3, 11, 12 178 “Trenger Norge EØS og tilslutning til TTIP? ” (23 October 2015). State Secretary Elsbeth Tronstad. Last accessed 29 March 2016 https://www.regjeringen.no/no/aktuelt/eos-ttip-tale/id2459102/ 179 Report to the Storting (white paper) summary. (2014-2015) pg. 5 180 Report to the Storting (white paper) summary. (2014-2015) pg. 8 181 Report to the Storting (white paper) summary. (2014-2015) pg. 8 182 “Data: East Asia & Pacific (developing only).” http://data.worldbank.org/region/EAP
  40. 40. A n n a K v i n g e | 40 country’s participation as a third party in disputes brought by WTO Members from this region show Norway’s interest in assisting these nations. Norway’s participation as a third party adds legitimacy to these nations and their arguments at the DSB. By standing up for other nations in the Dispute Settlement and the WTO, Norway is exercising their power of influence to make every Member at the World Trade Organization matter. If Norway is worried about their role in international trade, an advanced small market, then what awaits small (and developing) nations who do not have Norway’s resources and are not number twenty-six in the World Bank GDP Ranking.183 Therefore, when the Norwegian government said that an instrument of development policy that Norway will use is trade,184 the World Trade Organization is an important aiding factor for this. Moreover, Norway’s interest in implementing and developing agreements that “are better adapted to the situation in the specific countries,”185 is not only beneficial for the small (and developing) nations, but for Norway – who’s internationalists are presenting Norway to be a strong force fighting for the same rights of all nations. Even though Norway is in favour of the WTO and is a frequent user of the Dispute Settlement Body through third party participation, like many other nations, the country has some reservations, especially with regards to further development of the trading system.186 The Norwegian government considers the strengthening and safeguarding of the system to be the main trade policy interest together with a further interest to promote Norwegian interests in the regular work of the WTO.187 In the report to the Parliament it was written that, “the success of Norwegian companies in the global market is important for the Norwegian economy,”188 which 183 “World Bank: Gross domestic product 2014.” http://databank.worldbank.org/data/download/GDP.pdf 184 Report to the Storting (white paper) summary. (2014-2015) pg. 8 185 Report to the Storting (white paper) summary. (2014-2015) pg. 9 186 Report to the Storting (white paper) summary. (2014-2015) pg. 12-13 187 Report to the Storting (white paper) summary. (2014-2015) pg. 11 188 Report to the Storting (white paper) summary. (2014-2015) pg. 18
  41. 41. A n n a K v i n g e | 41 means that the Norwegian government, like any other, looks for benefits for its own nation and its businesses. Furthermore, given that Norway is worried about a lack of participation in the negotiations of trade agreements Norway’s participation in the WTO is crucial.189 The government wants to have a word in the conversations with any means possible – from informal to formal channels.190 ii. Economic and trade connections to the European Communities The majority of the submissions made by Norway in the cases I examined focused on the laws of GATT and the WTO as well as on the legal precedent made in previous cases. In addition, Norway restates the arguments of the complainant and the respondent in their third party submissions to the Panel(s) or the Appellate Body. What is limited in all of these submissions is the opinion of the third party. With most of the focus on laws and previous cases, there is little argumentation made by Norway as a country. Even though the 2005 Oral Statement by Norway begins by saying, “I would like to thank you for this opportunity to present the Norwegian view on the case at hand,”191 and the 2009 Written Submission begins with “Norway welcomes this opportunity to be heard and to present its views as a third party in this appeal concerning a disagreement…”192 there is almost no Norwegian view throughout these or other statements and submissions made by Norway. There are a few times with statements like, “Norway agrees with…”193 or “Norway believes that…,”194 in the 2005 Oral Statement. In other submissions we also see statements such as, “Norway argues that…,”195 “Norway believes 189 Report to the Storting (white paper) summary. (2014-2015) pg. 11 190 Report to the Storting (white paper) summary. (2014-2015) pg. 10 191 DS294 - Oral Statement (Geneva, 17 March 2005) Pg. 2 192 DS294 - Third Party Submission. (Geneva, 10 March 2009) Pg. 1 193 DS294 - Oral Statement of Norway. (Geneva, 17 March 2005) Pg. 2 194 DS294 - Oral Statement of Norway. (Geneva, 17 March 2005) Pg. 5 195 DS294 - Third Participant Submission by. (Geneva, 13 February 2006) Pg. 5
  42. 42. A n n a K v i n g e | 42 that…,”196 “Norway supports…”197 or “In Norway’s view…,”198 however, these statements are rare. In a document of fifteen pages only in five small parts does Norway state what their own view on the case is. This shows that even though third party participation in the DSB is important, Norway’s submissions to dispute cases as a third party are not focused on their individual views. Rather, this shows that the focus of third party participation lies in reiterating the same points over and over again and to show strong support for the party that the third party is supporting. By focusing on the laws of the WTO the third party participant is pounding on the same point the complainant or the defendant is focusing on. In other words, the third party participant is showing its support for the other Member and is telling either the Panel or the Appellate Body of why the Member they are supporting is correct. This shows that advanced small markets participate as third parties in cases to support the dispute party they are connected to. In the WTO, there have been seventeen cases in which the European Union was the complainant and Norway was a third party. There have been thirteen cases where the EU was the respondent in a case where Norway was a third party, and there have been forty-two cases in which Norway and the EU were both third parties.199 This shows that there are other strong connections between Norway and the European Union in addition to the European Free Trade Association (EFTA). This trade connection is one explanation as to why Norway participates as a third party in disputes, especially in those which the European Union is the complainant. The outcome of a dispute in which the European Union is involved in can strongly affect Norway’s 196 DS294 - Third Party Submission by Norway. (Geneva, 10 March 2009) Pg. 2, 10 197 DS294 - Third Party Submission by Norway. (Geneva, 10 March 2009) Pg. 5 198 DS294 - Third Party Submission by Norway. (Geneva, 10 March 2009) Pg. 14 199 “DISPUTE SETTLEMENT: THE DISPUTES Find disputes cases.” https://www.wto.org/english/tratop_e/dispu_e/find_dispu_cases_e.htm#results
  43. 43. A n n a K v i n g e | 43 economy and trade. Therefore, by participating in the cases in which the EU is the complainant, Norway’s internationalists support a strong trade ally and look out for Norway’s interests. Norway, one of the few nations not a member of the European Union is strongly connected to the politico-economic union through the European Free Trade Association (EFTA). EFTA was founded by Norway and six other nations in 1960.200 Norway shares this free trade agreement with Iceland, Liechtenstein and Switzerland.201 Given that EFTA promotes free trade and economic integration and that almost every other country not party to EFTA is part of the European Union,202 a lot of Norway’s economic interests are intertwined with the EU. Through this free trade agreement Norway does a lot of trade with the EU (Figure 3). This figure shows Norway’s biggest export markets for goods and services in 2013 in millions of krona,203 with the European Union being number one. Furthermore, looking at the difference between number one - the EU and number two - the United States of America, the export numbers are significantly different. The number for the European Union is fourteen times larger than the one for the US. In addition, Norway does not have a free trade agreement with the United States as Norway has with the EU. This shows Norway’s stronger connection to the European Union from the one with the United States. 200 The European Free Trade Association. http://www.efta.int/about-efta/european-free-trade-association 201 The European Free Trade Association. http://www.efta.int/about-efta/european-free-trade-association 202 The European Free Trade Association. http://www.efta.int/ 203 Krone is the Norwegian currency, which translates into English as crown. On May 2nd 2016, one US dollar is 8.02 kroner. www.dn.no
  44. 44. A n n a K v i n g e | 44 FIGURE 3: Norway’s biggest export market for good and services in 2013204 Given the strong trade connection between Norway and the European Union, Norway has a significant reason for participating in disputes as a third party in support of the European Union. First, Norway participates in certain cases because the internationalists believe that the laws of the WTO and the legal precedent made in the disputes under the Dispute Settlement Body are applicable to all WTO Members. Second, as I was told in my interview with the lawyers from the Norwegian Ministry of Foreign Affairs the precedent established in some cases can be extended to other WTO Members at a later point. This was reaffirmed in the 2012 article in the American Society of International Law where Cho writes that, “countries [will] continue to challenge U.S. zeroing…in the hope that the United States will recalculate dumping margins on those products…as it did for the EU and Japan,”205 and again by New Zealand when the U.S. filed a case against Japan over import restrictions on apples, “The Americans will now sit down 204 Report to the Storting (white paper). (2014-2015) Pg.96 205 “No More Zeroing?: The United States Changes its Antidumping Policy to Comply with the WTO.” Sungjoon Cho. (9 March 2012). American Society of International Law https://www.asil.org/insights/volume/16/issue/8/no-more- zeroing-united-states-changes-its-antidumping-policy-comply-wto

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