DISPUTE RESOLUTION and FTAs Peter Drahos Asian Regional

DISPUTE RESOLUTION and FTAs Peter Drahos, Asian Regional Workshop on Bilateral FTAs, KL, Malaysia, 26 -28 August 2005

Choice of Forum Provision US-Chile Article 22. 3: Choice of Forum 1. Where a dispute regarding any matter arises under this Agreement and under another free trade agreement to which both Parties are party or the WTO Agreement, the complaining Party may select the forum in which to settle the dispute. 2. Once the complaining Party has requested a panel under an agreement referred to in paragraph 1, the forum selected shall be used to the exclusion of the others.

Choice of Forum in US FTAs US-Israel (1985) NAFTA (1994) US-Jordan (2001) US-Chile (2004) US-Singapore (2004) US-Morocco (2004) US-Australia (2005) US-CAFTA (2005) US-Bahrain No provision Article 2005 (qualified) Articles 17. 1. (e) and 17. 4 (qualified) Article 22. 3 Article 20. 4 Article 21. 4 Article 20. 3 Article 19. 4

Disadvantages of Choice of Forum in FTAs 1. where the US exercises choice of forum in favor of the bilateral forum, the weaker state will not be able to use the WTO to defend the case against the US.

Disadvantages of Choice of Forum in FTAs 2. Where a state wishes to bring a WTO action against the US, the fact that the US has signed so many FTAs with other states may mean reduced coalitionbuilding opportunities for that state.

Disadvantages of Choice of Forum in FTAs 3. Where a weaker state has a FTA with the US it may inhibit its participation in WTO dispute settlement processes. CONCLUSION The overall effect of this bilateral web will be to reduce the effectiveness of the WTO as a means for weaker actors to defend their interests in trade disputes.

The Bilateral Web – FTAs and TIFAs “Any potential FTA partner must be a WTO member and have a TIFA with the United States. The United States now has TIFAs with Indonesia, Philippines, Thailand, Brunei Darussalam and Malaysia. The U. S. goal is to create a network of bilateral FTAs with ASEAN countries”.

EU’s Approach Article 189. 4. (c) of the EU-Chile FTA. Where a party seeks redress for breach of an obligation that is also a breach of a WTO obligation, that party “shall have recourse” to the WTO (unless both parties otherwise agree).

Non-violation Complaints in FTAs (US-Singapore) ARTICLE 20. 4 : ADDITIONAL DISPUTE SETTLEMENT PROCEDURES 1. Except as otherwise provided in this Agreement or as the Parties otherwise agree, the provisions of this Article shall apply wherever a Party considers that: (c) a benefit the Party could reasonably have expected to accrue to it under Chapters 2 (National Treatment and Market Access for Goods), 3 (Rules of Origin), Chapter 8 (Cross Border Trade in Services), or Chapter 16 (Intellectual Property Rights) is being nullified or impaired as a result of a measure that is not inconsistent with this Agreement.

US Position on Non Violation “the period for discussion of views on scope and modalities of non-violation complaints has passed and that no purpose will be served in continuing discussions”. See, Communication from the United States, Scope and Modalities of Non. Violation Complaints Under the TRIPS Agreement, (IP/C/W/194).

Countries that have agreed to Non-Violation in the context of IP Chapter US-Chile (2004) US-Singapore (2004) US-Morocco (2004) US-Australia (2005) US-CAFTA (2005) US-Bahrain

State Practice and IP Countries that have FTAs with US or are Negotiating Colombia, Peru, Ecuador, Bolivia, Australia, Bahrain, Chile, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, Jordan, Morocco, Panama, Singapore, South Africa, Botswana, Lesotho, Namibia, Swaziland, Thailand TOTAL 24 Countries that have TIFAs with US Algeria, Kuwait, Qatar, Saudia Arabia, United Arab Emirates, Yemen, Indonesia, Philippines, Brunei Darussalam, Malaysia TOTAL 10