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WTO minnows cry foul on mediation

24th October 2002

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The dispute settlement system of the WTO is commonly held up as a shining example of how a rules-based system gives small, poor countries the chance to challenge unfair trading practices by the rich and powerful—and win, reports the Financial Times.

Costa Rica blazed the trail by forcing the US to abandon restrictions on its underwear exports. Other developing countries have scored victories over the US and the EU on products ranging from sardines to steel and semiconductors.

Yet many poor nations, which make up four-fifths of the 144-strong WTO membership, say the system is stacked against them and needs radical reform. Talks on revising the WTO's dispute settlement rules are due to conclude next May.

"We do find quite objectionable the manner that the WTO dispute settlement system is uncritically hailed as a resounding success, when more than half the WTO membership have been sidelined by the system," Amina Mohamed, Kenya's WTO envoy who speaks for the African group, told negotiators last month.

Just over 90 disputes—about a third of the 270-odd cases brought to the WTO in its eight-year history—have been filed by developing countries, roughly half against industrialized nations. However, a dozen developing countries in Latin America and Asia, led by Brazil and India, account for almost all the 90-plus filings. No African or least-developed country has brought a case: they say the system is too expensive and complex, and does not provide adequate remedies if they win.

WTO Director-General Supachai Panitchpakdi had poorer WTO members principally in mind when he announced that one of his priorities would be the strengthening of mediation and consultation procedures. However, while this idea has had a good reception, developing countries may still want their day in court. "In the underwear dispute, we got a clear-cut decision that we would not have got in an out-of-court settlement," said Alberto Trejos, Costa Rica's trade minister.

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