Designing Common but Differentiated Rules for Regional Trade Disputes

May 2018
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In the twenty-first century, World Trade Organization (WTO) members have put great energy and creativity in liberalising trade through regional trade agreements (RTAs), even as trade liberalisation in the WTO has met increasing challenges. This paper discusses how the parties to RTAs have approached the problem of enforcing RTA obligations and settling disputes. It examines why there have been relatively few known RTA panel disputes so far, and how this situation could change. Even if dispute settlement mechanisms are not currently used, they give RTA parties the option to bring and pursue disputes about RTA compliance. This is important as having options matters for real-world outcomes. The paper further introduces a proposal to facilitate options for RTA parties to settle their disputes by drafting a model set of unambiguous common dispute settlement procedures, with standardised differentiated options to accommodate governments’ needs and situations. Other suggestions include creation of a reference database of RTA dispute settlement provisions and a checklist of practical issues for administering an RTA dispute.

The paper is part of the RTA Exchange on Dispute Settlement project. It is aimed at analysing experiences and best practices, with a view to cultivating creative ideas for global trade policymaking and facilitating the enforcement of RTAs, taking into account their practical feasibility and the political realities.

The RTA Exchange, jointly implemented by the International Centre for Trade and Sustainable Development (ICTSD) and the Inter-American Development Bank (IDB), is a platform that convenes purposeful multi-stakeholder dialogues that work in the interest of constructing better trade and investment agreements for sustainable development at the regional and multilateral levels.

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