A Study on the Equivalence Requirement of WTO Retaliation

WTO 보복조치의 동등요건에 관한 연구

The World Trade Organization (WTO) offers remedies for non-compliance by the introduction of compensation or retaliation in the Dispute Settlement Understanding (DSU). There are no the provisions under the WTO DSU and it seems unclear what retaliation is attempting to achieve. Therefore, it is unclear whether the goal of WTO retaliation is to induce compliance or to restore the balance between the rights and the obligations of WTO members. It has been claimed the WTO has a strong dispute settlement system by providing retaliation when the recommendations and rulings of Dispute Settlement Body (DSB) are not complied with. But this seems to be inadequate to bring about effective and timely compliance. Especially there is a problem with free riding by a violating member because the level of retaliation is determined from the expiration of a reasonable period of time, providing an incentive to delay compliance. Also the level of the suspension of concessions or other obligations authorized by the DSB is equivalent to the level of nullification or impairment, according to DSU Article 22.4. However, if the member concerned objections to the level of the suspension proposed, the matter shall be referred to arbitration. The arbitrator shall not examine the nature of the suspension of concessions or other obligations to be suspended but shall determine whether the level of such suspension is equivalent to the nullification or impairment. The arbitrator makes an assessment standard of equivalence by comparing the suspension of concessions or other obligations and the nullification or impairment calculated in terms of the amount of trade. But it is necessary that other standards replace the quantitative standards when the level of the nullification or impairment cannot be quantified by concrete damages.