84 Bown and Hoekman (reference Bown and Hoekman2008) point out that one of the serious problems related to developing countries and trade agreements, particularly for relatively poor countries, is generally that trading partners were not willing to take on dispute settlement challenges. They show how failure to enforce dispute resolution becomes an accomplice in the tolerance of setbacks, leading to the termination of such agreements. This article examines how the disputes between the Dominican Republic and the WTO safeguard measures raise a new set of issues concerning the overlap of SAAs and safeguard measures. The cases filed by four Central American countries – Costa Rica (DS 415), Guatemala (DS 416), Honduras (DS 417) and El Salvador (DS 418) are unique in two respects. First, disputes are one of the few times a country has used WTO dispute settlement to challenge one of its PEF trading partners because of the application of safeguard measures against its imports. Second, these disputes are the first time that the WTO has examined whether a political measure constitutes an unlawful safeguard measure, while the duty applied does not exceed the bound duty on the WTO Member`s schedule (and thus its obligations with respect to quotas and other quantitative restrictions). While it is unusual in such circumstances for a case of justice to occur, we argue that the interaction between the Dominican Republic`s multilateral commitments and the PTA commitments likely contributed to the protection measure applied and that the WTO panel rightly stated it problematic. The Dominican Republic put forward two arguments to support the argument that the „unforeseen development“ requirement in the former AB case-law should be eliminated. First, it found that the Convention on Safeguard Measures omits the language of „unforeseen development“ contained in Article XIX of the GATT.
Since the safeguard agreement is „a more specific and subsequent agreement“, its requirements must be exceeded by the contrary provisions of Article XIX of the GATT. In addition to the argument based on the lex specialis and lex posterior derogat priori, the Dominican Republic put forward a second argument, only in the case where the court considered that it had recourse to article 32 of the Vienna Convention on the Law of Treaties to determine this legal question. This argument also indicated that the history of the Uruguay Round negotiations revealed the intention of the parties to eliminate the requirement of „unforeseen development“. The Dominican Republic reported that the negotiators had included a clause on the notion of „unforeseen development“ in a previous draft text of the 1989 Agreement on Safeguard Measures, but then deleted it for finalization. Third, we argue that the interaction between PTAs, safeguard measures and WTO disputes is more complex than the impact of a PT in reducing tariffs and other barriers to trade. In particular, SAAs can further affect a country`s ability to exercise policy options to deal with increased foreign competition through escape clause mechanisms. These restrictions imposed by the PTA may in turn lead a government to take measures that are inconsistent with the country`s general WTO obligations. Section 4 examines how this dynamic played out in the cases of the Dominican Republic – protection measures. 7 Thus, Pauwelyn (pauwelyn2004 justification) criticises the Appellate Body for introducing an unnecessary complication without a clear textual basis to support the creation of that teaching. Ahn (reference Ahn, Matsushita, Ahn and Chen2006) argues that the Appellate Body has not been the appropriate forum to rule on this issue and that it creates a serious gap for the application of a security measure by the most handicapped clause.
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