Dynamic balance and lever effect in the WTO agriculture dispute settlement : case study of China and implication for the WTO reform

Abstract

The objective of this thesis is to find theoretical bases and practical solutions to enhance the effectiveness of agriculture dispute settlement, while strengthening the mutually reinforcing relationship between agriculture dispute settlement and negotiation in the WTO. I argue that the theory of ‘Contextualism’ can be applied to improve the dispute settlement system, while the ‘lever effect’ theory should be accommodated to the new context for improving the relationship between agriculture dispute settlement and negotiation. On the one hand, the ‘Contextualism’ theory indicates that a dynamic balance between power (diplomatic) and rule (judicial) natures should be achieved for improving the effectiveness of agriculture dispute settlement. In this vein, the concerns on both the power and rule elements of the dispute settlement system need to be addressed, and a Special Working Party (SWP) should be incorporated for striking the dynamic balance on a case-by-case calibration. On the other hand, the ‘lever effect’ theory indicates the agriculture dispute settlement could potentially facilitate the negotiation, but it should be accommodated to the new context: the limitation of agriculture dispute settlement with the AB paralyzed; the evolving transformation of agricultural exceptionalism; and the fragmentation of trade policy-making among the WTO Members.

For the application of the theoretical framework, I focus on examining the agriculture negotiation history, the agriculture cases involving China, and the practice of WTO reform.

The historical review of agriculture negotiation from GATT to the WTO eras reflects an evolving transformation of agricultural exceptionalism in the international community, i.e. post-exceptionalism. I suggest that the current dispute settlement system and agriculture negotiation strategy should be accommodated to the development of post-exceptionalism with resilient and flexible arrangements. I also found that China plays a unique role that could potentially bridge the gap between different agriculture negotiation coalitions.

After studied the agriculture cases involving China, I found that the functions of the SWP should cover the following in each agriculture case: technical assistance for the coordination of diplomatic activities, building the SWP report database, rendering non-binding rule interpretation, and monitoring the fulfillment of transparency rule. From the perspective of China, the case study reflects the limitation of agriculture dispute settlement in easing trade tensions. It also reveals the impact of domestic agriculture reform and regional trade activities on the WTO agriculture negotiation. At the multilateral level, I found that the ‘lever effect’ could be enhanced through the SWP, which works as a productive linkage between the dispute settlement system and Committee on Agriculture (CoA).

In the analysis of WTO reform, I found that some challenges need to be tackled for the incorporation of the SWP in practice, including: the procedural and systematic concerns of the judicial proceedings, the adjustment of confidentiality rule in DSU, and the improvement of Specific Trade Concerns (STCs) mechanism in the CoA. For enhancing the ‘lever effect’ in the new context, I suggest providing corresponding strategies and approaches to respond to the two circumstances: complementary and tense post-exceptionalism in the WTO.