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Competition and Coordination in Dispute Settlement Procedures between WTO and Regional Economic Communities: Comparative Review of Forum-choice Clauses (Japanese)

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  • KAWASE Tsuyoshi
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    The judicialization of international dispute settlement procedures is a marked phenomenon particularly in the realm of economic affairs. This trend has spread from the World Trade Organization (WTO) to regional trade agreements (RTAs). Many procedures under RTAs have the characteristics of quasi-judicial proceedings similar to those of the WTO. Meanwhile, substantive rules under RTAs, to a considerable extent, overlap those of the WTO Agreement. This raises the possibility that a single dispute may be subject to both WTO and RTA rules and, in some cases, come under the jurisdictional authority of both the WTO and RTA, and hence produce conflicting or inconsistent adjudications in each forum. Furthermore, over the longer term, diversified interpretations of similar substantive rules could accumulate and the integrity of the international trade order, which has been maintained by the principle of single undertaking and through unification of dispute settlement procedures since the WTO's establishment, may be damaged. Fragmentation of the international trade order cannot be addressed by conventional procedural principles under public international law, such as the principles of res judicata and litispendence , both premised on dealing with cases concerning "same dispute" - cases identical particularly in the ground of claim. Therefore, forum choice rules must be provided for on the part of RTAs. RTA responses in this regard can be broadly classified into the three types: 1) first-forum-first, in which the forum under which proceedings have first been initiated is given exclusive jurisdiction; 2) WTO-first or RTA-first, in which the WTO or RTA, as applicable, has sole jurisdiction irrespective of which of the forums first received the case; and 3) no-coordination, in which no forum choice clause is established. Many existing RTAs fall under the no-coordination type, whereas most of those with a forum-choice clause are of the first-forum-first type. However, the first-forum-first type is problematic in that it is difficult to determine the sameness of a dispute referred to a first forum and one referred to a second forum. Moreover, this system is practically impossible because the proceeding of a WTO dispute settlement procedure cannot be prevented; claims under a WTO agreement and those of RTAs are never identical. The no-coordination type simply leaves unaddressed the problem of "fragmentation" of rules governing international trade. Given the present state of affairs, and considering the effectiveness of the WTO dispute settlement procedures and the cost of damaging the integrity of WTO law as a "world trade constitution," WTO-first is the most desirable type of forum-choice clause. In this respect, Article 189 of the EU-Chile Free Trade Agreement that, in principle, gives priority to the WTO dispute settlement procedures in settling a dispute concerning an obligation under the FTA that is equivalent in substance to one under the WTO. Although this type of forum-choice clause has its limitations, it deserves attention as a potential mechanism to incorporate into Japan's future RTAs.

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    Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion Papers (Japanese) with number 07050.

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    Length: 80 pages
    Date of creation: Dec 2007
    Handle: RePEc:eti:rdpsjp:07050
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