Latin American and Caribbean countries have been among the main users of the Dispute Settlement Body (DSB) of the World Trade Organization (WTO) during its first 20 years of existence, according to a new study by ECLAC.
Between January 1, 1995 and December 31, 2014, the region’s countries initiated as complainants 117 dispute settlement cases before the WTO and were respondents in another 93 cases. These figures are equivalent to 24% and 19%, respectively, of all the cases brought during this period (488), according to the document The Participation of Latin America and the Caribbean in the WTO’s Dispute Settlement Mechanism (available only in Spanish), written by experts from ECLAC’s International Trade and Integration Division.
As a result, the region’s participation in the DSB has been much greater than its presence in the world’s merchandise trade, which totaled 5.5% on average during the same time span. However, participation in the mechanism is concentrated in a small number of countries.
According to the study, Brazil, Mexico, Argentina and Chile are the region’s main users of the DSB, accounting for 63% of all cases in which Latin American and Caribbean countries are complainants and 69% of all cases in which they are respondents (see attached graphic).
These four countries occupied the first, second, fourth and eighth rungs, respectively, among the 10 developing countries that most frequently resorted to the DSB as complainants between 1995 and 2014. Brazil, Mexico and Argentina even surpassed China—the world’s biggest exporter—in terms of their presence in the mechanism and they are at similar levels to industrialized countries such as Canada and Japan.
The study also reveals that 52% of the cases in which Latin American and Caribbean countries are respondents resulted from complaints filed by countries from the same region, which indicates that there are numerous intraregional trade disputes. Latin American and Caribbean nations have often preferred to resort to the WTO even when they belong to the same economic integration blocs or have trade accords in effect that include their own dispute settlement mechanisms.
The document explains that the United States is the WTO member that has received the most complaints via the DSB from countries of the region, with a quarter of the total (30 cases), followed by the European Union (24 cases), and Chile (9 cases). China, which is the second largest trading partner of Latin America and the Caribbean, has only been targeted by countries from the region in 5 opportunities (4 by Mexico and one by Guatemala).
Meanwhile, Argentina is the Latin American country that has been cited as a respondent the most often before the WTO during the period under study (22 times), followed by Brazil (15) and Mexico (14).
In its first 20 years of existence, the WTO’s dispute settlement mechanism has become the “jewel in the crown” of that organization (in the words of its former Director-General Pascal Lamy). It is highly valued by its members, who turn to it frequently to resolve trade differences even when they have alternative forums for doing so.