CC BY
17
УДК 341.641
DOI: 10.12737/jflcl.2021.018
Trade Disputes in the WTO System: Russia as a Third Party
Anastasia S. Loginova1 3, Irina V. Mikheeva1 4, Mania L. Gorbunova2
''National Research University "Higher School of Economics", Nizhny Novgorod, Russia
2Lobachevsky State University of Nizhny Novgorod, Nizhny Novgorod, Russia, gorbunova@iee.unn.ru, https://orcid.org/0000-0003-2733-568X
3aloginova@hse.ru, https://orcid.org/0000-0003-4135-3286
4irinarap@mail.ru, https://orcid.org/0000-0001-9323-6511
Abstract. Currently, there are some difficulties in implementing the mechanism for resolving trade disputes established by the WTO rules. These are: the open question of the the Appellate Body functioning and the search for its alternative forms, failure to comply with the stipulated procedural deadlines; the need to prove a significant trade interest in the absence of a mechanism for evaluating it, which may lead to unjustified refusals to participate in the consideration of a trade dispute as a third party, etc. These problems determine the need not only to acquire practical skills in applying the rules and regulations of the WTO, but also for the theoretical understanding of the mechanism for implementing its trade interests protection. For Russia, it is important to participate not only as a plaintiff and defendant but as a third party of a trade dispute to gain experience and to form a staff capable to represent the state in the negotiation process and at the stage of consideration of cases in DSB.
Using comparative legal and formal-legal methods, there is attempt to analyze the experience of possible effektive use of the dispute resolution mechanism, guided by the rules and regulations established by the WTO. Attention is drawn to the fact that Russia pays the most attention to disputes concerning the European Union, China and the United States of America. The autors categorize disputes in which Russia participates as a third party. There is speculation about the need to reform the mechanism for resolving trade disputes in the WTO due to the expansion of third-party rights (e.g., to allow a third party to obtain upon request information and documents, to secure entitlement to a presence at major meetings treteiskii group (not just the first), perhaps without the right to comment on the interim report of the arbitration panel) making appropriate amendments to article 10 of the Agreement. It can also be recommended to include a third party in the trade dispute and at the stage of appeal procedures for understanding whether there is a significant trade interest in the country.
Keywords: World Trade Organization, Dispute Resolution Body, trade disputes, Russia, third party
For citation. Loginova A. S., Mikheeva I. V., Gorbunova M. L. Trade Disputes in the WTO System: Russia as a Third Party. Journal of Foreign Legislation and Comparative Law, 2021, vol. 17, no. 2, pp. 69—88. DOI: 10.12737/jflcl.2021.018
Торговые споры в системе ВТО: Россия — третья сторона
А. С. Логинова1, 3, И. В. Михеева1,4, М. Л. Горбунова2
1Национальный исследовательский университет «Высшая школа экономики», Нижний Новгород, Россия
Национальный исследовательский Нижегородский государственный университет им. Н. И. Лобачевского, Нижний Новгород, Россия, gorbunova@iee.unn.ru, https://orcid.org/0000-0003-2733-568X
3aloginova@hse.ru, https://orcid.org/0000-0003-4135-3286
4irinarap@mail.ru, https://orcid.org/0000-0001-9323-6511
Аннотация. В настоящее время существует ряд сложностей реализации закрепленного нормами Всемирной торговой организации (ВТО) механизма разрешения торговых споров, в частности, остаются открытыми вопросы функционирования апелляционного органа и поиска альтернативных ему форм, несоблюдения им предусмотренных процессуальных сроков, доказывания существенного торгового интереса при отсутствии механизма его оценивания и т. д. Названные проблемы предопределяют для России необходимость не только приобретения практических навыков применения правил и норм ВТО, но и теоретического осмысления механизма реализации защиты своих торговых интересов. Для России важно участие в торговых спорах в качестве не столько истца или ответчика, сколько третьей стороны в целях приобретения опыта и формирования кадров, способных полноценно представлять государство в процессе переговоров и на этапе рассмотрения дел в органе по разрешению споров.
В исследовании с помощью сравнительно-правового и формально-юридического методов предпринята попытка проанализировать опыт возможного эффективного использования механизма разрешения споров в рамках ВТО, руководствуясь при этом нормами и правилами, установленными ВТО.
Обращается внимание на то, что наибольшее внимание Россия проявляет к спорам в отношении Евросоюза, Китая и США. Произведено категорирование споров, в которых Россия принимает участие в качестве третьей стороны. Выдвигается предположение о необходимости реформирования механизма разрешения торговых споров в ВТО за счет расширения прав третьей стороны (разрешение ей получать по требованию информацию и документы, закрепление правомочия на присутствие на основных заседаниях третейской группы). Рекомендуется включение в торговый спор
третьей стороны на стадии проведения апелляционных процедур для понимания наличия существенного торгового интереса у страны.
Ключевые слова: Всемирная торговая организация, орган разрешения споров, торговые споры, Россия, третья сторона
Для цитирования. Логинова А. С., Михеева И. В., Горбунова М. Л. Торговые споры в системе ВТО: Россия — третья сторона // Журнал зарубежного законодательства и сравнительного правоведения. 2021. Т. 17. № 2. С. 69—88. (На англ. яз.) DOI: 10.127377jflcl.2021.018
Introduction
The essential factor of the World trade organization (hereinafter — the WTO) work is the system of dispute resolution that serves as a legal guarantee for member states in defending their political and economic interests1. Especially when such a need actually exists. Trade relationships between states have become a particular combination of economic and politics. The sources of strong economies allow domination of one state over another predetermining political stability (or instability) in the world. In this regard, the WTO dispute settlement mechanism has a certain significance and a fundamental basis for implementation. Whereby disputed relations have a sustainable expression.
Trade disputes have a diverse nature in terms of content, parties involved and adequacy of legal action. It is interesting that the most active WTO disputes participants are the countries with a strong economy. In America it is the USA and Canada. In Europe — European Union.
In the East — Japan and China. In the activity of each of them researchers emphasise one or another accents: some usually act as a plaintiff, some as a defendant and other are a third party. However, the economically developed countries ensure mostly their role participation in disputes quite proportionally2.
Researches highlight a certain pattern where new WTO members in the first years after their accession usually have to try the role of defendant. However, Russia for example usually "enters" a dispute as a third party — in more than 79 cases3.
Of course, after accession to the WTO in August 2012 Russian Federation faced the need to resolve effectively trade disputes that arise among member states. However, due to the lack of the extensive experience Russia has some difficulties in implementation of the WTO rules and regulations for the purposes of filing and resolving
1 See: Mavroidis P. C., Henrik H., Nordström H. Is the Use of the WTO Dispute Settlement System Biased? The WTO and International Trade Law / Dispute Settlement. Ed. by P. C. Mavroidis, A. O. Sykes. Cheltenham, 2005. P. 212.
2 See: Knobel A. Yu., Baeva M. A., Firanchuk A. S. Russia's participation in trade disputes within the WTO: analysis of competitiveness. Moscow, 2016. P. 16. (In Russ.) Available at: http://www.gproxx.eom/https://www.ranepa.ru/images/docs/ nayka/delo/Knobel_VTO_blok.pdf.
3 See: Russian Federation and the WTO. (In Russ.) Available at: https://www.wto.org/english/thewto_e/countries_e/russia_e.htm (accessed 18.07.2018).
disputes within the WTO. For this very reason, participation as a third party in disputes resolved in the framework of the WTO allows Russia to gain an objective experience and a subjective understanding of potential directions in order to promote one's economic interests within the contentious relations.
1. Mechanism and procedures for resolving trade disputes within the World Trade Organization
Now, there has been developed a mechanism based on the Dispute Settlement Understanding of the WTO (hereinafter — the Understanding)4. This mechanism has a number of specific features. One of them is the clear stage hierarchy, which gives at the same time a well-defined flexibility to dispute resolution. Adoption and effect of the Understanding establishes a framework for implementation of other WTO agreements and decisions, as well as its protocols, serves as a certain carcass that from time to time stabilises conflictive trade political relations between countries.
The system of trade dispute settlement within the WTO is an integral part of it. The WTO plays an important role not only in free trade promotion, but also provides its member states with an option to protect their interest being guided by the rules and regulations established by the WTO. Resolution of trade disputes among WTO members is considered to be the best peaceful way to resolve disagreements5. However, Hoekman notes, that the WTO needs for reform and new working methods, because existing working methods have lost the ability to objectively and comprehensively resolve trade disputes6.
There are two main methods of dispute resolutions pointed. First, these are bilateral consultations. In the course of their implementation, attempts are aimed to find a solution that satisfies both parties. Another method is to appeal to a special body — the Dispute Settlement Body (hereinafter — the DSB). The WTO General Council performs this function7.
4 See: Understanding on rules and procedures governing the settlement of disputes. Annex 2 of the WTO Agreement. 15 April 1994. Available at: https://www.wto.org/English/Tratop_E/ dispu_e/dsu_e.htm (accessed 07.02.2020).
5 See: Johannesson L., Mavroidis P. C. The WTO Dispute Settlement System 1995—2016: A Data Set and Its Descriptive Statistics. Journal of World Trade, 2017, vol. 51, iss. 3, p. 357.
6 See: Hoekman B. Urgent and Important: Improving WTO Performance by Revisiting Working Practices. Journal of World Trade, 2019, vol. 53, iss. 3, p. 373—394.
7 See: Marrakesh Agreement Establishing the World Trade Organization. The official website of the WTO. Available at: https: //
The dispute settlement procedure is broader than just "an appeal to the DSB" and includes not only litigation itself in this body, but also consultations between parties, as a preceding stage of each litigation, as well as further execution of the WTO judgment by parties to a dispute. Thus, the resolution of the dispute within the WTO goes through these three mandatory stages.
It is worth to mention that if the parties to foreign (international) economic trade turnover are private subjects (as a rule, legal entities), then the public authorities actually participate in the dispute settlement procedures within the WTO. These are the member states of the WTO themselves. Consequently, the international trade of the member states has a significant interstate character, it is transferred from simply economic plane to the plane of political-economic relations. At the same time, national governments join the "dispute-resolving" process after receiving information from national market operators.
In frames of the distinguished methods there are identified three stages of dispute resolution within the DSB: request for consultations; set up of the panel; dispute settlement in the Appellate Body (hereinafter — AB).
Each of the named stages has its own material and procedural legal basis. For the consultations it is the article XXII of the GATT8 and article 4 of the Understanding9. They are to be held within 60 days and in the strictest confidentiality. The term of consultations can be prolonged if the suit was brought against a developing country. Consultations can be performed only if certain conditions are in presence. These are either non-compliance with any provisions of the trade agreement between participants of foreign economic relations, or failure to achieve its goals. Only in this case one member state of the WTO has a right to file a request for consultations with other member state of the WTO (a so-called offender). On this stage the state, whose rights have been violated, advances arguments for its position and this can contribute to resolution of the dispute arisen and not proceed to the next stage — its trial directly in the DSB10. It is well known that at this stage diplomatic channels play the most important role. In this regard, the DSB formally does not participate in such consultations. At the same time, there is a rule of the compulsory
www.wto.org/english/docs_e/legal_e/04-wto_e.htm (accessed 10.02.2020).
8 See: General Agreement on Tariffs and Trade (GATT) 1947. Available at: http://www.hse.ru/org/hse/wto_reference/doc_11_01 (accessed 07.02.2020).
9 See: Understanding on rules and procedures governing the settlement of disputes. Annex 2 of the WTO Agreement. 15 April 1994. Available at: https://www.wto.org/English/Tratop_E/ dispu_e/dsu_e.htm (accessed 07.02.2020).
10 See: Vakhania T. V. Consultations as a means of resolving
disputes in the WTO. Foreign Trade Law, 2005, no. 2, p. 26. (In
Russ.)
notification of the WTO committees and councils about the state inquiry submitted to the DSB.
The stage under consideration (consultations) does not exclude alternative ways of dispute resolution (reconciliation, mediation, good offices). They can be held simultaneously with the procedure of dispute resolution by the panel, provided, of course, that disputing parties have expressed their consent thereon. In case consultations have failed and no unanimous decision was met by the countries in dispute, the next procedural stage would be creation of the panel. The last (and, basically, it is the first instance of dispute resolution in the DSB) includes experts. Their amount varies from 3 to 5 members appointed by the WTO director-general. Experts receive all the arguments in writing from contesting states. The name of procedural document is "Working Procedures" (it is an Appendix No. 3 to the Understanding)11.
It should be noted that procedural terms of the panel are stipulated. It reassembles within 45 days. The term of 6 months is given to the panel for dispute resolution and adoption of a final report. The panel does not make any rulings but forms a specially prepared report and submits it to the DSB for its further acceptance or rejection. The final report is namely the result of the panel's work for the disputing parties and is a report for the WTO members. It is submitted to the DSB and shall be accepted within 60 days. The report shall contain conclusions made by the panel, that will subsequently become the basis for elaboration of recommendations. The condition of adoption of the report is that no decision about its rejection was passed and none of the parties to a dispute intends to proceed with a dispute in the Appellate Body12. The last one is a permanent body in the WTO structure.
Finally, individualization of the previously mentioned stage of dispute settlement is attributed to the work of the AB. It is worth mentioning that its work does not imply any review of decision on a particular dispute and consideration of new facts. The competence of the Appellate Body concerns exclusively legal matters considered in the strict confidentiality13. Its aim is interpreting the provisions of the WTO agreements. However, the powers of this body are extensive. In its final conclusion the legal findings and implications of the panel can be upheld, modified or even reversed.
11 See: Trade Policy Review Mechanism (TPRM). Available at: https://www.wto.org/english/tratop_e/tpr_e/tprm_e.htm (accessed 07.02.2020).
12 See: Understanding on rules and procedures governing the settlement of disputes. Annex 2 of the WTO Agreement. 15 April 1994. Available at: https://www.wto.org/English/Tratop_E/ dispu_e/dsu_e.htm (accessed 07.02.2020).
13 See: Steger D. The founding of the Appellate Body. A History of Law and Lawyers in the GATT/WTO: The Development of the Rule of Law in the Multilateral Trading System. Ed. by G. Marceau. Cambridge, 2015. P. 34. DOI: 10.1017/CB09781316048160.034.
The structure and procedural aspects of functioning of this body are expressly stipulated in the WTO statutory documents. It includes arbitrators. The experts from all over the world perform functions of this body. Prevalently, from Japan, India, Egypt, Brasil, USA, Australia14. There are seven arbitrators designated, however only three of them can be appointed for one proceeding. They are commissioned for 4 years and the possibility of reappointment is provided. Nowadays, there are a number of problems associated with the United States blocking the appointment of arbitrators. The AB can lose its quorum. Analyzing the role of the Appellate Body, the researchers express concern about its future15. Currently, WTO members are concerned about resolving the situation with the AB. In October 2019, a total of 88 WTO members (counting the EU as one WTO member) signed a proposal to appoint new arbitrators as a matter of urgency. However, 47 WTO members chose to remain silent. On December 11, 2019, there was one active member of the Appellate Body.
This made the appeal process in the WTO nonfunctional, since the AB requires a minimum of three members16. R. McDougall notes that the stalemate in the WTO, which is connected with the appointment of new members of the Appellate Body is just one symptom of crisis in cooperation on trade17. Thus it becomes necessary to search for alternative forms. In this regard, there is a certain concern in searching of its alternative forms. There are already some precedents of it. Although it is difficult to call them "systematic", rather the opposite. Once, there was a dispute, where participants (Taiwan
14 See: Shepenko R. A. WTO and Anti-Dumping Disputes Settelment: General Characteristics. Perm University Herald. Juridical Sciences, 2014, iss. 1 (23), p. 325. (In Russ.) Available at: https://cyberleninka.ru/article/n7vto-i-uregulirovanie-antidempingovyh-sporov-obschaya-harakteristika (accessed 06.02.2020). (In Russ.)
15 See: Pauwelyn J. WTO Dispute Settlement Post 2019: What to Expect? Journal of International Economic Law, 2019, vol. 22, iss. 3, 297—321. DOI: https://doi.org/10.1093/jiel/jgz024; Gygli S., Haelg F., Potrafke N., Sturm J.-E. The KOF Globalisation Index— Revisited. The Review of International Organizations, 2019, vol. 14, iss. 3, p. 543—574. DOI: 10.1007/s11558-019-09344-2; Hoekman B., Mavroidis P. C. Burning Down the House? The Appellate Body in the Centre of the WTO Crisis. 2019. Available at: https://scholarship.law.columbia.edu/cgi/viewcontent.cgi?art icle=3351&context=faculty_scholarship (accessed 06.02.2020).
16 See: Fiorini M., Hoekman B., Mavroidis P., Saluste M., Wolfe R. WTO Dispute Settlement and the Appellate Body Crisis: Insider Perceptions and Members' Revealed Preferences. EUI Working Paper RSCAS 2019/95, p. 19. Available at: https:// cadmus.eui.eu/bitstream/handle/1814/65244/RSCAS%202019_95. pdf?sequence=1&isAllowed=y.
17 See: McDougall R. The Crisis in WTO Dispute Settlement: Fixing Birth Defects to Restore Balance. Journal of World Trade, 2018, vol. 52, iss. 6, pp. 867—896.
and Indonesia) initially agreed that it would end with a ruling of the Panel and would not reach the stage of appeal18.
Another option is suggested by the WTO Dispute Settlement Understanding. This document stipulates the alternative proceeding (article 25 of the Understanding). What does it mean? It encourages parties to agree about the dispute settlement in other, prompt arbitrage. The situation that is developing today in the AB is of vital importance also for us in the context of the Russia-initiated dispute with the USA on customs19. This dispute can become a first one by the end of which there would be no one to handle the claim on the stage of appeal.
Forecasts for the reopening of the Appellate Body are disappointing. Taking this into account, at the economic forum in Davos (Switzerland) the EU and 16 countries reached an agreement on a temporary dispute settlement mechanism within the World Trade Organization, which involves the second stage of dispute resolution within the WTO. Despite the fact that the scope of disputes, which could be resolved by this new procedure, is still unclear (whether only new disputes will be considered under the proposed temporary mechanism, or whether it will extend its effect to all unresolved disputes due to the crisis of the Appellate Body), it seems that the introduction of such mechanism may become the most constructive step to overcome the crisis20. The issue of joining the temporary appeal mechanism is also being considered by the Russian Government.
It is expected that the procedures for implementing the temporal characteristics of the appeal mechanism will be closer to those of the Appellate Body. It is possible that the AB temporal characteristics can also be used. These characteristics include the appeal period of 60—90 days. It should be noted that this term commenced when the report of the panel was submitted to the Body21. However, it is fair to say that these terms were not always respected due to increase in the scope of work. Since the Appellate Body operated as a part of the DSB, the WTO documents
18 See: Million dollar cases. Head of the Department of the Ministry of economic development — about claims in the WTO. Available at: https://rg.ru/2019/05/13/majorova-rossiia-perestala-doveriat-inostrannym-iuristam-spory-v-vto.html (accessed 07.02.2020). (In Russ.)
19 See: DS554: United States — Certain Measures on Steel and Aluminium Products. 2019. Available at: https://www.wto. org/english/tratop_e/dispu_e/cases_e/ds554_e.htm (accessed
14.05.2019).
20 See: The Cabinet of Ministers is studying the issue of Russia's Accession to the Temporary Appellate Mechanism of the WTO — Ministry of Economic Development of the Russian Federation. Available at: https://mfd.ru/news/view/?id=2336770 (accessed
06.02.2020).
21 See: Trunk-Fedorova M. P. The appellate body of the World
Trade Organization: prospects for development. International Justice, 2018, no. 1 (25), p. 112—121. (In Russ.)
also stipulated the term for acceptance or rejection of the appeals report by the Dispute Settlement Body. It took 30 days22.
Apparently, the reason for the forced termination of the work of the DSB was the antagonism from the USA. According to the German media (Der Spiegel), the entire WTO system may collapse, and the rules of world trade will cease to apply de facto. The USA side sets out a number of requirements for the functioning of the DSU's Appellate Body. In the opinion of the United States, during the proceedings the rights and obligations of the parties are not strictly monitored as well as the deadlines for the proceedings are not kept. There is a claim against China and other states regarding their self-declared status of a State in the WTO. In this sense, during the following WTO public forum in Geneva, an alternative statement was voiced that it may be possible that participating countries could organize an Appellate Body without the United States participation. This is a debatable option, but the US representative admitted it it. The trade community of countries would have to resolve these issues eventually without coordination with the United States.
To a larger extent, the effectiveness of the WTO in regulating global trade depends on the capacity of the Dispute Settlement Body. In this sense, the decision on the dispute "Russia — Measures Affecting the Importation of Railway Equipment and Parts Thereof" initiated by Ukraine against Russia within the framework of the WTO, is symptomatic. Ukraine claimed that an irreparable damage was caused because of unlawful actions by Russian authorities concerning its railway industry. In addition, Ukraine indicated a decrease in the export of railway products to Russia from $1.7 billion in 2013 to 110 million in 2015. However, as a result of the dispute, the DSB recognized that systematic restriction of Ukrainian railway products on the Russian market does not exist. The Appellate Body upheld the conclusion of the arbitration group that the so-called "non-recognition" of certificates for individual railway products from Ukraine was a violation of the Agreement on Technical Barriers. However, in this part, the decision of the Appellate Body will not entail a change in the fundamental approaches to certification work, and the identified violations were eliminated by the Russian side in 2018.
The arbitration panel determined that the Russian certification bodies did not sufficiently inform the applicants about the reasons for the refusal to issue conformity certificates for Ukrainian railway products. However, the very reasons why unsafe products could not be certified were not called into question by the arbitration panel or the Appellate Body. Despite the fact that effectively the decision of the arbitration panel on all substantive claims of Ukraine remained unchanged,
22 See: Understanding the WTO: settling disputes. A unique contribution. Available at: https://www.wto.org/ENGLISH/ thewto_e/whatis_e/tif_e/disp1_e.htm (accessed 08.02.2020).
the Appellate Body revised the decision of the panel on a number of legal issues. It was noted that on many issues neither the arguments of the arbitration panel nor the arguments of both the parties are correct from the point of view of WTO rules. The Appellate Body action in the framework of this dispute once again confirmed the need to preserve the appeal instance in the structure of the WTO dispute resolution mechanism.
The appeal is the ultimate instance in the WTO dispute resolution process. Meanwhile, the WTO Appellate Body is not able to consider appeals from December 11, 2019. In this regard, already in January 2020, representatives of Finland, Denmark, Germany, the Netherlands, and the Czech Republic began to discuss the reform of the World Trade Organization in Stockholm. At the same time, not every member state believes that it is worth reforming the WTO. Some judgments are made about the possibility of creating an alternative union. This may be affected, for example, by a withdrawal from a US organization or a global economic recession, the likelihood of which is growing23.
It was believed that the prospects for reform processes in the WTO would be announced at the 12th WTO Ministerial Conference in Nur-Sultan, the capital of the Republic of Kazakhstan on June 8—11. It was expected that the ministers of trade of 164 countries participating in the WTO would come to the meeting, and the total number of participants would exceed 4—5 thousand people. Meanwhile, due to the threat of the spread of coronavirus, Kazakhstan canceled the ministerial conference of the World Trade Organization (WTO) in Nur-Sultan.
At the same time, the World Trade Organization (WTO) Secretariat has set up an expert group to monitor the impact of the 2020 pandemic on global commerce to prepare a regular report on the steps of the G20 countries that facilitate or limit global trade. The last time such report covered the period from mid-October 2019 to mid-May 2020. There the WTO predicted a fall down in world trade to 32% in 2020. This conclusion indicates a need to increase the effectiveness of the WTO. In particular, in June 2020, at a videoconference of trade ministers of the EU member states, Minister of Economics and Energy of Germany P. Altmayer said that in the face of the crisis, a "strong World Trade Organization" is needed. The position on the important role of multilateral trading organizations such as the WTO during the crisis turned out to be common. The emphasis is on increasing the transparency of trade restrictions and government support to improve the WTO, on the need for the medium and long term to develop rules for digital commerce, to restore the full function of the WTO in resolving disputes24.
23 See: [They] stopped to trust: What kills the WTO. Available at: https://www.gazeta.ru/business/2020/02/18/12966313.shtml (accessed 10.06.2020). (In Russ.)
24 See: To counter the crisis, a strong WTO is needed — the Minister of Economy of Germany. (In Russ.) Available at:
The last aspect is particularly important. Steps to protect key features of the multilateral trading system having been taken by the EU. The Council gave the go-ahead to the Multi-party Interim Appeal Arbitration Arrangement (MPIA). A new system that will allow the EU, together with other participating WTO members, to overcome the current paralysis of the WTO's Appellate Body and solve trade disputes amongst themselves. The new arrangement will be temporary, and based on Article 25 of the WTO Dispute Settlement Understanding (DSU). It mirrors the main features of the WTO appeal system. The MPIA will enable the participating members to benefit from a binding resolution of trade disputes and have the right to an independent and impartial appeal review of panel reports, as it is the case in the WTO system. The MPIA is meant as a temporary arrangement, as the EU remains committed to working with all WTO members to find a permanent and urgent solution to the paralysis of the WTO Appellate Body.
On 27 March 2020 the ministers of the following WTO member countries announced that they had decided, subject to the completion of their respective domestic procedures, to put in place the MPIA on the basis of a document negotiated among them: Australia, Brazil, Canada, China, Chile, Chinese Taipei, Colombia, Costa Rica, the European Union, Guatemala, Hong Kong, Mexico, New Zealand, Norway, Singapore, Switzerland, and Uruguay. The MPIA is open for any WTO member to join, and will become operational upon its notification to the WTO's Dispute Settlement Body which is expected in the coming weeks25. The Council approved the multiparty interim appeal arbitration arrangement through written procedure [Multi-Party Interim Appeal Arbitration Arrangement Pursuant to Article 25 of the DSU]26.
As part of the adjustment of the appellate mechanism, it is important to take into account that the character of decisions passed following the results of dispute settlement procedures in the DSB is not formal for the parties. If there is a violation of the provisions of the WTO Agreements by either party recognized, this party should bring then its legislation into line with the requirements of Organization and agree with other party
https://news.rambler.ru/other/44325855/?utm_content=news_ media&utm_medium=read_more&utm_source=copylinkhttps:// news.rambler.ru/other/44325855-dlya-protivodeystviya-krizisu-neobhodima-silnaya-vto-ministr-ekonomiki-frg/ (accessed 10.06.2020).
25 See: Council approves a multi-party interim appeal arbitration arrangement to solve trade disputes. Available at: https://www. consilium.europa.eu/en/press/press-releases/2020/04/15/council-approves-a-multi-party-interim-appeal-arbitration-arrangement-to-solve-trade-disputes/ (accessed 10.06.2020).
26 See: Multi-party interim appeal arbitration arrangement
pursuant to Article 25 of the DSU. Available at: https://www.
consilium.europa.eu/media/43334/st07112-en20.pdf (accessed
10.06.2020).
on compensation. As such, compensation may serve, for instance, a reduction of import tariffs on specific group of goods. Moreover, there are the restrictive measures for the state that does not comply with the recommendations of the DSB ("suspend concessions or other obligations").
Various researchers consider the dispute resolution mechanism in the DSB as a mixed one, allowing to combine diplomatic such as negotiations and consultations as well as judicial components. This understanding of the DSB also explains some of its features such as "the tailored nature of the decisions made, the deliberated kind of sanctions regime, and the general evolution of the role and types of agreements concluded within the WTO"27. At the same time, since the mechanism under consideration has the determined legal support in a form of agreements concretizing it, its legal nature becomes more evident. Furthermore, the very content of the legal support of the dispute resolution mechanism allows us to talk about its converging evolution, which cannot be confused with an amalgamation with the existing mechanisms in other international trade and economic communities, represented by international organizations, international regional agreements. Moreover, unlike the subject composition of disputes taking place in the EU Court, the Eurasian Economic Union (hereinafter — the EEU) Court, etc., the WTO does not allow the consideration of disputes between states and individuals, but only between WTO member states. This phenomenon characterizes the public international legal nature of the dispute resolution mechanism in the WTO.
Every WTO member state has a right to protect its interests through this mechanism. Moreover, with its help the member states can achieve compliance by other states with incurred obligations, as well as require cancellation of unjustified trade measures against them. To exercise one's rights it can be necessary and sufficient to understand the principles and procedures of dispute settlement mechanism, as well to study the practice of contestation of particular WTO provisions. Thus, participation of states in disputes as a third party can be substantial and useful. Although such participation assumes the presence of certain economic and even intellectual resources, it remains available for any state without prejudice to its capabilities and status.
Within the framework of the DSB mechanism, each WTO member state has an opportunity to join the ongoing dispute as a third party (in addition to the "complainer" — the initiator of the dispute and the defendant — the party applying the contested measures). For this purpose, it is important for the acceding country to have a substantial interest to the subject matter of the dispute. In order to exercise this right the country should
27 Shumilov V. M. Law of the World Trade Organization (WTO): textbook. Moscow, 2014. P. 158 (In Russ.); Ispolinov A. S. Towards the 20th anniversary of the WTO: a critical look at the practice of the dispute settlement body. Tradepolicy, 2015, no. 1/1, p. 10. (In Russ.)
notify the DSB before the establishment of the panel. Such notification does not require the special consent of the DSB to admit a country compelling to enter the dispute as a "third party". A country demanding to become a third party and notifying the DSB of this requirement automatically acquires the status and corresponding rights. Consequently, participation in disputes in the capacity of third party gives an opportunity to the countries to demonstrate the necessary activity. Particularly, their proposals should be certainly sent to the parties to the dispute and recorded in the report of the Panel. Besides, in case when the country that has joined the dispute as a third party finds her interests aggrieved, it can exercise its right to use normal dispute settlement procedures and individually file a request for consultation (section 4 of article 10 of the Understanding)28.
2. Russia's Participation in resolving trade disputes as a third party: analysis of competitiveness
The procedure of joining a trade dispute as a third party is specified in Art. 10 of the Agreement on rules and procedures for dispute resolution. The legal status of the country joining the dispute as a third party is also set up there. According to this Article, any WTO member country has the right to join the dispute, if it has a substantial interest. If the country wishes to participate in the dispute as a third party, it must notify its interest to the DSB. Article 10 of the Arrangements establishes the right of a third party to make only written statements at the stage of the work of the arbitration group, which are transmitted to the parties to the trade dispute and are recorded in the report of the arbitration group. It is possible to join the dispute at the stage of consultations or the creation of an arbitration group29.
Third parties receive statements from the dispute parties for examination at the first panel meeting. If a country, upon examining the applications, finds that a measure that is the subject of a trade dispute cancels out or reduces its benefits, it may submit an independent application to the DSB, which, if possible, will be transferred to the initial panel.
The experience of Russia joining trade disputes as a third party has displayed in more than 85 cases30. It is worth noting that the number of disputes to which Russia joins as a third party is growing rapidly. The subject of disputes is different. For Russia, the most
28 See: Understanding on rules and procedures governing the settlement of disputes. Annex 2 of the WTO Agreement. 15 April 1994. Available at: https://www.wto.org/English/Tratop_E/ dispu_e/dsu_e.htm (accessed 07.02.2020).
29 See: Narayanan S. Dispute settlement understanding of the WTO: Need for improvement and clarification. New Delhi, 2003. Pp. 44—46. Available at: http://www.icrier.org/pdf/wp117.pdf (accessed 07.02.2020).
30 See: Russian Federation and the WTO. Available at: https://www.wto.org/english/thewto_e/countries_e/russia_e.htm (accessed 13.01.2020).
important subjects are those connected with application of compensation and anti-dumping measures, technical barriers, investments and subventions. Researchers identify groups of such disputes based on their subject. The latter includes prohibition or licensing of imports; anti-dumping, compensation, special protective investigations and measures; intellectual property rights and tariffs31.
The interest of Russia is complex. This is, above all, a commercial interest. Secondly, it is the practice of studying the legal mechanism for trade dispute resolution in the system of Trade Organization (its material and procedural aspects) and accumulation of experience in assertion one's rights and interests. Finally, this is clarification of application of certain WTO rules and regulations.
Participation in disputes provides the opportunity for new WTO members, their lawyers, economists, specialists in the sphere of the foreign trade to receive the necessary experience, create national interdepartmental system in order to study the effects of disputes and communicate with the interested subjects of the business32.
As for statistics, Russia usually accedes to the disputes where one of the parties to it is China, the USA or the EU. The most important role in this issue play the disputes related to subventions and compensatory measures, antidumping, technical barriers and investments. As a rule, Russia takes part as a third party in the disputes related to agricultural goods, metallurgy and automobile industry33.
The WTO disputes, where Russia participated as a third party, can be conventionally classified by the subject, using a classification already developed in science.
1. Disputes about ban or licensing of import
An example of such dispute is the dispute DS495 — Import bans and testing and certification requirements for radionuclides. On 21 May 2015, Japan requested consultations with Korea. The dispute concerns import bans and additional testing and certification requirements regarding the presence of certain radionuclides subsequent to the accident at the NPP "Fukushima
31 See: Knobel A. Yu., Baeva M. A., Firanchuk A. S. Op. cit. P. 44.
32 See: Crosby D. Russia's participation in the WTO dispute resolution procedure to maintain and expand access to world markets. International Centre for Trade and Sustainable Development. 2015. (In Russ.) Available at: https://www.ictsd. org/bridges-news/MOCTti/news/yHacTHe-poccHH-B-npo^gy-pe-pa3pemeHHa-cnopoB-BTO-gM-coxpaHeHHa-H-pacmupeHHa (accessed 08.02.2020).
33 See: Baeva M. A. Trade Disputes within the WTO, in which Russia Participates, and the Mechanism for their Resolution. Russian Foreign Economic Bulletin, 2015, no. 3, p. 89. (In Russ.) Available at: https://cyberleninka.ru/article/n/torgovye-spory-v-ramkah-vto-v-kotoryh-uchastvuet-rossiya-i-mehanizm-ih-razresheniya (accessed 08.02.2020).
Daiichi" on the north-east coast of Japan in March 2011. The adopted measures influence on the import of products from Japan. Republic of Korea introduced a ban on imports of some types of fishery products from particular Japanese prefectures that were subsequently expended on all fishery products from these prefectures.
According to the plaintiff, the Republic of Korea has not complied with the transparency obligations set forth in Appendix B to the Agreement on Sanitary and Phytosanitary Measures (hereinafter — the SPS Agreement). Korea's announcements about the introduction of these measures in press releases published on governmental websites were not sufficient to fulfill the obligation, in addition the responses of Korean reference center to two queries from Japan for submission of documents and responses did not also comply with obligations of Korea under the SPS Agreement.
On 8 of February 2016 the panel was composed. The United States and the European Union, as well as Russia, Norway, India, China, Canada, Brazil, New Zealand, Chinese Taipei and Guatemala participated in the dispute as third parties.
The report of Panel was circulated to the member states only on 22 February 2018, because the Chair of the panel postponed the release of the report because of sophisticated procedural and factual nature of the case.
In its report, the panel reached the following conclusions:
Korea's 2011 additional testing requirements and 2012 product-specific import bans were not more trade-restrictive than required when adopted.
additional testing requirements from the year 2013 and the blanket import ban with respect to the 27-fishery products subject to Japan's claim, excluding Pacific cod from Fukushima and Ibaraki, were inconsistent with Article 2.3 of the SPS Agreement;
by maintaining the product-specific and import bans on the 28 fishery products from the 8 prefectures and the 2011 and 2013 additional testing requirements on Japanese products, Korea acted in contradiction of Article 2.3 of the SPS Agreement;
Japan failed to prove that Korea acted inconsistently with the provisions of Annex C and Article 8 of the SPS Agreement with respect to the adoption and maintenance of the 2011 and the 2013 additional testing requirements.
Korea acted inconsistently with Annex B and Article 7 of the SPS Agreement, with respect to the publication of all of the challenged measures. The fact, that Korea's SPS Enquiry Point failed to respond to Japan's follow-up query in conjunction with its earlier failure, is sufficient to establish that Korea acted inconsistently with the obligation specified in Annex B and Article 7 of the SPS Agreement.
On 9 April 2018, Korea appealed against certain issues of law and legal interpretations set forth in the panel report. It should be noticed that the term of dispute resolution had been repeatedly postponed because of
increased workload of the Appellate body34. The report with recommendation to bring the measures in line with the WTO provisions was adopted on 19 April 2019. At the session on 26 April 2019 the DSB adopted the report of the Appellate Body and the report of expert group with amendments introduced to the report of the AB. As early as 19 May 2019 Korea informed DSB that it is determined to implement DSB recommendations and decisions in the way that would be consistent with Korea's WTO commitments and that a reasonable period of time would be required for it35.
The accession into this dispute as the third party is determined for Russian Federation by a number of material and procedural factors. The point is that Russia also imposed a ban on fish import from Japan after the explosion on the nuclear power plant "Fukushima Daiichi". This ban has been in force since 2011 for 4 years and was lifted in July 2015. However, upon condition that the imported from the prefecture Fukushima products will have a special certificate proving the absence of radionuclides. In addition, seems to be significant the experience gained in applying sanitary and phytosanitary measures in accordance with WTO rules and regulations.
The Figure 1 demonstrates the dynamics of import purchases of CN FEA 03 group goods "Fish and crustaceans, mollusks and other aquatic invertebrates" from Japan implemented by countries participating in the arbitration. According to the data, it can be concluded that the situation connected with the accident consequences and the subsequent ban on the fish import led to a reduction in purchases of products from Japan to a minimum. However, because of the nature of the restriction, related to the region of the products origin, the data of international statistics do not allow us to see the effect of this geographical factor on import flows and to separate the effect of weakening of consumer demand and the effect of restrictive practices.
2. Anti-dumping, compensation disputes and disputes about special protective measures and investigations
Of particular interest in this group is the dispute DS414: China — Countervailing and anti-dumping duties on grain oriented flat-rolled electrical steel from the United States. The plaintiff claimed for violation of agreements about anti-dumping duties, subventions and countervailing measures. The USA primary complaint was that China initiated countervailing and anti-dumping duty investigations whereby it failed to provide protection of confidential information, as well as improperly determined the duties for the exporters, incorrectly identified the relationship between the damage to the industry and the alleged dumping import of goods.
34 See: DS495: Korea — Import Bans, and Testing and Certification Requirements for Radionuclides. 2019. Available at: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds495_e. htm (accessed 10.11.2019).
35 Ibid.
Figure 1. Import from Japan of CN FEA 03 "Fish and crustaceans, molluscs and other aquatic invertebrates" in million dollars in per year terms — all countries participating in the dispute (except Guatemala).
The source: UN Comtrade Database
Russia entered the dispute supporting the plaintiff because the impugned measures were being applied not only to the goods from the USA, but also to the goods from Russia. Therefore, Russia derived from the dispute not only the dispute resolution practice, but also obtained indirect benefits from its participation, because the conflict resulted in suspension of export duties36.
The data on the Figure 2 demonstrate that introduced restriction led to the nullification of Russian export of this sub position of goods to the PRC and the suspension of the duties, that were the subject of the dispute, did not affect restoration of Russian positions in the concerned market. The US strategy, acting as the plaintiff in the dispute, is exemplary in this proceeding. The country was not the key interested party in abolition of the countervailing and anti-dumping duties introduced by the PRC in this case — the highest export volumes in the period under consideration accrue to Japan, the Republic of Korea and the EU (the third parties to this dispute).
3. Disputes regarding export restrictions
In this regard, the dispute DS431 is of particular interest: China — Measures related to the exportation of rare earths, tungsten and molybdenum. The matter point
36 See: Knobel A. Yu., Baeva M. A., Firanchuk A. S. Op. cit. P. 57.
in this case is violation of GATT 1994 provisions, as well as China's Protocol of Accession to the WTO. China failed to properly unify and publish the export measures related to rare earths, tungsten and molybdenum. As for Russia, she participated at this dispute procuring its own benefit, because abolition of the restriction imposed by China had directly influenced Russian steel industry.
The dispute had been continuing from 2012 to 2014. (The Appellate Body report was prepared on 7 August.)
Figures 3—5 show the dynamics of import from China of metals, which fell under restrictive measures, that allow us to see, that the imposed bans had the greatest impact on molybdenum and rare earths purchases. It can be noticed that the biggest purchasers — the EU, the USA, Japan, Brazil and Russia, in particular, could not reactivate the former volumes of procurements from China. However, Russia gained an essential experience in questions of procedure of dispute resolutions.
4. Disputes related to intellectual property rights
Here can be highlighted the dispute DS458: Australia — Certain measures concerning trademarks, geographical indications and other plain packaging requirements applicable to tobacco products and packaging. It was announced about violation of GATT 1994, Technical Barriers to Trade (TBT) and Intellectual Property (TRIPS).
Figure 2. Export to China of good subposition CN FEA 72511 "Flat-rolled products of silicon-electrical steel, of a width of 600 mm or more, grain-oriented", from the disputing countries with statistics, in million dollars.
The source: UN Comtrade Database
Figure 3. Import from the PRC of goods of the item CN FEA 0801 "Tungsten and items made of it, including waste and scarp", in million dollars. The source: UN Comtrade Database
Figure 4. Import from the PRC of goods of the item CN FEA 0802 "Molybdenum and items made of it, including waste and scarp", in million dollars. The source: UN Comtrade Database
The case was that in 2012 Australia adopted a law package that stipulated the requirement to sell tobacco products in packages without trademarks, colors, design or logos. In this case, according to the plaintiff, intellectual property rights were violated.
The restrictive regime enacted by legislative provisions, in fact, could be more favorable for domestic producers than for foreign ones, and did not provide a sufficient protection against unfair competition. Following the consultations Cuba and Australia did not achieve the agreement. On the session on 25 April 2014 the DSB set up the panel. Because of large workload and complexity of this dispute the Chair of the panel informed the DSB that the panel is determined to submit its final report not later than on May 2017. On 21 September 2017, the Chair of the expert group notified the DSB that because of complexity of legal and factual issues that had arisen in this dispute, the panel expected to issue its final report for the parties by the end of the
third quarter of 2017. Only on 28 June 2018, this panel report was circulated to the WTO members37.
As shown in Figure 6, the cigarette-marking requirement of Australia did not influence the import reduction — stagnation touched among the leaders the EU and China, which are not the large suppliers. Remarkable is the Figure 7, which shows that during the dispute resolution period the plaintiff Cuba substantively increased the export volumes to Australia. In authors' opinion it represents that the introduced by Australia restriction, which is a sort of sales standard, did not have any foreign trade impact despite the litigation.
37 See: DS458 Australia — Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging. 2019. Available at: https://www.wto.org/english/tratop_e/dispu_e/ cases_e/ds458_e.htm (accessed 13.10.2019).
Figure 5. Import from the PRC of goods of the item CN FEA 280530 "Rare earths, scandium and yttrium in the pure state, in combinations and alloys", in million dollars. The source: UN Comtrade Database
Figure 6. Import to Australia of goods of the item 2402 "Cigars, cropped cigars, cigarillosand cigarettes from tobacco or its substitutes" from the largest countries participating at the dispute, in million dollars.
The source: UN Comtrade Database
It is worth mentioning that despite the fact that Russia joined the dispute as the third party, its economic interests were not affected in any manner because the country did not export tobacco products to Australia in the specified period. In this case Russia's particular interest was in receiving clarifications of aspects of intellectual property rights protection that were given in the course of proceedings.
5. Disputes regarding subventions, including different preferences
In this group, it can be highlighted the dispute DS456: India — certain measures relating to solar cells and solar modules. The plaintiff was the USA. According to the United States, the defendant violated the provisions of the GATT 1994, as well as a series of agreements related to investment measures, subventions and countervailing measures. India created more favorable regime for domestic components for solar cells and modules in 2013. The decision was passed by the panel and the report was circulated to the WTO Members on 24 April 2016. However, on 20 April 2016 India notified the DSB of its decision to appeal to the Appellate Body certain issues of law and legal interpretation. In addition, already in several months — on 16 September 2016, the report of the AB was circulated to the WTO members. India agreed to implement the requirements stipulated in the report. For implementation of recommendations and rulings set forth in the report the reasonable period of time equal to 14 months was established for India subject to approval by the USA38.
The data of the Figure 8 show that for the China, which is the leader in solar cells and batteries import, the restriction mattered in 2014 only. The data of the Figure 9, where another leading importers of this high-technology product are represented, indicate that 2013—2014 were problematic for all the countries. However afterwards trajectories of the countries differ: some countries such as Malaysia and Taiwan in principle saved and increased their foreign trade positions on the Indian market, the developed countries and the groups of developed countries — the EU, USA (the plaintiff in the dispute) and Japan — had rather lost their competitive position. However, since we are talking about restrictions in the sphere of foreign investments, it can be assumed that the interests of capital in this industry have suffered less, since imports can be carried out from third countries; or companies in the countries under consideration could make the necessary investments in Indian production capacities.
Russia's interest in the dispute comes from the fact that the overall share of Russian export to India of this sort of goods is substantial and the export environment is favorable, as can be seen on the Figure 10, despite the fact that Russia remarkably suffered from this restriction in 2014. However, the fact of increase in sales of
38 See: DS 456 India—Certain Measures Relating to Solar Cells and Solar Modules. Available at: https://www.wto.org/english/ tratop_e/dispu_e/cases_e/ds456_e.htm (accessed 13.10.2019).
ambitious high-tech products associated with renewable sources of energy in the dynamic and capacious Indian market proves practicability of Russia's acceding to the proceeding as a third party.
6. Disputes concerning tariffs
To the WTO tariff disputes, where Russia is a third party, relates for instance the dispute DS492: the EU — Measures affecting tariff concessions on certain poultry meat products. The plaintiff is China. The latest announced that violation of GATT 1944 took place. The core of the subject was that the EU introduced tariff quotas for Brazil and Thailand. These quotas concerned products produced from meat and poultry meat. The dispute was settled following the results of the panel report adoption. On 30 May 2019, China and the EU informed the DSB that they reached the mutual agreement. It implied that the European Union would grant the access to the market for three processed poultry products from China in the form of tariff quotas39.
According to the data of the Figure 11, China is in fact the key interested party in this proceeding: Brazil dominates among importers of finished and preserved products from poultry and other products and canned food from poultry (the subitems also include goods from duck meat).
However, its share decreases while China had suffered from the implemented quota, but as result of successful proceeding, the sales volume of the country in the European market "had recovered". The Figure 12 shows that Argentina and the US, which were third parties to a dispute, also benefited from the dispute.
Because the EU is the trading partner of Russia, for our country especially interesting was to study procedural and material issues of the dispute resolution where the EU participated. In particular, for understanding the following issues: how to change bound tariffs, how to conduct necessary negotiations and so on. Russia's disappointment is justified, as it is shown on the Figure 13, the losses affected the item 160239 "Other products and canned food from poultry" — the indicators of 2014 are far from the recovery.
Conclusions
In the contemporary context, Russia regularly faces the necessity to protect its interests by means of participation at the WTO disputes, also acting as the third party. The capability of adequate participation of Russia in the dispute resolution process is directly affected by several subjective and objective factors.
Firstly, this is the lack of experience in participating in trade conflicts. Certainly, this problem is the question of time. Nowadays, Russia actively participates at dispute resolution as a third party, thereby forming the necessary
39 See: DS 492 European Union — Measures Affecting Tariff Concessions on Certain Poultry Meat Products, 2019. Available at: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds492_e. htm (accessed 13.10.2019).
Figure 7. Import from Cuba to Australia of goods with the item 2402 "Cigars, cropped cigars, cigariUos and cigarettes from tobacco or its substitutes" from the largest countries participating at the dispute, in million dollars.
The source: UN Comtrade Database
Figure 8. Import of goods with the item 854140 "Semiconductor photosensitive devices, including photovoltaic cells, whether or not assembled in modules or made up into panels; light emitting diodes" to India, in million dollars.
The source: UN Comtrade Database
250
2012 2013 2014 2015 2016 2017
EU-28 Japan — -Malaysia Other Asia, nés — — — USA
Figure 9. The import of goods with the item 854140 "Semiconductor photosensitive devices, including photovoltaic cells, whether or not assembled in modules or made up into panels; light emitting diodes" to India: the leading countries, except
China, in million dollars. The source: UN Comtrade Database
3,5 3
*
2,5
2
1
0,5 0
2012 2013 2014 2015 2016 2017 ......Russian Federation
Figure 10. The import of goods with the item 854140 "Semiconductor photosensitive devices, including photovoltaic cells, whether or not assembled in modules or made up into panels; light emitting diodes" to India: Russia, in million dollars.
The source: UN Comtrade Database
practice, and this is the adequate and advanced strategic line. It should be noted, that this practice is not in vane.
So, in 2018 Russia, acting as a defendant, finally had to its credit some won cases, among which were the disputes with a quite complex neighbor of Russian Federation — Ukraine. One of the disputes was being arbitrated upon an initiative of Ukraine40. Russia had
40 See: DS499: Russia — Measures affecting the importation of railway equipment and parts thereof, 2019. Available at: https://
been charged with the fact that Ukrainian railway products systematically "were" not admitted to the Russian market. Formally, it is so. Violation of this kind is considered very grave for the WTO. Nevertheless, there were compelling reasons for this kind of restrictions from Russia's side towards Ukrainian locomotives. At any rate, the Russia could not perform
www.wto.org/english/tratop_e/dispu_e/cases_e/ds499_e.htm (accessed 17.12.2019).
Figure 11. Import of goods with the item 160232 "Finished and preserved products from poultry" (Gallus Domesticus) and 160239 "Other products and canned food from poultry" in the EU, in million dollars: Brasil and China.
The source: UN Comtrade Database
3 2 1 0
2014 2015 2016 2017 2018
Argentina — — — USA
Figure 12. Import of goods of the item 160232 "Finished and preserved products from poultry" (Gallus Domesticus) and 160239 "Other products and canned food from poultry" in the EU, in million dollars: Argentina and the USA.
The source: UN Comtrade Database
the on-site inspection of products compliance with certification requirements. The chances to win the case were low... However, maybe thank to experience of participation in disputes as a third party, Russia could present its position competent and carefully argued41.
41 See: Russia — Measures Affecting the Importation of
Railway Equipment and Parts There of Report of the Appellate
Body (WT/DS499/AB/R). Available at: https://www.economy.gov. ru/material/file/6cec657781d71cb25538ada73b880f4e/DS499.pdf
(accessed 10.06.2020).
In reality, in frames of resolution of trade disputes, a special attention is paid to procedural aspects and, what is most crucial, to preceding decisions on similar cases. In the instant case, Russia managed to use the acquired experience, even a limited one, and provide evidence, that the introduced restrictions were not aimed to prevent the flow of imports from Ukraine. The dispute was being considered during 3 years. The result was the victory of Russia, the value of which for our state can be estimated not so much by economic as by political background. Accordingly, on February 28, 2020, the WTO Dispute
Figure 13. Import of goods of the item 160232 "Finished and preserved products from poultry" (Gallus Domesticus) and 160239 "Other products and canned food from poultry" in the EU, in million dollars: Russia.
The source: UN Comtrade Database
Settlement Body (DSB) approved the reports of the Appellate Body and the arbitration panel on the dispute initiated by Ukraine versus Russia in the framework of the WTO "Russia — Measures Affecting the Importation of Railway Equipment and Parts Thereof'. Thus, a final decision was made in a dispute between Russia and Ukraine, lasting from October 2015. According to the results of the appeal filed by Ukraine, the decision of the arbitration panel, in fact, remained unchanged. All economically significant claims of Ukraine against the actions of Russian certification bodies are recognized as unfounded42.
Another dispute (here Russia was the initiator) was related to anti-dumping duties43. Ukraine imposed them on import of Russian ammonium nitrate. As result, the claims raised by the Russian side were acknowledged as justified by the WTO panel. The Appellate Body confirmed the win of Russia in the dispute DS493 on 12 September 201944. Another dispute won by Russia was with the EU in the role of defendant and is linked to the
42 See: The WTO Dispute Settlement Body did not find any significant violations in Russia's restrictions on Ukrainian railway products. Website of the Ministry of Economic Development of the Russian Federation. (In Russ.) Available at: https://www.economy.gov. ru/material/news/organ_po_razresheniyu_sporov_vto_ne_nashyol_ nikakih_sushchestvennyh_narusheniy_v_ogranicheniyah_rossii_ na_ukrainskuyu_zheleznodorozhnuyu_produkciyu.html (accessed 10.06.2020).
43 See: DS493: Ukraine — Anti-Dumping Measures on Ammonium Nitrate, 2019. Available at: https://www.wto. org/english/tratop_e/dispu_e/cases_e/ds493_e.htm (accessed 17.12.2019).
44 Ibid.
"Third energy package"45. Despite different evaluation approaches of Russian and foreign experts towards the aforementioned dispute, nonetheless the impartiality of the DSB can be observed46.
Secondly, this is the lack of qualified specialists that could efficiently represent the state both in the process of negotiation and on the stage of dispute resolution in the DSB. It should be borne in mind that the achievement of success in the dispute depends on the quality of preparatory and everyday work of a large amount of specialist in this sphere. Among them there are lawyers and economists, as well as experts, negotiators, and so on. However, their number is not sufficient today in Russia. The shortage of specialists also explains the delay in the consideration of disputes stipulated in the agreements. Often, the panel and the Appellate Body explain the violation of the deadlines precisely by the lack of specialists and the complexity of the dispute under consideration47.However, the authors of the article do not
45 See: DS476: European Union and its Member States — Certain Measures Relating to the Energy Sector, 2019. Available at: https://www.wto.org/english/tratop_e/dispu_e/cases_e/ds476_e. htm (accessed 17.12.2019).
46 See: Popov A. The case for the billions, that Russia has learned to win disputes in the WTO. (In Russ.) Available at: https://www. forbes.ru/biznes/366289-dela-na-milliardy-rossiya-nauchilas-vyigryvat-spory-v-vto (accessed 20.12.2018).
47 See: DS499: Russia — Measures affecting the importation of railway equipment and parts thereof. Available at: https://www. wto.org/english/tratop_e/dispu_e/cases_e/ds499_e.htm (accessed 24.08.2020); DS512: Russia — Measures Concerning Traffic in Transit. Available at: https://www.wto.org/english/tratop_e/ dispu_e/cases_e/ds512_e.htm (accessed 24.08.2020).
set the task of improving the qualifications of Russian lawyers in international affairs through comprehending the content of this article.
Considering international experience, one of the methods to resolve this problem could be recruiting of foreign specialists. Of course, the involvement of foreign specialists could be an auxiliary means in solving the highlighted problems. In fact, Russia won the disputes using its own source of legal specialists, while the opposite party was using the source of the leading foreign legal companies. This concern, for instance, the lately won dispute "Russia v. Ukraine" on transit and railway wagons. At the same time involvement of foreign staff is not excluded by the contemporary concept of Russian migration policy, according to which attraction of highly skilled professionals is actually considered as one of the sources of formation of human capital. At the same time formation of mechanisms of such involvement is considered as one of the strategic tasks48.
Thus, the professionalism of lawyers and economists is especially important, precisely because the key to success is the proficient argumentation adducing of one's position and the perfect knowledge of the WTO procedural rulings of dispute resolutions.
Therefore, for the comprehensive participation of the state in the WTO, it is essential to use all the instruments provided to protect the interests of states, including also the WTO system of trade dispute resolution. The key element of this mechanism is its clear regulation, what, however, does not deprive this mechanism of the necessary flexibility.
Summing up, it is essential to emphasise the importance of participation of Russia in various disputes in the role of third party. The WTO has intentionally created a framework that enables to become a participant (a third party) to almost any economic dispute regardless of whether this conflict directly concerns the interests of the particular state or just appears "curious" in the context of material and procedural legal provisions applied therein. Russia, which has just recently acceded the WTO, can be regarded as its active participant because for several years it succeeded to participate in disputes both on the side of the plaintiff and defendant, and as a third party. As a rule, Russia participates in disputes regarding the EU, the USA and China that are its main economic competitors and trade partners. At some trade disputes, Russia shows initiative and underlines, that one or another policy of the WTO member affects its economic and even politico-economic interests.
48 See: Decree of the President ofthe Russian Federation No. 622 of October 31, 2018 "On the Concept of the state migration policy of the Russian Federation for 2019—2025". (In Russ.) Available at: https://www.garant.ru/products/ipo/prime/doc/71992260/ (accessed 17.12.2019).
Russia's involvement as a third party is linked to its trade policy. Indeed, any state policy, including trade one, has a legal basis and the regulatory legal consolidation in regard, which makes it possible to refer to the legal nature of the dispute resolution mechanism in the WTO as well as to draw attention to the importance of the material and procedural aspects of this mechanism along with strategic trade and economic tasks of each participant in the dispute.
The feature of Russia's participation in disputes as the third party is not only its substantial interest thereto, but also the need to elaborate and understand the methodology of certain investigations in the framework of implementation of the WTO principles and the application of its rules and regulations in certain situations. Indeed, the USA and the EU, that have considerably more experience in international disputes, have such practice.
This practice Russia can and should take over in order to competently defend its trade and political preferences. The experience gained can provide a better understanding of principles and rules of international trade within the global community. Besides, demonstration of Russia's active position in the WTO dispute resolution could help it to use all the advantages provided by the WTO to the maximum possible extent.
It seems obvious that the necessity to reform the mechanism for resolving trade disputes in the WTO is ripe. Article 10 of the Understanding on rules and procedures governing the settlement of disputes has a blurred framework and a narrow point-by-point regulation of third-party rights. It may be necessary to extend the rights of third parties by adding amendments to article 10 of the WTO Agreements. In this sense, it is advisable to allow a third party to receive information and documents at its request, to secure the right to attend the main meetings of the third-party group, and not only at the first one without the right to comment on the interim report of the third-party group. Article 10 of the WTO Agreements states that a third party may only make written statements to the dispute resolution authority, excluding the possibility of oral statements. We believe that this provision infringes on the rights of a third party and violates the principle of competition between the parties. In addition, the content of the WTO Agreements assumes the participation of a country as a third party only if it proves a significant commercial interest in the case. However, there is no mechanism for evaluating "a substantial trade interest", which may lead to unjustified refusals to participate in the consideration of a trade dispute as a third party. As a recommendation, it can be also suggested to provide the possibility of being included in a trade dispute as a third party at the stage of appeal procedures, since at the stage of consultations and the creation of an arbitration group it is not always possible to understand whether a country has a significant trade interest.
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Information about the authors
A. S. Loginova, associate professor at the Department of constitutional and administrative law of the National Research University "Higher School of Economics", candidate of legal sciences
I. V. Mikheeva, head of the Department of constitutional and administrative law of the National Research University "Higher School of Economics", doctor of legal sciences
M. L. Gorbunova, head of the Department of world economy and customs affairs of the Lobachevsky State University of Nizhny Novgorod, doctor of economic sciences. ResearcherlD: H-1580-2018
Информация об авторах
Анастасия Сергеевна Логинова, доцент кафедры конституционного и административного права Национального исследовательского университета «Высшая школа экономики», кандидат юридических наук, доцент
Ирина Вячеславовна Михеева, заведующая кафедрой конституционного и административного права Национального исследовательского университета «Высшая школа экономики», доктор юридических наук
Мария Лавровна Горбунова, заведующая кафедрой мировой экономики и таможенного дела Национального исследовательского Нижегородского государственного университета им. Н. И. Лобачевского, доктор экономических наук. ResearcherlD: H-1580-2018
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