US May Defy WTO Over Steel Tariffs, Report Suggests

by Glen Shapiro, LawAndTax-News.com, New York

08 April 2003

Following the recent World Trade Organisation (WTO) ruling over US steel tariffs, a report in the US National Law Journal last week suggested that the country may choose to ignore the international trade body's decision, with potentially devastating consequences for the resolution of international trade disputes.

In a growing number of instances, according to the report, countries are choosing not to comply with WTO rulings - since the organisation was launched seven years ago, there have been at least ten such cases, which accounts for about 14% of all final decisions so far. Speaking to the NLJ Gary Horlick, international trade practice partner at Washington-based law firm Wilmer, Cutler & Pickering, observed that:

'The whole WTO dispute resolution process is breaking down...eventually, as cases like this mount up, the dispute resolution mechanism collapses. You can't have a system where people don't comply. It won't be credible.'

Experts have warned that if countries such as the United States, which is by far the biggest offender in terms of non-implementation, do not begin to abide by the WTO's decisions, the international trade community faces a return to unilateralism.

'You'd go back to a wild West cowboy mentality, where might makes right,' William Barringer, partner in the international trade department of Wilkie Farr & Gallagher's Washington office explained, continuing:

'That would ultimately adversely affect the flow of international trade, which would adversely affect the world economy.'

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