The WTO Reaches 500 Requests for Dispute Settlement
Marcus Sohlberg
The World Trade Organization (WTO) reached a milestone on November 10 when Pakistan filed the 500th request for trade consultation since the organization’s inception in 1995. A consultation request is the first step to initiate formal trade dispute settlement at the WTO. Not all consultations, however, reach formal litigation. Out of the 500 requests, about half proceeded to formal litigation, which some argue is a testament to the WTO’s ability to resolve trade disputes efficiently through consultations without having to enter the litigation phase.
Data compiled by the WTO show the following results from the 500 requests for consultation to date:
• 110 disputes were resolved through consultation/bilaterally or withdrawn;
• 282 disputes proceeded to litigation;
• The compliance rate with WTO dispute settlement rulings was very high (about 90 percent).
Historically, the main users of the WTO dispute settlement system are the United States and the European Union, but in more recent history China, Indonesia, Russia and Japan also are among the most frequent participants.
Bill Updating The Buy American Act Makes The Rounds In Congress
Quinn Bailey & Shannon Doyle Barna
In October 2015, two Congressmen proposed legislation known as the 21st Century Buy American Act which, if passed, would amend the Buy American Act. Congress enacted the Buy American Act in 1933 to create a preferential structure for American production and manufacturing in the fulfillment of government contracts. It required that all products purchased by the government be manufactured in the United States, with few exceptions. Introduced by Senator Chris Murphy (D-CT) in the Senate (S. 2167) and Representative David Cicilline (D-RI) in the House of Representatives (H.R. 3670), the new bill is intended to close the most commonly exploited exception in the legislation—the outside-the-country exception, which in 2004 accounted for 83 percent of the value of excepted contracts.
This bill would forbid the use of the outside-the-country exception unless (1) a cost analysis demonstrates that the items to be acquired would be more than 50 percent more expensive for the U.S. government if acquired from a firm manufacturing the items in the United States, or (2) the item is “needed urgently for national security purposes.” It also increases the composition requirement for the Buy American Act, requiring that 60 percent of a product’s content be American manufactured, up from 50 percent. Additionally, the bill requires a jobs impact analysis be conducted in order to receive a public interest waiver.
The Senate version of the 21st Century Buy American Act has been referred to the Senate Committee on Homeland Security and Governmental Affairs. The House version has been referred to a number of committees, including the House Financial Services Committee and the House Oversight and Government Reform Committee.
The United States and South Africa Work to Resolve Export Barriers
Kate Benner
There were several developments during November in the ongoing dispute between the United States and South Africa over South African’s treatment of agricultural imports from the United States. On November 5, President Obama notified Congress and South Africa that the U.S. would suspend South Africa’s benefits under the African Growth and Opportunity Act (AGOA), citing South Africa’s failure to eliminate barriers to trade and investment. This was in response to the findings of an out-of-cycle review mandated by Congress in the Trade Preferences Extension Act of 2015. The suspension will become effective 60 days after the announcement, unless South Africa makes specific improvements to American poultry, pork, and beef access. South African Trade Minister Rob Davies stated that the outstanding issues and the suspension could be resolved within the 60 day window. On November 17, the United States and South Africa took one such step and signed a veterinary trade protocol to resume imports of 65,000 tons of chicken a year. It remains to be seen if South Africa will meet the other benchmarks to avoid suspension.
