South Africa in WTO dispute settlement

South Africa and African countries generally have not taken to using the Dispute Settlement Understanding (DSU) to enforce their rights in the World Trade Organization (WTO). It is speculated that African countries have difficulties participating in the institutional structures of the WTO generally, and in the dispute settlement mechanism specifically.

The constraints faced by African countries include human resource constraints, financial constraints, which often lead to inability to defend interests, and a fear of backlash from the world’s larger trading powers, including advanced developing countries. These constraints are particularly notable in the multilateral trading system, which is becoming more complex. It is not only the complexity of the substantive international trade law, but also the complexity of the litigation process that makes WTO dispute settlement proceedings a daunting task for many African countries. In view of this, no African country has ever requested consultations against another WTO Member. This includes South Africa.

A serious and credible threat facing South Africa in respect of its WTO rights and obligations is the possibility of another WTO Member initiating a dispute and for South Africa to have to enforce its rights from the back foot as it where. There is no legislation or even informal policy that dictates how disputes to enforce South Africa’s WTO rights and obligations are brought or defended. In assessing this risk it is somewhat alarming that South Africa has however had three requests for consultations made against it between 1995 and 2008. The countries involved in these cases were India, Turkey and Indonesia. None of these matters proceeded to the establishment of a panel. In June 2012 a request for consultations was received by South Africa from Brazil. This is then the fourth consultation request that has been received by South Africa in the WTO era and this dispute is ongoing at the time of writing. There are thus two BRICS countries that have cited complaints against South Africa, being India and Brazil.

It is recommended that when South Africa does take up participation that the cases be prepared as a joint public sector private sector partnership. The overarching principle should be to firstly treat the disputes on the merits but to initially do so with the added strategic objective of using the participation as a training platform with the view to creating an enduring capacity base that can be used in other WTO disputes. This said, South Africa is partly on the back foot and needs to put up a defence at short notice. This is because our capacity is low due to a lack of prior participation in WTO dispute settlement. This should make private sector support an added attraction for the government.

Hilton Lambert has prepared a paper entitled ‘The BRICS, South Africa & Dispute Settlement in the WTO’ which explores these issues in more detail.

A full version of the paper is available here.