Dispute Settlement Court Critical for CSME

Marcia Forbes PhD

The dialogue regarding how best to arrive at a dispute settlement court to facilitate effective operation of the Caribbean Single Market and Economy (CSME) in light of the recent ruling of the Privy Council, should now be on in earnest. There is no sensible way to avoid the establishment of a properly constituted dispute body if the CSME is to appropriately function within its anticipated parameters. Without an authoritative body, preferably with the force of law, once a trade dispute arises, there is likely to be mayhem, confusion and as we say in Jamaica ‘bad blood and vexation’ among the members involved in the dispute.

The situation as existed within the World Trade Organization (WTO) prior to the 1979 inauguration of its Dispute Settlement Understanding (DSU) is somewhat instructive. Prior to the DSU, disputing members of the WTO were known to drag their feet or ignore rulings against them since those who so ruled lacked the legal ‘teeth’ to institute their rulings. This frequently resulted in stalemates and paralysis. Additionally because several WTO Codes had their own dispute settlements, this led to an untidy, cumbersome situation. To a very large extent the 1979 Dispute Settlement Understanding, along with its later improvements, helped to change all that.

The DSU is regarded as a critical element in providing security and predictability to the multilateral trading system. A properly constituted Caribbean Court of Justice (CCJ) would serve a similar role for the CSME. Although the DSU, albeit not a court,  may be criticized for being very detailed, legalistic and rule-conforming, it  is this which helps to make it more predictable, corruption-proof and devoid of back-room political deals. While one would never denigrate the role of diplomacy and dialogue, the increasing complexity of world trade negotiations makes having clearly established rules and a court specifically mandated to deal with deviations an attractive and productive option.

It is this adherence to rules and having them applied equally to rich and poor, large and small countries which saw little Antigua able to defend itself against the world’s only super-power, United States of America with respect to on-line gambling. Toward the end of 2004, the WTO Dispute Panel ruled in favour of Antigua.

The WTO’s Dispute Settlement System is now faced with difficult questions in this time of fundamental change in economic structures. This is accompanied by changing attitudes to the role of Government coupled with issues of sovereignty. Tension between the role of nation-states and that of international or regional institutions to facilitate trade is more likely than not. It would serve us well in the Caribbean to monitor how the WTO answers these questions as we wrestle with our own challenge of creating a Caribbean Court of Justice, whether only to deal with trade issues or wider matters.

Regional trade reportedly comprises only a minor aspect of  the trade for the main drivers of the CSME, accounting for only about 1.8% of Jamaica’s trade, 7.4% of Trinidad’s and 9.1% of Barbados’. Yet even with these relatively small percentages, dispute is imminent. Agriculture is one potential area of contention. Within CARICOM several countries continue to maintain trade barriers with respect to agriculture. This is done ostensibly for health reasons so as to prevent the spread of plant infections. In reality, however, the restrictions seem to be mainly protectionist consequent on the similarity of agricultural products among the various CARICOM member territories. When this is fully reviewed and the removal of non-tariff barriers insisted on, some member territories will not be happy.

It is for situations like this and other similarly touchy ones which will evolve within the context of CSME why a legally constituted dispute settlement system is so important.