A critical review of cross-retaliation as a justiciable countermeasure with reference to the <i>EC– bananas III (article 22.6 – EC)</i> case

Abstract

The World Trade Organisation (WTO) is the international legal personality which regulates the World Trading System. It is governed by a set of six covered Agreements which are divided into sectors and subsectors. A dispute is said to have arisen in the WTO when the industry of a member-state is affected by measures taken by another member-state. A complaint lies before the Dispute Settlement Body (DSB) of the WTO which upon conclusive hearing of a matter comes up with recommendations which the defaulting party has to implement. In the face of non-compliance the erring party may be subjected to countermeasures which may be within the sector where violation occurred. But the aggrieved party has the discretion to suspend concessions or obligation in another sector but under the same agreement where violation occurred or even to suspend under another covered agreement. Cross-retaliation is basically about the ability of a party to counter adverse measures by suspending obligations or other concessions in another sector or under another covered agreement, different from where the nullification and impairment occurred. The thrust of this article is to unravel the truth behind the wide discretions afforded the aggrieved party in relation to cross-retaliation as a countermeasure and to critique the extent of its justiciability. These aims are achieved through an appraisal of the provisions of the Dispute Settlement Understanding (DSU) and a critique of the EC Bananas III case² which is a locus classicus case in this regard. It further critiques the position of the law and how relevant it is to reality and then makes recommendations for further improvements.

Keywords: Cross-Retaliation, Justiciability, EC-Bananas III, Countermeasure