Non Violation Nullification of Benefit Claims: Opportunities and Dilemmas for Australia in the WTO Dispute Settlement System

AUSTRALIAN PERSPECTIVES ON WTO DISPUTE SETTLEMENT, Bray, M., ed., pp. 123-129, Australian Department of Foreign Affairs and Trade, 2009

21 Pages Posted: 25 May 2009 Last revised: 27 May 2009

See all articles by Thomas Alured Faunce

Thomas Alured Faunce

Australian National University

Warwick Neville

affiliation not provided to SSRN

Anton Wasson

Independent

Date Written: May 24, 2009

Abstract

This paper critically analyses existing WTO Dispute Settlement rules and experience to raise awareness amongst industry, government and relevant trade law practitioners of the value in developing expertise about initiating and defending non-violation nullification of benefits (“NVNB”) claims and proceedings. NVNB claims directly arise in a WTO setting under Article 26 of the Dispute Settlement Understanding (“DSU”), Article XXIII of the General Agreement on Tariffs and Trade (“GATT1994”), Article XXIII of the General Agreement on Trade in Services (“GATS”) and Article 64 of the Trade-Related Intellectual Property agreement (“TRIPS”).

NVNB claims represent one of the potentially most valuable, yet also potentially threatening, areas of WTO Dispute Settlement jurisprudence for the Commonwealth government, for Australian exporters and other companies whose competitive position may be affected by the trade restrictive actions of foreign governments. Under NVNB provisions, the full range of dispute resolution mechanisms may be invoked, whether or not a breach of any specific trade rule is alleged, provided a “reasonably expected” “benefit” accruing under the relevant trade agreement, has been “nullified or impaired” by a “measure” applied by a WTO member.

We will examine the contentious tactical role of the WTO DSU NVNB claims and proceedings in converting the ‘constructive textual ambiguities’ of strongly contended trade agreement provisions, into binding rules. We shall also consider the steps that need to be taken to prepare to initiate such claims and to defend against them.

This Chapter begins by outlining the origins and place of NVNB provisions in the DSU, GATT, GATS and TRIPS. It then discuses the relevant WTO NVNB jurisprudence and considers some opportunities and dilemmas presented by such claims in the context of the WTO DSU and Australia’s long term pubic policy objectives. It concludes by offering some options for strategically utilising NVNB claims and defences.

Keywords: WTO, dispute settlement, free trade agreements, non-violation nullification of benefits, innovation, constructive ambiguity

JEL Classification: O31, H41, I18, M14, L65, K31

Suggested Citation

Faunce, Thomas Alured and Neville, Warwick and Wasson, Anton, Non Violation Nullification of Benefit Claims: Opportunities and Dilemmas for Australia in the WTO Dispute Settlement System (May 24, 2009). AUSTRALIAN PERSPECTIVES ON WTO DISPUTE SETTLEMENT, Bray, M., ed., pp. 123-129, Australian Department of Foreign Affairs and Trade, 2009. Available at SSRN: https://ssrn.com/abstract=1409504 or http://dx.doi.org/10.2139/ssrn.1409504

Thomas Alured Faunce (Contact Author)

Australian National University ( email )

Canberra, Australian Capital Territory 0200
Australia
61 2 61253563 (Phone)

Warwick Neville

affiliation not provided to SSRN

Anton Wasson

Independent

No Address Available

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