Canada: Canada And The EU Agree To WTO Dispute Settlement Work-Around

Last Updated: July 31 2019
Article by Cyndee Todgham Cherniak

On July 25, 2019, Canada and the European Union issued a joint statement confirming they had reached an Interim Appeal Arbitration Arrangement to resolve World Trade Organization ("WTO") disputes (at the Appellate Body stage). Starting on December 10, 2019, the Appellate Body will be unable to hear new appeals due to the United States blocking appointments of new Appellate Body members. The WTO Appellate Body normally has seven members and currently is down to three members. Two of the remaining WTO Appellate Body members' terms expire in December. WTO Appeals are heard by three WTO Appellate Body members.

It is important to recognize that there is no problem with first stage appeals before the Dispute Settlement Body ("DSB"). Countries first have consultations when there is a dispute and if they cannot resolve the dispute, then the complaining members will file a dispute with the DSB.

Canada and the EU have agreed on an interim appeal arbitration arrangement based on existing WTO rules to resolve disputes after a DSB decision has been issued. The Interim Appeal Arbitration Arrangement will apply to only to disputes between the EU and Canada (but not other countries against Canada or the EU) in the event the Appellate Body is unable to hear appeals. The Interim Appeal Arbitration Arrangement will remain in effect until the Appellate Body is fully operational.

Canada and the EU will resort to arbitration under Article 25 of the Dispute Settlement Understanding ("DSU") as an interim appeal arbitration procedure if the Appellate Body is not able to hear appeals of DSB reports in any future dispute between Canada and the European Union due to an insufficient number of Appellate Body members. Under the appeal arbitration procedure, Canada and the European Union intend to replicate as closely as possible all substantive and procedural aspects as well as the practice of Appellate Review pursuant to Article 17 of the DSU including the provision of appropriate administrative and legal support to the arbitrators by the Appellate Body Secretariat.

Appeals will be heard by three former members of the Appellate Body, serving as arbitrators pursuant to Article 25 of the DSU. The arbitrators will be selected by the WTO Director-General from the pool of available former members of the Appellate Body. Two nationals of the same Member may not serve on the same case.

Canada and the EU have agreed to enter into an Appeal Arbitration Agreement within 60 days of the establishment of a DSB panel (that is, before the DSB decision is even issued) and notify the WTO secretariat of the agreement. The Appeal Arbitration Agreement will ensure that if Canada files a trade dispute against the EU, or vice-versa, both WTO members can be sure that the case can be adjudicated, appealed and settled in a ruling that both sides will respect as binding and final.

Where other WTO members file disputes relating to the same matter as the dispute between Canada and the EU, Canada and the EU envisage that a single arbitration panel should be formed to hear the appeals together. As a result, the process is not undermined if other WTO members get to exercise their legal rights.

Historically, Canada has filed a number of disputes against the EU and the EU has filed few disputes against Canada. The Interim Appeal Arbitration Arrangement is intended to be a legal template that other countries could support and join. The EU and Canada are expected to try to negotiate similar workaround arrangements with other WTO members such as China, India and Brazil.

Canada's disputes against the EU include (excluding third party disputes):

The EU disputes against Canada (excluding third party disputes) include:

Why is this important to Canadian companies? This is important because Canadian companies that are negatively effected by an EU measure will be able to consider strategies to communicate with Global Affairs Canada and ask Canada to file consultations with the WTO to get rid of the offending measure. Currently, without an effective Appellate Body, Canadian companies have to file litigation under EU procedures to challenge an offending measure that harms their business interests. Canada being able to obtain a WTO DSU decision that a measure is inconsistent with the EU's international obligations is in some cases a better dispute settlement option. Companies are not able to bring disputes directly to the WTO. Instead the Canadian company must convince the Government of Canada to file the dispute and dedicate resources to resolving the dispute (e.g., pay the salaries of Department of Justice lawyers and other relevant government officials, hire outside counsel, etc).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions