November 3rd 2001

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Articles from this issue:

Cover Story: Afghanistan - Why the war on terrorism will be long and risky

Editorial: Why the ALP could win by default

TESTIMONIAL: A policy agenda for Australia's future prosperity

Election 2001: When will the parties support a new bank?

Defence: US Navy commissions Australian high speed catamaran

Canberra Observed: Nationals looking down the barrel

Straws in the Wind: Varieties of evil / Russian fears / My enemy's enemy is my friend

Law: Family Court redefines man

Government spokesmen confirm WTO threats

Media: Moral equivalence / Will they be invited back?

Letter: Settlement deaths

Letter: Beazley defended

Letter: Defence solution

Comment: The evil face of terrorism

Drugs: The case against medical cannabis

Obituary: Vale Phyllis Boyd

China: Can the Chinese Communist Party survive the market?

Books: 'John Maynard Keynes: Fighting for Britain 1937-46' by Robert Skidelsky

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Government spokesmen confirm WTO threats

by Colin Teese

News Weekly, November 3, 2001

In the last issue of News Weekly this writer made some general comments on the report of the Parliamentary Joint Standing Committee on Treaties, relating to the World Trade Organisation and Australia. A section of the Report was devoted to the WTO dispute settlement procedures as they affected Australia.

As a result of evidence presented to it, the Committee expressed little criticism of the process (indeed, quite the opposite; it seemed perfectly satisfied with the arrangement). Its only observation was to the effect that so far, all but the large firms have had difficulty in having the government take their cases to the WTO.

Its only recommendation, which presumably was intended to help redress the above shortcoming, was to propose that Australia follow the New Zealand example and hire private-sector lawyers to help pursue cases. As already pointed out by this writer, the main effect of this suggestion would be to introduce excessive legalism into the dispute settlement process, and, of course, add to its cost.

And, in the midst of all this, the Committee seemed to take no notice of the information provided by the DFAT representative. His comments were both interesting and disturbing, as he outlined Australia's approached the dispute settlement procedures in the WTO.

First, he said, it's customary in the WTO for the major supplier to initiate a dispute. But supposing that supplier doesn't, and suppose Australian exporters are only responsible for one per cent of world trade in the product, but suppose that one per cent is vitally important for them, do we set aside our rights in service of some WTO Convention - if indeed it is a convention? In the old GATT the convention was not what your share of the trade was, but whether you had suffered injury by any rule breach. No injury, no case.

Second, the DFAT representative said that pursuit of our rights depends heavily upon whether or not we enjoy a trade surplus with the offending party. The clear implication of his remark being that if we had a serious surplus with an offending partner, we would not contest its offending practices, no matter what harm was suffered by our exporters.

Now this writer may be mistaken, but he was of the view that the WTO was promoting a multilateral trading system. In such a system - especially for dispute settlement purposes - the state of bilateral balances was irrelevant. Of course DFAT might still be smarting over the fact that Japan, with whom we enjoy a trade surplus, threatened certain areas of our trade if we pursued a dispute against its government.

Of course, the DFAT man says, correctly, that we don't proceed unless we have a strong case.

And finally, most astonishing of all, DFAT claims that we must be careful "... that an attack on another member's conduct (that is to say and offending member) does not leave Australia vulnerable in other industry sectors".

Presumably this is meant to convey the idea that if large and powerful trading partners object to what we might do (as in the case of Japan), we back off. Surely that is in direct contradiction with the constantly asserted DFAT proposition that the value of the WTO is precisely that it protects the small nation in its disputations with the large?

News Weekly readers will not be surprised to learn that the WTO is governed by the same power relationships that prevail in other areas of international affairs. And it has certainly been a constant theme behind all of the disputes involving Australia, whether we were "sinners" or "sinned against"?

What is surprising is to have it confirmed from the mouth of the DFAT official providing information to the Committee.

  • Colin Teese

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