24 Jun LEGAL MEMORANDUM
Legal Memorandum Costa Dorada Seeks Justice1 Instructions: Please prepare a brieÖng memorandum to Ambassador Nieves of Costa Dorada, a hypothetical Latin American developing country, answering the questions set out below. Your essay should be based on the WTO Dispute Settlement Understanding and the readings in Jackson et al. Additional research should be unnecessary, and citation of other authorities might well be counterproductive. It is estimated that your memorandum should not need to be more than 7 to 10 pages, double-spaced. Please answer each question separately and number each answer. Please turn in a hard copy of your memorandum in class and submit an electronic copy via TWEN On both the hard copy and electronic copy, please use only an anonymous number to identify yourself. To protect its ailing steel industry from import competition, Nordlandia, a hypothetical advanced industrial country and WTO member, has imposed a quota on imports of steel from Costa Dorada, a hypothetical developing country and WTO member. Nordlandia’s quota limits steel imports from Costa Dorada to the same annual quantity of steel as it has imported from Costa Dorada in past years. After extensive lobbying by Ferrometal S.A., Costa Dorada’s major steel producer, and the Costa Dorada General Confederation of Labor, the Government of Costa Dorada has decided to challenge Nordlandia’s import quota as a violation of WTO obligations under GATT articles XI and XIX and the WTO Agreement on Safeguards. You are an associate with the law Örm of Hardy & Housman, which advises the Government of Costa Dorada on international trade matters. You have been assigned to advise Costa Dorada’s Delegation to the WTO on procedural issues arising in the course of the dispute settlement proceedings against Nordlandia. (Your assignment is limited to issues arising under the WTO Dispute Settlement Understanding. You do not need to consider GATT articles XI and XIX and the Agreement on Safeguards, which another lawyer in the Örm is assigned to research.) In the course of the proceedings, Costa Dorada’s Permanent Representative to the WTO, Ambassador Roberto Nieves, requests your advice on the following situations: 1. To mitigate the damage to Costa Dorada’s steel exports and employment in the steel industry, it is important to act quickly against Nordlandia’s import quota. Therefore, Costa Dorada’s Minister of Foreign Trade, Enrique González, instructs Ambassador Nieves to request the immediate establishment of a panel at the next meeting of the DSB. Meanwhile, Ambassador Nieves learns that Nordlandia’s Permanent Representative to the WTO, Ambassador Natasha Lotze-Hassel, has received instructions from her Government to block the establishment of a panel as much as possible. Is Costa Dorada acting in accordance with the DSU by requesting the immediate 1 Adapted from Peter Van den Bossche, The Law and Policy of the World Trade Organization: Text, Cases and Materials 304-306 (Cambridge 2005). -2- establishment of a panel at the next meeting of the DSB?If not, what should Costa Dorada do to expedite the establishment of the panel? Can Costa Dorada prevent Nordlandia from blocking it? 2. After the panel is established but before its composition is determined, Nordlandia’s Ambassador Lotze-Hassel announces that her Government will insist that the panel include Öve members, of whom at least one is a national of Nordlandia and none is a national of a developing country. Among the Öve members, it wants two economists and a metallurgical engineer. Ambassador Lotze-Hassel’s instructions are to refuse to agree to any panel whose composition does not meet these requirements. The Government of Costa Dorada cannot agree to Nordlandia’s demands and, instead, wants to assure that at least one panelist is a national of a developing country. What can Costa Dorada do to expedite the process of composing the panel, including securing the appointment of a panelist from a developing country and avoiding Nordlandia’s demands? 3. In Nordlandia’s Örst submission to the panel, Nordlandia argues that even if its import quota were inconsistent with WTO obligations, Costa Dorada has failed to sustain its burden of coming forward with any economic evidence to show that the import quota (which permits Costa Dorada to export the same annual quantity of steel as it has exported in past years) has harmed Costa Dorada’s steel exports. How should Costa Dorada’s rebuttal submission respond to Nordlandia’s argument? 4. In the panel report, the panel Önds in favor of Costa Dorada and recommends that the DSB request Nordlandia to bring its measure at issue in this dispute into conformity with its WTO obligations. Ambassador Lotze-Hassel denounces the report as a legal travesty and Nordlandia appeals the case to the Appellate Body. Ambassador Nieves learns that the division of the Appellate Body that will hear the case includes an Appellate Body Member who is a citizen of Nordlandia. Can Costa Dorada prevent the Nordlandian citizen from hearing the appeal? 5. The Appellate Body upholds the Panel Report. Ambassador Lotze-Hassel announces that the Government of Nordlandia intends to block adoption of the Appellate Body Report and the Panel Report as upheld. Can Costa Dorada prevent Nordlandia from blocking the adoption of the reports? 6. After the DSB adopts the Appellate Body Report and the Panel Report as upheld, Ambassador Lotze-Hassel announces that Nordlandiawill comply with the DSB’s recommendations and rulings eventually, but that it is unable to do so immediately. Can Costa Dorada compel Nordlandia to withdraw the quota immediately? 7. After the expiration of six months (the period that was determined to be a reasonable time for implementation), Ambassador Lotze-Hassel claims that Nordlandia has fully implemented the recommendations and rulings of the DSB. Minister of Trade González and Ambassador Nieves arebaf×ed by this announcement since the import quota on steel is still in force. Can Costa Dorada immediately take retaliatory measures?If not, what should Costa Dorada do?
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