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INTRODUCTION TO WTO In 1947, 23 countries came into an agreement in Geneva on multilateral Trade. This agreement was termed as The General Agreement on Tariffs and Trade GATT! which came into effect on 1st of "an. 194#. These countries sought to e$%and multilateral trade among them. India was one of the founder mem&ers of GATT. 'an( countries signed this agreement in 1994 which resulted no. of mem&ers of GATT to 124.

The agreement consists of two main themes)*

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1! The agreement formulated some regulations which were to &e o&served &( the mem&er countries. 2! The mem&er countries were to com%l( with was the 'ost +avoured ,ation '+,! clause. GATT was not an organi-ation &ut was a

multilateral treat(, it had no legal status. It %rovided a %latform to its mem&er nations to negotiate and enlarge their trade.


ation '+.! clause. PRINCIPLES 1! +ollow the 'ost +avoured . 2! 1nsuring full em%lo(ment through a stead( growth of effective demand and real income.ective of GATT was to e$%and international trade &( /i&eralising trade to &ring economic %ros%erit(. 3! 2evelo%ing o%timum utilisation of resources of the world. 1! 0aising standard of living of the mem&er countries.ectives. . 4! 1$%ansion in %roduction e$change of goods and services on a glo&al level. GATT mentions the following im%ortant o&.5 5 5 5 5 5 5 5 5 5 The %rimar( o&.

3! Grant %rotection to domestic industries. could effectivel( &loc. including the nation who8s actions were the su&.ect of com%laint. %rocedures for settling dis%utes were ineffective and time consuming since a single nation. 4! 3ondemn the use of 4uantitative restrictions or 4uotas. :nder the GATT.6 6 6 6 6 6 6 6 6 6 2! 3arr( on trade in a non discriminator( wa(. 1! It remains to &e seen . or dela( ever( stage of the dis%ute resolution %rocess. 5! /i&eralise tariff and non*tariff measures through multilateral negotiations. INTRODUCTION TO WTO DISPUTE RESOLUTION The 6T78s 2is%ute 9ettlement :nderstanding 29:! evolved out of the ineffective means used under the GATT for settling disagreements among mem&ers.

'ore recentl(. in the a&sence of tariffs.ing it more difficult or costl( for foreign com%etitors to do &usiness in a countr(. most of the %rogress in reducing trade &arriers focused on trade in goods and in reducing or eliminating the tariff levels on those goods. +re4uentl(. The 29: was designed to deal with the com%le$it( of reducing and eliminating non*tariff &arriers to trade. In the earl( (ears of the GATT. such non*tariff trade &arriers are the inadvertent . tariffs have &een all &ut eliminated in a wide variet( of sectors. This has meant that non*tariff trade &arriers have &ecome more im%ortant since.7 7 7 7 7 7 7 7 7 7 whether countries will com%l( with the new 6T7 dis%ute settlement mechanism. &ut thus far the %rocess has met with relative success. A non*tariff trade &arrier can &e almost an( government %olic( or regulation that has the effect of ma. onl( such &arriers significantl( distort the overall %attern of trade* li&erali-ation.

countries have &een sus%ected of deli&eratel( creating such regulations under the guise of regulator( intent. has found . %erha%s more than an( other countr(. to the detriment of the international free*trade regime. &ut which have the effect of %rotecting domestic industries from o%en international com%etition. sought to s%ecif( the conditions under which national regulations were %ermissi&le even if the( had the effect of restraining trade. such as the 9=9 Agreement. or other %u&lic %olic( goals. The 6T78s strengthened dis%ute resolution mechanism was designed to have the authorit( to sort out this <fine line &etween national %rerogatives and unacce%ta&le trade restrictions< 9everal of the su%%lemental agreements to the GATT created during the :rugua( 0ound. The :nited 9tates. In other cases.8 8 8 8 8 8 8 8 8 8 conse4uence of well meaning attem%ts to regulate to ensure safet( or %rotection for the environment.

=articularl(. 3ritics argued that the 6T7 would <com%el 3ongress and our states to a&andon man( health and environmental standards< if the( were at odds with international trade rules. these critics noted that the . it was the :nited 9tates who %ushed for strengthening the 2is%ute 9ettlement %rovisions of the GATT during the :rugua( 0ound. could offer the :nited 9tates an e4uita&le &alance of advantage. with much of the negative reaction to the 6T7 itself centered around the concern that :.9. e$%orts going into other countries would &e eroded &( hidden &arriers to trade. In 19##.< The concern was that formal concessions granted to :.9. as it stood. laws and regulations ma( &e reversed &( the 29: %anels or the A%%ellate >od(. <the GATT. the :nited 9tates har&ors reservations in regards to its sovereignt(.9 9 9 9 9 9 9 9 9 9 itself on &oth sides of this delicate &alance. in %art &ecause 3ongress was not convinced that. 7n the other hand.

and that the( could authori-e nations to retaliate against violations of the trade agreements with unilateral sanctions. The( further noted that the A%%ellate >od( and the dis%ute settlement %anels vote in secret. which ultimatel( votes to ado%t or re. O ER IEW O! THE DISPUTE SETTLEMENT UNDERSTANDING: . It was argued &( some that the cumulative effect of 6T7 dis%ute %anel decisions would &e to erode the sovereignt( of the :nited 9tates.10 10 10 10 10 10 10 10 10 10 :nited 9tates would not have a veto in the 6T7 and that each nation would have an e4ual sa( in the 29>.ect %anel re%orts. 7ne of the %ur%oses of this review is to assess the validit( of this claim in light of the actual functioning of the 6T7 s(stem over the last three (ears.

which administers dis%ute settlement %rocedures. 9trengthened rules and %rocedures . It %rovides strict time frames for the dis%ute settlement %rocess and esta&lishes an a%%eals s(stem to standardi-e the inter%retation of s%ecific clauses of the agreements. The 29: created the 2is%ute 9ettlement >od( 29>!.11 11 11 11 11 11 11 11 11 11 The 2is%ute 9ettlement :nderstanding 29:!. All 6T7 mem&er nation*states are su&.nown as the :nderstanding on 0ules and =rocedures Governing the 9ettlement of 2is%utes. It also %rovides for the automatic esta&lishment of a %anel and automatic ado%tion of a %anel re%ort to %revent nations from sto%%ing action &( sim%l( ignoring com%laints. consisting of all 6T7 mem&ers.ect to it and are the onl( legal entities that ma( &ring and file cases to the 6T7. formall( . esta&lishes rules and %rocedures that manage various dis%utes arising under the 3overed Agreements of the +inal Act of the :rugua( 0ound.

A%%ellate >od( review. conciliation and mediation.< The &asic stages of dis%ute resolution covered in the understanding include consultation.%& A mem&er*countr( ma( re4uest consultations when it considers another mem&er* countr( to have <infringed u%on the o&ligations assumed under a 3overed Agreement.< If the res%ondent fails to res%ond within ten da(s or enter into consultations within thirt( da(s. C%&'()*+*. good offices.< .12 12 12 12 12 12 12 12 12 12 with strict time limits for the dis%ute settlement %rocess aim at %roviding <securit( and %redicta&ilit( to the multilateral trading s(stem< and achieving <?a@ solution mutuall( acce%ta&le to the %arties to a dis%ute and consistent with the covered agreements. the com%laint <ma( %roceed directl( to re4uest the esta&lishment of a %anel. and remedies. a %anel %hase.

The com%laining %art( ma( re4uest the formation of %anel.en voluntaril( if the %arties to the dis%ute so agree. conciliation or mediation %rocess has failed to settle the dis%ute. no nation could sim%l( ignore its o&ligations under .o re4uirements on form.M0-. or %rocedure for them e$ist.13 13 13 13 13 13 13 13 13 13 G%%..ointl( consider that the good offices. <if the %arties to the dis%ute . An( %art( ma( initiate or terminate them at an( time.+*.a&le understanding on how to %roceed. good offices.< Thus the 29: recogni-ed that what was im%ortant was that the nations involved in a dis%ute come to a wor. 9till.< .%& +&. time./0'1 C%&/.e consultation in which <a com%lainant has the %ower to force a res%ondent to re%l( and consult or face a %anel.%& :nli.). and that sometimes the formal 6T7 dis%ute resolution %rocess would not &e the &est wa( to find such an accord. conciliation and mediation <are underta.O..+*.

e note of its &ehavior. <unless at that meeting the 29> decides &( consensus not to esta&lish a %anel.ing the ris. the com%laining %art( ma( re4uest the formation of %anel. .14 14 14 14 14 14 14 14 14 14 international trade agreements without ta.< and whose governments are not the %arties to the dis%ute. good offices.< Three %anelists com%ose a %anel unless the %arties agree to have five %anelists.< <=anels shall &e com%osed of well* 4ualified governmental andAor non*governmental individuals< <with a view to ensuring the inde%endence of the mem&ers. that a 6T7 %anel would ta. <unless the %arties to the dis%ute agree otherwise. The 29> shall form a %anel. conciliation or mediation fails to settle the dis%ute. P+&0) P2+'0 If consultation.

15 15 15 15 15 15 15 15 15 15 The 9ecretariat %ro%oses nominations for %anels that the %arties shall not o%%ose <e$ce%t for com%elling reasons. <the director*general in consultation with the chairman of the 29> and the chairman of the relevant council or committees< shall a%%oint the %anellists. u%on the re4uest of either %art(.< .e written su&missions to the %anel. 6hen multi%le %arties re4uest the esta&lishment of a %anel with regard to the same matter.< The 29: gives an( mem&er that has <a su&stantial interest in a matter &efore a %anel< and notifies <its interest to the 29><! an o%%ortunit( <to &e heard &( the %anel and to ma.< If the %arties disagree on the %anelists.ing into account the rights of all mem&ers concerned. the 29: suggests a strong %reference for a single %anel to &e esta&lished <to e$amine these com%laints ta.

< 6ithin si$t( da(s after the re%ort is circulated to the mem&ers.06 .16 16 16 16 16 16 16 16 16 16 <The %anel shall su&mit its findings in the form of written re%ort to the 29>. If no comments are %rovided &( the %arties within the comment %eriod. the <re%ort shall &e the final re%ort and circulated %rom%tl( to the mem&ers. The %anel <shall hold a further meeting with the %arties< if the %arties %resent written comments. In interim review stage. the %anel su&mits an interim re%ort to the %arties. it shall not e$ceed si$ months from the formation of the %anel to su&mission of the re%ort to the 29>. <the re%ort shall &e ado%ted at a 29> meeting unless a %art( to the dis%ute formall( notifies the 29> of its decision to a%%eal or the 29> decides &( consensus not to ada%t the re%ort.< A330))+*0 B%-4 R05.< As a general rule.

the( would &e su&.udges in the :nited 9tates. the mem&ers of the a%%ellate %anel do not serve for life. with demonstrated e$%ertise in law.e . and its re%orts anon(mous. international trade and the su&. The A%%ellate >od( <shall &e com%osed of seven %ersons.< Its %roceedings shall &e confidential. thus corru%ting the fairness of the %rocess. This %rovision is im%ortant &ecause. unli. This means that if their decisions were %u&lic.ect matter of the 3overed Agreements generall(.17 17 17 17 17 17 17 17 17 17 The 29> esta&lishes a standing A%%ellate >od( that will hear the a%%eals from %anel cases. 2ecisions made &( the A%%ellate . three of whom shall serve on an( one case.ect to %ersonal retaliation &( governments unha%%( with decisions.< Those %ersons serving on the A%%ellate >od( are to &e <%ersons of recogni-ed authorit(.< The >od( shall consider onl( <issues of law covered in the %anel re%ort and legal inter%retations develo%ed &( the %anel.

if . 6ithin twent( da(s after the e$%iration of the reasona&le %eriod of time.< The 29> and the %arties shall acce%t the re%ort &( the A%%ellate >od( without amendments <unless the 29> decides &( consensus not to ado%t the A%%ellate >od( re%ort within thirt( da(s following its circulation to the mem&ers. modif(.0' There are conse4uences for the mem&er whose measure or trade %ractice is found to violate the 3overed Agreements &( a %anel or A%%ellate >od(.< R070-.< the com%lainant ma( re4uest negotiations for com%ensation. The dis%ute %anel issues recommendations with suggestions of how a nation is to come into com%liance with the trade agreements.18 18 18 18 18 18 18 18 18 18 >od( <ma( u%hold. If the mem&er fails to do so within the determined <reasona&le %eriod of time. or reverse the legal findings and conclusions of the %anel.

%& . or an ar&itrator a%%ointed &( the director*general< ma( conduct ar&itration. it ma( see. The 29> <shall grant authori-ation to sus%end concessions or other o&ligations within thirt( da(s of the e$%ir( of the reasona&le time unless the 29> decides &( consensus to re.< The defendent ma( o&. the com%laining %art( <ma( re4uest authori-ation from the 29> to sus%end the a%%lication to the mem&er concerned of concessions or other o&ligations under the 3overed Agreements.ect to the level of sus%ension %ro%osed.< 0etaliation shall &e first limited to the same sector s!.ect the re4uest.*8+*. <The original %anel. A89. If the com%laining %art( considers the retaliation insufficient. retaliation across sectors.19 19 19 19 19 19 19 19 19 19 satisfactor( com%ensation is not agreed. if mem&ers are availa&le.

< Those %arties must reach mutual agreement to ar&itration and the %rocedures to &e followed. Third %arties ma( &ecome %art( to the ar&itration <onl( u%on the agreement of the %arties that have agreed to have recourse to ar&itration. Agreed ar&itration must &e notified to all mem&ers %rior to the &eginning of the ar&itration %rocess. ar&itration within the 6T7 as an alternative means of dis%ute settlement <to facilitate the solution of certain dis%utes that concern issues that are clearl( defined &( &oth %arties.20 20 20 20 20 20 20 20 20 20 'em&ers ma( see.< The %arties to the %roceeding must agree to a&ide &( the ar&itration award. <Ar&itration awards shall &e notified to the 29> and the 3ouncil or 3ommittee of an( relevant agreement where an( mem&er ma( raise an( %oint relating thereto.< .

e a tentative anal(sis of the im%act of this institutional evolution of the international trading s(stem.ow that the 6T7 2is%ute 9ettlement %rocedures have &een in use for three (ears.21 21 21 21 21 21 21 21 21 21 THE WTO#S DISPUTE SETTLEMENT SYSTEM IN OPERATION . A rich variet( of cases have &een addressed &( the 6T7 dis%ute settlement %rocedures. The( have also targeted countries at vastl( different stages of develo%ment. and as large as the 1uro%ean :nion. . 9ee +igure 1! These include com%laints against countries with economies as small as Guatemala. including countries li.e India at one end of the s%ectrum and the :nited 9tates and "a%an on the other. it is %ossi&le to ma.

:(80 1 WTO DISPUTE CASES BY INDUSTRY I&-('*84 Agricultural =roducts Alcoholic and other >everages Te$tile and 3lothing Animal 9.in =roducts 1lectronics Telecommunications Automo&iles Aircraft 9atellite 9(stems 3ement =roducts N(7908 %. /+'0' 32 B 1C 2 3 3 5 2 1 1 .22 22 22 22 22 22 22 22 22 22 !.

In the first three (ears of the 6T7.ine of these cases have gone through the entire %rocess. and that the( have increased confidence that other .ote) Among eight(*three distinct matters. . 11# com%laints have &een &rought. onl( some 2CC cases were dis%uted.23 23 23 23 23 23 23 23 23 23 3hemical =roducts =harmaceutical =roducts 7ther Industrial =roducts B 5 4 . resulting in the ado%tion of a%%ellate re%orts &( the 29>. including settled and inactive casesD a&ove statistics include five cases of dis%utes involving more than two industries. dealing with eight(*three distinct matters. The increased use of the dis%ute settlement %rocedures under the 6T7 suggests that nations see value in the reforms that were im%lemented. In the entire fort(*seven (ears of the GATT.

The ma.orit( of com%laints have &een &rought &( develo%ed countries against other develo%ed countries. with the ne$t largest categor( &eing com%laints &( develo%ed countries against develo%ing nations. 2ue to the wide range of to%ics addressed &( the dis%ute settlement %anels. 9ee +igure 2! !. it is difficult to ma. at least twent(* five com%laints have &een initiated &( develo%ing countries.24 24 24 24 24 24 24 24 24 24 nations will a&ide &( their trade o&ligations if the 29> finds them to &e in violation of s%ecific %rovisions. a few earl( trends are evident. Eowever. .:(80 2 CASE CHARACTERISTICS BY COUNTRY .e generali-ations a&out the overall im%act of the 29:.evertheless.

manufactures.0' 7+**08 27 3B 1B 9 94 .(0&/.&+&*' 2evelo%ed 3ountr( against 2evelo%ing 3ountr( 2evelo%ed 3ountr( against 2evelo%ed 3ountr( 2evelo%ing 3ountr( against 2evelo%ed 3ountr( 2evelo%ing 3ountr( against 2evelo%ing 3ountr( !80.ote) +our matters were more than dou&l( counted &ecause the suits were &rought &( multi%le com%lainants. 9ee +igure 3! . These com%laints have dealt with traditional sectors such as trade in goods.25 25 25 25 25 25 25 25 25 25 C%73)+. and agricultural %roducts. &ut the( have also dealt with newer trade issues such as intellectual %ro%ert( rights.

N+*.26 26 26 26 26 26 26 26 26 26 !.%&+) P%).ote) 9tatistics are from data %rovided through the 6T7 we&site and :9T0 %ress releases.:(80 3 NEW AREAS BEGIN TO EMERGE S0/*%8 'anufacturing Agricultural General Goods Intellectual =ro%ert( 7thers B4 R0./4 . WTO DISPUTE PANELS AND THE BALANCE BETWEEN TRADE A:80070&*' +&.(0'* 4# 42 9 1C B .

27 27 27 27 27 27 27 27 27 27 9ince the various agreements that constitute the 6T7 cover such a wide range of to%ics. the( must &e cautious when ma. in the decisions of the %anels and the A%%ellate >od(. This %laces 6T7 dis%ute %anels in a delicate %osition. there has &een a tendenc( to write decisions in a wa( that minimi-es the &urden on nations to change their regulations and laws in order to com%l( with their 6T7 trade o&ligations. 6hen the( .ing recommendations that reverse the %references of national governments. dis%ute settlement %anelists find that a num&er of su&.ects come under their authorit(. This does not mean that dis%ute settlement %anels have not found nations in violation of the trade agreements. Thus far. 7n the one hand the( must identif( cases where nations are failing to com%l( with international trade agreementsD on the other.

>oth e$am%les are com%laints &( the :nited 9tates.28 28 28 28 28 28 28 28 28 28 have. In the first case the :nited 9tates won the concessions it soughtD in the second case the %anel found no evidence of violation of the trade agreements. and the other against "a%an regarding the %hotogra%hic film industr(. These cases have &een selected as e$am%les &ecause the( have received a lot of attention. . the( have left national governments with a variet( of o%tions in order to come into com%liance. however. &ut the trend descri&ed can &e found in each case where a %anel re%ort has &een issued. Two cases in which %anel re%orts were ado%ted reflect the 6T78s tendenc( to avoid &ecoming overl( involved in the internal regulator( affairs of nations. one against the 1uro%ean :nion 1:! regarding restrictions on im%ort of hormone treated meat.

The 1: is conducting further studies in the ho%es of . since the hormone restrictions were initiall( ado%ted under intense %u&lic %ressure. left o%en a wide variet( of wa(s for the 1: to com%l(. in effect. as e$%ressed through their national legislatures and the 1uro%ean =arliament.ustif( the &an. &ut. Alternativel(. This was a case where the 6T7 %anel clearl( confronted the democratic will of the %eo%le. the %anel indicated that technical changes in the . &ut left o%tions for the 1: as well &( suggesting that more com%lete scientific evidence would .29 29 29 29 29 29 29 29 29 29 E(8%30+& H%87%&0 C+'0 In the 1uro%ean Eormone 3ase the %anel found the scientific evidence for the im%ort restrictions on &eef treated with growth hormones to &e insufficient to . The %anel sided with the :nited 9tates &( finding that the %rovisions were ar&itrar( and had the effect of restricting trade.ustif( the restriction on trade.ustif(ing the &an.

e su&stantive changes to come into com%liance. If it does not. 3o. "a%an8s &iggest %hotogra%hic film and %a%er %roducer. Trade 0e%resentative :9T0! to investigate the "a%anese %hotogra%hic film and %a%er mar. the 1: will &e re4uired to offer other trading concessions to com%ensate for losses.i film dis%ute centers on the distri&ution s(stem in "a%an.30 30 30 30 30 30 30 30 30 30 wa( the %olic( is im%lemented could reduce the %olic(8s negative im%act on trade. was involved in <anti*com%etitive trade . The 1: has until 1999 to com%l(.. and the 1: will have to ma. as. 1astman Goda. C+'0 The Goda. 9till. the %anel was firm in ruling that the current %olic( is inconsistent with the 9=9 Agreement.9.*+u.i =hoto +ilm. some F2CC million %er (ear according to the :nited 9tates.ed the :. K%-+<=!(>.et. charged that +u.. Goda. 3o. In 'a( 1995.

u% +u. Accordingl(. Goda.ing it difficult for im%orted consumer %hotogra%hic film and %a%er to &e mar. Goda. asserted that +u.i.eted in "a%anese sho%s. .. re4uested that "a%anese regulations &e changed in order to &rea.B &illion. tacitl( dominated the consumer film mar. Goda..8s %roducts &ecause of &ac.31 31 31 31 31 31 31 31 31 31 %ractices< in "a%an.i had a 75 %ercent mar. According to Goda.i8s e$clusive distri&ution s(stem. room deals with +u. this e$%lained wh( +u. Goda. "a%anese regulations im%licitl( favored +u.i &( ma.et share in "a%an while Goda. had onl( a 7 %ercent share in 199B. also said that some sho%s in "a%an were not allowed to carr( Goda.i. According to Goda.et in "a%an using unfair %ractices. with the su%%ort of the "a%anese government. estimated its losses since the 197Cs due to the unfair %ractices at F5.

it would have &een involved in creating new international o&ligations.i case. The ruling suggests that the :nited 9tates and other nations need not &e overl( concerned that the 6T78s dis%ute settlement mechanism will overtl( threaten national sovereignt(. 3onse4uentl(. there is no international standard for anti*trust regulation. the %anel ruled that "a%anese regulations %redated the reductions in tariffs that had &een negotiated on %hotogra%hic film. If the 6T7 dis%ute settlement %anel had found in favor of the :nited 9tates. 3urrentl(. an act not sanctioned &( the 6T7 Agreement. . those regulations could not have negated the &enefits accruing to the :nited 9tates in the trade agreement.32 32 32 32 32 32 32 32 32 32 In the Goda. This technical ruling allowed the 6T7 to avoid a far*reaching decision that could have found "a%anese vertical integration of &usiness in conflict with the intent of the 6T7 regime.*+u.

33 33 33 33 33 33 33 33 33 33 In "une of 1995.et &arriers for %hotogra%hic films and %a%ers. The third discriminator( measure cited involved controls on %rice com%etition and %romotion as su%ervised &( the "a%anese +air Trade 3ommission. the :nited 9tates filed a com%laint in the 6T7 on "une 13. The :nited 9tates argued that the im%ort*resistant mar. 199B. The .et structure created &( the "a%anese government violated the national treatment %rinci%le of the GATT Article III. this law discouraged large stores from carr(ing film other than +u. and found that three <li&erali-ation countermeasures< discriminated against im%orted goods.iD the second was the large*stores law enacted in 1974. re4uesting consultations with "a%an. According to the :nited 9tates. After eleven months of investigation. the :nited 9tates &egan to investigate "a%anese mar.i8s. The first measure was e$clusive wholesaling arrangements currentl( dominated &( +u.

are limited. The :nited 9tates also made a <non*violation< claim that these measures nullif( or im%air &enefits accruing to the :nited 9tates.34 34 34 34 34 34 34 34 34 34 :nited 9tates also asserted that "a%an8s restrictions on retail o%erations and %romotional activities ran counter to the trans%arenc( standard set out in the GATT Article H.i denied Goda.i claimed that Goda.en &( the other countr( does not directl( violate an( of the Articles of the trade agreements. however. +urthermore.i asserted that it had never cons%ired with the "a%anese government to discriminate against im%orted goods. even if "a%an a%%ears to offer neutral treatment of im%orted goods. The t(%es of redress availa&le under such com%laints.et share in "a%an . even if the s%ecific measure ta. A <non*violation< claim is s%ecificall( authori-ed in the GATT Agreements if the actions of another nation reduce the value of negotiated trade concessions.8s assertion. +u. +u.8s loss of mar. +u.

+ourth.eting strateg( was not su%erior to that of +u. Thus. for a num&er of reasons. can e$%lain low mar.et share in the :nited 9tates is onl( 11 %ercent while Goda. the %ro%ortion is e$actl( the reverse of the situation in "a%an suggesting that &oth Goda.8s mar. and +u. dominates the mar. and selling to smaller retailers through %hoto finishing la&s.et channels included selling directl( to retailers. Third.i8s. 9econd. selling to secondar( dealers. there was no &ottlenec. and not formal restrictions on trade. Goda.i8s new %roducts.et with a 75 %ercent share. failed to introduce innovative %roducts to com%ete with +u.et since it had the same access to consumers as +u.et of its rival. These mar. Goda.i stated that its mar. Therefore. from the mar.i.i have difficult( %enetrating the domestic mar. +u.et %enetration &( foreign . to &loc. Goda. +irst. consumers8 lo(alt( to the domestic &rand.35 35 35 35 35 35 35 35 35 35 could &e attri&uted to Goda.

ills and services. The tri&unal ar&itration %anelists were from >ra-il.i.i film. the 6T7 interim re%ort was su&mitted on 2ecem&er 5.8s allegations that "a%anese regulations had the effect of su%%orting anti*com%etitive %ractices &( +u.ew Iealand.36 36 36 36 36 36 36 36 36 36 com%etition. 1997.i &ecause of its investment in innovative %roducts and its creative mar. re4uested a dis%ute settlement %anel on 9e%tem&er 2C.ed to investigate Goda. and . The( determined that the :nited 9tates had not demonstrated that its 6T7 rights had &een im%aired. The :nited 9tates. customers &u( +u. .9. The re%ort re. The %anel was tas.ected the :. although Goda. failing to reach an agreement with "a%an. After more than a (ear8s investigation. 199B. com%laint against +u. 9wit-erland.eting s. is chea%er in "a%an. There is also a claim that.

8s %rofits decreased &( 25 %ercent in 1997 from the (ear &efore.et. there is evidence that +u. 3urrent retail %rices for %hotogra%hic film and %a%er in "a%an reflect this. +u.et share in "a%an has diminished from 74 %ercent in the earl( 199Cs to B7 %ercent at the end of 1997.8s mar. In the :. though +u.et share to 2C %ercent.9.i . Goda. has dou&led its mar.37 37 37 37 37 37 37 37 37 37 1ven though the %anel did not rule as Goda. mar. Goda.ed. with %rices a&out 3C to 4C %ercent &elow com%ara&le %rices in the :nited 9tates.et share in "a%an now accounts for a&out 11 %ercent since it won the . Goda. would have li. The %rofit margin of the color film industr( in "a%an used to &e close to 12 %ercent. com%ared to B %ercent on overseas sales. &ut this has also fallen. In the . mar. however.i8s mar.9. +u.i8s &usiness in the :.agano 7l(m%ic Games s%onsorshi% &( %a(ing F44 million in 199B.i denies this.et is also im%roving.agano area where the Games were held.

' M%&*2?Y0+8 "anuar( 1993 J%9' C(* 2.et.et share to 14 %ercent while Goda..o&s over ne$t two (ears in order to remain com%etitive.38 38 38 38 38 38 38 38 38 38 increased its mar. 9ee +igure 4! !. Goda.CCC . announced %lans to cut costs &( a &illion dollars and la( off 1C.CCC .:(80 " K%-+<#' L+4%. had 7B %ercent of the mar.

et share for +u. !. Inc.ovem&er 1C.i in the :nited 9tates. it is consumers who &enefit from increased glo&al com%etition through lower %rices.39 39 39 39 39 39 39 39 39 39 August 1993 .#CC 9ource) 3hallenger. Increased mar. suggests that consumers are increasingl( tr(ing the im%orted &rand.ovem&er 1994 +e&ruar( 1995 . Gra( J 3hristmas.CCC #CC 4.CCC 1C. In the end.CCC 1997 T%*+) 2B. and for Goda.:(80 5 . in "a%an.

40 40 40 40 40 40 40 40 40 40 WTO COMPLAINTS BY COUNTRY .