Keywords
Ecuador
banana
cross-retaliation
TRIPS
European Union
banana
cross-retaliation
TRIPS
European Union
Abstract
The formation of the World Trade Organization (WTO) in 1995 was a step forward to a more organized and rule-binding universal trade regime. The WTO is acknowledged as a rule-oriented institution as it implements a detailed and binding dispute settlement mechanism, for which most developing countries are appreciative. Nevertheless, this mechanism does not overcome the age-old question of how developing countries should go about ensuing developed nations comply with the WTO's rulings. The notion of cross-agreement retaliation is discussed in the article as a possible solution to the aforementioned problem. Cross-agreement retaliation, also commonly known as cross retaliation, enables developing countries to suspend concessions in different agreements, especially in relation to the agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), which provides crucial concessions for developed countries. Using the most well-known WTO dispute, the Banana War, this article examines the crucial role of cross retaliation. In that case, Ecuador, one of the plaintiffs, was granted the right to cross-retaliate under the TRIPS agreement, yet despite the authorization, it did not enforce its right and subsequently the case dragged on for years. This begs the question of why Ecuador refrained from implementing its right. The instrument of cross retaliation may be used as a precedent for future disputes involving developing countries in the WTO. This article analyzes the reason for Ecuador's decision by examining the complexity of cross-retaliation implementation, the true nature of cross-retaliation, and other significant contributing factors to the dispute.
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Alter, KJ and Meunier, S 2006, 'Nested and Overlapping Regimes in the Translantic Banana Trade Dispute', Journal of European Public Policy, vol.13, no. 3, pp. 362-382
Anderson, K 2002, Peculiarities of Retaliation in WTO Dispute Settlement', Centre for International Economic Studies Discussion Paper, No.0207, Adelaide University
Anderson, SD and Blanchet, J 2010, 'The United States° Experience and Practice in Suspending WTO Obligations', dalam Bown, CP & Pauwelyn, J 2010 (eds.), The Law, Economics and Politics of Retaliation in WTO Dispute Settlement, Cambridge University Press, New York, pp. 235-243
Barnett, M and Duvall, R 2005, Tower in Global Governance' dalam Barnett, M & Duvall, R 2005 (eds), Power in Global Governance, Cambridge University Press, Cambridge
Bown, CP 2009, Self Enforcing Trade Developing Countries and WTO Dispute Settlement, Brooking Institution Press, Washington D.C.
Bown, CP and Pauwelyn, J 2010, 'Introduction: Trade Retaliation in WTO Dispute Settlement: A Multidisciplinary Analysis', dalam Bown, CP & Pauwelyn, J 2010 (eds.), The Law, Economics and Politics of Retaliation in WTO Dispute Settlement, Cambridge University Press, New York, pp. 1-20
Brenes, ER and Madrigal, K 2003, 'Banana Trade in Latin America', dalam Josling, TE dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp. 97-122
Charnovitz, S 2001, 'Rethinking WTO Trade Sanctions', The American Journal of International Law, vol. 95, no.4, pp. 792-832
Charnovitz, S 2002, 'Should the Teeth be Pulled? An Analysis of WTO Sanctions', dalam Kennedy, DM & Southwick, J (eds) 2002, The Political Economy of International Trade Law: Essay in Honor of Robert E. Hudec, Cambridge University Press, Cambridge, pp. 602-635
Clegg, P 2005, 'Banana Splits and Policy Challenges: The ACP Caribbean and the Fragmentation of Interest Coalitions', European Review of Latin American and Caribbean Studies, no, 79, pp. 27-45
Dunne, MS 2002, 'Redefining Power Orientation: A Reassessment of Jackson's Paradigm in Light of Asymmetries of Power, Negotiation, and Compliance in the GATT/ WTO Dispute Settlement System,' Law and Policy in International Business, vol.34, pp. 278-342
Horlick, GH 2002, 'Problems with the Compliance Structure of the WTO Dispute Resolution Process', dalam Kennedy, DM & Southwick, J (eds) 2002, The Political Economy of International Trade Law: Essay in Honor of Robert E. Hudec, Cambridge University Press, Cambridge, pp. 636-645
IMF 2000, Ecuador and the IMF, News Brief No.00/14, March 9th, 2000, accessed February 11, 2013,
FAOSTAT 1999a, Banana's Exports: Countries by Commodity, Food and Agriculture Organization of the United Nations, accessed March 10, 2013,
FAOSTAT 1999b, Banana's Import: Countries by Commodity, Food and Agriculture Organization of the United Nations, accessed March 10, 2013,
FAOSTAT 2011, Banana's Production: Countries by Commodities, Food and Agriculture Organization of the United Nations, accessed March 10, 2013,
ICC 2012, Cross Retaliation Under the WTO Dispute Settlement Mechanism Involving TRIPS Provisions, Document No. 450/1074, ICC Commission on Intelectual Property, Paris, accessed February 21, 2012,
Josling, T 2003, 'Bananas and the WTO: Testing the New Dispute Settlement Process', dalam Josling, TE dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp. 169-194
Kunze, K 2009, 'Solving EC-Bananas: The WTO Dispute Settlement Mechanism and Developing Countries', MLB Thesis, Bucerius Law School, Hamburg
Mitchell, AD & Salonidis, C 2011, 'David's Sling: Cross Agreement Retaliation in International Trade Disputes', Journal of World Trade, vol. 45, no. 2, pp. 457-488
Nzelibe, J 2005, 'The Credibility Imperative: The Political Dynamics of Retaliation in the World Trade Organization's Dispute Resolution Mechanism', Chicago Public Law and Legal Theory Working Paper, no. 55, pp. 1-45
Nottage, H 2009, 'Developing Countries in the WTO Dispute Settlement Mechanism', Global Economic Governance Working Paper, vol. 47
Paggi, M and Spreen T 2003, 'Overview of the World Banana Market', dalam
Josling, TB dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp.7-16
Paris Club 2000, The Paris Club Agrees to a Rescheduling of Ecuador's
Debt, Press Release, accessed 11 February 2013,
Pauwelyn, J 2010, 'The Calculation and Design of Trade Retaliation in Context: What is the Goal of Suspending WTO Obligations?, dalam Bown, CP & Pauwelyn, J 2010 (eds.), The Law, Economics and Politics of Retaliation in WTO Dispute Settlement, Cambridge University Press, New York, pp. 34-65
Ruse-Khan, HG 2007, Suspension of Obligations under TRIPS as an Effective Means to Induce Compliance?, University of Leicester, pp. 1-29
Sacerdoti, G 2010, 'The Nature of WTO Arbitrations on Retaliation', dalam B own, CP & Pauwelyn, J 2010 (eds.), The Law, Economics and Politics of Retaliation in WTO Dispute Settlement, Cambridge University Press, New York, pp. 23-33
Slater, GL 2009, 'The Suspension of Intellectual Property Obligations Under TRIPS: a Proposal for Retaliating Countries in the World Trade Organization', The Georgetown Law Journal, vol. 97, pp. 1365-1408
Smith, James, 'Compliance Bargaining in the WTO: Ecuador and the Banana Dipute', dalam Odell, John S., (ed.), Negotiating Trade Developing Countries in the WTO and NAFTA, Cambridge University Press, New York, 2006
Spadano, L. 2008, 'Cross-agreement Retaliation in the WTO Dispute Settlement System: An Important Enforcement Mechanism for Developing CountriesT, World Trade Review, vol. 7, no. 3, pp. 511-545
Stovall, JG and Hathaway, DE 2003, `US Interests in the Banana Trade Controversy', dalam Josling, TE dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp. 151-168
Subramanian, A and Watal, J 2000, 'Can TRIPS Serves as an Enforcement Device for Developing Countries in the WTO?', Journal of International Economic Law, vol. 3, no. 3, pp. 403-416
Tangermann, S 2003a, 'European Interest in the Banana Market', dalam Josling, TE dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp. 17-44
Tangermann, S 2003b, 'The European Common Banana Policy', dalam Josling, TE dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp. 45-66
Taylor, T 2003, 'Evolution of the Banana Multinationals', dalam Josling, TE dan Taylor, TG (eds) 2003, The Bananas Wars The Anatomy of a Trade Dispute, CABI Publishing, Cambridge, pp. 67-96
UNCTAD 2007, Banana Market, Market Information in the Commodities Area, accessed February 22, 2013,
van den Bossche, P 2008, The Law and Policy of the World Trade Organization Text, Cases, and Materials, Edisi Kedua, Cambridge University Press, New York
Vanzetti, D, Cordoba, SF, and Chau, V 2005, Banana Split: How EU Policies Divide Global Producers, Policy Issues in International Trade and Commodities Study Series No. 31, Trade Analysis Branch Division of International Trade in Goods and Services, and Com-modities UNCTAD, jenewa
Whiteman, AL 2010, 'Cross Retaliation under the TRIPS Agreement: An Analysis of Policy Options for Brazil', North Carolina Journal of International Law and Commerce, vol. 36, pp. 187-227
WIPO 2013, Contracting Parties: Ecuador, accessed March 23, 2013,
WTO 1999, European Communities-Regime for the Importation, Sale, and Distribution of Bananas- Recourse by Ecuador to Article 22.2 of the DSU, Document Online: WT/DS27/52, accessed March 14, 2013
WTO 2000, European Communities-Regime for the Importation, Sale, and Distribution of Bananas- Recourse to Article 22.7 of the DSU by Ecuador, Document Online: WT/ DS27/54, accessed March 14, 2013
WTO 2001a, European Communities-Regime for the Importation, Sale, and Distribution of Bananas-Request of Consultation, Document Online: WT/DS27/55, accessed March 14, 2013
WTO 2001b, European Communities-Regime for the Importation, Sale, and Distribution of Bananas-Notification of Mutually Agreed Solution, Document Online: WT/DS27/58, accessed March 14, 2013
WTO 2001c, European Communities-Regime for the Importation, Sale, and Distribution of Bananas-Understanding on Bananas between Ecuador and the EC, Document Online: WT/DS27/60, accessed March 14, 2013
WTO 2012a, European Communities-Regime for the Importation, Sale, and Distribution of Bananas (DS27), WTO Dispute Settlement: One Page Case Summaries, accessed January 10, 2013
WTO 2012b, Schedules on the Tariff Concessions to the GATT 1994, Certification of Modifications and Rectifications, Schedule CXL-European Communities, Document Online: WLI 100, accessed February 20, 2013
WTO 2012c, Historic Signing ends 20 Years of EU-Latin America Banana Disputes, News Items, accessed Februari 21, 2013
Zimmermann, TA 2006, Negotiating The Review of the WTO Dispute Settlement Understanding, Cameron May, London