Businesses in Egypt would do better if they knew more about WTO dispute settlement mechanisms, writes Sherine Nasr It is not about passing judgement, but the priority is to settle disputes through consultation if possible -- this is what the World Trade Organisation's (WTO) dispute settlement system underlines to member states. Although at least 42 per cent of Egypt's trade is with WTO member states, Egyptian businesses are mostly unfamiliar with the procedures and measures taken to resolve trade problems with WTO partners. "The Egyptian business community can profit from the WTO if they understand the basics," according to Arthur E Appleton, partner in Appleton and Luff in Geneva. "Unfortunately, they do not know how the WTO works," continued Appleton, who was addressing a seminar organised by the American Chamber of Commerce in Egypt (AmCham) on Sunday. He further suggested that both businesses and legal firms alike need to receive basic WTO training on trade dispute issues. According to the WTO Dispute Settlement Understanding (DSU), the main principles governing settlements are equitable, fast, effective and mutually acceptable. "We thought it is essential to acquaint the Egyptian business community and law firms with the system, its benefits and advantages, as well as its drawbacks and how to circumvent them," noted AmCham President Taher Helmi. Typically, a dispute arises when a member government believes another member is violating an agreement or a commitment that it has made to the WTO. The system is based on clearly defined rules, with timetables for completing a case, and first rulings are made by a panel and endorsed (or rejected) by the WTO's full membership. "The WTO dispute settlement mechanism is often known as the 'jewel in the crown' of the multilateral trading system," stated Helmi, adding that the effective resolution of trade disputes is vital for the smooth flow of multilateral trade. While beneficial, the system is overshadowed by several drawbacks. For example, while all countries are equal, some countries are more equal than others. "This is particularly true in the case of big trade giants such as the United States," explained Appleton, and that business communities in developed countries can pressure their governments to take steps and decisions that serve their best interests. Although the DSU is a process to make governments abide by WTO rules, in the end it is up to each country whether to comply or not. "Sometimes diplomatic concerns prevent businesses from having their problems heard in Geneva," said Appleton. Although the system has progressively improved, the process is still not very transparent, he added. The guest speaker continued that firms in developing countries cannot compete with international businesses which hire specialised law firms to closely monitor violations; the lack of resources also limits the involvement of developing countries in DSU proceedings; and businesses in these countries are often not active players in the WTO. While the WTO is largely a state-to-state agreement, business communities can still benefit by establishing relations with other business communities in other WTO member states. "Whether the system is functioning well or not is not our issue today," stressed Helmi. "Our main concern is why Egypt is not using the system adequately and what the private sector knows about it." The AmCham president explained that the private sector may not be aware of the fact that the government alone cannot bring a case to the DSU, and that the private sector is "the main motivator" of the system. Helmi conceded that the dispute settlement mechanism has so far functioned well, receiving more than 350 requests for consultations since it was established 10 years ago. "If we have not used the system as we should have so far, this should change in the future with our new trade policy" he said. The new challenges of integrating in the world's trading system is also another reason why Egyptian businesses must put the WTO's DSU to best use, Helmi concluded.
