Analysis Of The Rules For Calculating Retaliation Level Under WTO Dispute Settlement Mechanism

The DSU has established an efficient dispute resolution mechanism.Due to the existence of this mechanism,the rulings and recommendations made by the dispute resolution body can be fully and effectively implemented.The calculation of the level of retaliation is often the focus of disputes between the two sides.The level of retaliation is directly related to the level of relief of the WTO.If the level of retaliation is too high,it will impose penalties on the party that violated the agreement and form punitive damages.If the level of retaliation is too low,Then the loss of the injured party will not be fully compensated.At present,DSU’s regulation of the level of retaliation is very simple: the level of retaliation is equal to the degree of loss or impairment.There are many places in this regulation that need to be explored.What is the nature of "equal" ? Is it only allowed to be "equal in number" or also "in nature?" What is the scope of "interests" ? Is it just “direct interest” or “indirect interest”?To solve this series of problems,we first need to clarify the purpose of retaliation.Different purposes determine the degree of retaliation.At present,there are three views on the purpose of retaliation:(1)Promote execution.(2)The balance of interests.(3)A variety of purposes.Depending on the purpose pursued,WTO members who implement retaliation can carry out different designs and implement retaliation plans accordingly.A variety of purposes are also the views that the author supports.In order to determine the level of loss of interest or impairment caused by abreach of agreement,it is necessary to compare the benefits pursued by the members of the WTO agreement with the losses suffered by the members after the violation.When calculating the specific amount of loss or impairment,three types of losses can usually be calculated: expected loss of interest,loss of reliance interest,and loss of return benefit,and different loss of benefits reflect different calculation methods.According to the analysis,the author believes that the calculation method of expecting loss of interest is preferable.This method is not only the most effective,but also the Pareto optimal.At the same time,in the calculation,the applicant should be given the right to retaliate against the facts.This practice is very helpful for the purpose of retaliation,and it can reduce the uncertainty of retaliation and reduce the disputes arising therefrom.In this regard,the author believes that the current calculation method used by arbitrators in WTO retaliatory level arbitration cases does not fully exert the effectiveness of the retaliation mechanism,which makes the violation party’s implementation of DSB recommendations and rulings insufficient.The corresponding solution is to replace the loss method with the calculation method of the expected benefit;to give the injured country the right to choose counter-factuality;the retaliation level arbitration is included in retaliation arbitration,and the duration of arbitration is reduced,with a view to minimizing The loss of all parties.