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To sum up, “the availability of Article XXIII:1(b) complaints can operate as a moral hazard in the dispute settlement procedures. Panels that are faced with a politically difficult interpretative issue or are internally divided can be tempted to refer the complaining WTO member to its procedural rights under Article XXIII:1(b) rather than confirming its substantive rights. By adopting that approach they spare the party complained against of the opprobrium of illegality, open the door to a negotiated settlement between the parties to the dispute, and accord the complaining party the right to retaliate should no settlement be reached--a solution that can be attractive to a pragmatically minded member of a panel or the Appellate Body seeking to avoid a difficult legal issue”.12
IIIPresupposed Situation Complaints
The GATT/WTO have never ruled that the existence of a situation as prescribed in Art. XXIII:1(c) give rise to a nullification or impairment. However, under the procedure set out in the DSU, the existence of such a situation-related dispute between WTO members is presupposed. As is stipulated in Article 26.2 of the DSU as:
“2. Complaints of the Type Described in Paragraph 1(c) of Article XXIII of GATT 1994
Where the provisions of paragraph 1(c) of Article XXIII of GATT 1994 are applicable to a covered agreement, a panel may only make rulings and recommendations where a party considers that any benefit accruing to it directly or indirectly under the relevant covered agreement is being nullified or impaired or the attainment of any objective of that Agreement is being impeded as a result of the existence of any situation other than those to which the provisions of paragraphs 1(a) and 1(b) of Article XXIII of GATT 1994 are applicable. Where and to the extent that such party considers and a panel determines that the matter is covered by this paragraph, the procedures of this Understanding shall apply only up to and including the point in the proceedings where the panel report has been circulated to the Members. The dispute settlement rules and procedures contained in the Decision of 12 April 1989 (BISD 36S/61-67) shall apply to consideration for adoption, and surveillance and implementation of recommendations and rulings. The following shall also apply:
(a) the complaining party shall present a detailed justification in support of any argument made with respect to issues covered under this paragraph;
(b) in cases involving matters covered by this paragraph, if a panel finds that cases also involve dispute settlement matters other than those covered by this paragraph, the panel shall circulate a report to the DSB addressing any such matters and a separate report on matters falling under this paragraph.”
There is no jurisprudence that illuminates the scope of Art. XXIII:1(c). However, two types of situations that could possibly fall under this provision can usefully be distinguished. First, situations of the kind that the drafters had in mind, namely a general depression, high unemployment, collapse of the price of a commodity and other emergencies in international economic relations that cannot be corrected by the action of a particular government; and, second, situations that are within the control of a particular government and therefore capable of being modified by that government. 13
In the first type of situation, Art. XXIII:1(c) has never been used for the purpose its drafters had in mind, namely to permit the Parties or Members to suspend the application of obligations under the GATT/WTO in response to an international economic emergency. In the case of an invocation of Art. XXIII:1(c) for this purpose, there is no complainant or respondent; there is merely a proposal to adjust obligations to respond to a situation that members are unable to prevent. For this reason, matters related to a situation might, according to Art. XXIII:2, be referred to the DSB without prior consultations with another member. The relevant passage states in Art. XXIII:2 that, “
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