Study Of Legal Issues Of Cross-retaliation In TRIPS

Trade retaliation as the last resort of the WTO dispute settlement system enables DSB to authorize the winning party to suspend WTO concessions or other obligations in order to induce compliance. Cross-retaliation, especially cross-retaliation in TRIPS can threaten developed countries to comply with the decision without doing harm to developing countries.There are three cases being authorized cross-retaliation in TRIPS, EC-Banana Ⅲ, US-Gambling and US- Upland Cotton. The winning parties finally reached satisfactory solutions with the losing parties in the negotiation stage through the threat of cross-retaliation in TRIPS. Therefore, the cross-retaliation in TRIPS is still an effective tool to induce compliance. Developing countries should pay attention to how to successfully apply for cross-retaliation in TRIPS. The authorization of cross-retaliation shall comply with DSU22.3 and arbitration under DSU22.6. In the arbitration of retaliation, arbitrators shall examine the conditions of cross-retaliation. Thus the study of interpretations of conditions stipulated in DSU22.3 by arbitrators can provide references for developing countries applying for cross-retaliation.This article firstly analyses the essential questions of trade retaliation such as trade retaliations theory 、the principles and characteristics of cross-retaliation; then this article goes further to argue for the effectiveness and rationality of cross-retaliation in TRIPS in order to build a solid basis for the following part; the third section of the article analyses in detail the procedural and substantial requirements of cross-retaliation and the examination standard of arbitrators based on the three cases; the fourth section comparatively analyses the three case and summarizes the defects and difficulties of cross-retaliation in TRIPS application and comes up with some constructive suggestions; the final section focus on how China can utilize the cross-retaliation in TRIPS.