From Bananas to Large Civil Aircraft: An On-Going Quest for Value-Added in the Computation of Countermeasures at the WTO

ABSTRACT This article discusses the methodology used in the quantification of the level of authorized countermeasures in trade disputes settled under the auspices of the World Trade Organization (WTO)’s dispute settlement system. It discusses the legal framework pertaining to the quantification of the level of the remedies provided for under the WTO agreements in case of failure by the respondent to timely comply with the rulings and recommendations of the Dispute Settlement Body and where no agreement on compensation is reached: suspension of concessions and countermeasures. It analyzes whether the current understanding of ‘damage’ in WTO law is consistent with the prevailing economic reality and suggests an alternate interpretation that would account for value actually added on the territory of the complainant as a basis for quantification of the level of countermeasures. Finally, the article responds to ‘pragmatic’ arguments advanced by those who conceptually oppose to a methodological reform that would authorize countermeasures based on the share of value-added attributable to the complainant rather than on the gross amount of exports of the good affected by the impugned measure.