The dispute settlement mechanism established under the World Trade Organisation is one of the most notable achievements of the multilateral trading system. It is unique among international tribunals adjudicating disputes among sovereign States in that it is generally able to enforce, in an economically and politically meaningful way, rulings sufficient to compel a violating party to reform its act or omission. By improving the prospect of compliance with rulings, the WTO Dispute Settlement Understanding (DSU) constitutes an essential element in ensuring the legal certainty and predictability of the multilateral trade system.

For a country to maximize its trade potential under the multilateral trade system, it must be able to pursue its trade interests and defend its trade rights if needed. The skills and resources necessary to enable effective recourse to the WTO dispute settlement mechanism have been cultivated in most developed countries but not in many developing countries. Egypt has a vibrant private sector which has strong trade interests as well as a responsive public administrative system and thus possesses some of the fundamental ingredients necessary to avail of the WTO dispute settlement system. Egypt has been formally challenged at the WTO on four occasions but is yet to initiate a complaint against a trade partner, albeit a number of trade barriers have already been identified. For Egypt to surmount this challenge, it is crucial that the private sector is engaged in Egypt’s foreign trade policy discussions, especially as it relates to the use of the various mechanisms in the multilateral trade system for the purpose of advancing Egypt’s trade goals. For the private sector to engage effectively in this process, it is critical that its understanding and appreciation for these mechanisms, including in particular the DSU and the WTO agreements, which have been relevant for its pursuit – or defence – of its trade interests, be continuously enhanced. Indeed, a stronger public-private partnership borne out of intelligent engagement is critical to facilitating Egypt’s ability to achieve its sustainable development objectives through trade.

As a contribution to this process, on 15-16 April, 2007, the Trade-Related Assistance Center at the American Chamber of Commerce in Egypt (Amcham) and the International Centre for Trade and Sustainable Development (ICTSD) brought together experts from Egypt and Geneva to discuss primarily (i) the strategic value of the WTO dispute settlement to Egypt’s private sector, and (ii) how a strong public-private partnership in Egypt can optimise use of the system, as well as exploit alternatives to it, as a means to maximize Egypt’s trade potential. The national dialogue served as a platform for the private sector to engage in discussions with WTO experts; to strengthen its knowledge and understanding of WTO law and options for pursuing its trade objectives through dispute settlement; and identify possible strategies that could facilitate a more effective engagement of the system where the need arises. The dialogue was conducted in an open, informal manner and encouraged frank discussions following each of the panel sessions. More than 150 participants from a broad range of affiliations including several high-level representatives from Egypt’s private sector, the Ministry of Trade and Industry, the Ministry of Foreign Affairs and academia attended the meeting.

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• Need for Enhanced Awareness of the WTO
  
  If Egypt is to advance its trade objectives over the coming years and not merely respond to increasing legal challenges raised against its trade measures by bigger trading partners, the private sector, as the direct beneficiaries of the multilateral trade system, must benefit from an enhanced understanding of the multilateral trade system and be able to engage directly and effectively with the government.
  
  Fundamental knowledge of the WTO agreements which are relevant to the trade interests – and have been the subject of disputes – of Egypt offer a good starting point for discussions with the private sector. These include agreements such as the WTO Anti-Dumping Agreement, the Agreement on Subsidies and Countervailing Measures, the Safeguards Agreement, the Agreement on Sanitary and Phytosanitary Measures and the Agreement on Technical Barriers to Trade. A deep, technical knowledge of these agreements is not necessary; rather, a basic understanding, particularly among those representatives from the private sector whose products are subjected to these types of measures, or otherwise seek to have such trade measures imposed on competing imports, is adequate.
  
  It is equally important however that the private sector is aware of the relevant measures, such as regulations, procedures and requirements, in place in their major export markets. Such knowledge would facilitate their ability to penetrate these markets and to inform government of these measures for the purpose of challenging these measures through dispute settlement, should this course of action be warranted.
  
  Legal practitioners in the private sector which serve business in Egypt also need to be familiarised with these agreements and, moreover, the DSU. However, while they may need, for purposes of advising their local clients, expertise in national legislation relevant to anti-dumping, safeguards and similar trade measures, in-depth, technical knowledge of the WTO agreements on these subjects may not be as critical. This is due to the relatively low annual number of alleged trade-distorting measures which Egypt can potentially challenge. From a cost-benefit perspective, at this stage, it may not be profitable for Egyptian law firms to spend resources on developing a high degree of expertise on international trade law. Instead, fundamental knowledge of international agreements, along with an enhanced understanding and ability of how to manage disputes, would be ‘sufficient’ for Egypt to be able to engage more effectively in international trade controversies.
  
  This is the opposite of the growing trend in law firms in the US and the EU, which see a continuing increase in the number of trade law and WTO-specific divisions employing legal and econometric experts. However, the trend is justified in these countries because of the volume of actual and potential trade disputes that the private sector in these markets contend with, which as stated, is not the case in Egypt.
  
  With respect to public sector awareness, it is recognised that a relatively good foundation of expertise has been developed in the government. The necessary institutions have been established in the pertinent ministries and while additional resources are always useful, the conference discussions indicated that initiatives on awareness-raising should focus on the private sector. To enhance the government’s expertise however, key experts at the conference suggested that Egypt explore the possibility of more active participation as ‘third party’ in disputes at the WTO. This offers Egypt the opportunity to engage in the dispute settlement mechanism without incurring excessive cost and contending with the expected political considerations that attach to the initiation of a dispute as a complainant. At the same time, it allows Egypt to learn the practice and nuances of litigation from other WTO Members, which have had more experience and are more sophisticated in their use of the DSU.
  
  A forward-looking strategy which should benefit both private sector and government legal practitioners is the establishment of training programmes similar to those undertaken by Brazil and Chile. Young lawyers with an interest in international trade law are offered internships in their countries’ Geneva-based WTO Missions, in international or domestic law firms, or in government offices that deals with international trade law. Some of these programs even include options for these young professionals to rotate among these agencies. These programmes encompass multiple benefits: they allow these professionals to tap into the vast pool of foreign and domestic experience to advance Egypt’s level of proficiency; the firms offering internship profits from free or lower-cost assistance; in return for agreeing to their employees’ participation in these programmes, the interns’ original employers receive enhanced capacity and the opportunity to strengthen their competence. The government is also strengthened by private sector training programmes as they enable the government to tap into additional domestic resources when necessary.



• Options for Litigation in the WTO
  
  Constraints arising from lack of technical, legal expertise with respect to WTO are likewise mitigated in the case of Egypt by its membership in the Advisory Centre for WTO Law (ACWL). The ACWL is an inter-governmental organization based in Geneva which functions like a law firm in providing legal services, albeit at substantially-reduced rates, to developing countries which seek to (i) obtain advice on legal issues relating to the WTO, and (ii) use the DSU to settle a trade dispute. ACWL has distinguished itself for the quality of its work, as evidenced by several disputes it has successfully litigated on behalf of developing countries.
  
  Given the availability of the ACWL’s services, financial considerations often-cited in different fora should also be less of a concern for the private sector in Egypt. Furthermore, engaging in cost-benefit analysis of the gains to be made from trying to seek an expeditious resolution of a trade dispute vis-à-vis the continuing expense resulting from implementation of the contested measure frequently shows that there may be merit to availing of the DSU. At the very least, cost-benefit analysis provides the private sector with knowledge of the costs involved with either option (litigating as opposed to maintaining the status quo).
  
  A further option for the private sector in Egypt would be to engage the legal services of an experienced foreign law firm. Oftentimes, foreign law firms can be retained to help with the revision of existing domestic measures to make them WTO-consistent, as an adjunct to a case where Egypt’s measures are being challenged under the DSU.
  
  Through the engagement of such legal experts from either the ACWL or experienced foreign law firms, the private sector not only receives the expertise needed to successfully tackle the dispute at hand; moreover, by actively participating in the preparations, including the actual litigation itself, it is provided an opportunity to develop its own capacity to pursue its trade interests in the future.
  
  In terms of procedure under DSU, Egypt could also consider alternative dispute resolution mechanisms such as mediation, conciliation or availing of the good offices of the WTO director-general to settle trade disputes in a less contentious way. These mechanisms can be more expeditious, less costly and allow Egypt to engage in dispute settlement without losing the political or diplomatic margin for manoeuvre which the government may wish to maintain. Moreover, because of the ‘soft approach’ towards dispute settlement, these alternatives overcome in part the dilemma that WTO Members often have in initiating disputes, i.e., gathering the political will to challenge in adversarial legal proceedings a trading partner which Egypt may want to maintain good trade relations with.



• Private Sector Coordination
  
  As Egypt’s trade volume expands and its market becomes increasingly important to international trade, the prospect of trade-related legal controversies likewise increases. It is therefore imperative that the private sector be coordinated and strengthened in its capacity to prepare for legal challenges as well as to pursue resolution of trade impediments it may face.
  
  Reference to successful coalition-building initiatives in other countries, such as the Coalition of Services Industries in the US, the European Services Forum in the EU, similar federations in Brazil, Hong Kong and others provide possible models for Egypt to emulate. These coalitions allow the private sector a more efficient method for sharing information and leveraging its interests in respect of trade policy and regulation. Furthermore, these models show how the private sector can effectively organize to enable itself to manage trade problems at the earliest stage possible so as to avoid trade disputes. Through these, the task of disseminating knowledge and training on the relevance of international trade law for the Egyptian private sector and the possible economic gains to be made from engaging the WTO dispute settlement system becomes more expedited. It likewise fulfils more evenly the need for heightened domestic awareness of Egypt’s rights under WTO law and increased transparency in trade related public sector decision making. The initiative of engaging directly with the government and in closer cooperation is made easier as the ministry need not deal with disparate representatives but rather a coherent constituency.



• Public-Private-Partnership
  
  A strengthening of the coordination and cooperation between the government and the private sector in Egypt was comprehensively discussed during the conference. Experts as well as participants agreed that streamlining a continuous operation of public-private-partnerships is a key element in enhancing Egypt’s capacity to advance as well as defend its trade interests. The framework for such a partnership and the degree to which it should evolve however was viewed differently, by the public or private sector representatives. From the perspective of the latter, it is crucial that the government’s decision making process for trade related issues be made more transparent to enable Egyptian businesses to best position themselves vis-à-vis exports and competing imports. Furthermore, a more speedy and efficient information process between the two sectors is needed to ensure that the private sector is well-informed about new developments, for instance, in the legal and customs systems of their trading partners. This also relates to the endeavour to avoid disputes or tackle problems at the earliest stage possible.
  
  Many of the invited panellists and experts support the inclusion of the private sector in internal Egyptian discussions on new domestic and foreign trade policies, as well as in the preparations when Egypt negotiates new bilateral and multilateral trade agreements. This direct participation would ensure that needs and concerns are represented and considered before agreements are inked. Currently, according to private sector participants, the flow of communication from the government to the private sector runs slow, and the latter is often times not made aware of changes or new developments that may affect it until injury has occurred. Government representatives, although defending their efforts to monitor trade flows and inform the private sector, agreed that they too would benefit from a stronger and more permanent collaboration, and that the modalities on how the private sector could be more closely involved - at all stages - when dealing with international trade matters should be carefully explored. Although the government will likely have to go through the usual bureaucratic process prior to agreeing and implementing a permanent cooperation initiative, the private sector was encouraged to pursue such a process continuously through a cross-sectoral effort. AmCham was named as a strong potential partner which could facilitate contact with the government and support permanent partnership initiatives.



• Regional Dispute Settlement Options
  
  Discussions on Egypt’s options for settling disputes outside the WTO and instead at the regional level, and the possible benefits that may flow from this, elicited much interest. The EU Partnership Agreement currently being negotiated and other regional trade agreements containing dispute settlement provisions were highlighted by the experts as key mechanisms which Egypt ought to negotiate carefully to enable these to provide constructive alternatives should a controversy arise from these regional and bilateral agreements. Whether these accords will in fact serve as frameworks for new independent dispute settlement structures and if so, how comfortable their Members will be actually invoking them, according to the experts, remains difficult to foresee for the time being.
  
  After ten years of operation, the WTO dispute settlement system has developed extensive and detailed jurisprudence, which offers prospective litigants a fair idea of a possible outcome. The cultivation of unswerving jurisprudence is neither an easy nor expedious task and even if not having had experience with the system first hand, a novel user may prefer operating a mechanism which has already laid out a significant amount of guideposts. Furthermore, the WTO agreements including DSU, although to a large degree advocated by stronger, developed countries, were negotiated in a forum which included developing countries. The adjudicative proceedings are governed by the rule of law and is therefore in principle, and arguably so in reality, equal for all countries. Bilateral trade agreements, in comparison, are negotiated in ‘closed’ environments that only include the prospective signatories. When strong economies negotiate trade accords with weaker or poorer trading partners, the agreed obligations will often times reflect the questionable dynamics.
  
  Nonetheless, bilateral and regional trade arrangements may serve as excellent laboratories for Egypt to develop its trade policy objectives, short term as well as long term. More importantly, the experiences that Egypt may draw from negotiating the framework for these trade agreements which are based on WTO-plus obligations, may strengthen its capacity to foresee and handle trade concerns at a much earliest stage and avoid disputes with all the complexities this entails. The Chile- and Mexico-EU agreements were drawn out as interesting examples which Egypt could advantageously study in great detail before continuing its own negotiations with the EU. The Chile / Mexico accords, along with other trade agreements, offer remarkable insight into what ones’ trading partners consider key issues, and how far the party is willing to stretch its policies. The experts encouraged the private sector to familiarize itself with previous EU agreements in an attempt to identify Brussels’ objectives and strategies. These efforts are seen as helping the sector pursue its trade interests and ensure that their concerns are considered when government-led negotiations take place.

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The huge impact and the many political and economic benefits a more profound and constant engagement in international trade law by the Egyptian private sector would bring forth was recognised by the conference. Supporting immediate action and devoting the necessary financial and human resources to implement the many proposed initiatives was a key general conclusion. More specifically, the conference formulated the following suggestions:

• Raising domestic awareness, including in both the public and the private sectors about the basics of international trade and WTO law, as well as laws and regulation of important trading partners; important to highlight why these are relevant to Egypt and what benefits it can draw from this.
• The establishment of training programmes for young lawyers in the private sector.
• Conduct of cost-benefit analysis in considering whether or not to initiate trade disputes.
• Maximize benefits arising from Egypt’s membership in the ACWL.
• Whenever possible, participation as a third party in WTO disputes for Egypt to familiarize itself with the system in a cost-efficient and politically low-key manner.
• Avail of alternative dispute resolution mechanisms at the WTO and careful negotiation of dispute settlement provisions in preferential trading arrangements.
• Need to examine good practices in coalition-building in other countries and implement the appropriate model in Egypt.
• Stronger private sector engagement in domestic foreign trade policy discussions and partaking in negotiating and designing new trade agreements.
• Increased transparency in international trade-related government decision making processes and more efficient inter-agency coordination.
• Strengthening of public-private partnerships through the establishment of permanent initiatives.
• The pooling of domestically-available resources among private sector representatives, government officials, civil society and academia.

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