In the ongoing arbitration in the U.S. - Cotton Subsidies case, the parties disagree on the purpose of "countermeasures" imposed under SCM Agreement Articles 4.10 and 7.9. In its written submission, the United States argues:
340. Articles 4.10 and 7.9 of the SCM agreement – which specify that countermeasures should be “appropriate” and “commensurate,” respectively – are consistent with the DSU’s focus on rebalancing concessions. Like Article 22.4 of the DSU, these standards focus on the effects of the disputed measure, not the level of countermeasures necessary to create sufficient political will to change the measure. Indeed, the footnote accompanying Article 4.10 notes that countermeasures (even in response to prohibited subsidies) shall not be “disproportionate in light of the fact that the subsidies dealt with under these provisions are prohibited.” An action can be prohibited by one of the WTO agreements and yet Article 22.4 of the DSU only authorizes rebalancing. ...
By contrast, Brazil argues in its submission that:
476. Brazil recalls that, as in general public international law, countermeasures in WTO law also serve the goal of encouraging the offending party to comply with its obligations. ...
So, we have two purposes suggested here: rebalancing concessions and encouraging compliance. My question is, does it really have to be either/or? Can't the provisions have a dual purpose? I should note that it's not clear to me if the United States is arguing that the purpose of countermeasures is only to rebalance concessions and if Brazil is arguing that the purpose is only to encourage compliance. Perhaps they are both just trying to highlight a particular aspect.
