The DSU, relative to GATT and other previous trade agreements, is a significant innovation. Overall, many writers have had positive evaluations. n306 Regardless, the system is still flawed. This comment asserts that the enforcement and compliance problems are aggravated when dealing with commercial aviation subsidies. The DSU has already been widely criticized. The extent of this critique will be limited to the major flaw that is salient to the aviation dispute. The DSB has a difficult time enforcing its recommendations and rulings when the stakes are high. In situations like the instant case, the DSU cannot produce an effective solution through litigation. There is a self-defeating loop created when both parties have committed similar violations. In this situation, compliance under the DSU is supposed to be compelled by a party who is also guilty of the same violation. This comment has asserted that all large civil aircraft producers have benefited from subsidization. Alleged subsidy violations, in regard to the civil aviation industry, will inevitably be defeated when both sides succeed with their claims. The SCM Agreement cannot be enforced under the DSU when applied to large civil aircraft. As EC-Bananas, U.S.-FSC, and the Canada-Brazil aviation disputes have demonstrated, the DSU lacks a reliable compliance mechanism. While the DSU is an improvement over GATT, it has the same inherent problem of any international agreement-lack of enforcement.
The remedy for non-compliance under the DSU is self-help. This is problematic because it relies on the individual complainant to serve as an enforcer when a losing member resists a ruling. In disputes like the Canada-Brazil aircraft case where both sides are expected to be an enforcer, the agreement being subjected to litigation will not be upheld. It is in the best interest of both sides to refrain from engaging in a trade war. The result is non-compliance. Consequently, the SCM Agreement is less likely to be enforced. The presence of a government subsidy is evidence that the State has an interest in that industry. When a member is devoted to maintaining non-compliant behavior, the DSU is unlikely to be effective. In instances like U.S.-FSC, the offending party can thwart compliance. Strong trade activity between members, like the United States and the European Union, discourage the use of authorized retaliation. This allows foot dragging and leads to no result from litigation.
In the event of a settlement, or compliance after litigation, it would be a major mark of success for the WTO. Considering the instant dispute is thought to be the biggest case brought to the DSB, a successful resolution would add to the creditability of the DSU and the WTO overall. Most likely, however, this dispute will serve as another footnote pointing to the shortcomings of the DSU. The circumstances have created a scenario that makes enforcement of the SCM Agreement unlikely. Both sides we likely the be found guilty of subsidization and neither side has a great incentive to give up its practices. The self-help trade sanctions made avaliable as an enforcement mechanism have dubious utility in this dispute. Despite the amount of attention the dispute has received, government support of the large civil aircraft industry will be maintained. If any changes are implemented, the aviation subsidies on both sides of the Atlantic will simply masquerade in different garbs. Any compliance will surely be token and subsidies will appear in different forms. Finally, the SCM Agreement, as applied to large civil aircraft, is not pragmatic. Proponents of the agreement ignore the unique demands of the large civil aircraft industry. Halting subsidies to aviation manufacturers stifles innovation, handcuffs competition, and is unrealistic.