The Arbitration Panel Report in Ukraine – Export Prohibition on Wood Products: Lessons from the ‘Pegasus’ of International Adjudication

The Arbitration Panel’s decision in Ukraine – Export Prohibition on Wood Products suggests the emerging trend among some Word Trade Organization (WTO) Members to settle their trade irritants regionally. This dispute was adjudicated between the EU and Ukraine, which are both WTO Members, under the WTO rules that are incorporated by reference into the Association Agreement between these parties and by the Arbitration Panel the two members of which are well-known WTO adjudicators. The dispute settlement proceedings in this case thus illustrate how regional dispute settlement mechanisms work in practice and shed some light on whether these mechanisms could serve as a viable alternative to the WTO at the time of the ongoing WTO dispute settlement crisis. Moreover, from a substantive perspective, some may view this decision as an important milestone in international economic law, which contributes to the long-standing debate on how the right balance should be struck between trade and environmental considerations, in this case, the conservation of forests. This article, however, addresses several important shortcomings in the Arbitration Panel’s reasoning, which appear to diminish the relevance of the decision beyond the dispute at hand.