Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear (DS461)

In this paper, we examine the recent WTO dispute Colombia – Measures Relating to the Importation of Textiles, Apparel and Footwear. The dispute centers on the appropriate use of trade measures to target trade-related money laundering, the WTO consistency of such measures, and an ancillary question of appropriate time for remedies to be applied. The economics of the measures employed do not directly target the ostensible justification for the measures, while Colombia failed to convince the Panel and Appellate Body of key points related to the necessity of the measures taken. There has been success targeting trade-related money laundering following from cooperation of customs authorities and financial regulators to more directly target the agents involved. There may be a role for the WTO, in the form of steps taken to encourage such cooperation (as in Argentina – Measures Relating to Trade in Goods and Services). The basic lesson is that second best, blunt, and likely misdirected policies are not easily justified at the WTO, though more direct measures may be