Article 22 of WTO dispute settlement as found in Annex 2 of the WTO Agreement deals with compensation and the suspension of concessions.
I'm wondering what kind of retaliation this entails. The article talks about "Compensation and the suspension of concessions or other obligations". But it's hard to put that into context.
This question spurred from a comment Sjoerd made (I'm quoting an excerpt) in the context of a hypothetical Northern Ireland border dispute at the WTO by China:
if China complains, all WTO can do is to grant China permission to apply a retaliation tariff on UK and/or EU goods
This seems very mild. Given the talk about WTO rules, PM Johnson has cited article 24 GATT to have continued free trade while a new agreement is negotiated.
Other countries (Argentina, Brazil, Canada, New Zealand, Thailand, the United States, and Uruguay), however, have already stated in a letter to the EU and UK missions to the WTO and UN, respectively, that:
The modification of these TRQ access arrangements cannot credibly be achieved through a technical rectification. None of these arrangements should be modified without our agreement. In this context, we expect a high degree of transparency through the sharing of relevant information and data. In the case of substantial changes affecting the balance of concessions, the whole membership of the organisation may take interest. A bilateral understanding between the United Kingdom and the remaining 27 Member States would not be sufficient in this regard, nor would a technical rectification be acceptable.
My question is to what extent other WTO members can punish the UK and EU (in this example, but I'm asking in general) through the aforementioned article 22 in case they lose a WTO dispute.