The dispute settlement mechanism of the World Trade Organisation (WTO) has emerged as a strong and efficient resolution mechanism in the contemporary world. How would you rate the dispute settlement body (DSB) of the WTO compared to other multilateral dispute resolution mechanisms such as the International Court of Justice?
I agree that the dispute settlement mechanism of the WTO has proven to be very strong and efficient, and in many ways very powerful. In fact, it is probably the most powerful international juridical institution (or tribunal) that exists at the international level, in an institution that has broad competence (more than very narrow technical matters). It is interesting to compare it with the International Court of Justice. The WTO dispute settlement procedure, since it was created at the time that the Marrakesh (Uruguay Round) treaty came into force on January 1, 1995, has more than 349 cases instituted. A large number of these cases do not go on to an actual panel proceeding, suggesting that there is quite a bit of case settlement going on. Nevertheless, the system has already produced 121 adopted panel reports and 78 adopted appellate body reports.
The appellate body procedure is quite unique and has lent an enormous amount of credibility to the analytical rigour of the process. These adopted reports all together provide more than 30,000 pages of jurisprudence. It is notable that this has occurred in slightly more than 10 years, and is many times the amount of case handling that the International Court of Justice can claim for the same period (or even longer). Of course, the issues before the International Court of Justice are quite different from those before the WTO, and the procedure for the International Court of Justice is less precise and a bit more political in structure than that of the WTO dispute settlement system. Nevertheless, the quality of jurisprudence of the WTO is very high, when observers compare it with other international tribunals, and also high in comparison with other international or national supreme courts like the European Court of Justice. I am not trying to rank those, mind you. I am simply saying that the quality and workmanship as well as rigour and analytical elements of the WTO jurisprudence can hold their own against any of those other juridical institutions.
Some scholars have argued that the DSB of the WTO should also be used to enforce non-WTO obligations of WTO member countries. And that the entire body of public international law should be applicable law for the WTO. How do you respond to this argument?
The question of how non-WTO obligations should relate to the juridical activity of the WTO is quite complex. I think, politically, it is not going to be possible to go very far in that direction in the near future. In addition, I doubt that it is wise for the WTO dispute settlement system to reach out and try to embrace the entire body of public international law, partly because the WTO dispute settlement system is relatively short on resources, particularly compared to some other international juridical bodies such as the International Court of Justice.
But there will inevitably be some issues where, if the WTO dispute settlement system does not give recognition to non-WTO obligations (which might be used as a defence in the WTO case), an element of injustice occurs. In addition, it could add to the burden of the disputants because they might have to take a portion of the case to another tribunal, which would not be very efficient.
I think the answer to the question is that the WTO dispute settlement system will have to look at situations involving non-WTO obligations on a case-by-case basis and proceed very cautiously to embrace such non-WTO obligations only in rather special cases.
The panels and the appellate body (AB) have been criticised by some scholars for displaying judicial activism. Is this charge appropriate, or is it an exaggeration? Do you think that panels and the AB should pursue some judicial activism in their functioning?
Judicial activism is a rubric that is often hurled at juridical institutions, both at the nation state and the international level. There is a great grey area about judicial activism. Clearly, a juridical institution ought not to be overtly and aggressively attempting to “make law” in a legislative sense. However, many critics argue that such a juridical institution should not try to fill gaps and in some cases should be much more constrained in the way they interpret the material.
This is a viewpoint that can be quite damaging to any juridical institution, particularly when the subject matter of the juridical institution is treaty language. When a treaty has been negotiated by a hundred or more members, and applies to 150 or more members, it is inevitable that there will be gaps and ambiguities. To argue that the juridical institution that has been set up by the members precisely to resolve some of these problems should be timid or unduly restrictive in how it goes about the task of gap-filling and ambiguity-resolving, is really to manifest a hostility to the whole notion of the importance of the juridical institution, which after all is designed to provide predictability and security to millions of entrepreneurs who depend on the rules and need some direction and resolution of disputes on the meaning of treaty language.
So, in reference to the way in which the question has been formulated, I think it is inevitable for an international juridical institution such as the WTO and its panels and appellate body to pursue some “judicial activism” in its functioning. The more the WTO as a total institution, including its decision-making and negotiation processes, seems paralysed, the more members will seek to take their cases to the dispute settlement system where they, in fact, seem to be able to make some progress in correcting some of the flaws of the institution and its members. Consequently, there is a tension between the dispute settlement system and the non-dispute settlement system, and this should lead members of the WTO to be more responsible in developing the organisation’s negotiating and decision-making procedures, by which the parties, members of the WTO, can express and negotiate and resolve their differences in a situation that is somewhat different from and perhaps more constructive than litigation.
What do you think are the main flaws of the DSB? And how should these flaws be corrected?
It is not easy, maybe even impossible, to list the “main flaws” of the DSB in any complete inventory. A few items might be mentioned, however, based on observations of a number of astute persons. Of course, there is often controversy about whether a certain attribute is, in fact, a flaw or a beneficial attribute. But the jurisprudence of the WTO seems unduly “textual”, although there is an indication that some early members of the appellate body thought that this was an appropriate way to gain credibility as being objective. As time goes by, however, the credibility of the WTO dispute settlement system seems reasonably well established and, therefore, a bit of experimentation or leeway in the way the treaty text is handled to achieve a resolution of problems that could otherwise be very inefficient for the WTO, is worthy and supportable.
Another problem that some have observed has been (at least at the panel level) the very elaborate length of the opinions, and sometimes the tediousness of the recited detail. This length and detail often occurs when the case involves a number of small issues, which can be as many as 40 or more in a particular case. Panels have sometimes felt it necessary to handle each one of these small issues with a fairly fulsome written rationale, when it might be possible, as a matter of style, to enunciate some principles and then indicate how those principles might be carried out in specific detailed situations.
There is also some criticism of the dispute settlement panels and appellate body, regarding the way they handle preparatory work of the treaties. This, of course, is a troublesome question and has been debated for many decades, if not longer, in general international law. But there are some situations in the WTO, particularly relating to safeguards and the “unforeseeable criteria” for certain measures, in which the dispute settlement reports seem to have ignored important features of the intent of the parties reflected in the preparatory work.
Developed countries such as the United States and the European Community have a poor track record in terms of complying with the rulings of the DSB. What kind of impact does such non–compliance have on the WTO? Do you approve of more stringent rules in the DSB to stop such abuses by developed countries?
The question assumes that the US and the EC have a poor track record in terms of compliance, and it may be possible to make the judgment that the track record of the US and the EC is somewhat less compliant than other cases in the WTO. However, overall, the track record of compliance appears to be very good, even including the US and the EC. The director of the legal service of the WTO has stated, at a conference, his opinion, that seems quite persuasive, that the compliance record on the whole has been quite good.
Of course, the US and the EC are among the largest economies under the supervision of the WTO. And so it is not surprising that each of these entities has a very large number of cases in which they have been disputants (either complainants or respondents). Because they have had such a large number each, it is not surprising that there have been at least a few cases in which it can be said that the degree of compliance has not been too salutary. If this were more typical and more frequent, it could have an impact on the credibility of the total dispute settlement system and would, therefore, undermine some of the policy goals of having the dispute settlement system. Personally, I do not think we are at that point yet.
With respect to the US, it has been observed that for the most part when it can comply by executive action without recourse to congressional action, the US does comply. The US has stated that its policy is always to comply. The difficulty for the US has come when it has had to obtain congressional legislative action in order to comply appropriately. Nevertheless, even in some of those cases there have been recent actions by Congress to comply, and I believe the trend towards good compliance will be more manifest as time goes by, and the governments of the world become more familiar with the processes and the policy reasons for compliance with the dispute settlement reports. I understand that there are various ideas for more “stringent rules” in the DSB to stop “abuses” by developed countries, but I do not think those are necessary yet.
I doubt that more stringent rules would be a very effective way, in the longer run, to achieve better compliance. In the Sutherland Report of the consultative body, established by the then WTO director-general Dr Supachai, the group reported considerable satisfaction with the WTO dispute settlement system and warned against certain proposed changes, suggesting that the main goal at present for the DSS is to “do no harm”. |
