Waincymer, Jeffrey --- "Transparency of Dispute Settlement within the World Trade Organization" [2000] MelbULawRw 32; (2000) 24(3) Melbourne University Law Review 797
Transparency of Dispute Settlement within the World Trade Organization
JEFFREY WAINCYMER[*]
[The World Trade Organization (‘WTO’) has become the key international institution regulating intergovernmental relations with respect to trade. As the work of the WTO has become more significant and pervasive, a number of critics and commentators have questioned its principles and processes. One question is whether these are sufficiently transparent. This paper seeks to evaluate that challenge. It considers the nature of transparency, the relevance the concept has to an international organisation and analyses various aspects of the WTO system, in particular, the dispute settlement process. The article suggests that the debate is confused because there are a wide variety of meanings of transparency that should not be mixed in the analysis. Recent developments in the field of publication and access to domestic rules and processes are appropriate and sufficient. Where dispute settlement is concerned there are many procedural uncertainties which adversely affect transparency that raise more broader concerns. The paper argues against the desirability of allowing private party rights of standing in WTO dispute settlement as an appropriate means of promoting greater transparency.]
INTRODUCTION
Key landmarks in time often inspire reflection on important past developments and their implications for future policy directions. In a Centennial Symposium dealing with legal issues, a vast array of issues might be considered. The field of international economic law suggests one obvious subject for such analysis and evaluation: the World Trade Organization (‘WTO’). Established by international treaty in 1995,[1] the WTO is now the primary international body dealing with intergovernmental trade relations. It replaced the General Agreement on Tariffs and Trade (‘GATT’),[2] an intergovernmental agreement that had operated for nearly 50 years.
The original GATT merely concerned itself with governmental interference in international trade in goods. It sought to limit the barriers to trade available to domestic governments. In particular, it sought to promote non-discrimination and, wherever some form of domestic industry protection was considered desirable, the use of tariffs rather than quantitative restrictions. While it did not mandate free trade, it sought to foster moves towards it by providing a framework for the reciprocal negotiated reduction of tariffs over time. Significant exemptions were built into the system. It had no formal organisational status.[3] Over time, however, it developed a rudimentary dispute settlement system.
The limited coverage and primitive organisational structure of GATT led to a desire for a comprehensive negotiation aimed at redressing these limitations. The negotiation, known as the Uruguay Round and held between 1986 and 1993, led to the establishment of the WTO. The WTO was the first significant international organisation established after the end of the Cold War. From the perspective of a country such as Australia, with its limited power on the world stage and its strong reliance on international trade in products subject to the greatest historical protectionism, it is an important field of research from which to draw conclusions as to the nature and utility of international law and institutions. Agreements effected under the WTO broadened the coverage of GATT norms to encompass trade in services, trade-related aspects of intellectual property and trade-related investment measures. The negotiations also led to expanded rules on sanitary and phytosanitary measures, textiles, agriculture, subsidies, anti-dumping duties and safeguards remedies. A particularly significant and novel development was the conversion of the GATT dispute settlement system into a binding and compulsory system with an appellate process.[4]
To supporters of the GATT–WTO system,[5] these were significant and commendable achievements that furthered the desirable trend from power-based to rule-based trade relations.[6] The contrary view is that these were alarming developments that would exacerbate the negative impact of globalisation and further limit sovereign rights and powers to support meritorious non-economic values. These issues collectively became a rallying cry for a reassessment of global governance and notions of sovereignty. Calls came for the promotion of what has been described as the civil society, in which free market economic goals are integrated with and subordinated to key values, such as environmental protection, culture and labour rights.[7] Protest has also become widespread, with well-publicised demonstrations at the WTO Ministerial meeting in Seattle in November 1999,[8] and at the World Economic Forum in Melbourne[9] and the meeting of the International Monetary Fund in Prague in September 2000.[10]
Resolving these issues and exploring these contentions require that attention be given to a range of complex philosophical and economic issues. These include challenges to the supposed benefits arising from international trade, the effect of trade on the environment, the impact of globalisation and the proper governance responses to it. Notwithstanding these public concerns, economists have continued to argue in favour of the welfare-enhancing effects of productive specialisation based on the principle of comparative advantage.[11] Historians and political scientists have also sought to highlight the positive impact of interdependence and economic co-operation on stability and peace.[12] While there is relatively widespread acceptance of these potential benefits among most policy-makers, there are many implementation issues that determine whether or not the potential benefits will materialise. There are also questions as to the way net welfare gains from specialisation and trade can be distributed in a just manner.[13] Critics can certainly point to examples of exploitation, significant areas of extreme poverty and a widening gap between rich and poor. Thus, the debate must remain a live one, regardless of any theoretical models or predictors.
While these issues are primarily debated within the fields of economics and political science, legal analysis is also highly relevant. This is so for a number of reasons. Firstly, in the international arena, there are no obvious law-creating and enforcement mechanisms that can ensure that optimal policies are adopted and then rendered into express and binding rights and obligations. Secondly, it is hard to derive a consensus position in complex international policy matters, particularly when these require trade-offs between competing values. Negotiations are hard to manage, with countries of vastly differing levels of interest and expertise operating within a largely consensus-based framework. Thirdly, where rules are developed, there is an added difficulty in devising and optimising dispute resolution mechanisms that support the commitments, but which also earn the respect of participants and observers in terms of the logic and consistency of their adjudicatory methodology.
These issues arise in a wide range of international contexts. Where international economic law is concerned, the GATT–WTO system has been unique, particularly in terms of its development and utilisation of a binding dispute settlement mechanism. Once again, supporters of the system hail it as a success and potential model for other areas of international relations.[14] Critics see it as unduly secretive and powerful and an improper creator of new legal obligations beyond the sphere envisaged in the intergovernmental negotiations.[15] This debate raises important jurisprudential and practical questions about the nature and elements of the system and desirable reforms that ought to be made to it.[16]
While the conceptual debate often reflects intensely polarised views, at times there are common criticisms from both supporters and opponents of the system. Calls have been made of late to increase the transparency of the work of the WTO, particularly the dispute settlement system. These calls have come from Members of the WTO,[17] key members of the Secretariat[18] and academic commentators.[19] Similar calls have also come from external bodies, particularly through representatives of non-governmental organisations (‘NGOs’) that deal with issues such as the environment and labour rights. To varying degrees, they have argued that increased openness and dialogue with a wider range of interests will lead to more equitable and efficient outcomes in WTO processes.[20] Calls for greater transparency have also formed an umbrella for a quite distinct and important conceptual challenge to the desirability or otherwise of a direct legal role for NGOs and private parties within the WTO system.[21] At the extreme, that debate questions the nature and role of sovereignty in international economic law.[22]
In many public fora the criticism of the system tends to be of a vague nature, calling for greater levels of transparency without identifying just what aspects of the WTO system are failing in this regard. Moreover, such advocates rarely seek to consider the concept of transparency itself, where it ought to fit into the WTO, and why this should be so. Bringing a varied range of issues together under the heading of transparency can only serve to confuse and complicate already difficult issues. For this reason, the essential aim of this paper is to place each of the challenges into its appropriate conceptual context and, where appropriate, provide preliminary responses.
The paper begins by identifying the background to the challenges to, and the meaning of, transparency. Attention is then given to its role as a concept in the wider scheme of the WTO, particularly in relation to the dispute settlement system. The paper concludes by challenging the arguments that have been presented in favour of the most radical reform proposal that has been promulgated under the rubric of transparency: the suggestion that private parties and NGOs be given direct standing within the WTO dispute settlement system. While the paper acknowledges the many problems in giving sovereign nation-states sole authority to bring and defend such disputes, a cost–benefit analysis of the proposed initiatives leads to a strong disinclination to adopt such measures, at least in the short to medium term.
II BACKGROUND TO THE CALLS FOR INCREASED TRANSPARENCY
Greater awareness of the GATT–WTO system and dissent as to its norms and aims have arisen for a number of reasons.[23] In the later years of the GATT and the early years of the WTO there has been a number of sensitive legal disputes concerning the interface between trade regulation and environmental policy. Both GATT and WTO dispute settlement panels have ruled that certain domestic environmental protection regulations are unreasonably discriminatory in form and, hence, breach international rules.[24] These findings inspired a significant attack by many environmental lobbyists. They also brought a new group of academic critics into the GATT–WTO arena.
A second factor is that, as attempts have been made to expand WTO norms or to respond to existing commitments to continue negotiations as expressed in the constituent documents, many developing countries have questioned the advantages that may accrue to their economies. In particular, the implementation by developed countries of commitments in the area of textiles trade did not accord with developing countries’ expectations. Developing countries were also concerned at the multilateral negotiating methodology, under which key discussions were often limited to leading industrialised countries.
During the Uruguay Round negotiations a number of countries were also concerned about the way in which negotiating agendas were developed at the domestic level. The main concern was that this occurred without appropriate democratic input. International trade negotiations generally take a number of years. They involve countries which have very wide negotiating briefs and which seek to obtain what political leaders and their bureaucratic advisers consider to be the most favourable outcomes in the face of the shifting agendas of their key trading partners. Individual voters rarely get to consider any of the detail of the identified goals. Yet these inevitably involve trade-offs between different sectors of the economy. This has inspired a significant debate about the propriety of such behaviour and the need, if any, to modify domestic institutions to widen public access to the policy-making stage.
The proposed Multilateral Agreement on Investment, which was unsuccessfully negotiated under the auspices of the Organisation for Economic Co-Operation and Development (‘OECD’), also raised widespread community concerns.[25] The same issues of democratic process were raised. In addition, the substantive content appeared to be more far-reaching because of its contemplation of non-discriminatory rights of establishment of enterprises in foreign economies. Consideration of the potential impact of liberalised investment rules on industries such as film and literature led to additional concerns as to the impact of such regimes on national culture and identity. The sheer breadth of the coverage of WTO norms, which addressed services, intellectual property rights, technical barriers to trade and some trade-related investment measures, ensured that there would be widespread interest and critical analysis.
These factors have brought together a disparate group of critics. Some attack the foundations of capitalism and the supposed benefits of international trade. Some are concerned with the nature and speed of change and the impact of globalisation on other values and goals. Some are concerned with the actual operation of the WTO. Some use the WTO as a scapegoat or even as a metaphor for these wider concerns. Most of the critics see it as unduly secretive and, in this context, support calls for greater transparency.
III THE NATURE OF TRANSPARENCY
Transparency is not only a concept spoken of by WTO critics. It is often referred to in the treaty provisions as a primary requirement. Nevertheless, the term is not defined.[26] Some of the specific agreements appear to use transparency as a shorthand heading for the obligation to notify changes and provide information.[27] The normative effects of these awareness measures go beyond mere provision of information to foreign traders. Here, trade scholarship is often informed by interdisciplinary perspectives. Trade scholars raise the notion of transparency as a constitutional and administrative control through domestic openness[28] and, in a related sense, transparency as an essential element of democracy.[29] Yet bringing these perspectives to bear on transparency can lead to conflicting assertions, given the different theoretical paradigms in philosophy, political science and international relations theory. For example, one perspective argues for greater individual involvement in governmental processes and scrutiny of governmental behaviour to protect against democratic deficit.[30] Another argues that secrecy and separation can protect pro-liberalisation executive branch members from the pressure arising from vested interests within the democratic system itself.[31]
A further constitutional issue relates to the roles of state governments and NGOs. In an international economic legal system based on traditional notions of national sovereignty, federal systems are harder to regulate because of their distinct legislatures.[32] Other forms of governance also raise distinct problems. For example, centrally planned economies are difficult to regulate via international trade treaties that concentrate on seeking to prescribe domestic legislative behaviour. Such economies may protect against foreign goods and services without express trade regulations simply through their own control over purchasing decisions.[33]
There are other practical issues that flow from variations in constitutional structures between different countries. For example, promoting greater involvement in the policy-making phase can be particularly difficult in countries with full separation of powers, such as the US. There is an inherent difficulty in having the executive branch of government negotiate international treaties only to find that these must then be ratified by a separate legislature.[34]
The next group of transparency issues is found at the level of the WTO rules and processes themselves, rather than the rules and processes operating domestically. At the very basic level, this includes the degree of awareness of procedural and substantive rules by the Members. Moreover, vague or incomplete rules are unlikely to be efficient. Any lack of transparency in the rules raises equity as well as efficiency issues, since these are likely to affect countries to different degrees. Those with greater legal resources would be better able to develop expertise in complex procedures and processes. Thus, a lack of transparency is more likely adversely to affect developing countries. Many of the least developed countries simply do not have the expertise to utilise fully the legal aspects of the system, which in turn fundamentally detracts from what appear to be equal legal rights.
Transparency would also have an educative effect. Clear and sensible rules and an open, well-publicised system should, one must hope, support liberalisation of trade by providing clear guidance to traders and governments. This should help prevent protectionist policies from being adopted.
The foregoing discussion highlights the broad reach of notions of transparency. It shows how inappropriate it is for critics to call merely for increased levels of transparency without directing their attention to specifics — to the reasons for the needed change and to the desirability of alternative reform options. In this context the bulk of this paper looks at the role of transparency within the dispute settlement system of the WTO.
IV TRANSPARENCY AND DISPUTE SETTLEMENT
WTO Members are currently considering whether there is a need for reform of the dispute settlement system.[35] While the revised system has only been operating for a relatively short space of time and has generally been viewed favourably by Members, some procedural modifications are already being considered. Transparency is one of the elements that is being evaluated. Before attention is given to the role of transparency in dispute settlement, a brief outline of the system is provided.
The history of the GATT–WTO system has shown the evolution of ever more detailed processes of dispute settlement. In the early years of GATT, politicians, diplomats and economists concentrated on promoting intergovernmental agreements to reduce tariffs and eschewed a technical and legalistic focus. Over time, there was a greater realisation that the demand for protectionism does not diminish simply because more liberal trading rules are agreed upon. Related to this was the realisation that, without an effective dispute settlement system that would resolve disputes in an objective and respected manner, the rules themselves would be of little normative effect.
A major feature of the WTO was the development of a revised and comprehensive dispute settlement system supported by a detailed set of procedural rules. While dispute settlement under the GATT had operated for many years with significant success, the 1970s and 1980s saw some major problems arise as a result of procedural inadequacies. The most significant of these arose from the basic consensual nature of GATT decision-making. While this was seen as a general strength of the system, it eventually became a problem in the area of dispute settlement. While the GATT developed a panel system which evaluated and reported on disputes, the results of the Panels’ deliberations were only of binding effect if adopted by consensus. The losing party could thus block an adverse Panel finding. While this never occurred in the early years of the GATT, a number of vitriolic disputes between the US and Europe in the 1970s saw this become an intermittent occurrence.[36]
Similar problems arose in relation to selecting panellists and identifying the terms of reference of the panel process itself. Once again, consensus was required. At times, responding countries were tempted to block or at least delay the establishment of Panels by refusing to agree on panellists or on terms of reference.
The negotiating parties in the Uruguay Round were thus confronted by a significant number of existing procedural flaws that required attention. The outcome of their negotiations was the adoption of an Understanding on Rules and Procedures Governing the Settlement of Disputes,[37] which included an Appendix on Working Procedures.[38] The key historical procedural flaws were directly addressed.
The revised dispute settlement system under the WTO evolved primarily from article 23 of GATT 1994, in conjunction with some specific provisions of the specialised agreements[39] and the DSU. Article 23 allows for a complaint to be brought in a number of instances, the most important being when there is an allegation of nullification or impairment of benefits under the covered agreements.[40]
The DSU sets up mechanisms and procedures for dispute settlement. The General Council of the WTO acts as a separate Dispute Settlement Body (‘DSB’) to co-ordinate all aspects of the process. The first stage of dispute settlement is the requirement of consultation between the parties.[41] If consultation does not resolve the matter, the complaining party can request the establishment of a Panel.[42] If the parties cannot agree on panellists, these are selected by the Director-General.[43] The Panel hears written and oral arguments from the parties and third party Members who have signified an interest in the matter.[44] After the hearings the Panel develops an interim report, which it provides to the parties for comment.[45] A final report is then presented to the DSB. This is adopted unless there is a consensus within the DSB against adopting it, or an appeal is brought to the Appellate Body.[46] Appellate Body reports are also presented to the DSB and adopted in the same way.[47]
The DSB has an ongoing role in monitoring compliance with any recommendations in the reports.[48] If a complaint is held to be valid and a party is asked to withdraw an offending measure and fails to do so, the successful party may be offered compensation, or can, if necessary, seek authorisation from the DSB to suspend concessions currently in favour of the offending party.[49]
The aim of this paper is not to analyse the adequacy of the procedural package per se. Rather, it is to consider transparency issues alone. Nevertheless, one overriding hypothesis is that if the processes are inadequate or ambiguous, the essential nature and workings of the system are insufficiently transparent. More contentious is the question of the appropriate content of legal norms and procedures. While it is always tempting to formalise procedures, any evaluation of sophisticated domestic civil procedures shows that no matter how detailed they are, there is always a need for flexibility and discretion and for the various rights and obligations of the parties to be balanced. It is simply not possible to make rules that identify in advance how each complex procedural decision ought to be made.
These questions need to be considered in the context of the modern trend in WTO disputes. As the rules of the WTO are becoming more and more complex, so too are the legal disputes. In the early years of the GATT, disputes often arose in relation to relatively straightforward obligations, such as those proscribing blanket restrictions on trade.[50] In many of these cases, the party in breach was well aware of its fault, but had resolved for political reasons to take a certain course of action and fully expected to have an adverse finding made against it. The current rules and disputes are quite different in their nature and scope. Many of the modern rules combine complex economic and accounting assessments. Many of the current rules also seek to combine conflicting policy goals such as the need to protect the environment and promote trade liberalisation. At times, there is a need for an evaluation of the intent behind government provisions. Other disputes deal with the reasonableness or otherwise of selected responses to legitimate societal problems. An example of a key recent dispute of this nature was the dispute between the US and the European Communities (‘EC’) about US use of growth hormones in the beef industry.[51] US farmers used such hormones while European farmers did not. The EC banned the importation of beef from cattle that had been administered with such hormones, arguing that the hormones might have posed a threat to health. The GATT 1994 allows an exemption for such bans when they are ‘necessary to protect human, animal or plant life or health’.[52] Such bans should, however, only be applied to the extent necessary and should be based on scientific principles.[53]
Procedural rules become vital for the resolution of such disputes. What kind of evidence can be presented to the Panel? Should the decision be based on the oral testimony and cross-examination normally found in common law systems or the more documentary style found in civil law jurisdictions? How is a Panel, often without legal training, and usually without scientific training, to resolve the testimony of different scientific experts? How strong must the evidence be of any potential adverse effect on health before government behaviour can be justified? By what procedure should one party be able to challenge the evidence of another? What confidentiality rights should there be in relation to the processes in issue and the evidence of the experts? This brief list of questions shows that the procedural aspects of resolving such a dispute can be just as complex as the negotiation of the substantive rules that govern the dispute. These are broad questions which, if fully answered, go beyond the scope of this paper. Nevertheless, the greater the extent to which they are not answered in the rules, or are only dealt with in an uncertain way, the more we can conclude that transparency of the norms is diminished.
Responding to these challenges requires a review of the very nature and function of dispute settlement within the WTO system. While the Members would be unlikely to make major changes or spend much time reconsidering fundamental aims in such a reform exercise, it is important to do so to consider what ultimate value increased transparency would promote. For example, there is a perennial debate as to whether GATT–WTO dispute settlement should be more legalistic or more pragmatic in form. One extreme advocates a rigid and binding adversarial system along the lines of Anglo–American common law models. The other extreme asserts that the WTO is more of a forum for peaceful and often negotiated solutions, rather than a promoter of binding adjudication. In the face of this division, merely improving the system’s legalistic features by making it more transparent will not be beneficial if the whole trend towards legalism is itself not beneficial.
Most legal scholars have been happy to support the shift to a more structured, open and objective legalistic model. The results of the Uruguay Round have encouraged this shift. Nevertheless, most observers and participants remain aware of the fragile nature of the WTO and the fundamental need to maintain the respect with which it is viewed by the international community.[54]
If there is no consensus about the answers to the questions raised above, there can be no consensus about the aims of the dispute settlement system and, in turn, about the role that transparency might play in facilitating those aims. These questions raise some of the most fundamental issues about the nature of international economic law, the role of international organisations and the role of dispute settlement mechanisms within those organisations.
V TRANSPARENCY VERSUS OTHER VALUES
At a general level we might say that the core aims of a dispute settlement system are that it should be fair — however that is to be judged — and efficient. Yet even where there is consensus as to the nature and aims of the dispute settlement system, there are added difficulties in trying to promote transparency at the same time as promoting the other values of such a system. As is invariably the case with international relations, and indeed any complex legal regime, there are many different values that we may wish to promote and which are likely to compete.[55] This raises issues of legal philosophy and economics.
Where philosophy is concerned, proponents of greater transparency would need to consider its inherent value and the inherent nature of legal systems. In an international legal system philosophical and cultural values may differ and there is a need to integrate those differences into the analysis. With regard to transparency of dispute settlement, there is a need to consider the rich literature on procedural justice and to determine the extent to which transparency in the processes is a vital element of any fair and efficient system. These issues suggest that transparency might be looked at as an instrumental value, that is, a value that seeks to promote another goal, or some inherent process value that is to be promoted for its own sake. For example, we need to consider whether a fair or just outcome is merely the result of just procedures or whether procedures can only be measured in terms of the quality of outcome. Is transparency to be valued because it encourages more accurate outcomes from the process? Does it help participants feel that they have been fairly treated? Is the system better respected because its processes and outcomes are more readily known? Is the value in the fact that a dispute settlement process demands some objective justification of particular domestic behaviour when challenged, thus ensuring transparency of reasoning and debate?
This has been a major debate among Western philosophers such as Bayles,[56] Galligan[57] and Tyler.[58] The aim of this paper is not to enter that debate, but merely to note at this stage that there are fundamental questions that arise when considering the transparency of any dispute settlement mechanism.
Similar uncertainties arise when economic issues are considered. Economics looks to the efficiency of the system. To those from the law and economics school, the efficiency of an adjudicatory system is maximised by minimising the sum of direct costs plus error costs. Increasing transparency may achieve this in a number of ways. The clearer and more widely known the laws and procedures are, the less likely there are to be costly disputes. Further, the more that diverse interests are able to provide some form of input into the process, the less likely it is that errors may arise. On the other hand, increasing the length of hearings to allow a larger number of vested interests to be represented will increase direct costs. This shows that economic analysis is likely to require complex measurements and evaluation of trade-offs. When considering trade-offs and cost–benefit analysis, we need to be aware of the economic theory of second best, which reminds us that if we are not at an ideal state, any reforms in the direction of that ideal state will not necessarily, on balance, be beneficial.[59]
Finally, in the international dispute settlement arena, the difficulties of economic analysis are exacerbated because, with any dispute, there are significant externalities which are hard to measure. The WTO dispute settlement system supports the trade norms as a whole. The value of the legal system is therefore tied to the value and effect of those norms.
VI TRANSPARENCY AND THE PROCESSES OF DISPUTE SETTLEMENT
As indicated above, while this commentary limits itself to transparency issues, those issues are not exclusive of other features of the dispute settlement system. The following sections look at various aspects of dispute settlement in the context of transparency norms and potential reforms. The overriding conclusion is that some elaboration of key procedural ambiguities would, among other things, greatly increase the transparency of the system.
The DSU does not clearly answer many key practical questions and does not even mention transparency, although concepts of ‘security’, ‘predictability’ and ‘clarification’ are related notions. Nevertheless, some minimum procedures are necessary and if Members do not decide what these will be, Panels will be forced to do so on a case-by-case basis.[60]
A Transparency and Access to Documents
Some of the more basic criticisms levelled against the WTO in recent years include the assertion that its workings are unnecessarily secretive and sheltered from public scrutiny. There are two aspects to this more limited notion of transparency. The first involves access to documents, rules and procedures. The second relates to liaison by the WTO with NGOs.[61] These criticisms do not relate to dispute settlement alone. They also embrace the negotiations and development of rules and principles. The appropriate policy response may vary, depending upon which aspect is being considered. In this sense a seemingly simple notion of access contains within it more fundamental questions such as the appropriate level of involvement of different groups and individuals.
Where dispute settlement is concerned, completed decisions of the Members or WTO Panels should be readily available as soon as possible to notify the wider community of the determinations made. Access to information at an earlier stage calls attention to the more fundamental question of standing for individuals and NGOs. This issue is dealt with later in the paper.[62] At this stage, some brief comments are made as to the trend in the public availability of GATT and WTO information.
The GATT–WTO system has had a long history of promoting openness in relation to documents and information, although the time frames and practicality of access have certainly improved in recent years. GATT derestricted documents were published in a regular series — Basic Instruments and Select Documents. The WTO’s own web site now provides a speedy source of information on key developments, including the full text of Panel and Appellate Body reports and update information on the state of various cases.[63]
WTO Members have resolved to speed up access to most relevant documents, and to provide for only a limited number of express exemption categories. To this end, a decision on derestriction was adopted on 18 July 1996 by the General Council.[64] The 1996 procedures indicate that documents are to be immediately circulated as unrestricted unless the contrary is specified in the Appendix to the procedures.[65]
Dispute settlement systems should also involve dispute prevention and indirect barriers to trade. In this sense the GATT–WTO system is concerned with promoting transparency of domestic rules and policies. A lack of such transparency is itself an inefficient barrier to trade. Publication of information is required both domestically and via notifications to the WTO. Article 10 of GATT 1994 provides that laws, regulations, judicial decisions and administrative rulings relevant to trade issues shall be published promptly in such a manner as to enable governments and traders to become acquainted with them.[66] It also calls for the establishment of appropriate domestic courts for challenges to bureaucratic behaviour. The GATT–WTO system thus provides for domestic dispute settlement options.[67]
Dispute prevention and awareness via WTO norms are also promoted through the Trade Policy Review Mechanism, whereby the trade policies and behaviours of individual countries are scrutinised on a regular basis.[68] Such scrutiny has a normative as well as an educational effect because the reports seek to identify measures which might offend against WTO rules, although they do not purport to do so in a binding adjudicatory manner.[69]
Finally, in addition to the obligation on Members to notify the WTO of key rule changes, Members also have rights to notify the WTO of actions of other Members.[70] Requirements to notify the WTO vary from one-off requirements at the time of the establishment of the WTO, to further one-off or regular requirements. This is particularly important in areas such as agriculture and subsidies, where it would not be possible for foreign interests properly to evaluate complex industry support mechanisms without such a notification requirement.[71]
B Transparency and Due Process
The Appellate Body in Shrimp–Turtle considered that article 10 of GATT 1994 provides for general principles of due process.[72] In EC — Hormones, the Appellate Body considered that the obligation on a Panel — under article 11 of the DSU — to make an objective assessment of the matter before it also included principles of due process of law or natural justice.[73]
To a comparative lawyer the key questions would then be: ‘What are the fundamental features of due process that are thereby incorporated?’ and ‘What status does transparency have within those features?’ We might seek to draw inspiration from international and domestic models in considering what the elements of the concept are and what reforms, if any, are required. It needs to be borne in mind, however, that many domestic-style reforms would have little value in the WTO system. International legal systems may be conceptually distinct. The nature of WTO disputes is also different from that of domestic private party disputes, given that WTO disputes involve ongoing and similar disputes between a wide range of nations.
There is also a problem in developing a consensus about process in an international dispute settlement system, given the different cultural and philosophical backgrounds of individual member countries. It is particularly hard to make procedural decisions without preferring features of one legal system over others.
At this stage, it can simply be concluded that, in the context of transparency, leaving such issues to be determined by the Panels and the Appellate Body, with insufficient guidance from the DSU itself, has significant negative implications for transparency and other process values in the dispute settlement system. If it is not possible at the outset to have rules which elaborate on all aspects of an adjudicatory process, then transparency will only be promoted after a sufficient number of individual disputes build up a body of procedural rulings which clarify the way marginal situations are to be treated. The issues are of such fundamental significance that it ought not to be left to individual Panels or Appellate Bodies to determine key principles.
C Transparency and Consultations
Consultations are a necessary precondition to the panel process. The most significant transparency question where consultations are concerned is whether they should be left as confidential discussions between the key parties, or whether a more open process should be adopted. For example, documents relating to the consultation stage, including questions and answers between the parties, are at present intended to be confidential.[74] The jurisprudence has, however, already identified some uncertainty. While Panels and the Appellate Body have made it clear that settlement discussions are to be treated as confidential, the same has not been the case with direct evidence pertaining to the dispute presented during consultations.[75]
Given that consultations are primarily aimed at being a means of fostering a mutually acceptable settlement, it is more appropriate to resolve any tension in favour of confidentiality. Advocating increased transparency at this stage would be a disincentive to engage in such settlement discussions.
D Transparency and Selection of Panellists
At present, the disputants seek to agree on the selection of panellists without notifying other Members or the public at large of their potential identities. Panellists are commonly drawn from the ranks of governmental representatives to the WTO, although outsiders are also used from time to time.
While some critics complain of so-called faceless bureaucrats and officials who resolve WTO disputes, this is an inappropriate criticism. As with arbitration, the individual parties have a right to seek to select the panellists in an environment of confidence. Once the panellists have been selected, their identities are made known. Conflicts of interest may be dealt with by general procedures at that stage.[76]
E Transparency, Jurisdiction and Standing
Like many of the issues to be discussed, questions of standing and jurisdiction go far beyond mere issues of transparency, dealing as they do with fundamental rights and obligations under the legal system. At the very least, however, to the extent that there is any lack of clarity in the current rules or in their interpretation, transparency is unnecessarily diminished.
One area of uncertainty relates to the legal interest required to establish standing. In EC — Bananas the EC unsuccessfully argued that the US did not have a right to challenge the EC’s banana import regime because the US had minimal banana production and exports.[77] The argument was based on a consideration of general public international principles of dispute settlement and addressed the question of whether a party is required to have a legal interest before bringing any case. Neither the Panel nor the Appellate Body thought that there was such a requirement under WTO provisions.[78] The Panel noted the general interrelationship and externalities of trade regulation breaches as constituting the essential underpinning of standing.[79]
Notwithstanding these statements, there is still some residual uncertainty. Because the Appellate Body pointed to a number of factors in determining that the US had appropriate jurisdiction, and because it went on to say that one or more of the factors may not be dispositive in another case,[80] the question of standing and the potential for any discretion against standing in appropriate cases remains open.
Some argue that there ought to be limits. For example, Bourgeois suggests that there should be some legal interest in relation to lost trade opportunities, otherwise the remedies provided for under the DSU would be meaningless if the respondent Member did not redress the fault after an adverse Panel finding.[81] However, this author argues that a contrary view is to be preferred. This form of compensation is the last resort. The primary aim is to have the offending measure removed. The fact that the complaining country might not have any potential for meaningful compensation should not be an overriding concern.[82]
Another area of uncertainty arises where WTO adjudication covers the interrelationship between trade and other issues. At times, a WTO dispute will also cover a factual situation dealt with by a non-trade treaty such as an environmental agreement. At other times, general principles of international law may be relevant in a particular factual arena. Yet the dispute settlement bodies of the WTO are not general courts of international law jurisdiction. There is, then, a conceptual question as to just what jurisdiction they have and how they should deal with non-WTO international legal principles. Once again, there is no guidance in the DSU. Palmeter and Mavroidis suggest a wide view and refer to articles 3(2) and 7 of the DSU as the basis for incorporating non-WTO international law.[83] Yet those articles only refer to interpretation of relevant provisions of WTO agreements in accordance with customary rules of interpretation of public international law, not substantive elements of that public international law. There are also questions as to the relationship between a WTO dispute settlement body and any other body seeking to resolve disputes under the other field of international relations.
Related to the matters of jurisdiction and standing is the question as to who can actually rule on these jurisdictional issues. Here there is also uncertainty and, hence, a lack of transparency. In Australia — Automotive Leather[84] the US brought two separate complaints about the same trade measure. Australia argued that there was no jurisdiction to commence a second Panel without the consensus of both parties.[85] The DSB resolved that this was a matter that could be determined by the Panel.[86] On the other hand, the Panel questioned whether it had the right to rule on its own jurisdiction.[87]
The result in that case shows that there is some need for reform, although issues of transparency would not of themselves answer the fundamental question as to who ought to decide on a Panel’s jurisdiction.[88] The question is whether it ought to be the DSB or the Panel. On the one hand, the provisions of the DSU suggest that it is the DSB itself that should make such determinations. The DSB is authorised to establish panels.[89] On the other hand, that Body is a less wieldy forum for resolving such legal jurisdictional questions, particularly in light of its consensus decision-making approach.
F Due Process and Detailing the Claim
Challenges between parties as to the processes themselves will also raise transparency issues if the grounds for challenge are unclear. One question is whether there should be limits to the dispute based on the ambit of the claim. In domestic legal systems, failure adequately to identify the grounds of a dispute will usually lead to delays and costs awards. In the extreme, a court may hold that the claim itself is void for uncertainty.[90]
It certainly would not be appropriate in the international arena to use these principles widely as grounds to negate the claim itself. WTO disputes do not arise until there has been meaningful consultation between the parties so that each is fully aware of the basic issue in dispute. Most problems could thus be handled by some form of amendment power. Allowing amendments would seem cost-effective and would minimise the need for scattergun ambit claims. On the other hand, because dispute settlement follows meaningful consultations, parties should not go to a Panel if they have not consulted one another on that point. A distinction should therefore be made between cases in which there is a fundamental difference in the ambit of a revised claim and cases in which there is merely a refinement of the argument.
Issues like this are rarely able to be resolved in the rules themselves. Procedural challenges will vary on a spectrum between the pedantic and the fundamental and it is the response of the adjudicatory body over time that helps to determine an appropriate balance between the extremes.
G Due Process and Representation by Private Counsel
Given the disparate size and levels of expertise of WTO Members, one transparency issue is whether Members can supplant their own resources by utilising private counsel in WTO disputes.
Neither GATT nor WTO rules have ever dealt specifically with this question. The historically conservative and intergovernmental nature of GATT–WTO interactions made many Members reluctant to support such an initiative, but the issue is complicated. On the one hand, Members may be justifiably concerned that large law firms might seek to capture the process as a fruitful new field of work. In turn, this could bring excessive adversarial zeal, biased processes in favour of Western-developed common law style litigation, and very high costs.
Another concern relates to the dynamic nature of WTO obligations. In normal private party dispute resolution, there is a one-off dispute and the parties may never have any involvement in the future. The legal outcome in the case often has no implications for the parties other than in relation to the remedy provided. Where the WTO is concerned, however, the decisions in all cases affect every Member’s trade position in some way or another. The innately patient and conservative approach of GATT Contracting Parties and WTO Members over the years can in part be explained by this factor, ensuring that extreme interpretations are widely disfavoured. Private counsel may not be as ready to consider the future implications of arguments raised on behalf of the client country in the instant case.[91]
On the other hand, the disparity in the size and expertise of WTO Missions in Geneva, coupled with the role of governmental counsel for many of the larger Members, suggests that smaller developing countries which feel unable to best present their own case should have the right to hire whatever staff they feel are appropriate to present the relevant arguments.[92]
While there are strong competing arguments, because the system is based on general principles of sovereignty, and because of the fact that governments can make anyone paid public servants to represent their cause, it was inevitable that the WTO would bow to proposals in favour of allowing private representation.[93] The Appellate Body in EC — Bananas allowed private representation after considering that there was nothing in the Agreements or Working Procedures that prevented it. It suggested two policy reasons for allowing representation. The first was that to allow developing countries to participate fully in the process, private counsel may be necessary.[94] The second was that where appeals are concerned, because they are limited to issues of law, it is particularly important that qualified counsel be involved.[95] By relying on the latter as one key policy issue, the Appellate Body made it less clear what the ongoing preferred position is where Panels are concerned. The first policy argument would suggest private party representation at all stages. The latter might appear to be limited to the Appellate Body stage, although it would be equally arguable that all Panels have significant questions of law involved as well as questions of fact. Arguments relating to those facts and evidentiary issues, burden of proof and the like, equally require expert advocates for effective dispute resolution. Indeed, recent Panels have allowed private counsel.[96]
H Transparency and Openness of the Hearing
An obvious transparency issue in domestic adjudication is that first instance and appellate courts are normally open to the public. The same is the case with international tribunals such as the International Court of Justice. It is then appropriate to consider whether Panel and Appellate Body hearings of the WTO should similarly be open to the public. Hudec suggests that if they are open, the defending country would be more likely to take every legal point to show that it is protecting its constituents. This would lengthen and complicate cases and threaten more appeal issues. Nevertheless, he argues that to deflect dangerous criticism from NGOs of the ‘Star Chamber’ nature of WTO dispute settlement, it should be made open. Panels should then be given judicial-style control to keep proceedings in check.[97]
The NGOs’ criticisms are of immediate concern. Nonetheless, there are significant cost–benefit issues that would have to be considered when deciding whether to make hearings open. NGOs might not decrease their criticism if they were given an opportunity to be present. Vested interests may instead seek to make capital out of comments of panellists and Secretariat members issued through the process. Posturing for the media would be a particular concern. It would also clearly politicise the process in cases such as Tuna–Dolphin[98] and Shrimp–Turtle,[99] with a real prospect of unwieldy ‘shows of strength’ from observers with vested interests. At the very least, these concerns point to the need for real controls, as suggested by Hudec.
I Transparency and Amicus Curiae Briefs
A related question to that of the openness of the hearing is whether there should be public access to written briefs presented as part of the dispute settlement process.[100] The conclusions to be drawn on this issue may depend on whether NGOs and other private parties ought to be given rights to participate in the process, at the least by providing amicus curiae briefs. If they are to be given the latter right, then they ought to be able to see the competing arguments that they need to address. Even if they are not to be given these rights, there is still value in having some transparency as to the arguments and evidence presented by governments before the dispute settlement organs of the WTO.
The question of amicus curiae briefs is far less contentious than the wider question of the rights of individuals to be directly represented as parties. The latter issue is discussed in the final stage of this paper.[101] Where amicus curiae briefs are concerned, there is no possibility of a plethora of cases being brought, for nation-states would still remain in control. NGOs can assist in an efficient process by adding their expertise and challenging the more casuistic of the national arguments.[102]
Amicus curiae briefs were accepted in Shrimp–Turtle.[103] While the Panel acknowledged that it had the right to seek information, it had not requested the briefs in question, and thus held that it was unable to accept the briefs.[104] The Appellate Body decided to accept the briefs on the basis that it could accept information at any stage, regardless of whether the information flowed from its own request under article 13 of the DSU. The Appellate Body considered that it was authorised to accept the submissions, but not bound to do so.[105]
A literalistic interpretation of article 13, as adopted by the Panel, would be to the effect that as the Panel may only ‘seek’ additional information, it is not authorised to accept unsolicited information.[106] That would not be sensible reasoning as, in any case, after being appraised of the unsolicited information, the Panel could then formally seek it.[107]
In US — Hot-Rolled Lead the Appellate Body noted the argument that article 13 only applies to Panels.[108] It considered that there was nothing in the DSU which expressly empowered or prevented it from considering amicus curiae briefs. It relied on article 17(9), which authorised it to draw up appropriate procedures. It concluded that it had the authority to decide whether to accept and consider any material it felt might be useful.[109]
J Receipt of Evidence and Due Process
Issues of evidence and fact-finding were rarely complex and important in early GATT disputes. This is no longer the norm. Current disputes are often about balancing competing rights and obligations. In many cases they are about determining questions of reasonableness, whether in relation to domestic administration or in balancing trade and non-trade values.[110] Many of these issues call not only for a complex array of factual material, but also for highly technical analysis of issues of causation and even governmental intentions.[111] A system that is moving towards a greater number of such complex matters, without clear guidance from the rules as to the basis for such determinations or as to the proper evidentiary methodology, will inevitably face high levels of uncertainty, particularly where domestic analogies show a lack of consensus as to how these issues ought to be determined. This in turn impacts upon notions of transparency.
Issues are being left to individual Panels, as very little is said in the DSU. Article 11 indicates that ‘a Panel should make an objective assessment of the matter before it, including an objective assessment of the facts of the case.’ Article 13 gives a Panel ‘the right to seek information and technical advice from any individual or body which it deems appropriate.’ It also allows it to ‘seek information from any relevant source and ... consult experts to obtain their opinion on certain aspects of the matter.’
One serious issue is how to test the veracity of evidence in such complex disputes, whether the evidence is in the form of the submissions of the parties, expert arguments or material presented by NGOs. There is simply no accepted means for testing the veracity of conflicting arguments along the lines of domestic legal systems. This raises arguments both for and against allowing greater involvement by outsiders in the process. On the one hand, this could help provide conflicting evidence to counterbalance self-serving submissions of parties. On the other hand, a plethora of non-governmental submissions which themselves cannot easily be tested for veracity would raise significant adjudicatory problems.[112]
In addition to these general evidentiary issues, there are also many technical procedural questions that will need to be addressed. These include questions such as the right to raise new evidence after the time of complaint,[113] common law versus civil law presumptions, the role of experts, methods of formal proof, judicial notice of fact-finding in other cases, deference to national bureaucratic fact-finders, third party rights and confidentiality.
K Transparency and Settlements
While a settlement could be seen as a private matter between two disputants, individual settlements impact upon most other Members in some way or another. As such, it is important to promote transparency of settlement outcomes. While the primary aim of the dispute settlement system is to foster a mutually agreed solution between the parties, the DSU acknowledges that third parties have a right to ensure that such settlements are consistent with WTO obligations. Thus, the DSU requires that such settlements be notified to the DSB where other Members may raise queries.[114] In turn, the notification document would be subject to the derestriction rules promulgated in 1996.[115]
L Grounds of Appeal
This paper previously addressed the question of whether due process and transparency require high levels of detail in the initial claim.[116] Similar issues arise in identifying grounds of appeal. How clearly must the grounds be set out before the Appellate Body will consider a challenge? In the Shrimp–Turtle case the Appellate Body held that the appellant does not need to set out all of the grounds; they merely need to indicate what decisions are being appealed.[117]
A related issue is the requirement that appeals be on questions of law, not fact. In all domestic legal systems, the distinction between questions of law and fact for appeal purposes is difficult and often blurred. In EC — Hormones the Appellate Body considered that fact-finding, including with respect to the issues of credibility and weight, was an issue for the Panel alone.[118] The Appellate Body further decided that the consistency of facts with a treaty provision is a question of law. Whether the Panel made an objective assessment, as required by article 11 of the DSU, is thus also a question of law, although one which the Appellate Body has said it would only consider where the error made was more than a mere error of appreciation.[119]
M Gaps in Decision-Making
Another transparency issue where process is concerned relates to the role of the Appellate Body when it overturns a finding. There is no general remittance power under the DSU as is usually the case with sophisticated domestic systems. Such a power should be provided, as appeal courts are not appropriate fact-finding bodies, although in the case of the WTO, Panel processes are quite similar in nature.
To overcome this problem, the Appellate Body has relied on article 17(13) of the DSU. This states that the Appellate Body ‘may uphold, modify or reverse the legal findings and conclusions of the Panel.’ The Appellate Body has interpreted this as allowing it to consider a legal issue which was not addressed by the Panel.[120] If a multi-tiered adjudicatory system could be described as one element of transparent and challengeable reasoning, there is a conceptual problem where an Appellate Body effectively makes a non-appellable finding at first instance in this way.
Gaps may also arise where the WTO rules are silent on a particular issue. While Panels should be very cautious about applying any notions of non-liquet, in Brazil — Measures Affecting Desiccated Coconut the Panel considered that no WTO law was applicable and hence no remedy was possible.[121] The need for caution arises because of the general and, at times, vague nature of WTO rules. The system would break down if Panels were quick to hold that the law was insufficiently clear to support a decision either way.
N Transparency and Judicial Economy
Another aspect of transparency relates to the openness of arguments and the identification of responses to all points raised. In a diplomatic institution one can understand why Panels might give deference to all arguments, no matter how weak they may be, and ensure that the Panel report accurately reflects the submissions made. This deference, however, may make the final report impenetrable to all but legal experts, simply through its sheer volume and complexity.
One response of the Appellate Body has been to raise the notion of judicial economy. In US — Measure Affecting Imports of Woven Wool Shirts and Blouses from India the Appellate Body stated that nothing in article 11 of the DSU ‘or in previous GATT practice requires a Panel to examine all legal claims made by the complaining party.’[122] It stated further that the ‘Panel need only address those claims which must be addressed in order to resolve the matter in issue in the dispute.’[123]
While that is an appropriate response, it is important that the principle be applied with caution. This is particularly so since the Appellate Body has no power to remit issues to the Panels. If a Panel is overruled on some issues but has chosen to leave others in abeyance because of judicial economy, there may be no practical recommendation that the Appellate Body could make.
O Transparency and Arbitral Methodology of Dispute Settlement
If the reasoning and judicial philosophy of the Panels and the Appellate Body are unclear, this also impacts upon true transparency. Respect for any legal system depends in part upon the ability of the losing party and third parties to discern a logical and consistent basis for the decision, as well as an understanding of the effect and operation of the rules and the normative effect of those rules on future behaviour.[124]
While it is possible to discern a creeping legalism throughout the later GATT years, the more recent Appellate Body decisions best highlight many of the inherent problems of legal interpretation and adjudication. These include the role of purposive interpretation; the position of international law; burdens of proof; the respect to be accorded to past cases; the respect to be accorded to scholarly writings; the desirability, if any, of refining meaning of historical documents to accord with modern circumstances; and the determination of the core meanings of such crucial WTO concepts as ‘discrimination’ and ‘like product’. We also see instances where broad legal concepts such as ‘reasonableness’ are superimposed on GATT–WTO norms.[125]
One transparency question where methodology is concerned is whether we are looking to find the development of clear, certain and visible ongoing principles through the reported decisions. If it has such a law-making function, the notion of transparency becomes inherently more complex and contentious in relating to substantive legal interpretation as well as the express rules. On the one hand, the DSU clearly expresses the fact that Panel and Appellate Body reports cannot add to the rights and obligations of Members.[126] On the other hand, the nature of adjudication and legal interpretation inevitably involves some impact on the fabric of those norms. Complex treaty provisions are negotiated over long time periods with narrow windows of political opportunity and insufficient support staff. In these circumstances they cannot be expected to be written with such clarity as to provide full transparency as to the rights and obligations there set out. This makes adjudication a particularly important element of the legal matrix.
In turn, this raises questions as to the role of precedent. There is certainly no common law style doctrine of precedent working within the WTO system. Nevertheless, the Appellate Body in Japan — Taxes on Alcoholic Beverages has pointed to the legitimate expectations raised by past decisions that have been adopted and even to the ability to consider sensible reasoning in past decisions that were not adopted.[127]
Another issue is transparency and harmonisation of dispute settlement interpretive techniques. Are there differences in view between legal families on issues of interpretation? Is there ever likely to be a consensus on interpretation methodology? Even within domestic jurisdictions there is invariably a tension between literal and purposive approaches to interpretation. Again at the domestic level, the adjudicator usually has the power to choose between these methodologies.
The same is true in the international arena. Article 3(2) of the DSU refers to the customary rules of interpretation of public international law. The Appellate Body has considered that this includes the principles contained in the Vienna Convention on the Law of Treaties.[128] Article 31 of the Vienna Convention calls for a treaty to be interpreted in good faith based on the actual text in context and in light of its objects and purpose. Subsequent treaties and practices can also be taken into account.[129] Article 32 allows for consideration of the travaux préparatoires, where the text is ambiguous, obscure or leads to a result that is manifestly absurd or unreasonable.
As with domestic systems, ambiguity can be in the eye of the adjudicatory beholder. Thus, we will find some dispute resolution tribunals that rely on the text alone, finding sufficient clarity within the words themselves. Those tribunals will also find the object and purpose of the treaty from the plain meaning of those words. Others will consider the broadest range of potential meanings and ancillary documents in support of a contrary approach to interpretation. While the Vienna Convention addresses the issue of treaty interpretation, it provides for the same diverse range of methodologies that operates in any domestic system. In turn, this provides significant discretion to adjudicators and reduces the certainty and transparency of adjudicatory methodology.
A further question relates to the standard of review and the value or otherwise of promoting some degree of deference to the determinations of sovereign governments and domestic bureaucracies. Croley and Jackson have presented a powerful argument in favour of deference to reasonable governmental determinations in key WTO areas.[130] The Appellate Body considered this question in
EC — Hormones.[131]
There is ongoing uncertainty because there are distinct concepts mixed up in this discussion. Standard of review is not an issue when a Panel is considering the proper interpretation to be given to a WTO provision. The situation is very different when a Panel is asked to evaluate a domestic bureaucratic decision in an area such as anti-dumping, countervailing measures or safeguards.
Another aspect of transparency as a subset of adjudicatory methodology involves dealing with cases where rules are sought to be avoided. On the one hand, it could be said that successful challenges to such casuistic approaches increase the effectiveness and transparency of the rules. On the other hand, leaving it to individual adjudicators to determine whether they wish to apply a purposive or literal approach to the determination raises uncertainty within the system.[132]
P Transparency and Responses to Dispute Settlement
The same remedial and coercive powers are not present in international law as they are in domestic legal systems. If there is uncertainty as to the remedies provided under the rules or as to the likely responses of different Members to adverse Panel decisions, transparency is further diminished. There is still at least an academic debate as to the basic obligation under the new norms.
The DSU indicates that if a responding country, asked to bring a measure into compliance, does not do so within a reasonable period of time, it may offer compensation. If compensation is not agreed upon, the successful complainant can suspend equivalent concessions.[133] In this context some governments have questioned whether the primary obligation is to comply with the rules or merely to compensate a complainant in the event of an adverse finding. Legal scholars would invariably advocate the former position.[134] A contrary view would raise serious consequences for smaller economies such as Australia. In the meantime, the uncertainty is unduly complicating some disputes and, presumably, a number of informal dispute settlement discussions.
A further limitation in any international legal regime is its inability to enforce awards. Transparency, through surveillance and an obligation to report regularly, provides what may well be the maximum incentive for compliance.[135] The DSU has specific reporting requirements,[136] but there are particular concerns with the time spans involved. In many cases, it could be more than 30 months before retaliation would be possible.
Another aspect of transparency concerns the actual ruling as opposed to the reasoning. Article 19(1) of the DSU allows Panels and the Appellate Body to recommend specific means of remedying measures in breach. Panels in the past have been reluctant to suggest ways in which measures can be amended. In the vast majority of cases the reports merely call for the measures in dispute to be brought into conformity with WTO obligations. There will be a most serious lack of transparency if Panels remain conservative in their approach and do not indicate what remedies are appropriate.
VII TRANSPARENCY AND THE
RIGHTS AND INVOLVEMENT
OF NON-MEMBERS
The final issue to be dealt with in this paper is the proper role of non-Member third parties in the WTO dispute settlement process. The paper has previously looked at the less contentious aspects of this question, namely, access to documents,[137] open hearings[138] and amicus curiae briefs.[139] There is also a general question of liaison with other interested groups. Many NGOs argue that there is a special need for formal and informal liaison mechanisms to ensure that their specialist input in areas of trade-related issues such as the environment, consumer rights and labour rights can assist in the development of appropriate policies.
It is important not to confuse the question of whether NGOs generally can have a positive benefit by taking an interest in the WTO with the distinct question of whether they should have specified legal rights. The latter, more fundamental question as to whether individual parties or NGOs should have any direct legal rights in any such international organisation is discussed in this section.
It makes sense from a political science perspective that various competing interests are made sufficiently aware of the processes and proposals, in order that they may challenge competing arguments. In doing so they help make governments appropriately accountable, and provide appropriate levels of information and debate for the ultimate benefit of individual citizens. Nevertheless, while we could readily accept the need for the involvement of certain interest groups at some stages of the decision-making process, there is still a need to consider whether this involvement ought to be at the domestic or international level, or both.
This raises another important constitutional question about the GATT–WTO system which in turn has a further transparency element. If the interests are appropriately represented at the domestic level, there may be less need for them to be represented at an international level. If they are not represented appropriately at a domestic level, then the argument may be raised that reforms are needed domestically. The international system cannot easily seek to redress such domestic political imbalances without jeopardising its own viability.
There are only vague references to the general issue of NGO involvement in the founding documents of the WTO. Article 5(2) of the Marrakesh Agreement provides that the ‘General Council may make appropriate arrangements for consultation and co-operation with non-governmental organizations concerned with matters related to those of the WTO.’[140]
On 18 July 1996 the General Council adopted guidelines for arrangements on relations with NGOs.[141] The guidelines noted the agreement of Members to increase transparency and develop communications with NGOs.[142] Documents were to be derestricted more promptly and placed on the Internet.[143] The Secretariat was called on to have more direct contact with NGOs, both informally and through symposia.[144] Symposia were held on the topics of least developed countries, the environment and trade facilitation.[145]
The Singapore Ministerial Conference in 1996 was the first event where a significant number of NGOs sought to be involved under the principles of the guidelines. This raised awkward questions as to accreditation. NGOs had to show that they were non-profit and that they engaged in activities related to those of the WTO.[146] NGOs were provided with a centre and rights to access plenary sessions of the Conference.
On 15 July 1998 the Director-General announced further initiatives for interaction with NGOs. These included regular briefings for NGOs, circulation of NGO position papers to Members, the establishment of an NGO section on the WTO web site[147] and regular meetings with the Director-General to consider how to improve relations.[148]
A number of commentators have sought to argue that the ultimate form of openness in the dispute settlement system is to give private rights to individuals as litigants.[149] At present there is no right for non-Members to participate. The only avenue for non-Members to have any formal involvement is through articles 13 and 17 of the DSU. These have been interpreted to give Panels and the Appellate Body respectively the right to seek information and technical advice from any individual or body they deem appropriate.[150]
Given that the Members are reviewing the dispute settlement system, the calls for private involvement need to be evaluated, although one quickly realises that the arguments presented have a far more theoretical framework than would normally be debated by Members. At present the debate is among academic commentators, except in relation to the issue of amicus curiae briefs, where the Appellate Body’s decisions referred to above came in for strong criticism from a number of Members.
Some academic commentators adopt a libertarian philosophical perspective. They suggest that the essential role and value of international economic law is to provide individuals with constitutional rights to freedom of economic activity in the face of governmental protectionist pressures.[151]
Some consider economic perspectives and the appropriate institutional choice that should be made in the international arena.[152] An economic perspective would suggest that the institutional structure and the direct rights within it ought to be those that promote greatest efficiency of the institution’s goals. Private rights might be appropriate where governments operate as inefficient proxies. These proposals flow from the recognition that WTO members are merely proxies for different interests, bureaucratic and private, with many conflicting aims.[153]
Public choice theorists might argue that because WTO obligations are mandatory, monitoring compliance is an important goal which can best be achieved by having private citizens act as an effective decentralised mechanism. Advocates might note that private parties have significant domestic rights under WTO norms in relation to measures such as those adopted under anti-dumping and countervailing duty provisions. Such rights may also arise through general principles of administrative law and, in some countries, arguably through the direct effect of WTO obligations.
Some adopt a political science perspective, arguing that individuals and NGOs are essential elements of viable theories of international relations.[154] This school of thought has led to academic challenges to traditional notions of international law itself.[155]
Some international relations scholars seek to argue that providing for individual rights is an important means of overcoming the inefficiencies and inequities of state-based power systems.[156] In particular, notions of democratic deficit raise the hypothesis as to whether NGO involvement is desirable at the international level, particularly to help those countries where there could not be democratic representation of these values at the domestic level. Other arguments note the inequities, inefficiencies and general biases of state-controlled dispute settlement. Some argue that states themselves may collude to ignore the law.[157] Weaker countries may be pressured out of bringing complaints for fear of retaliation. At times, countries may turn a blind eye to foreign indiscretions, as they wish to adopt similar pro-vested interest but welfare-reducing behaviour themselves.
The perspectives of certain individuals can also have an inordinate influence in these decisions. Political science perspectives suggest that bureaucrats are often risk averse. They might not bring actions that ought to be brought, simply because they may be unwilling for their government to challenge another government’s behaviour — and possibly lose — thereby affecting their own reputations. This leads some to argue that giving private actors standing will ensure that the rules are applied across the board, rather than selectively.[158]
In light of such concerns, a key argument in favour of giving private parties rights is to enable them to challenge their own governments.[159] Leaving rights to nation-states themselves will obviously not result in any country challenging its own behaviour.
While the theories are diverse, when taken as a whole, there is a basis for a powerful intellectual challenge to the status quo.[160]
There are, however, a number of responses that might be made to the various arguments in favour of private party rights. The political science arguments can cut both ways. These point to the tendency for governments to be captured by vested interests when deciding which actions to bring. There is the countervailing fact that individual litigants can also be expected to act like rational self-maximisers whose litigation would not be inherently welfare-enhancing.
Neither is it clear that selectivity is always a problem or that it could be easily redressed. For example, if governments must choose which cases to bring, they are likely to bring those that involve the greatest significance for trade. This may be efficient from a national perspective, although admittedly inequitable from the perspective of an individual small trader who has suffered.
Determinations by countries as to which cases they will bring can also be seen as part of the general foreign policy aspect of governmental behaviour. Protecting their monopoly over trade disputes is not necessarily the most efficient means of optimising foreign policy influence, but at least it is an accepted feature of international relations.
At times, countries will choose not to bring actions for sensible strategic reasons. Because the international economic system is not fully comprehensive and does not have ideal enforcement mechanisms, it is possible that in a number of situations, a country could know that it would at best win the battle and lose the war. This might be because of some hidden retaliation elsewhere that would not be open to challenge before any international forum. While such Realpolitik is inefficient and unwelcome, the weaker party’s response may be the most welfare-maximising in the circumstances.
One of the main problems of allowing private party participation is the incorrect presumption that the world is ready for trade patterns wholly consistent with WTO norms. The reality is that no participant in the system would expect 100 per cent compliance 100 per cent of the time. Private parties, being used to treating domestic laws and legal rights in that way, could very quickly bring before the WTO a critical mass of complaints that would not only exhaust its physical resources, but could raise grave concerns in the minds of most government officials as to the value of remaining in the system.
If the WTO is to have any positive impact on governmental behaviour, protecting the institution is an important aim. Private traders who are only concerned with their bottom line would not take this factor into account in determining which cases to pursue and on what basis they should be settled. On the other hand, decisions by governments not to bring challenges to the WTO may not always be based on considerations that promote the interests of the system. For example, a decision by a government not to challenge a particular foreign subsidy on the basis that the legal argument, if successful, would undermine its own prohibited subsidy schemes, would be sub-optimal. In addition, if a government chooses not to bring a complaint because the foreign government threatens retaliation or an adverse response in some bilateral agreement, this is also against the overall interests of the system.
A further problem with private party rights is that, at times, the international arena could be misused as a forum for domestic political opposition. If employing efficiency arguments, one may question whether private parties should be able to seek to exert influence at both the domestic and international levels. Given the consensual nature of WTO Negotiating Rounds and the dominant influence of the US and the EC, NGOs would do better to gain an appropriate foothold into the domestic policy-making processes of those countries. This would ensure greater balance in negotiated WTO norms.
The granting of private rights could also act as a disincentive for new accessions by non-market economies which do not have a tradition of providing for individual citizens’ rights to challenge bureaucratic behaviour. Such an approach could make the WTO less appealing to those countries, although the reciprocal nature of trade agreements and the strong push by leading economies and international institutions towards wider participation is a strong countervailing influence. The fragility of the system should once again not be overlooked. Many states feel compelled to join the WTO, as the pressure from markets and lenders to do so is immense. States are not entitled to make reservations to their obligations when joining the WTO.[161] Failure to be a party to the WTO Agreement[162] means that countries may, in the absence of appropriate bilateral agreements, discriminate unfavourably against a particular country’s exports.
A political science perspective can at times show that free trade can best be supported by removing vested interests, rather than by incorporating them all.[163] For example, would the negative publicity of an adverse finding, after an NGO had been a party, be worse or better than the present situation in high profile cases such as Shrimp–Turtle? In addition, disputes between private traders and foreign governments would still be susceptible to political pressure from either the trader’s own government or the foreign government. The private trader would normally remain concerned as to the ultimate effect of dispute settlement on its future relationship with the foreign government, as might the trader’s own government.
Private actors will also not value externalities and public goods in deciding whether to sue. States may be overly cautious, but a caution based on an understanding of the fragile nature of the GATT–WTO system and a desire to maintain its viability at all costs has arguably been very beneficial to its survival. Private parties do not look for balanced interpretations. States know that the same rules work both for and against them. Purely private parties would behave differently, merely looking at the short-term dollar value on a cost–benefit basis of bringing a case.
Just as intergovernmental settlements may need to be scrutinised for WTO legality, this is likely to be a greater concern if private parties were involved. The possibility of duress on the part of the governmental respondent would be significant. Private party settlements would also be inclined towards anti-competitive solutions.[164] If retaliation were a possibility, they would not look at the negative externality on other sectors.
In addition, giving private parties rights without rights to damages and restitution would be a classic case of second best. Giving restitution rights would lead to countries ignoring the WTO. Only some private parties would have an interest in a system that cannot provide damages and cannot ensure enforceability.
Other issues arise when we look at NGOs representing particular interests as opposed to private commercial parties having direct involvement. They will invariably be looking at single issues such as environmental or labour rights. Being proponents of those rights, they are admittedly expert at presenting certain perspectives, but may well be poorly placed to balance competing views about those interests. For example, those who advocate that the WTO should consider labour rights may do so for both honourable and protectionist reasons. A labour-based NGO may have difficulty in distinguishing between these situations. On the other hand, it may be that their involvement is justifiable on the basis that even parochial voices help to restore a balanced perspective that otherwise would not exist.
There would also be problems because different NGOs might have distinct views on a particular issue. Those concerned with a particular issue, such as the environment, often have quite different philosophies and goals.[165] There are also differences in the quality and openness in NGOs themselves and in the information that they would provide to an international organisation. Yet unless all who wish to have standing were given it, the democratic deficit could not be said to be overcome.
Other questions arise from a conceptual perspective that calls for direct rights for all whose interests are significantly affected. Would we give rights to industry groups or individual industry members? Would we give rights to competitors to challenge the arguments of one particular trader? Would we also allow upstream suppliers and downstream users to present their arguments? Would consumers be separately represented?
One approach would be to have a code of conduct drafted for the involvement of NGOs. Failure to comply with the code would prevent the NGO in question from being involved in the future. Some suggest that criteria could be established to determine which international NGOs would qualify.[166] Yet there are major conceptual questions tied up in such a suggestion. There is a difference between allowing any NGO, only those approved by the Panel or only those approved by the parties to participate. Allowing all would be based on a post-sovereignty international law model. Allowing those approved by the parties would be a corollary of the consensus basis of WTO behaviour. Allowing those approved by the Panel would be based on a procedural efficiency-based expansion of the existing DSU rule that allows Panels to seek evidence and advice, where appropriate, in helping to resolve a dispute effectively.[167]
Proponents of private rights look to the European Court of Justice and the International Centre for the Settlement of Investment Disputes (‘ICSID’) as models. The latter, which operates under the World Bank, provides for arbitration of investment disputes between states and private individuals.[168] They may also look to the International Labour Organization, membership of which is extended to unions and employer groups.
Private rights are necessary when the type of dispute would be better handled in this way on a cost–benefit basis. ICSID is necessary because individuals who get involved in private disputes with states cannot always expect the state’s judicial system to support their individual rights. To facilitate productive investment, therefore, there is a value in providing an assured dispute resolution system for such direct disputes. Without direct rights, there is a strong disincentive for foreign direct investment. This is also the case with most aspects of human rights, although human rights and trade issues are not mutually exclusive. Economic rights are an element of human rights if we see those rights as encompassing freedom to trade and exchange and to develop labour associations. Nevertheless, if there is a reasonably widespread acceptance of the benefits of trade at the governmental level, there is less need for the empowerment of individuals to promote the same results.
A related suggestion is to try to replicate, at the international level, foreigners’ rights to domestic participation under national systems. TRIPS provides for individual rights in this way.[169] Private rights under TRIPS may make more sense because inaction by a foreign government can destroy the value of intellectual property. More fundamentally, the national treatment obligation underlying the GATT–WTO system would support foreign parties having domestic rights identical to those of nationals.
There are already direct disputes between international traders and governments at the domestic level under laws that emanate from international obligations. These occur in the areas of tariff classification and valuation, safeguards and anti-dumping and countervailing provisions. If the domestic bureaucrats and judicial organs do not follow WTO norms, disputes can also be brought to the international body.[170]
At times, interested parties are given specific domestic rights under WTO rules. The interests of the parties referred to in the Agreement on Subsidies and Countervailing Measures[171] and the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994[172] includes representative consumer organisations. Certain NGOs, such as environmental lobby groups, would not normally expect to be accepted under such a general criterion. This may, of course, vary from country to country, as there is no WTO definition of interested parties. In each case the notion of interested party should be circumscribed by the policy aims and implications of the particular agreement being considered. For example, the Agreement on Subsidies and Countervailing Measures merely deals with whether there is any form of subsidy and whether that subsidy is actionable or prohibited. There is no general public interest test as there is, for example, with article 3(1) of the Agreement on Safeguards.[173]
One difficulty with this suggestion arises where there are differential standards of administrative access and legal redress in various Member countries.[174] Even if this is the case, while harmonisation may be a long-term goal, it ought not to be seen as a short-term fundamental defect of an international agreement. Sovereign nations still allow for differential balances of rights and obligations in a domestic polity, circumscribing sovereignty as they see fit through international agreements.
There are also numerous implementation questions that would arise if we gave rights to private individuals and NGOs. How many private participants would have tried to be represented in a case such as EC — Hormones?[175] How many disputes could we expect in a given year? What logistical problems would this raise? If there were to be private party involvement, would there need to be costs orders? Would we find that there was a bombardment of actions by private law firms? How would we deal with vexatious individuals? Would we have class actions? How would we deal with a case if some private parties wanted to defend an action and a government did not? Should there be fees for panellists, as is the case with international arbitration, given that the system is already operating under severe financial constraints?[176] Would private parties have rights to challenge settlements between WTO members?
One commentator has sought to alleviate the problem in a quite different way. Nichols advocates an exemption to WTO norms to cover the types of issues that NGOs typically feel are under-represented and undervalued.[177] He suggests an exception that ‘would state that laws primarily codifying an underlying societal value and only incidentally hindering free trade should not be subject to WTO scrutiny.’[178] He acknowledges that this would require consideration of motives behind laws, but feels that this is routinely undertaken by both domestic and international tribunals.
While Panels do from time to time consider legislative purposes,[179] it would be too much to expect Panels regularly to be determining the range of appropriate societal values. There would also be problems in determining a methodology by which to differentiate between incidental and greater than incidental interference with free trade. It would simply not be possible for Members to agree on those issues with any clarity. Nor would they be happy with the body of jurisprudence developed over time by panellists and Appellate Body members that sought to expand upon these notions. The whole essence of the GATT–WTO approach to these complex areas where trade and other societal values interrelate is not to identify either as ‘trumps’, but rather to impose a test of reasonableness. Normally, this will mean that if an option consistent with WTO norms were reasonably available and not undertaken, then the offending measure would be unreasonable in the circumstances.
Another problem with this suggestion is that if countries are able fully to exempt measures that promote such underlying societal values, it would be hard to provide redress even in those cases where Panels felt confident to strike down laws. Amendments could still seek to promote the underlying value and merely try to make them increasingly ‘WTO-proof’.[180]
VIII CONCLUSION
The foregoing analysis has sought to suggest that there is a wide variety of meanings of transparency when considered in the context of the WTO system. The more limited forms of transparency, calling for publication of and access to domestic rules and procedures, are a long-standing and improving element of GATT–WTO norms. Recent developments which speed up the process and narrow the range of exempt documents are appropriate and sufficient in that regard.
Improving access for NGOs through liaison and other mechanisms is a development consistent with the behaviour of other international organisations and should be further pursued and evaluated concurrently.
Where dispute settlement is concerned, there remain many procedural uncertainties which raise concerns far beyond the notion of transparency, but which affect it to a significant degree.
Finally, this paper has sought to show that there is a very large number of concerns that would need to be addressed before any steps are taken to give private parties direct rights in the GATT–WTO system. On the other hand, even if it is agreed that there is a substantial number of concerns, this does not mean that the problems which led to that suggested solution are not real or significant. Notions of private party rights are not to be dismissed lightly, as they can be founded on a range of persuasive theoretical perspectives. Nevertheless, the fragility and unique successes of the GATT–WTO system should not be ignored. If there is a real potential for imbalance of interests in the development of WTO rules and the adjudication of trade disputes, then other solutions ought to be considered.
This paper has addressed the primary need to ensure appropriate representation of all interests at the national level. If the main argument in favour of giving private parties rights in the international arena is a failure to provide adequately for their interests at the national level, then the better response may be to redress that concern. Democracy deficits need to be addressed at the national level until such time as there is any meaningful push to revise notions of international sovereignty and to develop exploratory forms of international political union. Because philosophical and cultural values can differ between countries, the appropriate democratic balance should be determined at the national level. Leaving aside the important question of negative externalities, one simply would not expect the same trade-off between environmental protection and growth to occur in a developed country as in one of the least developed countries.
Where developed Western countries are concerned, this paper has already noted a number of potential domestic reforms. Some countries make cases public and invite public submissions. Many countries have also established negotiation advisory groups involving business and NGOs in discussions prior to the negotiations. In a number of countries these discussions have included industry-based and environmental assessments.[181] Other domestic measures could ensure that private parties have sufficient rights to have their complaints heard and evaluated by domestic officials and appropriate opportunities to provide input when policies are established.
Much of the concern with the WTO is not fundamentally about private rights, but rather is a concern with some of the immediate manifestations of globalisation and trade-oriented national policies and trade-offs. As globalisation develops, and as more and more national governments feel constrained to adopt measures that promote their economies and their exports, it is clear that the relative importance of societal and civil values to those politicians seems to have been temporarily reduced. As politicians are concerned to cut inflation, lower the size of government and reduce taxes, there is a general trend to reduce spending in these areas, with inevitable interference with quality of life. However, this should not be seen as an inevitable corollary of globalisation or international trade. Trade is not a value in and of itself, but is a means to an end. A number of European countries have shown that liberal trade policies can be adopted concurrently with the promotion of a strong social welfare system. All that is needed is a political commitment to appropriate and redistributive tax levels. Yet it is certainly true that too many Western governments see some inherent conflict between economic success and the civil society.
Finding a balance at the international level may require co-ordination of policy-making between a trade body such as the WTO and other international initiatives. Just as the WTO and GATT saw a consensus on common trade standards, so, too, can environmental and labour agreements help to foster minimum standards in these other key areas. Such international developments can help foster the appropriate rebalancing in domestic political systems, but it is in those systems that the immediate shift must come.
For these reasons, it is appropriate to resist the suggestion to give private parties direct rights in the WTO system, but at the same time, to accept as tenable the theoretical and practical underpinnings of such a suggestion and to evaluate and explore the possibilities over time.
[*] BCom, LLB (Melb), LLM (Monash); Barrister and Solicitor of the Supreme Court of Victoria; Professor, School of Law, Deakin University. The comments of the anonymous reviewer are gratefully acknowledged.
[1] The WTO was established by the Marrakesh Agreement Establishing the World Trade Organization, opened for signature 15 April 1994, 1867–9 UNTS 1, 33 ILM 1125 (entered into force 1 January 1995) (‘WTO Agreement’). The WTO Agreement is a compendium of individual trade-related treaties negotiated together; one of these is identically titled: Marrakesh Agreement Establishing the World Trade Organisation, opened for signature 15 April 1994, 1867 UNTS 154, 33 ILM 1144 (entered into force 1 January 1995) (‘Marrakesh Agreement’). The compendium is also often called the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations although, strictly speaking, this refers only to the first agreement within the compendium: Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, opened for signature 15 April 1994, 1867 UNTS 14, 33 ILM 1143 (entered into force 1 January 1995). Treaties within the WTO Agreement are henceforth cited individually.
[2] Opened for signature 30 October 1947, 55 UNTS 187 (entered into force provisionally 1 January 1948) (‘GATT 1947’). The GATT and the WTO evolved through a number of Negotiating Rounds. The initial GATT rules were evaluated and added to or modified through new codes and supplementary agreements. Early Rounds concentrated predominantly on reciprocal negotiated tariff reductions. While such tariff reductions have remained a key element of all Negotiating Rounds, in recent years, modifications to the substantive rules have become equally, if not more, important.
[3] That was unremarkable as far as the GATT was concerned, given that it was only ever intended to be an interim agreement. The GATT Contracting Parties were seeking to establish an International Trade Organization alongside the International Monetary Fund and the World Bank, the three proposed central elements of the Bretton Woods system which sought to establish an integrated and comprehensive international economic order after World War II. When United States’ congressional support for an International Trade Organization waned, the key participants — who had merely negotiated the GATT as an interim measure to foster and protect immediate tariff reductions — chose to continue operating under a protocol of provisional application and build in ad hoc institutional elements over time: Protocol of Provisional Application of the General Agreement on Tariffs and Trade, opened for signature 30 October 1947, 55 UNTS 308, 56– 61 UNTS 1 (Schedules) (entered into force 1 January 1948, terminated 1 January 1996). That institutional defect was overcome in 1995 with the establishment of the WTO as a permanent body with a proper institutional framework and detailed rules about decision-making and the like: see above n 1.
[4] While the agreements were significant, comprehensive rules were not possible in all areas sought to be negotiated. In addition, there were some fields that were never sought to be addressed. These are being discussed by some as possible areas for a future negotiating round. In the meantime, the WTO has established working parties and committees in areas such as trade and environment and trade and competition policy to begin at least the analysis of some of these areas: WTO, Trading into the Future (2nd ed, 1999) 46–7, 50, 61.
[5] Most commentators speak of the GATT–WTO system rather than considering each separately. This is so for a number of reasons. Firstly, with the establishment of the WTO, the text of GATT 1947, above n 2, as amended, was incorporated into Annex 1A of the WTO Agreement, above n 1, as General Agreement on Tariffs and Trade 1994, opened for signature 15 April 1994, 1869 UNTS 190, 33 ILM 1154 (entered into force 1 January 1995) (‘GATT 1994’). Secondly, previous jurisprudence in relation to GATT 1947 was made expressly relevant as a guide to the WTO: Marrakesh Agreement, above n 1, art 16(1). Thirdly, much of the data on which scholarly analysis is based is that of the GATT era, particularly where this relates to the success or otherwise of the dispute settlement system.
[6] This debate is largely associated with the writings of one of the leading experts and scholars, Professor Jackson: see, eg, John Jackson, The World Trading System: Law and Policy of International Economic Relations (2nd ed, 1997) 109ff.
[7] See generally Jan Aart Scholte, Robert O’Brien and Marc Williams, ‘The WTO and Civil Society’ (1999) 33(1) Journal of World Trade 107.
[8] David Sanger and Joseph Kahn, ‘A Chaotic Intersection of Tear Gas and Trade Talks’, New York Times (New York, United States), 1 December 2000, A14; Sam Howe Verhovek and Steven Greenhouse, ‘Seattle Is under Curfew after Disruptions’, New York Times (New York, United States), 1 December 2000, A1, A14; Sam Howe Verhovek, ‘Seattle Is Stung, Angry and Chagrined as Opportunity Turns to Chaos’, New York Times (New York, United States), 2 December 2000, A16; Sam Howe Verhovek, ‘After Riots, Seattle Is Chagrined Yet Cheerful’, New York Times (New York, United States), 6 December 2000, A28.
[9] Andrew Rule, ‘Battle of Melbourne’, The Age (Melbourne), 12 September 2000, 1; Murray Mottram, ‘The Suits versus the Stridents: It’s a Draw’, The Age (Melbourne), 12 September 2000, 1, 8; Andrew Rule and Adrian Rollins, ‘Police Bust the Casino Blockade’, The Age (Melbourne), 13 September 2000, 7.
[10] ‘Anti-Capitalist Protesters Confront Prague Police’, The Times (London, United Kingdom), 27 September 2000, 19.
[11] For economists, see Paul Krugman, Rethinking International Trade (1990); Jagdish Bhagwati, Arvind Panagariya and T N Srinivasan, Lectures on International Trade (2nd ed, 1998). Challenges to the value of comparative advantage as a driver of policy have come from Marxist and dependency theorists. For the development/dependency issues, see Raúl Prebisch, ‘Commercial Policy in the Underdeveloped Countries’ (1959) 49(2) American Economic Review 251; Towards a New Trade Policy for Development: Report by the Secretary-General of the United Nations Conference on Trade and Development, UN Doc E/Conf.46/3 (1964). For an outline and critique of the Marxist perspective, see Robert Gilpin, War and Change in World Politics (1981). Within classical perspectives there are challenges to some WTO initiatives, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights, opened for signature 15 April 1994, 1869 UNTS 299, 33 ILM 1197 (entered into force 1 January 1995) (‘TRIPS’). TRIPS mandates greater protection of intellectual property rights and, as such, has the potential to interfere with the comparative advantage of developing countries whose advantage may lie in their ability to reverse engineer or pirate technological innovation. Even here, such a criticism would depend on the policy attitude to intellectual property protection under public goods analysis.
[12] See, eg, Albert Hirschman, National Power and the Structure of Foreign Trade (1969).
[13] See, eg, Dani Rodrik, Has Globalisation Gone Too Far? (1997) 4–5.
[14] See, eg, Ernst-Ulrich Petersmann, ‘Constitutionalism and International Organizations’ (1996) 17 Northwestern Journal of International Law & Business 398.
[15] Some of the key criticisms are outlined in Scholte, O’Brien and Williams, above n 7.
[16] Such issues have not been debated at this conceptual level within the WTO itself. This is understandable as both the WTO and GATT originated in international agreements between sovereign nation-states. While unstated, the philosophical underpinning of the system has been the acceptance of the paramount rights of sovereign nations. States retain full economic freedom except where these rights have been constrained through recognised developments in international law. For example, art 2(1) of the United Nations Charter recognises that every state is sovereign and equal. Where commerce and trade are concerned, any limitation to those sovereign rights is generally established consensually through treaty.
Further support for the essentially pro-sovereignty bias of the GATT–WTO system is provided by the accepted process of decision-making within the system. All key decisions under GATT, including the adoption of Panel reports on disputes, have almost always been reached on a consensus basis. Historically, new rules have been developed and disputes resolved only with the consensus of each of the participating contracting parties. The only key change under the WTO is that Panel or Appellate Body reports are automatically adopted, except where the Dispute Settlement Body decides by consensus not to adopt the report: Understanding on Rules and Procedures Governing the Settlement of Disputes, opened for signature 15 April 1994, 1869 UNTS 401, 33 ILM 1226, arts 16(4), 17(4) (entered into force 1 January 1995) (‘DSU’).
[17] A number of US statements in particular make such calls. See, eg, Message from the President of the United States Transmitting the Uruguay Round Trade Agreements, Text of Agreements Implementing Bill, Statement of Administrative Action and Required Supporting Statements,
H R Doc No 103–316, 103d Cong, 2d Sess, vol 1, 656, 679 (1994). President Clinton, in a speech to the WTO on 18 May 1998, urged greater transparency in the trade body’s operations: Gary Yerkey, ‘Clinton Steers Clear of New Round of Talks, Asks WTO Ministers to Explore New Methods’ (1998) 15 BNA International Trade Reporter 889. See also ‘US Ambassador Says Support Growing for US Effort to Open Up WTO Processes’, BNA International Trade Daily (Washington DC, US), 15 July 1998.
[18] The former Director-General of the WTO, Renato Ruggiero, called for greater openness and access to the WTO’s dispute settlement system in order to boost public confidence in the system: Gary Yerkey, ‘Ruggiero Urges Greater Public Access to WTO Dispute Settlement Proceedings’ (1998) 15 BNA International Trade Reporter 692. See also Daniel Pruzin, ‘Ruggiero Defends WTO Transparency — Outlines Plans to Increase Public Access’, BNA International Trade Daily (Washington DC, US), 21 July 1998; Daniel Pruzin, ‘WTO Chief Outlines Plans for Increased Transparency’ (1998) 15 BNA International Trade Reporter 1263.
[19] See, eg, Steve Charnovitz, ‘Participation of Nongovernmental Organizations in the World Trade Organization’ (1996) 17 University of Pennsylvania Journal of International Economic Law 331; Daniel Esty, ‘Linkages and Governance: NGOs at the World Trade Organization’ (1998) 19 University of Pennsylvania Journal of International Economic Law 709.
[20] For details of some of the key NGOs who have challenged the WTO structure and processes, see Scholte, O’Brien and Williams, above n 7.
[21] See, eg, John Barton and Barry Carter, ‘International Law and Institutions for a New Age’ (1993) 81 Georgetown Law Journal 535; Glen Schleyer, ‘Power to the People: Allowing Private Parties to Raise Claims before the WTO Dispute Resolution System’ (1997) 65 Fordham Law Review 2275; G Richard Shell, ‘The Trade Stakeholders Model and Participation by Nonstate Parties in the World Trade Organization’ (1996) 17 University of Pennsylvania Journal of International Economic Law 359; Andrea Schneider, ‘Democracy and Dispute Resolution: Individual Rights in International Trade Organizations’ (1998) 19 University of Pennsylvania Journal of International Economic Law 587.
[22] See Spencer Weber Waller and Alan Simon, ‘Analyzing Claims of Sovereignty in International Economic Disputes’ (1985) 7 Northwestern Journal of International Law & Business 1; Joel Trachtman, ‘Reflections on the Nature of the State: Sovereignty, Power and Responsibility’ (1994) 20 Canada–United States Law Journal 399; J Samuel Barkin and Bruce Cronin, ‘The State and the Nation: Changing Norms and the Rules of Sovereignty in International Relations’ (1994) 48 International Organization 107.
[23] The historical lack of general public interest in the GATT–WTO system is understandable. In the early days there was relatively little scope for dispute, with a small number of participants and a post-War impoverished group of European countries keen to rebuild their economies through trade, financed by the US-inspired Marshall Plan, while at the same time having the right to protect against imports in the face of balance of payments difficulties. Over time, as various exemptions became less freely available, the commitments came to have more bite in domestic politics. Even then, the debate rarely spilled over into the public arena. Vested interests which opposed trade liberalisation did not need to enter this arena, but instead, lobbied strongly — and often successfully — in the more secretive branches of the political arena.
[24] GATT Panel, Report of the Panel: United States — Restrictions on Imports of Tuna DS21/R, 30 ILM 1594 (3 September 1991); GATT Panel, Report of the Panel: United States — Restrictions on Imports of Tuna DS29/R, 33 ILM 839 (16 June 1994) (‘Tuna–Dolphin’). These two cases were not adopted by the then GATT Council, but still led to significant criticism: see, eg, Steve Charnovitz, ‘Dolphins and Tuna: An Analysis of the Second GATT Panel Report’ (1994) 24 Environmental Law Reporter 10 567. More recent cases in the WTO include: WTO Appellate Body, Report of the Appellate Body: United States — Standards for Reformulated and Conventional Gasoline AB-1996-1 (29 April 1996); WTO Appellate Body, Report of the Appellate Body: United States — Import Prohibition of Certain Shrimp and Shrimp Products AB-1998-4 (12 October 1998) (‘Shrimp–Turtle’).
[25] In May 1995 the OECD Council committed itself to beginning negotiations aimed at reaching a Multilateral Agreement on Investment (‘MAI’) by the time of the Ministerial Meeting of 1997. The MAI was intended to ‘provide a broad multilateral framework for international investment with high standards for the liberalisation of investment regimes and investment protection and with effective dispute settlement procedures’: OECD, Towards Multilateral Investment Rules (1996) 3. The negotiations were extended prior to that deadline, but in October 1998 the OECD announced that the formal quest for an MAI had been abandoned: Stuart Eizenstat, Chairman’s Statement, Press Release (1998) OECD <http://www.oecd.org/media/release/nw98-101a.htm> at 31 December 2000 (copy on file with author). Some countries have sought to continue the discussion within the OECD, while others believe it is important to move it into the WTO as part of the agenda for a new Round of WTO Negotiations. WTO Ministerial Members met in Seattle in November 1999 to consider establishing such a Round and to determine the agenda, but the meeting was a failure in that regard.
[26] One author defines transparency in relation to a dispute resolution system as referring to ‘the clarity and intelligibility of the procedures of the system as well as to the outcome’: Schneider, above n 21, 613.
[27] See, eg, Agreement on the Application of Sanitary and Phytosanitary Measures, opened for signature 15 April 1994, 1867 UNTS 493, art 7, Annex B (entered into force 1 January 1995); Agreement on Trade-Related Investment Measures, opened for signature 15 April 1994, 1869 UNTS 299, 33 ILM 1197, art 6 (entered into force 1 January 1995) (‘TRIMS’); Agreement on Preshipment Inspection, opened for signature 15 April 1994, 1868 UNTS 368, arts 2(5)–(8), 3(2) (entered into force 1 January 1995); General Agreement on Trade in Services, opened for signature 15 April 1994, 1869 UNTS 183, 33 ILM 1168, art 3 (entered into force 1 January 1995); TRIPS, above n 11, art 63.
[28] A number of authors have argued against the secrecy and lack of public involvement in trade policy development: see, eg, Robert Housman, ‘Democratizing International Trade Decision-Making’ (1994) 27 Cornell International Law Journal 699; Patti Goldman, ‘The Democratization of the Development of United States Trade Policy’ (1994) 27 Cornell International Law Journal 631; Paul Stephan, ‘Accountability and International Lawmaking: Rules, Rents and Legitimacy’ (1996) 17 Northwestern Journal of International Law & Business 681. These concerns might be redressed by practical measures. For example, Australia’s Productivity Commission is a body set up under statute which can be called on by government to report on any proposed tariff change: Productivity Commission Act 1998 (Cth) pt 3. The government is prevented from making changes to the tariffs without having received a report from the Commission. The Commission holds open hearings in relation to each report; both domestic and foreign interests can be represented. Nevertheless, the Commission does not involve itself in the establishment of the government’s negotiating agenda.
[29] For public choice analyses of these constitutional issues, see Charles Rowley and Willem Thorbecke, ‘The Role of Congress and the Executive in US Trade Policy Determination: A Public Choice Analysis’ in Meinhard Hilf and Ernst-Ulrich Petersmann (eds), National Constitutions and International Economic Law (1993); Ernst-Ulrich Petersmann, ‘Constitutionalism and International Organizations’, above n 14.
[30] See, eg, J H H Weiler, ‘The Transformation of Europe’ (1991) 100 Yale Law Journal 2403. He speaks of the ‘Democracy Deficit’ in Europe, where national laws can be overridden by legislation promulgated by unelected branches of the European Union.
[31] Philip Nichols, ‘Participation of Nongovernmental Parties in the World Trade Organization: Extension of Standing in World Trade Organization Disputes to Nongovernment Parties’ (1996) 17 University of Pennsylvania Journal of International Economic Law 295, 319.
[32] Problems of this nature are likely to grow over time. If the system does not provide an effective remedy for state level protectionism, the demand for such protectionism will almost certainly rise. For example, there is a growing number of US State measures that are coming under the scrutiny of WTO Members.
[33] The Agreement on Government Procurement, opened for signature 15 April 1994, 1915 UNTS 103 (entered into force 1 January 1996), a plurilateral agreement under Annex 4 of the WTO Agreement, above n 1, is a very limited attempt to deal with this fundamental issue.
[34] The US deals with the problem by providing the President from time to time with a ‘fast track’ mandate, where Congress promises that if the treaty is negotiated within a fixed period of time, it will vote for the implementing legislation on an all or nothing basis without seeking to make any amendments. While fast track authority is a practical way to deal with the interrelationship between the Executive and Congress, it also raises fundamental political issues. Parliamentary democracy does not normally involve legislatures being bound to consider packages on such an all or nothing basis.
[35] The Decision on the Application and Review of the Understanding on Rules and Procedures Governing the Settlement of Disputes, signed 15 April 1994, 1867 UNTS 114, 33 ILM 1259, called for a review of the rules by the Ministerial Conference by the end of 1998. This has been extended and is ongoing, although, at the time of writing, the timetable remains uncertain.
[36] A key example was the dispute between the US and a number of European countries over US Domestic International Sales Corporations (‘DISC’) legislation: GATT Panel, Report of the Panel: United States — Tax Legislation (DISC) BISD 23S/98 (12 November 1976); GATT Panel, Report of the Panel: United States — Income Tax Practices Maintained by France BISD 23S/114 (12 November 1976); GATT Panel, Report of the Panel: United States — Income Tax Practices Maintained by Belgium BISD 23S/127 (12 November 1976); GATT Panel, Report of the Panel: United States — Income Tax Practices Maintained by the Netherlands BISD 23S/137 (12 November 1976).
[38] Ibid app 3.
[39] Agreement on Agriculture, opened for signature 15 April 1994, 1867 UNTS 410, art 19 (entered into force 1 January 1995); Agreement on the Application of Sanitary and Phytosanitary Measures, above n 27, art 11; Agreement on Textiles and Clothing, opened for signature 15 April 1994, 1868 UNTS 14, art 8(10) (entered into force 1 January 1995); Agreement on Technical Barriers to Trade, opened for signature 15 April 1994, 1868 UNTS 120, art 14 (entered into force 1 January 1995); TRIMS, above n 27, art 8; Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, opened for signature 15 April 1994, 1868 UNTS 201, art 17 (entered into force 1 January 1995); Agreement on Preshipment Inspection, above n 27, art 8; Agreement on Rules of Origin, opened for signature 15 April 1994, 1868 UNTS 397, art 8 (entered into force 1 January 1995); Agreement on Import Licensing Procedures, opened for signature 15 April 1994, 1868 UNTS 436, art 6 (entered into force 1 January 1995); Agreement on Subsidies and Countervailing Measures, opened for signature 15 April 1994, 1869 UNTS 14, art 30 (entered into force 1 January 1995); Agreement on Safeguards, opened for signature 15 April 1994, 1869 UNTS 154, art 14 (entered into force 1 January 1995); General Agreement on Trade in Services, above n 27, art 23; TRIPS, above n 11, art 64.
[40] Under this provision, GATT jurisprudence led to the development of both violation and non-violation complaints, the latter category being questioned by at least one academic commentator: see Pierre Pescatore, ‘The GATT Dispute Settlement Mechanism — Its Present Situation and Its Prospects’ (1993) 27(1) Journal of World Trade 5, 19; but note the contrary discussion in Ernst-Ulrich Petersmann, The GATT/WTO Dispute Settlement System: International Law, International Organizations, and Dispute Settlement (1997) 135ff.
[42] Ibid art 4(7).
[43] Ibid art 8(7).
[44] Ibid app 3, arts 4–6.
[45] Ibid art 15.
[46] Ibid art 16(4).
[47] Ibid art 17(14).
[48] Ibid art 21(6).
[49] Ibid art 22.
[50] Eg GATT 1947, above n 2, art 11.
[51] WTO Appellate Body, Report of the Appellate Body: European Communities — Measures Concerning Meat and Meat Products (Hormones), AB-1997-4 (16 January 1998) (‘EC — Hormones’).
[52] GATT 1994, above n 5, art 20(b).
[53] Agreement on the Application of Sanitary and Phytosanitary Measures, above n 27, art 2(2).
[54] For example, Professor John Jackson has suggested that the WTO was facing ‘an emerging constitutional problem’ arising from the increased use of dispute settlement processes to try to fill gaps in the texts of the agreements: John Jackson, ‘Expert Warns of Burden to WTO Dispute System’ (1998) 15 BNA International Trade Reporter 778.
[55] The European Community has engaged in substantial work to try to promote transparency, but at least one commentator has pointed out that increasing transparency in one aspect of the system, while there are still imbalances in others, is not likely to lead to efficiency gains: Juliet Lodge, ‘Transparency and Democratic Legitimacy’ (1994) 32 Journal of Common Market Studies 343.
[56] Michael Bayles, Procedural Justice — Allocating to Individuals (1990).
[57] D J Galligan, Due Process and Fair Procedures (1996).
[58] Tom Tyler, ‘What is Procedural Justice?: Criteria Used by Citizens to Assess the Fairness of Legal Procedure’ (1988) 22 Law and Society Review 103.
[59] For a discussion of this theory, see R G Lipsey and Kelvin Lancaster, ‘The General Theory of Second Best’ (1956) 24 Review of Economic Studies 218.
[60] The Appellate Body itself has on at least two occasions commented that detailed standard working procedures for Panels would help to ensure due process and fairness in Panel proceedings: WTO Appellate Body, Report of the Appellate Body: European Communities — Regime for the Importation, Sale and Distribution of Bananas AB-1997-3 (9 September 1997) [144] (‘EC — Bananas’); WTO Appellate Body, Report of the Appellate Body: India — Patent Protection for Pharmaceutical and Agricultural Chemical Products AB-1997-5 (19 December 1997) [95].
[61] This section draws heavily on Gabrielle Marceau and Peter Pedersen, ‘Is the WTO Open and Transparent? A Discussion of the Relationship of the WTO with Non-Governmental Organisations and Civil Society’s Claims for More Transparency and Public Participation’ (1999) 33(1) Journal of World Trade 5.
[62] See below Part VI(E).
[63] The website can be found at <http://www.wto.org> .
[64] WTO General Council, Procedures for the Circulation and Derestriction of WTO Documents, WT/L/160/Rev 1 (1996) <http://www.wto.org/english/docs_e/ddf_e/derest_e.htm> at 31 December 2000 (copy on file with author).
[65] Ibid art 1. The Appendix specifies working documents; documents dealing with modification or withdrawal of concessions; minutes of meetings other than of the Trade Policy Review Body; Secretariat and government reports relating to the Trade Policy Review Mechanism, opened for signature 15 April 1994, 1869 UNTS 480 (entered into force 1 January 1995); documents relating to working parties on accession; documents relating to balance of payments consultations; documents submitted for circulation as restricted documents; and preliminary reports of Panels.
[66] In addition to obligations to publicise rules and procedures, there is also an obligation in a number of agreements to provide enquiry points. In some cases these relate to Members only, but in others, these relate to the rights of a broader range of interested parties: see, eg, Agreement on Technical Barriers to Trade, above n 39, art 10.
[67] Article 10 is referred to or replicated in a number of the Uruguay Round Agreements: see Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade 1994, opened for signature 15 April 1994, 1868 UNTS 279, art 12 (entered into force 1 January 1995); TRIMS, above n 27, art 6; Agreement on Import Licensing Procedures, above n 39, art 1(4); General Agreement on Trade in Services, above n 27, art 3; Agreement on Safeguards, above n 39, art 3; Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, above n 39, art 12; Agreement on Subsidies and Countervailing Measures, above n 39, art 22; TRIPS, above n 11, art 63.
[68] Trade Policy Review Mechanism, above n 65. This review occurs in a manner similar to that in which the OECD looks at general governmental economic policies.
[69] Ibid art A(i). Domestic obligations are also affected by each individual country’s freedom of information rules and policies. For example, the US has wide-ranging obligations to notify the public of WTO issues that have been held to include its submissions to the WTO as well as formal rules and procedures: Public Citizen v Office of the United States Trade Representative, 804 F Supp 385 (DDC, 1992).
[70] See, eg, Agreement on Subsidies and Countervailing Measures, above n 39, art 25(10).
[71] Numerous commercial publishers and scholarly journals have also entered the field of international economic law, thus increasing awareness of the primary rules and the workings of the GATT–WTO system. Transparency through increased awareness is also promoted through unilateral action of foreign trade officials such as through the list of unfair foreign trading practices drawn up each year by the United States Trade Representative, the Japanese Ministry for International Trade and Investment and the European Commission. Because these lists assert illegality of foreign measures and because of the bilateral pressure that is often brought to bear upon the use of such measures, these lists also have a normative effect, although the unilateral assertions of illegality are generally not accepted by the targeted countries involved.
[72] WTO Appellate Body, Shrimp–Turtle AB-1998-4 (12 October 1998) [182]–[183].
[73] WTO Appellate Body, EC — Hormones AB-1997-4 (16 January 1998) [133].
[74] DSU, above n 16, art 4(6).
[75] See WTO Panel, Report of the Panel: United States — Restrictions on Imports of Cotton and Man-Made Fibre Underwear WT/DS24/R (8 November 1996) [7.27]; WTO Appellate Body, Report of the Appellate Body: India — Patent Protection for Pharmaceutical and Agricultural Chemical Products AB-1997-5 (19 December 1997) [94].
[76] See generally WTO Appellate Body, Working Procedures for Appellate Review WT/AB/WB/3 (28 February 1997) ss 2(2)–(3), 9–11, 13; Whitney Debevoise, ‘Access to Documents and Panel and Appellate Body Sessions: Practice and Suggestions for Greater Transparency’ (1998) 32 International Lawyer 817, 820–1.
[77] WTO Panel, EC — Bananas WT/DS27/R/ECU, WT/DS27/R/GTM, WT/DS27/R/MEX, WT/DS27/R/USA (22 May 1997) [2.21]–[2.22]; WTO Appellate Body, EC — Bananas AB-1997-3 (9 September 1997) [15]–[17].
[78] WTO Panel, EC — Bananas WT/DS27/R/ECU, WT/DS27/R/GTM, WT/DS27/R/MEX, WT/DS27/R/USA (22 May 1997) [7.47]–[7.52]; WTO Appellate Body, EC — Bananas AB-1997-3 (9 September 1997) [132]–[138].
[79] WTO Panel, EC — Bananas WT/DS27/R/ECU, WT/DS27/R/GTM, WT/DS27/R/MEX, WT/DS27/R/USA (22 May 1997) [7.50].
[80] WTO Appellate Body, EC — Bananas AB-1997-3 (9 September 1997) [138].
[81] Jacques Bourgeois, ‘GATT/WTO Dispute Settlement Practice in the Field of Anti-Dumping Law’ in Ernst-Ulrich Petersmann, International Trade Law and the GATT/WTO Dispute Settlement System (1997) 285, 288.
[82] It is also arguable that a Member will always have a sufficient interest in any event given the wording of art 23(1) of the DSU, above n 16. Because this provision states that a Member may seek to redress violations by nullification and impairment, this itself may be a sufficient legal interest as contrasted with an economic or physical interest that is demonstrably affected. At times this is modified by specific provisions within the Uruguay Round agreements which require some proof of adverse effect before a remedy is possible. This is the case with the actionable category of subsidies, although here it is not a question of standing where a preliminary ruling can be obtained, but instead, an essential element of the actual claim itself: see Agreement on Subsidies and Countervailing Measures, above n 39, arts 5, 6.
[83] David Palmeter and Petros Mavroidis, ‘The WTO Legal System: Sources of Law’ (1998) 92 American Journal of International Law 398.
[84] WTO Panel, Report of the Panel: Australia — Subsidies Provided to Producers and Exporters of Automotive Leather WT/DS126/R (25 May 1999) (‘Australia — Automotive Leather’).
[85] Ibid [6.15]–[6.26].
[86] WTO Dispute Settlement Body, Minutes of Meeting Held in the Centre William Rappard on 22 June 1998 WT/DSB/M/46 (1998) 10. See also WTO Panel, Australia — Automotive Leather WT/DS126/R (25 May 1999) [6.17].
[87] WTO Panel, Australia — Automotive Leather WT/DS126/R (25 May 1999) [9.12].
[88] One possibility might be expressly to give the Panel the same powers as arbitrators to rule on their own jurisdiction. This is known as the competence–competence rule. The analogy is not appropriate, however. The justification for giving arbitrators that right is to make arbitration an effective dispute settlement mechanism. If the essence of arbitration is consensus and if the parties are also in dispute as to whether there are grounds for arbitration, an arbitrator would be caught in an impossible position if sophisticated arbitration rules did not provide for a general right to make such a preliminary ruling.
[89] DSU, above n 16, arts 2(1), 6.
[90] Related issues are: at what stage a defendant should give notification of defences and whether the claimant should instead have to plead that defences are not available.
[91] One author argues against the concerns about the dynamic nature of disputes by suggesting that private counsel are not normally given free reign in conducting litigation and that, in any event, private counsel are already allowed to draft the written briefs: Peter Lichtenbaum, ‘Procedural Issues in WTO Dispute Resolution’ (1998) 19 Michigan Journal of International Law 1195, 1206, responding to comments made by an officer from the Office of the United States Trade Representative: 1206, fn 39.
[92] One experienced panellist, Thomas Cottier, has also argued that having the private sector in the team of the parties represented would be beneficial simply because these key people are required during the question and answer sessions: Petros Mavroidis et al, ‘Is the WTO Dispute Settlement Mechanism Responsive to the Needs of Traders? Would a System of Direct Action by Private Parties Yield Better Results?’ (1998) 32(2) Journal of World Trade 147. This is an amended transcript of a Panel Discussion held at the 6th Geneva Global Arbitration Forum, Geneva,
3–4 December 1997.
[93] The Panel in EC — Bananas, for example, excluded private lawyers representing St Lucia from attending the Panel meeting, arguing that the working procedures indicated that only governmental Members would be present and that issues of confidentiality, cost and the effect on the general intergovernmental character of dispute settlement would also be of concern: WTO Panel, EC — Bananas WT/DS27/R/ECU, WT/DS27/R/GTM, WT/DS27/R/MEX, WT/DS27/R/USA (22 May 1997) [7.11]. When the case was brought before the Appellate Body, St Lucia’s repeated request to be represented by private counsel was successful. The Appellate Body considered further issues including conflicts of interest, ethics, representation of multiple governments and whether or not it was an established principle of international law that governments could designate who would represent them before international organisations: WTO Appellate Body, EC — Bananas AB-1997-3 (9 September 1997) [5]–[12]. See also Rutsel Martha, ‘Representation of Parties in World Trade Disputes’ (1997) 31(2) Journal of World Trade 83.
[94] WTO Appellate Body, EC — Bananas AB-1997-3 (9 September 1997) [12].
[95] Ibid.
[96] WTO Panel, Report of the Panel: Indonesia — Certain Measures Affecting the Automobile Industry WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/DS64/R (2 July 1998) [4.1]–[4.35], [14.1].
[97] Robert Hudec, ‘The New WTO Dispute Settlement Procedure: An Overview of the First Three Years’ (1999) 8 Minnesota Journal of Global Trade 1, 44–7.
[98] GATT Panel, Tuna–Dolphin DS29/R, 33 ILM 839 (16 June 1994).
[99] WTO Appellate Body, Shrimp–Turtle AB-1998-4 (12 October 1998).
[100] For some countries, this is answered through their own Freedom of Information policies or express legislative provisions.
[102] Dinah Shelton, ‘The Participation of Nongovernmental Organizations in International Judicial Proceedings’ (1994) 88 American Journal of International Law 611, 611–12.
[103] WTO Appellate Body, Shrimp–Turtle AB-1998-4 (12 October 1998).
[104] WTO Panel, Shrimp–Turtle WT/DS58/R (15 May 1998) pt VII [8].
[105] WTO Appellate Body, Shrimp–Turtle AB-1998-4 (12 October 1998) [101]–[110].
[106] WTO Panel, Shrimp–Turtle WT/DS58/R (15 May 1998) pt VII [8].
[107] Marceau and Pedersen point out the need to develop working procedures in relation to the initial receipt of NGO submissions and, in relation to prima facie examination of these, confirming acceptance and distribution to all parties: Marceau and Pederson, above n 61, 36.
[108] WTO Appellate Body, Report of the Appellate Body: United States — Imposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom AB-2000-1 (10 May 2000) [36]–[37] (‘ US — Hot-Rolled Lead’).
[109] Ibid [39].
[110] Other disputes deal with complex and vague principles such as the notion of ‘like product’, the notion of ‘serious prejudice’, or the nature and scope of domestic implementation standards under international agreements such as TRIPS, above n 11.
[111] In WTO Panel, Australia — Automotive Leather WT/DS126/R (25 May 1999) [9.67] the Panel felt that the more a government’s subsidy scheme was intended to promote exports, the more it could be said to be in fact tied to export performance.
[112] Debevoise, above n 76, 824.
[113] In WTO Panel, Report of the Panel: Argentina — Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items WT/DS56/R (25 November 1997) [6.55] Argentina argued that the Panel should not have allowed new evidence presented by the US two days prior to the second substantive meeting between the parties. The Panel gave Argentina two weeks to respond to the new evidence. While the Appellate Body considered that a different Panel might have given a lengthier period, it did not believe that the Panel in question had committed an abuse of discretion: WTO Appellate Body, Report of the Appellate Body: Argentina — Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items AB-1998-1 (27 March 1998)
[80]–[81].
[114] DSU, above n 16, art 3(6).
[115] WTO General Council, Procedures for the Circulation and Derestriction of WTO Documents, above n 64.
[116] See above Part VI(F).
[117] WTO Appellate Body, Shrimp–Turtle AB-1998-4 (12 October 1998) [95].
[118] WTO Appellate Body, EC — Hormones AB-1997-4 (16 January 1998) [132].
[119] Ibid [133].
[120] See, eg, WTO Appellate Body, Report of the Appellate Body: Canada — Certain Measures Concerning Periodicals AB-1997-2 (30 June 1997) 27.
[121] WTO Panel, Report of the Panel: Brazil — Measures Affecting Desiccated Coconut WT/DS22/R (17 October 1996) [225]–[285]. This was as a result of the temporal effect of the transitional provisions of the WTO Agreement, not as a result of substantive gaps in the law itself.
[122] WTO Appellate Body, Report of the Appellate Body: United States — Measure Affecting Imports of Woven Wool Shirts and Blouses from India AB-1997-1 (25 April 1997) 20 (emphasis in original).
[123] Ibid 21.
[124] On the other hand, the rules of the GATT–WTO system may now be so complex that even with the best experts and endeavours, the outcomes of disputes may fail to give sufficient guidance as to future government behaviour. This is particularly so to the extent that more and more disputes are about balancing competing values and determining whether governmental behaviour was reasonable or whether its intent was to breach certain rules.
[125] See, eg, WTO Appellate Body, Report of the Appellate Body: United States — Standards for Reformulated and Conventional Gasoline AB-1996-1 (29 April 1996) 22.
[126] DSU, above n 16, art 3(2).
[127] WTO Appellate Body, Report of the Appellate Body: Japan — Taxes on Alcoholic Beverages AB-1996-2 (4 October 1996) 15–16.
[128] Opened for signature 23 May 1969, 1155 UNTS 331, 8 ILM 679 (entered into force 27 January 1980) (‘Vienna Convention’). See WTO Appellate Body, Report of the Appellate Body: United States — Standards for Reformulated and Conventional Gasoline AB-1996-1 (29 April 1996) 17.
[129] Vienna Convention, above n 128, art 31(3).
[130] Steven Croley and John Jackson, ‘WTO Dispute Procedures, Standard of Review, and Deference to National Governments’ (1996) 90 American Journal of International Law 193.
[131] WTO Appellate Body, EC — Hormones AB-1997-4 (16 January 1998) [115]. The Appellate Body emphasised that ‘the applicable standard is neither de novo review as such, nor “total deference”, but rather the “objective assessment of the facts”’: at [117].
[132] See, eg, WTO Appellate Body, Report of the Appellate Body: Argentina — Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items AB-1998-1 (27 March 1998). In that case duty rates on footwear, textiles, apparel and other items were bound in Argentina at 35 per cent. From 1993 Argentina maintained in parallel a system of ‘minimum specific import duties’ in relation to those items. Under that regime the duty was derived from an average import price which was calculated for all goods within a particular category, irrespective of the actual price of the goods. Thus, while in form, the bound rate was adhered to, in substance, for lower price goods that were given a higher representative value, the effective rate was higher. The Appellate Body agreed that this system by its structure and design resulted in customs duties in excess of the bound rates for some products at least: at [6.47].
[133] DSU, above n 16, art 22.
[134] See, eg, John Jackson, ‘The WTO Dispute Settlement Understanding — Misunderstandings on the Nature of Legal Obligation’ (1997) 91 American Journal of International Law 60, 63.
[135] DSU, above n 16, art 21.
[136] Ibid.
[137] See Part VI(A) above.
[138] See Part VI(H) above.
[139] See Part VI(I) above.
[141] WTO General Council, Guidelines for Arrangements on Relations with Non-Governmental Organizations, WT/L/162 (adopted 18 July 1996) (‘NGO Guidelines’).
[142] Ibid cl 2.
[143] Ibid cl 3.
[144] Ibid cl 4.
[145] Marceau and Pedersen, above n 61, 16–17.
[146] One hundred and fifty-nine NGOs submitted requests to attend, of which 108 actually came. By the time of the May 1998 Geneva Ministerial Conference, 152 NGOs had registered to attend the plenary sessions, of which 128 actually did so: ibid 14–17.
[147] The NGO section of the WTO web site can be found at <http://www.wto.org/english/forums_e/
ngo_e/ngo_e.htm>.
[148] WTO, Ruggiero Announces Enhanced WTO Plan for Cooperation with NGOs, Press Release, No 107 (17 July 1998). The NGO Guidelines, above n 141, make it very clear that direct legal involvement is not a current agenda item. The guidelines note the ‘broadly held view that it would not be possible for NGOs to be directly involved in the work of the WTO or its meetings’: cl 6. The Guidelines also note that NGOs may consult more appropriately at the national level and indicate that if chairpersons of WTO Councils and committees meet with NGOs, they do so in their personal capacity unless a particular Council or committee decides otherwise: cll 5–6.
[149] Jackson, The World Trading System, above n 6, 111; Barton and Carter, above n 21; Schneider, above n 21; Shell, above n 21; Schleyer, above n 21; Martin Lukas, ‘The Role of Private Parties in the Enforcement of the Uruguay Round Agreements’ (1995) 29(5) Journal of World Trade 181; Ronald Brand, ‘GATT and the Evolution of United States Trade Law’ (1992) 18 Brooklyn Journal of International Law 101.
[150] Marceau and Pedersen query whether this power applies to the Appellate Body, given that it is not referred to in art 13 of the DSU: Marceau and Pederson, above n 61, 34.
[151] See, eg, Petersmann, The GATT/WTO Dispute Settlement System, above n 40.
[152] See, eg, Jeffrey Dunoff and Joel Trachtman, ‘Economic Analysis of International Law’ (1999) 24 Yale Journal of International Law 1.
[153] In certain circumstances no particular WTO Member would be a likely proxy for an affected interest. Transnational corporations are also difficult to link to a particular economy, at least in so far as certain of their trade interests are concerned.
[154] See, eg, Anne-Marie Slaughter, Andrew Tulumello and Stepan Wood, ‘International Law and International Relations Theory: A New Generation of Interdisciplinary Scholarship’ (1998) 92 American Journal of International Law 367.
[155] See, eg, Wolfgang Friedmann, The Changing Structure of International Law (1964); David Kennedy, International Legal Structures (1987); Kenneth Abbott, ‘“Economic” Issues and Political Participation: The Evolving Boundaries of International Federalism’ (1996) 18 Cardozo Law Review 971.
[156] See, eg, Schneider, above n 21; Laurence Helfer and Anne-Marie Slaughter, ‘Toward a Theory of Effective Supranational Adjudication’ (1997) 107 Yale Law Journal 273.
[157] See, eg, Schneider, above n 21, 608–9.
[158] Ibid 595.
[159] Ibid 627–9.
[160] While these ideas might, at first sight, seem far-reaching and impractical, it has been noted that the issue was at least debated amongst the drafters of the Havana Charter of the International Trade Organization, opened for signature 24 March 1948, Cmd 7375, UN Doc E/Conf.2/78 (the Charter was never ratified): Lukas, above n 149, 191.
[161] Marrakesh Agreement, above n 1, art 16(5).
[163] See, eg, Nichols, above n 31, 319, noting the trade liberalisation preferences of the US President as opposed to Congress which is more vulnerable to special interest pressure.
[164] See, eg, the comments of Eleanor Fox in Mavroidis et al, above n 92, 159.
[165] See Nichols, above n 31, 319, who distinguishes between parts of the environmental movement covering recreationalists, conservationists and preservationists.
[166] Charnovitz, ‘Participation of Nongovernmental Organizations’, above n 19. Charnovitz notes that proposed procedures for such involvement were in fact presented by the Secretariat to the first International Trade Organization conference: at 338–9.
[167] DSU, above n 16, art 13.
[168] Convention on the Settlement of Investment Disputes between States and Nationals of Other States, opened for signature 18 March 1965, 575 UNTS 159, 4 ILM 532 (entered into force 14 October 1966).
[170] Consideration of the special cases of intellectual property and state trading regimes shows that there is no necessity to consider the question of private party rights on an all or nothing basis. There is a whole range of possible levels of integration of private parties. The North American Free Trade Agreement, signed 17 December 1992, Canada–Mexico–United States, 32 ILM 289, 605 (entered into force 1 January 1994) (‘NAFTA’) falls between the wider European Community model as per art 173 of the Treaty Establishing the European Economic Community, opened for signature 25 March 1957, 298 UNTS 11 (entered into force 1 January 1958) and the present WTO position. Under NAFTA private parties are given rights in relation to anti-dumping and investment disputes alone: NAFTA arts 1907(3) (relating to anti-dumping), 1115–38 (establishing a mechanism for investors of one party to resolve disputes in relation to another party). The process must still be commenced by a government at the instigation of a private party. William Davey, the former Director of the Legal Affairs Division of the WTO, has spoken of ‘intermediate direct effect’ which occurs in relation to government procurement and TRIPS. These agreements provide for measures to be incorporated domestically, which in turn give private parties rights: see the comments of William Davey in Mavroidis et al, above n 92, 160; TRIPS, above n 11, art 41(2).
[173] The Agreement on Technical Barriers to Trade, above n 39, provides obligations to include NGO standardising bodies in the process: arts 3, 4, 8.
[174] Lukas, above n 149, 200.
[175] WTO Appellate Body, EC — Hormones AB-1997-4 (16 January 1998).
[176] See the comments of William Davey in Mavroidis et al, above n 92, 161.
[177] Nichols, above n 31, 300–2.
[178] Ibid 301.
[179] See, eg, GATT Panel, Report of the Panel: United States — Measures Affecting Alcoholic and Malt Beverages BISD 39S/206 (19 June 1992) [5.7]–[5.12], where the Panel considered whether a law was passed for protectionist or legitimate regulatory purposes.
[180] Nichols also advocates expanding the composition of panellists to include non-trade experts. This solution should also only be considered if there is a perceived problem in current panellists and Appellate Body members’ dealing with the interrelationship between trade and non-trade issues. In domestic legal systems judges and arbitrators are often not experts in the facts in dispute but instead are experts in analysing arguments and evidence. If the WTO rules are reasonable, then there should only be a need for differently constituted Panels if critics can point to cases where the adjudication has failed to give rise to appropriate outcomes and reasons. If, as Nichols points out, no one environmental NGO could represent all environmental interests, how could one international environmental scholar necessarily improve the constitution of a Panel?: Nichols, above n 31, 328–9.
[181] Ibid 306.