Perhaps no other important international institution is more
misunderstood than the Geneva-based World Trade Organization.
And perhaps no other aspect of the important work of the WTO
is more misunderstood than the way in which it attempts to resolve
trade disputes.
It is partly for this reason that issues relating to WTO dispute
settlement are so often the subjects of headlines and controversy
around the world. There is a widespread perception that the WTO
is something separate from the nations of the world, and that it is
able to make governments do its arbitrary bidding in matters
relating to international trade.
This is not so. The Organization is
not some global Leviathan of trade. The
WTO is simply a framework in which
the 146 countries and other customs territories
that are its members have chosen
to work together on trade problems.
Actions taken by the WTO are not
arbitrary. They are all governed entirely
by treaty obligations, which the member
countries have previously accepted, and
which require consensus among all the
member states. That includes actions
taken to help resolve international trade
disputes.WTO members have agreed to
use the WTO dispute settlement system
for all their treaty-related disputes, and
to be bound by its rulings.
This is the source of much of the
controversy about the WTO. But it is
also the source of much of the strength
of the WTO as an international framework
for resolving international trade
disputes and for upholding global
trade.
For the past eight years, I have spent
much of my time in Geneva as one of
the seven international members of the
WTO's Appellate Body, which is the instance
of final appeal in WTO dispute
settlement. Now that I have completed
my final term on the Appellate Body, I
am freer to comment on many general
aspects of WTO dispute settlement.
My first point is that WTO members
must begin to shine greater light on the
Organization. For the past eight years, I
have helped keep the doors to the oral
hearings of the Appellate Body closed, in
accordance with the rules established by
the WTO member governments. Now I
am free to say for the first time what I
have always thought.We must open the
doors and let in the light of public
scrutiny.
We must let the five billion people in
the world who are served by the WTO
see the Organization in action. If we do
not, WTO member governments will
never win the increased public support
needed to maximize mutual gains from
trade in a rule-based world trading system.
Only with more open doors shall
we be able to achieve all our goals for
more open trade.
Specifically, we must open the proceedings
of the panels and the oral hearings
of the Appellate Body to media
coverage and to overall public observance.
We must do the same for the
meetings of the General Council, the
Dispute Settlement Body, and all the
other major councils of the WTO.
I am not proposing that the deliberations
of panels or the Appellate Body
should be open. No judicial system in the
world does that. Nor am I suggesting that
trade negotiations that are separate from
the general meetings of the various WTO
councils should be conducted in public.
No one who has ever negotiated trade
agreements would favor that.
But there is every reason for other
WTO proceedings to be open to public
scrutiny. It is only because the doors are
closed that critics can claim any credibility
in referring to the WTO as a "star
chamber" or a "kangaroo court." It is
only because the doors are closed that
there are suspicions that the process of
decision making in the WTO may not be
consistent with the WTO treaty.
If the doors were opened, the world
would see that those who have been entrusted
with the responsibility of helping
resolve trade disputes are fulfilling that
responsibility correctly and conscientiously.
WTO jurists are independent,
impartial, fair, objective, and utterly exhaustive
in examining virtually every
nuance of every issue that is raised in
every dispute. It is only because the
doors are closed that anyone is able to
suggest otherwise.
Perhaps the biggest beneficiaries of
opening the doors of the WTO would be
the member governments themselves. As
it is, a majority of WTO members have
never even seen a hearing of the Appellate
Body. That is because only parties
and third parties to a dispute are allowed
to attend and participate in an oral hearing
in a WTO appeal. Opening the doors
would allow many WTO members to see
what happens in WTO dispute settlement
proceedings for the first time.
Keeping the doors closed is self defeating
for the WTO. It feeds the unfounded
paranoia about the WTO that
prevails among anti-globalists, hard-core
protectionists and all the other groups
that oppose what WTO members are
trying to accomplish.
To be sure, on the first day the doors
were opened, the panels and the Appellate
Body would undoubtedly attract a
few demonstrators wearing turtle costumes,
or displaying other symbols of
opposition to WTO policies. But the
novelty of the first day would soon pall.
As someone who has sat through endless
hours of discussions about the meaning
of a single footnote among the more
than 30,000 pages of the WTO "covered
agreements," I am confident that within
a few days only those turtles with the
hardest shells would remain.
I am certainly not proposing that
Non-Governmental Organizations and
other private interests should be parties
to dispute settlement proceedings or to
trade negotiations, or that they should
have any form of official standing in the
Organization. The WTO must remain an
intergovernmental body consisting exclusively
of countries and other customs territories.
NGOs and other private interests
are not governments, and should not
have the rights of governments. Ways,
however, should be found for those outside
the WTO with a demonstrated interest
in the outcome of WTO proceedings
to have their say. As well as opening the
doors, we must open the windows.
Such openness can be achieved nationally,
as is done routinely in the
United States under American law,
which requires that many varying views
must be heard in the making of trade
policy. It can also be achieved internationally.
At the WTO, there have been increasingly
successful efforts to involve
NGOs and other private interests more
closely in the ongoing process of global
trade decision making. These efforts
must continue and increase.
In particular, dispute settlement
panels and the Appellate Body must continue
to accept "amicus curiae" briefs in
their proceedings, and they must make
greater use of such briefs in dispute settlement.
The opportunity to submit such
briefs can give those from the wider
world a say, without in any way undermining
the essential intergovernmental
nature of the proceedings. Amicus briefs
can provide an additional and valuable
point of view, as they do for judiciaries
throughout the world.
The apprehensions about amicus
briefs often expressed by WTO members
are misplaced. Amicus briefs will not
overwhelm or dominate the dispute settlement
system. The participation of the
authors of such briefs in dispute settlement
proceedings should be limited to
the submission of their briefs. The acceptance
of such briefs should be subject
to reasonable rules, as in other judicial
systems.
WTO members should understand
that if they do not approve new rules,
amicus briefs will continue to be accepted
in dispute settlement under existing
procedures. And there may soon
come a case in which more explicit use
will be made of such briefs.
On these and many other issues
relating to the WTO and to its dispute
settlement system, we must also open
our minds. The WTO dispute settlement
system is the most successful such
arrangement in the history of the world.
Nevertheless, although it builds on
nearly half a century of work in the
GATT, the system is less than a decade
old. At most, some of the provisions of
the WTO have been construed a few
times. Most of the provisions of the
WTO treaty have not been construed at
all. There are entire agreements in the
treaty that still have never been construed
even once by the Appellate Body.
Thus, in some respects, virtually every
new case that comes before the WTO is
still very much what lawyers call "a case
of first impression."
For this reason, we should be careful
not to make sweeping generalizations
about the future implications of the outcomes
of the relative handful of disputes
that have so far been resolved.WTO dispute
settlement is a work in progress,
and our continued progress will be incremental.
The system will evolve rule by
rule and case by case.
Many other changes are also worthy
of consideration, some of which are currently
under review, while others are not.
For many reasons, we need rules of evidence
and rules of discovery in WTO
dispute settlement. One reason, for example,
is the urgency of finding an effective
way to balance the need for panels to
find facts with the necessity for governments
to protect confidential business
information. We need comprehensive
standard working procedures that would
apply to all the procedural aspects of
WTO panel proceedings, akin to the
standard "Working Procedures for Appellate
Review" we have had from the
outset in WTO appeals.
We need a better understanding, and
a stronger consensus, among all WTO
members on the appropriate standard of
review in dispute settlement, particularly
for trade remedies.What the WTO treaty
says about the standard of review for
some trade remedies is not always the
same as what some people in Washington
think it says.
We also need a stronger consensus
on the balance WTO members are seeking
in the treaty between their right to
apply trade remedies and their right to
benefit from trade concessions through
market access.
We need more and better rules enshrined
in the treaty on the appropriate
interrelationships between trade and the
environment, trade and labor, trade and
health, trade and human rights, trade
and intellectual property, trade and
bribery, and trade law and other international
law.
Ideally, none of these issues should
be resolved in WTO dispute settlement.
All these procedural and substantive issues,
and many more of similar significance
and sensitivity, should be resolved
by negotiations among member governments
that lead to the adoption of rules
that carry the weight of treaty obligations.
But the world will not wait. If
these issues are not clearly resolved
through negotiations, then many of
them will be resolved, necessarily,
through dispute settlement.
We must also open our minds to the
need for structural changes in WTO dispute
settlement. Two proposals deserve
special attention. First, we need a standing
Panel Body as recommended by the
European Union. And, second, we shall
soon need to transform the standing
Appellate Body from a part-time into a
full-time global tribunal for trade.
There are many other issues that also
merit attention. They include the need
for remand powers for the Appellate
Body, the anachronism of "interim reviews"
and the need to enhance third
party rights.We need to clarify the availability
of "special and differential treatment"
for developing countries, and to
provide more assistance to developing
countries in asserting their rights in dispute
settlement.We need more resources
to support the work of dispute settlement.
We must also deal with murky issues
such as those involving "damages"
and "remedies" in trade disputes, and
many more.
What we need most in dispute settlement,
however, is not a change in the
dispute settlement system itself.We need
effective changes in all the other endeavors
of the WTO that are not a part of
dispute settlement. Whatever doors,
windows and minds we may need to
open in dispute settlement, the greatest
difficulties of the WTO are not in this
area. We have an effective system for
clarifying and upholding rules in the
WTO. What we need most of all is an
equally effective system for making and
revising rules through successful multilateral
negotiations.
When we established the WTO, we
hoped it would become a forum for ongoing
negotiations on myriad emerging
and ever-evolving trade issues.We hoped
for a "permanent round" of global trade
rulemaking by WTO members. Instead,
we are now engaged in the ninth round
of multilateral trade negotiations, which
is in many ways much like the previous
eight.
I certainly believe that the overriding
priority must be the successful conclusion
of the Doha Development Round.
But, as we work to achieve this, we must
remember our original vision for the
WTO. We must continue to try to find
better ways to work together to agree on
the right rules for trade on a continuing
basis.
We must work, too, for ways in
which the WTO can become an ever better
example of democratic and cooperative
self-governance among the nations
of the world. If we succeed in all this,
then I am confident that the WTO dispute
settlement system will also continue
to succeed as an appropriate and effective
part of the overall world trading system.
If we open the doors, the windows
and our minds, we can open the way to
building and sustaining a worldwide
consensus for more open trade. If we
have more open trade, we can have more
open societies, and we can have more of
the freedom that open societies make
possible.
James Bacchus completed two four-year terms as one of the seven Members of
the Appellate Body of the World Trade Organization in Geneva, of which he remains
the longest-serving member, in
December 2003. He also served as the Appellate Body's Chairman. He previously
served as a Member of the U.S. Congress from Florida and as a special assistant
to the U.S. Trade Representative.
He is currently chairman of the global trade practice group of the international
law firm Greenberg Traurig, P. A., and also a professor of law at Vanderbilt
University Law School. He is the author of
Trade and Freedom, published in London by Cameron May.
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