I  am  not  sure  about  the  poetic  tastes  of  my  distinguished  colleagues  on  the panel

Bhala, Raj

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FIVE THEORETICAL THEMES IN THE WORLDTRADE ORGANIZATION ADJUDICATORYSYSTEMRaj Bhala*I. RECOLLECTING EMOTION ............................. 437II. THEME #1: THE MORIBUND STATE OF JOHN AUSTIN ........ 438III. THEME #2: THE COLD WAR BETWEEN DEVELOPED ANDDEVELOPING COUNTRIES ............................. 439lV. THEME #3: THE STRUGGLE FOR LEGITIMACY, OR THERESURRECTION OF IMMANUEL KANT .................... 440V. THEME #4: DE FACTO STARE DECISIS ................... 441VI. THEME #5: THE MISSING MUSES, OR THE DREADFULQUALITY OF W RITING ............................... 442VII. FILLING IN THE LANDSCAPE ............................. 443I. RECOLLECTING EMOTIONI am not sure about the poetic tastes of my distinguished colleagues on thepanel. But, I think we could all agree with William Wordsworth's definitionof "poetry" as "emotion recollected in tranquility.""Emotion recollected in tranquility." From lovers of Wordsworth to loversof E. E. Cummings, I think all of us on the panel would agree that the WorldTrade Organization (WTO) dispute settlement mechanism, indeed, the WTOsystem itself, was born amidst a great deal of emotion on January 1, 1995. And,I think that all of us would agree that, perhaps to our surprise, the emotionsurrounding the DSU and its operation during the last five years has, ifanything, become more heated, dare I say passionate.Defenders of the system point to the large volume of cases, including high-profile disputes, that the system has handled with a reasonable degree ofsuccess in terms of quality decisions and compliance. Detractors call the* Professor of Law, The George Washington University Law School. A.B. (Economics), Duke,1984; M.Sc. (Economics), London School of Economics, 1985; M.Sc. (Management), Oxford, 1986; J.D.,Harvard, 1989. Marshall Scholar, 1984-86. Professor Bhala is the author of International Trade Law: Casesand Materials (second edition forthcoming, 2000), and the co-author of World Trade Law (1998, 1999Supplement). These remarks were presented in New York on November 6, 1999 at the Panel on WTODispute Settlement at the International Law Weekend 99 at the Association of the Bar of the City of NewYork.438 ILSA Journal of International & Comparative Law [Vol. 6:437system non-transparent, exclusive if not elitist, and insensitive to importantenvironmental, labor, human rights, and even national security concerns.Our challenge is to reflect on the emotion surrounding the DSU and itsoperation, and as lawyers, to evaluate the various defenses and detractions thathave been made. We are to try to look back, and look ahead, with a somewhatparadoxical, but really quite unifying, mind set familiar to the greatest of poets:a dispassionate one that nevertheless preserves heart-felt sentiments andinstincts.My distinguished colleagues are far more able than I to lead us through ina tranquil manner the particular ups and downs of the last five years with thismind set. Wordsworth's poetry is famous for its landscapes put into words.My particular challenge is to sketch the outlines of the landscape for the poetryof my colleagues to come. To put it in less metaphorical terms, my task is todiscuss some of the grand theoretical themes that have emerged, or areemerging, in and as a result of WTO adjudication.II. THEME #1: THE MORIBUND STATE OF JOHN AUSTINWe have all heard it said that "international law is not really 'law."' Theadage is based on the perception that international rules are unenforceable. Itis an adage based on the positivism of John Austin. To Austin, "law" is thecommand of a sovereign that is habitually obeyed under a threat of punishment.I think that on our landscape, international trade law, Austinian positivismis in a moribund state. It may have been alive and well in the pre-UruguayRoundera. Cases like Oilseeds were the food for this corpus of jurisprudence.Now, we have arguably the most sophisticated dispute resolution system in allof the international law specialties.We have a mechanism with real deadlines. We have a mechanism with setprocedures. Best of all, we have a mechanism that, to put it in its mildest form,expresses a clear preference for compliance, and failing compliance, ineluctablyleads to compensation or retaliation.The Bananas and Beef Hormones, and possibly Turtle-Shrimp casesnotwithstanding, losing WTO Members are implementing reports within thetypical 15-month time frame. There, then, is the command of the sovereign thatis habitually obeyed under threat of punishment. That "sovereign," or centralauthority in a very loose sense, is the DSB. That threat of punishment isretaliation.To be sure, there is a legitimate debate about whether the DSU actuallycompels compliance, whether it means to avoid giving the losing Member anoption to comply, pay damages, or accept retaliation. How you read therelevant DSU provisions affects your stance here, and I think there are strongpoints on both sides. Nevertheless, to say that "international law, at leastBhalainternational trade law is not really law" is now a statement borne more ofignorance than truth.III. THEME #2: THE COLD WAR BETWEEN DEVELOPED ANDDEVELOPING COUNTRIESCan we identify any schism in the global economy of the new millenniumthat is any wider, and growing any faster, than that between the First and ThirdWorlds? Fifty years of trade liberalization has done a lot for a handful ofcountries, and very little for the bulk of them; or, at least, that is the perception.The WTO is an elite club dominated by the United States, EuropeanUnion, Japan, and Canada, all of which are far more interested in gainingmarket access in, or shutting imports out from, the likes of India, Costa Rica,Brazil, and sub-Saharan Africa; or, at least, that is the perception.WTO adjudication is a war that the hegemonic trading nations are bestable to fight, because they have the armies of international trade lawyers, theforward deployments of fully staffed experts in Geneva, and the backing ofmultinational corporate interests; or, at least, that is the perception.WTO adjudication is extraordinarily expensive, and developing countriescan neither afford the weaponry needed, in the form of a counsel of choice, noris it firmly established that they have a right to private-sector attorneys; or, atleast, that is the perception.Now, in this war, perception is reality. If the governments of four to fivebillion people feel a certain way, then that feeling cannot be dismissed. Maybeit can be assuaged by pointing out that small countries like Costa Rica wincases against big countries like the United States. Then, what do you say to thesmall countries of the African, Caribbean, and Pacific who feel they are beingsent to a guillotine operated by Dole, Chiquita, and Del Monte? How do yourationalize a demand for private party access to WTO panels and the AppellateBody if that access would drive up the legal costs of developing countriesbecause they would be named as respondents in a wave of lawsuits? Indeed,how do you rationalize even the current, sovereign-state-only access systemwith the pathetically small budget of the-WTO dedicated to the legal defenseinterests of Third World countries? (Overall, the WTO's budget is patheticallysmall, roughly $122 million, with a staff of a little over 500. It is said that thetotal WTO budget is roughly equal to the International Monetary Fund's annualtravel budget.) It will not do to say that the budget will increase, and a centerto help these countries will be established, if the new-found resources cannotbe used to bring cases against the First World.What I am saying, at bottom, is that if the WTO adjudicatory mechanismcontinues to be perceived as an un-level battle ground on which developed20001 439ILSA Journal of International & Comparative Law [Vol. 6:437country interests tend to be advanced, then that mechanism will be increasinglysuspect, resented, and maybe even ignored.IV. THEME #3: THE STRUGGLE FOR LEGITIMACY, OR THE RESURRECTIONOF IMMANUEL KANTTo put it differently, the legitimacy of that mechanism will be underminedby the gaping schism between the "haves" and "have nots." Indeed, thestruggle for legitimacy, or what we might dub the resurrection of ImmanuelKant, is the third theoretical theme on the landscape that I wish to sketch.I believe that when the history of international trade law is written half acentury or a century from now, scholars will look back and draw parallelsbetween the new-born DSU mechanism and the American Supreme Court ofour Great Chief Justice's days. In a very different context, Justice Marshallstruggled mightily to establish the legitimacy of the Court, and so too are thepanels, Appellate Body, and DSB, or, at least, they ought to be.What do we mean by legitimacy? At bottom, it means an acceptance, arespect, that transcends the mere threat of punishment. An acceptance andrespect that is based on a sincere belief in the procedures, substantivereasoning, competence, and most importantly, fairness, of the adjudicator. Howdo the addressees of panel and Appellate Body reports, and other partiesaffected by these reports, come to see the DSU system as legitimate?Individuals and businesses have no direct access to that system. Non-Governmental Organizations (NGO) have only the most indirect and tenuousaccess. Yet, individuals, businesses, and NGO's can rightly point to thegrowing body of international relations theory that tells us that a principle tenetof realism, that sovereign states are not the main players in the global economy,is wrong. After all, nations do not trade. People trade. Corporations trade.It was Immanuel Kant who counseled us in his essay, Perpetual Peace,that the center of the international law must be the normative status of theindividual, that it is wrong to conceive of international law as concerned onlywith the rights and duties of states as the fundamental unit of that law withoutalso examining each state's domestic political system and its treatment of itscitizens. To Kant, the business of international law was inextricably linked tothe question of domestic justice. To Kant, international law, and we can extendthis to international trade law, is legitimate only if its founded on an alliance ofseparate, free nations united by their moral commitment to individual freedom,not merely by their allegiance to the international rule of law and the mutualbenefits of peaceful intercourse. Put bluntly (as many are in connection withthe WTO Ministerial Meeting in Seattle), whether the General AgreementTariffs and Trade (GAT), WTO regime is "legitimate" or "just" depends very4402000]much on whether the WTO Members are committed to domestic justice in therealms of human, labor, and environmental rights.So, then what is this World Trade Organization? Is it, perhaps, really aSovereign State Trading Organization? What are we to make of this SovereignState animal that produces decisions that, however persuasive in terms ofGATT Article XX:(b) and (g), horrify environmentally-minded observers. Howare we to deal with the fears of labor and human rights activists, who see theirinterests as the next ones to be sacrificed at the altar of Most Favored Nation(MFN), national treatment, tariff bindings, non-discriminatory application ofquotas, or some other trade-liberalizing principle? However noble thatprinciple may be on the black boards of the neo-classical economists, in theequations of the game theorists, or in the theories of the positivist philosophers,obviously it has not been universally persuasive.In other words, there is a loud, even violent, clash of philosophies andcultures here. On the one side, there are traditionalists who focus on tradeliberalization and its merits. On the other side, there are those who see beyondcomparative advantage doctrine, who push the trade agenda to include newconcepts and concerns.The pressure to push out the boundaries is exacerbated by the adjudicatoryprocess itself. It is seen by many activists, not unfairly, as non-transparent. Anirony indeed, given that the judges of Geneva certainly would embrace GATTArticle X, and have in a few decisions, for others! Can anyone sit in on a panelor Appellate Body hearing? Can anyone obtain the briefs in a case? Can weturn on Court TV and watch the proceedings? The answer to these sorts ofquestions is "no." What about the routine use of outside experts to inform thejudges of Geneva about the issues at stake? Here we see a hesitant, ad hocapproach. How, then, are we to agree the DSU process is "legitimate" if muchof that process excludes important voices, if much of that process is hiddenfrom our eyes, if that process does not always call upon the best and brightestspecialists to help resolve a dispute?V. THEME #4: DE FACTO STARE DECISISIt cannot be denied that the WTO adjudicatory process has producedopinions impressive in number. It cannot be denied that virtually every one ofthose opinions is replete with citation to previous opinions. It cannot be deniedthat many of those citations are for more than purposes of guidance orillustrating consistency, but that veer towards and even cross the line, betweencitation for guidance and continuity, on the one hand, and authority, on theother hand.Shall we then continue to assert, with Article 38(l)(d) of the Statute of theInternational Court of Justice and Section 102 of the Restatement on ForeignBhalaILSA Journal of International & Comparative Law [Vol. 6:437Relations Law (Third), that judicial decisions are mere evidence of the law, notthe law itself? Shall we continue to believe that there is no body of interna-tional common law on trade that is emerging? Shall we hold fast to the pretensethat stare decisis does not operate in a defacto sense?My leading questions suggest my own view. Whether you agree with thatview or not, I think you can see the tremendous theoretical challenge posed bythe corpus of WTO decisions. Is that corpus illustrative of a re-defining of theway in which Anglo-American and civil law cultures interact? Is it a sort ofhybrid between the two cultures? Or, is it an incarnation of a trend in civil,including French, legal culture toward an increasing reliance on precedent,notwithstanding the rhetoric of the civil code? Put in more culturallyinsensitive terms, is the use of precedent in WTO decisions an illustration ofwhat we know from Coke, McDonalds, Madonna, Steven Spielberg, Nike, andLevi's, namely, that "globalization" means "Americanization?"I dare say that this issue is likely to become all the more poignant in thecoming years. Why? The vast majority of the leading international tradelawyers of the new millennium who are from outside of the United States are,or are seeking, LL.M. degrees in the United States. America is exportinghuman capital that is being schooled in the ways of common law reasoning.Like Alexandria a few millennia ago, like Oxbridge more recently, theextraterritorial influence of the American academy is unparalleled, indeed,essentially unchallenged. If it is indeed the case that a de facto stare decisisdoctrine is operating in WTO adjudication, ought we to consider admitting thisopenly and, further, amending the DSU and WTO Agreement where necessaryto make this doctrine official, that is, a de jure one whereby reports reallypossess the potency of precedent?VI. THEME #5: THE MISSING MUSES, OR THE DREADFULQUALITY OF WRITINGIt would be an evil overstatement for me to urge that every panel andAppellate Body report bespeaks the extraordinarily poor writing skills of thepanelists and Appellate Body members. For the most part, I do not knowpersonally the panelists and Appellate Body members so I cannot say if theirinnate writing skills veer more to a Wordsworth or a trashy romance novel inthe slush pile of a New York editor.But, I do think it fair to say that whatever writing assets they do have,these assets are not used as frequently as they ought to be. It does not seem tome that the panels and Appellate Body realize the direct link between theirlegitimacy in the eyes of the world, on the one hand, and the quality of theirwritten product, on the other hand.442Why are the opinions of Justice Marshall, Justice Holmes, Lord Mansfield,or Lord Diplock so revered? Is it only for their substantive content? Of coursenot. It is because those opinions were so well composed. For the most part,they were concise, avoiding redundancies. For the most part, they drew on therichness of the English language, using words and phraseologies that excitedour imaginations. They used cleverly constructed analogies that inspired ourintellects, and, for the most part, they dealt squarely and sternly with the issueat hand, not burying their prose in technicalities, not shrinking from the grandunderlying tensions.I suggest that most panel and Appellate Body reports lack these virtues.In connection with my work on the second edition of my International TradeLaw casebook, and on various law review articles, I am having the experienceof reading a large number of these reports. While I am odd enough to find itpleasurable, most would not.Why must you read, re-read, and read again passages to ascertain theirmeaning? Why must you wade through paragraph after paragraph of thearguments of the parties, and of third parties, only to find these argumentssummarized later in the discussion? Why must you mentally correct grammati-cal errors, be they split infinitives or misplaced commas? Are you wrong todemand of our supreme adjudicators of international trade law better writing?I think not. I think it eminently fair to ask these panelists and Appellate Bodymembers to recall their education in not just Wordsworth, but also Homer,Gibbon, and Churchill, and to unleash the spirit of the Greats in an effort tomake their contemporary work more appealing, and more worthy of acceptance.VII. FILLING IN THE LANDSCAPE ...I shall stop at this point, in the hope that some of these themes mayresonate in you and serve as a sketch of the landscape that my colleagues arenow going to discuss in greater practical detail. Let me thank you for yourgracious attention, and express my special appreciation to Steve De Luca forthis opportunity to recollect, and to forecast, emotion amidst tranquility.2O00 Bhala 443

Five Theoretical Themes In The World Trade organization Adjudicatory System

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Five Theoretical Themes In The World Trade organization Adjudicatory System

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