Changes in the jurisprudence of the WTO Appellate Body during the past twenty years

Author:Frieder Roessler
Position:Independent Researcher, Switzerland
Pages:129-146
SUMMARY

Purpose - This paper aims to examine changes in the jurisprudence of the World Trade Organization Appellate Body in three areas of law (judicial economy, the identification of the measure to be examined under Article XX of the General Agreement on Tariffs and Trade and other duties and import charges), and concludes that the Appellate Body failed to acknowledge and... (see full summary)

 
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Changes in the jurisprudence of
the WTO Appellate Body during
the past twenty years
Frieder Roessler
Switzerland
Abstract
Purpose – This paper aims to examine changes in the jurisprudence of the World Trade Organization
Appellate Body in three areas of law (judicial economy, the identication of the measure to be examined
under Article XX of the General Agreement on Tariffs and Trade and other duties and import charges),
and concludes that the Appellate Body failed to acknowledge and cogently explain in each of these
areas, the changes it made.
Design/methodology/approach – The paper asks two key questions: what has the Appellate Body
done when its own rulings in past cases stood in the way of a legally sound ruling in a new case, and how
should it handle such instances in the future?
Findings – The paper concludes that all changes in jurisprudence reduce predictability, but that
predictability suffers even more when the changes are made in disguise because panels and Members
then receive confused or conicting normative signals.
Originality/value The paper argues that the Appellate Body should seek consistency of
jurisprudence wherever possible. It should handle changes in jurisprudence more transparently and
adopt internal procedures that make the need for them less likely.
Keywords WTO, Appellate Body, GATT, Jurisprudence, Judicial economy,
Internal decision making procedures
Paper type Research paper
Introduction
David Unterhalter, who served on the Appellate Body from 2006 to 2013, points out:
[…] that the WTO dispute settlement system is required to provide security and predictability
but does not create a formal norm of precedent. Yet, no observer of the practices of the dispute
settlement system could fail to conclude that past decisions of the Appellate Body and the
panels are central to the legal reasoning relied upon by litigants and adjudicators.
In his view, the resort to precedents is not just lawyer’s habit or even a pragmatic way of
disposing of a matter with economy. The past decisions carry weight because they are:
bearers of the institution’s best efforts to render the covered agreements coherent and capable
of being applied by the members of the WTO with consistency and predictability. That is a
legacy of authority by reason, not diktat (Unterhalter, 2015, p. 473).
Similar reasoning led the Appellate Body to conclude in USA – Stainless Steel (Mexico)
that:
[…] the legal interpretation embodied in adopted panel and Appellate Body reports becomes
part and parcel of the acquis of the WTO dispute settlement system. Ensuring “security and
predictability” in the dispute settlement system, as contemplated in Article 3.2 of the DSU,
The current issue and full text archive of this journal is available on Emerald Insight at:
www.emeraldinsight.com/1477-0024.htm
Jurisprudence
of the WTO
Appellate
Body
129
Journalof International Trade Law
andPolicy
Vol.14 No. 3, 2015
pp.129-146
©Emerald Group Publishing Limited
1477-0024
DOI 10.1108/JITLP-11-2015-0035
implies that, absent cogent reasons, an adjudicatory body will resolve the same legal question
in the same way in a subsequent case[1].
Consistency of jurisprudence is, in my view, not only a principle of jurisprudence; it is
also one of the political foundations of the World Trade Organization (WTO)’s
compulsory adjudication. Members may often be able to implement a ruling against
them only if they can be condent that the interpretation on which the ruling against
them was based will be applied equally to rulings on similar measures taken by any of
the other 160 Members. A government that has to remove an obstacle to imports as a
result of an adverse ruling may nd it difcult to implement the ruling unless it can
assure the political forces opposing the implementation that other countries would also
have to remove similar obstacles in similar circumstances and that, as a result, what is
lost on the import side will be gained on the export side. WTO Members abide by the
rulings of the panel and the Appellate Body with the expectation of reciprocity.
Members prefer to have their measures examined under the dispute settlement
procedures of the WTO rather than those that contained regional trade agreements
because WTO procedures offer the advantage of near universal reciprocity: the party
that lost the case in the WTO can invoke the interpretation on which the ruling against
it was based by not only in future disputes with its regional trading partners but in those
with virtually all its trading partners.
In short, consistency in the interpretation of WTO law ensures reciprocity, which in
turn facilitates adherence to those rules and makes dispute settlement in the WTO an
attractive alternative to dispute settlement under regional agreements. An Appellate
Body ruling adverse to a Member that cannot be reconciled with a previous ruling, that
is made without any cogently explained legal underpinning or that is so vague or so
case-specic that it is incapable of general application, deprives that Member of the
assurance of reciprocal treatment by other Members and therefore undermines the
acceptability of adverse rulings and the attractiveness of the WTO’s dispute settlement
system.
While consistency of jurisprudence must for these legal and political reasons be a
central objective of the Appellate Body, it cannot be its only objective. As Mitsuo
Matsushita, who was a member of the Appellate Body from 1995 to 2000, points out “as
a human institution, the Appellate Body cannot assume infallibility” (Matsushita, 2015,
p. 557). Each case before the Appellate Body not only presents new legal issues but also
frequently opens new perspectives on issues already ruled upon, and therefore invites,
and sometimes compels, a reconsideration of previous rulings. Given the extreme
complexity of WTO law, it is often difcult to foresee all the legal consequences of an
interpretation. A new case may for these reasons reveal that the application of an
interpretation that offered a reasonable solution to one dispute would have unacceptable
consequences in another. David Unterhalter, with his vast experience as an adjudicator,
concluded:
Plainly, given the large number of decisions taken by the Appellate Body, there will be
instances where an interpretational turn was taken that might now seem doubtful. There are
cases where time and reection might suggest that a line of reasoning is unavailing or an
application of law to fact could have done differently. Any adjudicator who takes important
decisions on signicant contested issues arising from disputed interpretations may
occasionally fall into error (Unterhalter, 2015, p. 472).
JITLP
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