“Deference as respect” in WTO standard of review

• Date: 22 March 2013
• Published date: 22 March 2013
• DOI: https://doi.org/10.1108/14770021311312485
• Pages: 23-41
• Author: Valerie D. Dye
• Subject Matter: Economics

“Deference as respect”

in WTO standard of review

Valerie D. Dye

Department of Law, University of Liverpool/Laureate online Education,

Amsterdam, The Netherlands

Abstract

Purpose – In WTO proceedings The Dispute Settlement Body has generally adopted a standard of

review that is less than deferential even in the Anti-Dumping agreement which envisages a deferential

standard of review. What should be the applicable standard of review in WTO proceedings? The

purpose of this paper is to present an analysis of the concept of “deference as respect” as developed by

David Dyzenhaus and discuss its application to the WTO. This paper argues that the WTO should

apply a standard of “deference as respect” in the interest of preserving economic sovereignty and the

legitimacy of the WTO.

Design/methodology/approach – The paper involves the analysis of relevant case law and also the

analysis and application of the concept of “deference as respect” in WTO proceedings. It also uses a

comparative methodology in that it highlights the application of domestic legal principles at the

international level.

Findings – The main f‌inding is that within the WTO there is need to balance the requirements of trade

liberalisation which eschews protectionism and the requirements of sovereignty and legitimacy. This

balance can partly be achieved when a standard of review akin to “deference as respect” is applied.

Originality/value – This paper is different from previous writings on WTO standard of review in

that it applies the concept of “deference as respect”. This analysis and application will provide

academics and members of the DSB with a new way of assessing the standard of review in the WTO.

Keywords Deference, Respect,Judicial review, De novo, Case law, Laws andlegislation

Paper type Research paper

Introduction

The World Trade Organisation (WTO) was launched in 1995 as a culmination of

decades of attempts to promote trade liberalisation. Such attempts started with post-war

negotiations to formulate the rules to regulate international monetary activities and

international trade.

The recourse to discussions to formulate rules of international trade and economics

came from the recognition that a successful liberal international economic order needs

rulesin order to be properly regulated.Such rules needed to guaranteenon-discrimination,

open market and prevent countries from “free riding” (Gilpin, 2001). Consequently, the

GATT 1947 waslaunched as a means to, not only promote freetrade, but at the same time

to reduce protectionism.However, the GATT 1947 was mainlya trading regime aimed at

reducing tariffs, and, as argued by Qureshi and Ziegler (2007), never emerged as a

full-f‌ledged international institution which was effectively able to implement trading

rules. This changed withthe Marrakesh agreement which established the WTOin 1995

and which supposedly replaced a power-based system with a rule-based system.

One of the most important aspects of the WTO was the establishment of the Dispute

Settlement Body (DSB) which administers the rules and provides “security and

predictability to the multilateral trading system”[1]. Articles 3.2 and 3.3 of the DSU

The current issue and full text archive of this journal is available at

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Journal of International Trade Law

and Policy

Vol. 12 No. 1, 2013

pp. 23-41

qEmerald Group Publishing Limited

1477-0024

DOI 10.1108/14770021311312485

“Deference

as respect”

23

provides for the maintenance of a proper balance of the rights and obligations of

members through the prompt settlement of disputes. It also established the DSB which

is responsible for appointing panels and for adopting the reports of the panel and

Appellate Body. The DSB is therefore one of the main cornerstones of the WTO since it

ensures that the organisation functions as a rule-based entity which guarantees that

the rules and principles of free trade are certain and enforceable.

Despite the fact that the WTO operates in a rule-based manner as opposed to its

predecessor theGATT 1947, the question of the rightsand sovereignty of members play

an important role in trade.In this regard, one of the main tasks of the dispute settlement

system is to balance the rules and principles of trade liberalisation with the demandsof

preservingnational economic sovereignty.This is based on the recognition thatmembers

have the right to take certain measures to protect not only their economy but also the

well-being of citizens and the environment. The dispute settlement system is especially

faced with this task when panels and the Appellate Body (the adjudicating bodies) are

asked to review measures taken by Member States to protect their economic and

environmental concerns. Decisions made by the adjudicating bodies over the years have

shownthat generally very little deferenceis shown to decisions made by MemberStates to

implementsuch measures. It is acceptedthat in reviewing the measurestaken by Member

States,panels need to ensure that the evaluationof facts have been unbiasedand objective.

Under Article11 DSU the panel also needs to make an objectiveassessment of the matter

before it. However,the adjudicating bodieshave taken this further and, asshown in cases

such as US-Lamb Safeguards[2], panels are not expected to accept reasonings and

conclusions of national authorities if other plausible reasons and conclusions exist. This

allows for very little deference towards Member States decisions.

With regard tothe anti-dumping agreement Article 17.6 allowsfor the application of a

more deferential standard of review, in that, as longas the establishment of the factswas

proper the panel should not overturn the authority’s evaluation even if they wouldhave

reacheda different conclusion.However, the adjudicatingbodies have insisted thatArticle

17.6 should be read in conjunction with Article 11 DSU. The result is that panels are

expectedto be open to the possibilitythat an authority’sconclusionmay not be adequate in

the light of other plausible explanations. Thus, even though Article 17.6 of the

anti-dumpingagreementoutlines a more deferentialstandard of review thisis not ref‌lected

in the decisions. This lack of deference to Member States’ decisions impinges upon the

economic sovereignty of Member States as wellas upon the legitimacy of the WTO.

The need to protect economic sovereignty may seem like a weak notion in light of the

fact that states willingly give up a great part of this sovereignty for the benef‌its of being

part of an international economic institution. The fact is that states are still accountable

to their citizens and are also much closer to the policies and problems that affec t those

citizens. In that regard, some amount of economic sovereignty needs to be maintained

and this should translate into a form of standard of review that respects this sovereignty.

Apart from this, the WTO has had serious challenges toits legitimacy ever since its

inception in 1995. Part of that challenge is based on the fact that the policies of the

WTO have considerable impact on the lives of citizens who have relatively little say

in its policies.Despite mechanisms withinthe WTO framework to benef‌it underdeveloped

and vulnerable countries it is impossible for international institutions to be as close to

citizens and the issues that affectthem as national governments can be. Member States

are therefore better placed to implement policies to benef‌it or protect citizens.

JITLP

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