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International Law Status of Wto Dispute Settlement Reports: Obligation to Comply or Option To “Buy Out”?

  • John H. Jackson

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1 Judith Hippler, Bello, The WTO Dispute Settlement Understanding: Less Is More, 90 AJIL 416, 41617 (1996).

2 John, H. Jackson, The WTO Dispute Settlement Understanding—Misunderstandings on the Nature of Legal Obligation, 91 AJIL 60 (1997) [hereinafter Jackson, Misunderstandings]. Interested readers may also wish to see the following works of this author, The World Trade Organization: Constitution and Jurisprudence 81 (Chatham House Papers, Royal Inst. Int’l Aff., 1998); The World Trading System: Law and Policy of International Economic Relations 126 (2d ed. 1997).

3 Understanding on Rules and Procedures Governing the Settlement of Disputes [hereinafter DSU], Annex 2 to Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, in World Trade Organization, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 354 (1999).

4 Jackson, Misunderstandings, supra note 2, at 60-61.

5 Judith Hippler, Bello, Book Review, 95 AJIL 984, 98687 (2001) (reviewing John, H. Jackson, The Jurisprudence of Gatt & The WTO) (footnotes omitted).

6 Warren, F. Schwartz & Alan, O. Sykes, The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization, 31 J. Legal Stud. S179 (2002).

7 Id. at S181. See infra p. 122 for an explanation of “efficient breach.”

8 Schwartz & Sykes, supra note 6, at S190.

9 Id.

10 Id.

11 Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, 1155 UNTS 331. Note that not all members of the WTO have ratified, and thus accepted, the Vienna Convention (e.g., Brazil, France, and the United States), but there is still general agreement that die Vienna Convention clauses on treaty interpretation (Arts. 31, 32) articulate die customary international law on the subject. The Convention’s approach to treaty interpretation can of course be criticized as unable to cope with certain problems currently facing world international institutions (but diat is a subject for a different article).

12 DSU, supra note 3, Art. 3.2.

13 United States—Standards for Reformulated and Conventional Gasoline, WTO Doc. WT/DS2/AB/R (adopted May 20, 1996) Japan—Taxes on Alcoholic Beverages, WTO Docs. WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R (adopted Nov. 1, 1996) (Appellate Body reports are distinguished by “AB” in die document number); see also Claus-Dieter, Ehlermann, Six Years on the Bench of the “World Trade Court”: Some Personal Experiences as Member of the Appellate Body of the World Trade Organization, 36 J. World Trade 605 (2002); Claus-Dieter, Ehlermann, Reflections on the Appellate Body of the World Trade Organization (WTO), 97 ASIL Proc. 77 (2003) (indicating the reasons for a textual approach, including objectivity and nonpoliticization).

14 The word “charter” is an informal term, and is not used in the treaty itself. See Marrakesh Agreement Establishing the World Trade Organization, in The Legal Texts, supra note 3, at 3.

15 DSU, supra note 3, Art. 3.2.

16 Id., Art. 3.4.

17 Id., Arts. 12, 17, & app. 3, “Working Procedures.”

18 Readers can find numerous references in GATT documents, including panel reports, to preparatory work in the 1947 and 1948 conferences on drafting the GATT. Many of these documents are collected in the important GATT document, Analytical Index: Guide to Gatt Law and Practice (6th ed. 1995).

19 A prime example is JapanTaxes on Alcoholic Beverages, supra note 13, where the Appellate Body, in footnote 39, cites for object and purpose the EPCT documents (documents of the Preparatory Committee of the United Nations International Conference on Trade and Employment, denoted by the symbol E/PC/T), which are the documents of the GATT preparatory work.

20 Implications of the “buy-out” approach might be inferred, although not without ambiguity, from the testimony of high U.S. officials in the 1994 congressional hearings, where the officials were urging approval of the Uruguay Round negotiated trade agreements. Uruguay Round GATT Agreement: Testimony of Ambassador Michael Kantor, U.S. Trade Representative, Before the House Committee on Agriculture (Mar. 16, 1994); Ambassador Rufus Yerxa, Deputy United States Trade Representative, The World Trade Organization and U.S. Sovereignty: Prepared Testimony Before the Senate Foreign Relations Committee (June 14, 1994), both available in LEXIS, Legis Library, Hearing File.

21 Analytical Index, supra note 18.

22 John, H. Jackson, World Trade and the Law of Gatt 170 (1969); John, H. Jackson, The Jurisprudence of the Gatt and the WTO: Insights on Treaty Law and Economic Relations 118 (2000) (on rule orientation).

23 John, H. Jackson, The Legal Meaning of a GATT DS Report: Some Reflections, in 1 Towards more Effective Supervision by International Organizations 149 (Blokker, Niels & Muller, Sam eds., 1994).

24 Jackson, The World Trading System, supra note 2, at 125.

25 Oliver Wendell, Holmes, The Path of the Law, 10 Harv. L. Rev. 457, 461 (1897).

26 Japan—Taxes on Alcoholic Beverages, supra note 13, pt. E, “Status of Adopted Panel Reports,” 3d & 6th paras, (including the statement referring to adopted GATT panel reports as “not binding, except with respect to resolving the particular dispute between the parties to that dispute”; id., text at n.30).

27 DSU, supra note 3, Arts. 21–26.

28 id., Art. 3.5.

29 Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance, Nov. 28, 1979, GATTB.I.S.D. (26th Supp.) at 210 (1980).

30 United States—Sections 301-310 of the Trade Act of 1974, WTO Doc. WT/DS152/R, paras. 7.73, 7.75–7.77 (adopted Jan. 27, 2000).

31 DSU, supra note 3, Art. 3.4, .5.

32 Id., Art. 3.7.

33 M., Art. 22.1.

34 Id., Art. 21.6, .1, respectively.

35 Id., Art. 22.2,.!,. 8.

36 Id., Art. 26.1(b).

37 Chayes, Abram & Antonia Handler, Chayes, The New Sovereignty (1995).

38 John H. Jackson, oral presentation at the Third Annual WTO Conference, Dispute Resolution—At the Crossroads, London (May 14, 2003) (sponsored by the British Institute of International & Comparative Law, the Journal of International Economic Law, and the Institute of International Economic Law). This presentation is currently being prepared for publication.

39 In particular, there were strong feelings about the need to “rein in” United States unilateralism. This was a fairly explicit goal of the European Community, sparked heavily by attitudes of the French, in the Uruguay Round, and it resulted basically in a 180-degree shift in attitude toward the need for a more rigorous DS system, compared to the position of the Europeans in the Tokyo Round of the 1970s, when they opposed improving or adding rigor to the DS system under the GATT.

40 John, H. Jackson, The WTO “Constitution” and Proposed Reforms: Seven “Mantras” Revisited, 4 J. Int’l Econ. L. 67 (2001) (addressing “mantras” related to the WTO, including the consensus rule).

41 United States—Taxes on Petroleum and Certain Imported Substances, GATT B.I.S.D. (34th Supp.) atl36 (1988) (adopted June 17, 1987).

42 Id., paras. 5.1.9, 5.1.12. This concept, which originated in 1962, provides that if a complainant establishes a breach (violation) of the treaty obligation (GATT or WTO), it amounts to a”prima facie” nullification or impairment, so that the burden of nullification or impairment is placed on the respondent Jackson, The World Trading System, supra note 2, ch. 4.

43 United States—Taxes on Petroleum and Certain Imported Substances, supra note 41, paras. 5.1.7, 5.1.9.

44 United States—Sections 301-310 of the Trade Act of 1974, supra note 30.

45 This case was not appealed by either side, and has been construed as an interesting approach to giving certain advantages and linguistic assurances to both the complainants and the respondents in a way that enabled both to claim victory.

46 United States—Sections 301-310 of the Trade Act of 1974, supra note 30, para. 7.71.

47 Id., para. 7.73.

48 United States—Anti-Dumping Act of 1916, WTO Doc. WT/DS136/AB/R (adopted Sept. 26, 2000). An interesting possible parallel question occurs in the human rights jurisprudence, particularly that of the European Court of Human Rights, as argued in Orakhelashvili, Alexander, Restrictive Interpretation of Human Rights Treaties in the Recent Jurisprudence of the European Court of Human Rights, 14 Eur. J. Int’l L. 529 (2003) (maintaining that restrictive interpretations are not appropriate for the conventions on human rights because of the erga omnes nature of the obligations and the concept that the object and purpose of the conventions is not the exchange of reciprocal rights, but the protection of the human rights of all individuals within the ambit of the convention).

49 United States—Sections 301-310 of the Trade Act of 1974, supra note 30, para. 7.75 n.663.

50 DSU, supra note 3, Art. 10.

51 See, e.g., United States—Definitive Safeguard Measures on Imports of Certain Steel Products, WTO Doc. WT/DS248/R (circulated July 11, 2003) (eight complainants); United States—Import Prohibition of Certain Shrimp and Shrimp Products, WTO Doc. WT/DS58/AB/R (adopted Nov. 6, 1998) (sixteen third parties).

52 Particularly the defect of “blocking,” see, eg., Jackson, The World Trading System, supra note 2, ch. 4.

53 Schwartz & Sykes, supra note 6.

54 Jackson, The World Trading System, supra note 2, at 147–49.

55 Schwartz & Sykes, supra note 6, at S181.

56 Id. at S189.

57 Id. at S191.

58 See the WTO document series TN/DS/. . . (2002–03).

59 See, e.g., Contribution of Brazil to the Improvement of the WTO Dispute Settlement Understanding—Revision, WTO Doc. TN/DS/W/45/Rev.l (2003).

60 The “Member concerned” is the party to the dispute to which the panel or Appellate Body recommendations are directed. [Editor’s note: This is DSU note 9.]

61 With respect to recommendations in cases not involving a violation of GATT 1994 or any other covered agreement, see Article 26. [Editor’s note: This is DSU note 10.]

International Law Status of Wto Dispute Settlement Reports: Obligation to Comply or Option To “Buy Out”?

  • John H. Jackson

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