Panel I: Jurisprudential and procedural features
1a. Chair: Valerie Hughes, WTO Director Appellate Body Secretariat
It is my pleasure to chair this very distinguished panel on "Jurisprudential and Procedural Features of WTO Dispute Settlement", especially because I am joined by some of my old friends and colleagues. I will not go into their detailed CVs because they are all far too accomplished and it would take much too long. I will instead just briefly introduce our speakers.
We will hear first from Professor Claus-Dieter Ehlermann, who is my former boss. He was one of the original seven Members of the WTO Appellate Body, serving from 1995 through 2001, and was Chairman of the Appellate Body in his last year of service. He is now Senior Counsel with Wilmer Cutler Pickering Hale and Dorr LLP in Brussels. I have an opportunity to see him now and again in Geneva because he has a very active WTO practice. Professor Ehlermann is going to talk about the standard of review in dispute settlement, a subject that I know he has been keenly interested in for some time.
Our next speaker will be Gary Horlick. Like Professor Ehlermann, Gary is with Wilmer Cutler Pickering Hale and Dorr LLP, although he is based in their Washington D.C. offices. Gary has participated in this conference every year. We see him here each time because he is one of the leading authorities in WTO law. He will be talking to us about the perils of WTO panel selection, something that many people in Geneva are talking about these days in the context of the DSU review.
Four commentators will follow. The first will be Dr. Federico Ortino from the University of Trento and New York University. Many of us will be familiar with his publications. Two recent ones that I would recommend to you in particular are The Basic Legal Instruments for the Liberalisation of Trade: a Comparative Analysis of EC and WTO Law, and WTO Jurisprudence on de jure and de facto Discrimination.
Eric White,Principal Legal Advisor in the Legal Service Division of the European Commission, will speak next. I see Eric regularly in Geneva arguing cases on behalf of the EC. The EC is a regular participant in WTO dispute settlement so that job keeps Eric very busy indeed, and he is well placed to share his insights on these topics.
Debra Steger, Executive in Residence at the University of Ottawa Faculty of Law, will comment as well. As you know, Debra was my predecessor as Director of the WTO Appellate Body Secretariat. All that training in institution-building has set her up well for her current project, which is the establishment of an international law institute at the University of Ottawa.
Finally, Joanne Scott from the University of Cambridge will share with us her thoughts on these complex issues. Joanne is also a regular in these sessions and is an expert in European law and WTO law.
It is a real privilege for me to have an opportunity to keep Professor Ehlermann to an allotted time because he often did that to me when I was appearing before him at the Appellate Body! He watched the clock very carefully and I shall do the same. Professor Ehlermann, you have fifteen minutes please.
Speakers:
1b. Professor Claus-Dieter Ehlermann, Wilmer Cutler Pickering LLP
Thank you very much Valerie, thank you Mads and John and Piet for giving me the opportunity to talk to you today. What I will explain is not really my own intellectual product but very much the fruit of discussions and co-writing together with Nicholas Lockhart, a former member of the Appellate Body staff.1 I will deal with standard of review. This is an old intriguing subject as Valerie has said. I will undertake a sort of marathon run with you through the slides which I have prepared. I promise that I will finish in time, even if I have not be able to go through all the slides. [Copy of the slides can be found under Papers section after this Panel.]
Standard of review, you know it from the national context; you know it from the international context. In the national context its main function is the separation of powers between the judiciary on the one side and the administrative and the legislative branches of government on the other side; but there is also clearly the control of higher Courts vis-à-vis lower Courts, and of higher administrative authorities vis-à-vis lower administrative authorities. In the international context, you have the additional dimension that the international level controls the national level, i.e., the national legislators, governments and courts, without any distinction. Therefore in the international context, the standard of review defines the degree of interference with state sovereignty. In the WTO context you can distinguish between what panels and the Appellate Body do with respect to national s, legislative, administrative, judicial acts, and what the Appellate Body does with respect to panels. These two standard reviews have to be distinguished carefully. I will limit myself to the first one. That is what panels or the Appellate Body do vis-à-vis the national level. In other words, I will not to go into the relationship between the Appellate Body and panels.
Standard of review is not defined as such in the DSU or in any other WTO agreement. However, you know Article 11 of the DSU, and, as a special rule, Article 17.6 of the Anti-Dumping Agreement. I still remember when the question of the standard of review was raised for the first time by the EU in Hormones. I was rather perplexed but I accommodated myself very easily to the convincing argument that one had to go to Article 11 of the DSU to find the relevant provisions.
What is Article 11 about? As you know, it defines the functions of panels: it requires a panel to make an objective assessment of the matter before it including an objective assessment of the facts. But Article 11 does not say anything with respect to the nature or the intensity of the review a panel should conduct, and there are of course very different degrees according to which a panel can review a national measure. Article 11 applies to all covered agreements without exception, except one. That is the Anti-Dumping Agreement.
It has been said in Hormones, i.e., the very first decision in which the standard of review issue was raised, that the applicable standard is neither de novo review nor total deference. This is probably the most important slide of the whole presentation. It is very useful in looking at standard of review issues to these four categories:
- The nature of the issues to be reviewed.
- The process leading to the adoption of the measure.
- The nature of treaty obligations.
- The nature of the measure.
Let’s take the first distinction, the nature of the issues. One has to distinguish between
- purely legal issues,
- purely factual issues and
- mixed and factual and legal issues.
First, the review of purely legal issues under agreements other than the Anti-Dumping Agreement. The review by a panel and, on appeal, by the Appellate Body of what is going on at the national level with respect to the interpretation of WTO law is a de novo review. No deference is paid to what a national authority has said about the interpretation of WTO law. The interpretation of WTO law is the proper and primary task of panels and the Appellate Body. That would be particularly true if a national authority were to apply directly WTO law. However, WTO law is normally not directly applicable before domestic courts, at least in the main trading partners, i. e., the United States and the EU. (In the EU we have of course one limited exception, the so-called Nakajima jurisprudence of the European Court of Justice).
As I have said before, WTO law contains one exception from Article 11 of the DSU, i.e., Article 17.6 (ii) of the Antidumping Agreement. According to the first sentence of this paragraph, “the panel shall interpret the relevant provisions in accordance with customary rules of international law. However, the second sentence adds that “where the panel finds that a relevant provision of the [Antidumping] Agreement admits more than one permissible interpretation, the panel shall find the authorities’ measure to be in conformity with the agreement if it rests upon one of those permissible interpretations”.
Article 17.6 (ii) was clearly intended by its promoters, i.e., the US, to be an exception to the general rule, laid down in Article 3.2 of the DSU, according to which the dispute settlement system serves “to clarify the existing provisions of [the covered] agreements in accordance with customary rules of interpretation of public international law”.
However, as drafted, Article 17.6 (ii) hardly achieves this result. Why not? Because the customary rules o international law are designed to lead to one - and not several equally permissible - results. Therefore, the first sentence of Article 17.6 (ii) leaves very little scope for the application of the second sentence. In other words, the hurdle of the first sentence is so high, that there is rarely room for recourse to the second sentence.
From the point of view of those who wanted a broad exception, this result is highly unsatisfactory. It is therefore not surprising, that the Appellate Body’s interpretation of Article 17.6 (ii) is severely criticized on the other side of the Atlantic. The Appellate Body, and the panels following the Appellate Body, have been accused of reading de facto the second sentence of Article 17.6(ii) out of the text.
One recent example of this controversy is the dissenting opinion in the last Lumber case concerning “zeroing”. The Appellate Body had said earlier that “zeroing” is not permitted. The majority of the panel members follow this guidance. However, one of the members of the panel dissents and opines that in his view ”zeroing” is one of several permissible interpretations.
Let us turn to factual issues. Here things become more complicated. You will remember the famous statement of the Appellate Body in Hormones according to which the appropriate standard of review is neither a de novo review nor total deference. That statement presupposes implicitly that a prior investigation has taken place at national level. In the Hormones case, the prior investigation to which the panel and the Appellate Body would normally pay deference would of course be a risk assessment, undertaken according to Article 5 of the SPS Agreement.
This leads us to the second of the set of criteria which I mentioned earlier, i.e., the process that leads to the adoption of the measure under review. The paper written together with Nicolas Lockhart2 explains that it is useful to distinguish between trade remedy cases, i.e., claims made under WTO agreements that prescribe a more or less precisely regulated process of investigation at the national level, on the one hand, and other cases, brought under the GATT, GATS, the TBT Agreement, and to a certain extent even the SPS Agreement, which contain hardly any rules regulating the domestic decision making process.
Within (but not only within) these investigative processes, it is useful to distinguish between the nature of different treaty obligations. With respect to procedural obligations, the control of panels and the Appellate Body is extremely strict. With respect to substantive obligations, and when it comes to facts, one has to distinguish.
Fact finding, notably in the context of the already mentioned highly regulated investigative processes, is normally a matter for the national authorities. Fact finding is not a natural and easy task of panels. On the contrary, panels are normally badly placed to establish facts. It results from an existence of an investigative process, and a final determination that has to be made at a certain point by the competent national authority, that facts which become available after the end of that process and the final determination cannot be looked at any more by panels or by the Appellate Body. There is a possibility to explore new elements, like new expert opinions, but only with respect to old facts, i.e., with respect to facts that were known, or could have been known, during the investigative process and at the moment the final determination.
Remains the evaluation of facts. That is probably the most critical, the most delicate business a panel and the Appellate Body have to perform. The evaluation of facts is not only a task of panels, but also of the Appellate Body, because the process of characterising the facts with respect to the law is a legal question. In Lamb, Appellate Body describe the evaluation process as follows. “The substantive aspect [of the review is whether the competent authorities have given a reasoned and adequate explanation for their determination…[A] panel can assess whether the competent authorities’ explanation for its determination is reasoned and adequate only if the panel critically examines that explanation …Panels must therefore review whether the competent authorities’ explanation fully addresses the nature, and especially the complexities of the data, and responds to other plausible interpretation of that data.”
Returning briefly to the Antidumping Agreement, I have to mention the special provisions of Article 17.6 (i). According to Article 17.6 (i), “in its assessment of the facts of the matter, the panel shall determine whether the authorities’ establishment of the facts was proper and whether their evaluation of those facts was unbiased and objective. If the establishment of the facts was proper and the evaluation was unbiased and objective, even though the panel might have reached a different conclusion, the evaluation shall not be overturned”. It is in my view open to doubt whether that definition really diverges substantially from what results from Article 11 of the DSU. It is possible that in the future we will see slight differences in the interpretation and application of two provisions.
One of the most intriguing questions that arise under the Antidumping Agreement is whether the characterisation of facts falls under the first or the second paragraph of Article 17.6. If the characterisation of facts belongs to Article 17.6 (ii), national authorities enjoy greater discretion than if this characterisation falls under Article 17.6 (i), although Article 17.6 (ii) has turned out to be considerably narrower than was intended by its promoters, in particular by the US.
What I have said so far applies to trade remedy cases which have given rise to the largest number of panel and Appellate Body reports. If we look at non-trade remedy agreements, such as the GATT, the GATS and the TBT Agreement we do find investigatory processes similar to those required by the Agreement on Subsidies, on Safeguards and the Anti-Dumping Agreement. Under the former group of Agreements, panels and the Appellate Body will therefore not pay the same deference to the results of the fact finding process that we observe in trade remedy cases. The SPS Agreement occupies a sort of intermediary position because its Article 5.1 which clearly requires some sort of prior investigation at the national level, i.e., the risk assessment.
In conclusion, the standard of review of panels and the Appellate Body depends on the Agreement, the type of issues, on the type of measures and on the type of obligations. Panels and Appellate Body have to navigate between two opposing principals between which are difficult to reconcile. On the one hand we have national sovereignty and WTO members’ discretion. On the other hand panels and the Appellate Body have to respect the prescriptions of the DSU according to which the dispute settlement system has to provide security and predictability to the multilateral trading system. The standard of review in trade remedy cases, as I have said, leaves a certain margin of discretion to the competent national authorities. But it appears to be rather strict in spite of the fact that panels and the Appellate Body pay deference to the investigatory process. This results, however, from the great number, the detail and the nature of the procedural and substantive obligations which the three trade remedy agreements impose. With respect to non-trade remedy cases, particularly GATT, GATS and TBT cases, panels and the Appellate Body are not restrained in the same way through a prior national investigatory process. Therefore the standard of review is less restrained and could be stricter. But these agreements are much less detailed and contain fewer procedural and substantive obligations. The measures at issue are not trade remedy measures. They do not necessarily pursue economic purposes but non economic objectives, such as the protection of health and safety or the protection of the environment.
Valerie Hughes: Thank you Claus. That is an awfully complicated subject to cover in fifteen minutes but you did it very well indeed. I would point out that, recently, parties regularly argue on appeal that the panel has not acted consistently with its obligations under DSU Article 11 to "make an objective assessment of the matter before it, including an objective assessment of the facts of the case." In fact, just the other day someone cleverly referred to this type of claim as the "claim de jour", because it appears in virtually every appeal. The Appellate Body was called upon to interpret a panel's obligations under DSU Article 11 in the early days of WTO dispute settlement in the famous Hormones case.3 The Appellate Body set a rather high standard for establishing that a panel had failed to meet its Article 11 obligations, essentially saying that a party had to prove that a panel had acted in bad faith.4 I believe that this might have had a "chilling effect", such that Members were somewhat reluctant to make such an allegation in subsequent cases. However, that reluctance no longer seems to be there, and claims under Article 11 are quite common now. So much so that the Appellate Body cautioned recently that a challenge under Article 11 is a very serious allegation and that parties must substantiate such claims with specific arguments. The Appellate Body made it clear that a claim under Article 11 of the DSU should not be vague or ambiguous, and that it should stand by itself and not as subsidiary to another alleged violation.[5]
I would now ask Gary Horlick to talk to us about the perils of WTO panel selection.
1c. Gary Horlick, Wilmer Cutler Pickering LLP
Thanks very much Val. The reason I like coming here is precisely that it brings together more than WTO people. In the area of dispute resolution in particular we now have under our belts more than 100 years of fairly formalised, judicialised if you will, international dispute resolution i.e. non-diplomatic. One of the things I think the WTO benefits from is insights brought from other areas of international dispute resolution. Many of the problems have been confronted before.
Before getting into my subject, I can’t resist, as Val couldn’t resist, commenting on Claus’ comment. Nothing in Article 11 says it’s a standard of review. The term is alien to the WTO. It’s more of a US concept and I’m not sure well suited to the WTO. Over the first ten years obviously many arguments have been generated about it but in the end, in my personal view, deference to decisions by national authorities is earned or more accurately it is thrown away. In practice, if national authorities repeatedly appear biased, appear sloppy, appear not very convinced of the need to follow their WTO obligations, that affects outcomes. Panels and the Appellate Body in particular (because it is a permanent organisation) will, at least subconsciously, take note of that behavior. I’m not sure many national authorities have taken this fact of human nature on board but they should. And defying a WTO ruling is bound to cause litigation heartache later.
I note that there have been many proposals about how to change the panel selection process. They are described quite well in Debra Steger’s December paper which has been distributed. Briefly, in a court case you don’t let the litigants choose the judge. It’s very rare. Arbitration is different. There are many models of arbitration, but typically you could have each party choose one arbitrator and then come up with a neutral. As many of you know, in the world of arbitration there are huge theological debates about whether the two party-chosen panel members are meant to be neutral or meant to be advocates for their party. When you get to fora such as the ICJ and ECJ and other multinational tribunals, what you see often is some sort of a roster chosen by groups of countries. This is not a formal description of how all the tribunals are chosen, but in practice regional groupings would get to nominate a judge, but it’s a real judge, a permanent judge, for the ECJ and ICJ. Obviously, the ECJ represents a much more politically cohesive and powerful body than the WTO, but it is debatable if the ICJ is. Against that background you have WTO panels which are obviously hybrids but the current situation (to again grossly overgeneralise) is pretty ad-hoc in the sense that there is no preconceived membership of a given panel. It’s a scramble in each case. The Secretariat proposes names, each party has a limited veto, there is some game playing (do you try to hold back some names if you are the Secretariat because someone is going to veto the ones you propose so maybe you hold back the people you really want on the panel until the others have been vetoed?), etc. All this is not a very good way to run a railroad, as we Americans say.
Eventually the WTO Director-General can be asked to choose the members of the panel. I would underline this provision. In NAFTA, for example, there is no one to choose the panel and delays in establishing panels can be quite long, a year or more. In that sense the WTO is blessed by its drafters by putting someone in charge of the railroad at least. Selection by the WTO Director-General happens about 50% of the time. There is an illustrative roster that you can find on the web site but the people on the roster are not really vetted in any way except by each member state proposing them . That, I would suggest undiplomatically, is not always a way of generating good panellists and indeed the roster is not always used. The Secretariat uses the roster but it actually casts its net far more broadly. The WTO Appellate Body, to take a contrast, is far more carefully chosen, as you would expect for an enterprise with a considerable amount of power given the lack of progress on the legislative front. So you have seven judges, they are chosen by all the Members and it’s negotiated but I think there is fair consensus that you’ve got fairly good people so far, present company certainly included, Claus. Interestingly enough, despite all the frenzy about nationality in panel selection (in general panels cannot have nationals of either party, although that’s not always logical), for the Appellate Body that’s waived so you will frequently find nationals of a party on the Appellate Body ruling on a case brought by or against that party.
One parallel which is interesting, because it was drafted at more or less the same time as the WTO DSU, is NAFTA Chapter 20, which is sort of the state-to-state dispute resolution in NAFTA. The US in NAFTA is a much larger economy than the other two countries combined and much larger population than the other two combined, so there is a political imperative not to be seen by the US to be outvoted in every case 2 to 1. The U.S. couldn’t have “one country one vote” for dispute resolution. On the other hand you couldn’t very well, if you are Canada or Mexico, politically say, OK we’ll do it proportional to population or GDP, and be seen to always be outvoted by the US. So the solution was quite interesting. First a roster of 30 is chosen, but pre-approved, and this is a key point. All three countries would have had to sign off on all 30, you’d have 10 from each country, but approved by each of the three countries. That means that when one of the three countries loses a case it can’t complain. It approved whoever voted against it. The US, being extremely sensitive to this perception of being outvoted, then added reverse selection. In effect, and I am leaving out some of the details, the US chooses from the roster two non-US citizens, and if it’s a binary dispute, the other country chooses from the roster two US citizens. To be blunt, in terms of the US political perspective, if the US is going to lose, it will lose because of a combination of at least three votes of either US citizens or panels members that the US chose. Again, no one is in a position to go away whining that the panel was stacked against the US since the US had some role in the stacking. There are some problems in practice with this roster, getting it approved among other things, but it is an interesting model in terms of a key item for governments, they need the perception that they didn’t do something so stupid as to allow a panel to be chosen by the other side.
Going back to the WTO, so far the panel selection system is working in the mechanical sense, but it’s a lot of work. There is a lot of wasted motion. Every time a new name comes up, everyone scrambles to run searches on Google and Lexis and whatever else they can come up with to find out who this person is. There are delays. It takes on average 58 days (thank you Mexico for doing the numbers) to name the panellists after the panel has been officially established which you might think that is a little long compared to what it is supposed to be, although there are greater delays elsewhere in the process.
More important, and I should have underlined this on the slide because this is the most important point, there is a conflict waiting to happen, in fact a scandal waiting to happen. You have delegates from governments serving on these panels. Those governments themselves are not, as I mentioned, parties to the case either as primary parties or third parties. However, for at least 30 to 40 WTO members, the ones who supply the vast number of panel members, they all have a position on nearly every issue and not to be too blunt about it but the dissenter on the zeroing case, which Claus [Ehlermann] mentioned, is from a government which was involved in such a dispute and you can read the dissent as jurisprudence, or you can read it as sour grapes, but someday this is going to blow up. It could well be worse, you could well find a panellist, because they are not obviously professional panellists, with some economic conflict. This is bound to happen. Will it happen today? No, I hope not. But it is guaranteed to happen. As Murphy’s Law would have it, it will happen in some case of extreme political sensitivity and will become a complete scandal.
The losers in any case, WTO or otherwise, tend to blame the judge rather than themselves, partly a phenomenon that lawyers convince themselves of the correctness of their own arguments and therefore it must have been that the panel was fixed. We have already seen losing litigants claim panels were unfair, claim the panel was wrong, claim that the Secretariat was unduly influencing the panel etc., etc., so you have a situation that is bound to happen in a context where someone is bound to make a scandal of it. So I would suggest that this not only is avoidable but should be avoided.
You also have supply and demand problems. You want experience, you want high quality panellists, but you want neutrality. There is considerable scholarly discourse now on how neutral judges can be in terms of background, attitude, experience. What does a party want in litigation? It wants to win the litigation. Parties collectively, however, recognising the mathematical impossibility of all of them winning -- you can’t have both sides win a litigation despite occasional attempts by the Appellate Body to do so -- so as a system what you want is to know that the judge is independent. Finding quality panellists could be less of a problem. There are now enough people with experience with panels, with WTO negotiations, with the WTO in general in a wide range of countries. This wasn’t true 10 years ago but 40/50 countries now have people who have been through the process and many of them are old enough to retire, so the pool is there. You have the human material for a full-time panel. That is where I have been leading you of course. The way to avoid this future scandal is full-time panellists. The Appellate Body, though technically not full-time, is veering there given the case load. The one thing I find negative about full time panelists, where I’ll finish, is that it does take away experience from the Members. One of the advantages of Members’ employees serving on panels is they see how they work. The panel process ceases to be a mystery and that is a plus for the system, so where I finish is this possible compromise (which is not my idea by the way, I’d give credit to the author but he doesn’t want it because he is a frequent panellist): to have a permanent roster of full time panellists and add in for each case one person from a non-party Member or someone from academia. That way you avoid the scandal because at worst that person is only one vote out of three. I don’t expect the May DSU negotiation deadline in 2004 to be met but if not, this is something that should not be held over until the end of the Doha agenda. Thank you.
Valerie Hughes: Thank you very much, Gary. We will no doubt hear more about this subject later on in the day. The debate about the benefits and drawbacks of a permanent list of panellists is fascinating, as is the speculation about how WTO Members would go about negotiating who should be on that list. What is interesting in this context is that the appointment process for Appellate Body Members has functioned very smoothly over the years. I am sure that there was a great deal of diplomatic manoeuvring on this –much more than meets the eye – but I would have thought it would have been significantly more difficult to reach agreement than it appears to have been.
We should turn now to those who have been asked to comment on these two presentations. If I could ask you to keep your comments to five minutes so that we will have time for questions from the audience and first, Federico Ortino please.
Comments:
1d. Dr Federico Ortino, University of Trento and NYU
Let me step back and add a further element in the broader debate over the role of the dispute settlement (DS) system in the WTO. More specifically, I would like to highlight one consequence of having this type of DS within this type of organization.
The WTO DS system is perceived as a very strong and effective system, characterized by distinctive, judiciary-like features including, for example, the permanent and professional nature of the Appellate Body (AB), compulsory jurisdiction, the AB authority over its own working rules, automaticity of adoption of reports (or negative consensus against adoption). On the other hand, the political branch is perceived as a weak or practically blocked. Binding DS reports cannot be changed easily. It is the intergovernmental nature of the institution, jealously defended by its entire membership and symbolized in the consensus rule that appears to be at the core of this weakness.
Within this institutional imbalance (highlighted by several commentators), the role of the court becomes quite delicate. If the task of courts (like the AB) may already be difficult in itself because of the legally and politically sensitive issues that are brought up before them by the parties, this task becomes even more delicate, if the political decision-making process is slow or—as in the case of the WTO—practically blocked.[6]
However, in the interplay between a strong judiciary and a weak political branch, there is, however, a further layer of concern. And this concern deals with the way in which the DS reports are perceived and used by the political branch of the WTO. I take a recent example to illustrate this point.
In a recent informal meeting of the WTO Negotiating Group on Rules (convened on 26 and 28 April), which focuses on the review and improvement of WTO rules dealing with topics such as dumping, antidumping measures, subsidies and countervailing measures – Members considered certain issues raised in a submission by the US specifically concerning antidumping. The US submission sought, among others, to spur discussion around the right of Members to determine the disbursement of collected antidumping duties (other two topics were (a) the potential to establish regional antidumping authorities in order to bring down costs for developing countries; and (b) the use of "facts available" in antidumping investigations).
Referring back to the panel and AB Report adopted a year ago on the Byrd Amendment (in which the DS ruled precisely against a US law which allowed for collected antidumping duties to be channelled back to the injured company), many Members reacted to this issue with great concern. Korea said the issue did not belong in the rules group, since a WTO panel and the AB had ruled the US law illegal. Japan said it was "quite surprised and deeply puzzled" that the US had brought the issue up, noting that new rules on this point would never be acceptable as the outcome of negotiations. Brazil said changing the rules to make illegal measures WTO consistent would set a bad precedent. Several other countries also echoed these concerns.
While I can concede that this may simply be all “diplomatic rhetoric” or a question of the proper mandate of the Negotiating Group, one cannot but wonder whether there is more in the reactions voiced by the Members at the US proposal on antidumping. It would appear that not only are WTO rules (1) difficult to modify by the weak political arm, but (2) they seem to acquire a higher normative strength once they have been adjudicated by the DS bodies. Are these rules really written in stone? If true, this second perception may have several implications on the role and conduct of the WTO DS bodies, as well as on the perception from the outside world of the entire system. Let me limit a few comments with regard to the implications on the role and conduct of the WTO DS bodies stemming from the second perception.
The reason for this second perception (i.e., WTO law acquiring a higher normative status once they have been run through the DS system) seems to be a combination of the judicial nature of the DS system and the still mercantilistic nature of WTO rule-making process. The former is embedded in the strong judiciary-like features of the DS system and in particular of the AB (the same we mentioned above, including moreover, the strict reliance on a literal interpretation). In other words, there is a perception of legal objectivity and rationality in the working of the WTO DS system.
With regard to the second point (the mercantilistic nature of the rule-making process), it seems that WTO law (i.e., the provisions of the covered agreement which the DS system needs to clarify (Article 3.2)) is still the result of quid pro quo, neo-mercantilist bargains. Once granted, they cannot be given back (at least without adequate compensation). [Hence, the imposition on DS bodies not to “add or diminish” the rights and obligations provided by WTO law.]
The legitimacy problem of this interplay is clear: it stems from the fact that these “bargains”, i.e., the provisions of WTO agreements, are not (or at least should not be viewed as) higher law, which cannot be subject to scrutiny or modified. For higher law, I am not referring to any meta-constitutional concept. More simply, I am referring to the notion that all Members are set to gain from every bargain, from every liberalization measure. As convincingly argued by a few scholars,[7] at least in the last round of negotiations (Uruguay), the bargains struck by Members, while in overall terms could be said to be based on reciprocal gains, individually they did not benefit all the members. It is usually argued that in the Uruguay round, for example, services was exchanged for agriculture and IP for textile. In the future, maybe, competition and/or investment will be exchanged for more agriculture.
Let me conclude with a challenge and an opportunity. The challenge (or concern) is that the operation of this type of DS system (with its strong and rigorous, judiciary-like features) may be used as (or represent) an obstacle in the process of review and improvement of the substantive bargains of the past. The opportunity is that this imbalance may represent a stimulus for a broader debate over the underlying nature and modus operandi of the entire organization: one which is not based on quid-pro-quo, mercantilistic bargains, but one which favours the search for sound disciplines, beneficial to, and sustainable for, the entire membership.
Valerie Hughes: Thank you Dr. Ortino. Eric, you are going to go all the way over there and I can’t stop you when you go over the time. That’s my problem.
1e. Eric White, European Commission
Good morning. I would like to comment on the two talks that we have just been hearing and I think that there is a link between them, which I will try to explain.
I was very interested in Claus Ehlermann’s discussion of the standard of review. In the old days, we used to think that the standard of review was nowhere regulated in the covered agreements except in Article 11 of the DSU. But listening to his talk and reading his article it becomes clear this is not the case. The standard of review in a particular case depends upon various things including the nature of the obligation and, in fact, also the nature of the measure under review. This means that the standard of review will vary from case to case.
If you look at the case law you will see that the standard of review applied in safeguard cases is much stricter than that which is applied, say, in subsidy cases or countervailing duty cases – not to mention anti-dumping cases – because the nature of the obligations is different. That is, safeguard measures are imposed against fair trade and the Appellate Body has stressed that this consideration guides its interpretation and application of the provisions of the Agreement on Safeguards. In fact, the standard of review applied in safeguard cases derives from Article 3 of the Agreement on Safeguards as much as from Article 11 of the DSU.
Also, it appears, the standard of review is laxer when an important issue like public health is involved than when, for example, an arguably less important issue, like consumer protection, is involved. Accordingly, to illustrate the point with cases which have been decided by the Appellate Body, a different standard of review is applied when considering whether a member has properly imposed a prohibition on asbestos than when considering whether a member has properly prohibited the use of the name sardines.
This deduction of the standard of review from the agreement and the nature of the obligation under consideration on the one hand and the nature of the contested measure on the other hand, in fact gives a lot of power to the panellists because they are the ones who decide what is the nature of the obligation, what is the nature of the measure and how important it is. Is health more important than consumer protection? What about the environment? Where does that fit in the scale of values? This will vary between panellists.
That brings me to the selection of panellists. Gary Horlick was saying that this is a scramble. I am not sure if it is really a scramble rather than a conspiracy to delay. Consider the time that is taken sometimes - up to six months - to choose panellists. For Gary Horlick, the main criterion for panel selection is integrity. He argues that panellists have to be vetted for integrity and that therefore the problem can be solved by having a list of panellists who have been already vetted for integrity. But there is much more to it than that, I think. If one looks at the way panellists are chosen you can see that it is based on characteristics and criteria. Should we choose a lawyer or an economist, or an academic, or a diplomat, or a government official. These characteristics and criteria are advanced because they are believed to influence the outcome of the case. But since all the members know that and have opposite views as to the desired outcome of the case, the choice of panellists is often difficult. That is how the game is played most of the time.
Another important criterion for the selection of panellists is how they are going to approach the case, what personality traits they will bring to the case. Will they do a thorough job? Will they leave it all to the secretariat? Will they want to at all costs follow the case law laid down by the Appellate Body or will they have their own theories which they want to expound? All of this influences the choice of panellists.
In fact, another aspect of panel selection is the attempt to influence the standard of review. By choosing panellists which have certain characteristics you will have a panel that exercises more or less deference to the findings of the administrative authority and the choices made by the member state.
Thank you very much. I will stop there. That is my 5 minutes.
Valerie Hughes: Very good. That’s really something. Debra Steger please.
1f. Debra Steger, University of Ottawa
Well we’ve been talking about standard of review or Dr Ehlermann has talked about standard of review, Gary [Horlick] has talked about the selection of panellists but standard of review is one of the many areas in which the panels and the Appellate Body have developed practice and procedure that I would argue is not specifically set out in all of its……….end of tape 1 side A
Tape 1 Side B
…developed certain standards, a certain approach, certain practice and procedure. Other areas that we could look at and talk about, but I’m not going to today, include standing, burden of proof, due process, fairness and recently we’ve been hearing the Appellate Body say things about good faith. These are legal standards, principals, practice procedure which those of you who are familiar with other legal systems take for granted as judge made standards practice and procedure. It’s clear in most legal systems that these standards, these approaches are not etched in stone, they are not negotiated, they are not set forth in the DSU or in a legal text somewhere and therefore because they are judge made they can evolve over time. However, when they do evolve, I think it is very important if you are a litigator involved in WTO dispute settlement, that the Appellate Body and panels if they are going to go further in developing new approaches, new standards, that these standards be developed with great care and intellectual rigour. Partly because that’s the best way to function if you are a judicial body but also out of fairness to the parties because some of these issues, like standard of review, and I’ll say a few things as well about burden of proof, are absolutely critical often in determining the outcome of a case and if the parties don’t know going into a case what approach you are going to take to something like burden of proof or standard of review, it can very well determine the outcome and the parties may not have known exactly what the standard was at the beginning that you were going to be applying. With respect to standard of review I think probably many of us who negotiated the DSU would agree with Gary that we hadn’t sort of initially thought that Article 11 of the DSU was truly a standard of review provision. It speaks of objective assessment of a matter. Claus has also mentioned Article 3.2 of the DSU but when you look carefully at that provision it talks about clarifying the existing provisions of the agreements. It also says that panels in the Appellate Body cannot add to or diminish rights and obligations but as Claus [Ehlermann] said, neither Article 11 nor 3.2 really tell panels in the Appellate Body exactly the type or nature of the review they are supposed to conduct. So I think that this approach that has been developed has been developed by the Appellate Body and by the panels themselves. With respect to standard of review it is a very difficult subject and it’s one that is difficult to sort of develop clear standards on and that was one reason why I think the negotiators left it very open. There is a difference between standard of review that a panel must apply in reviewing the action or the measure of a particular government and that’s the type of standard of review that Dr Ehlermann has talked about today, but there is also the standard of review applied by the Appellate Body in reviewing decisions or rulings of panels. In the latter case, the DSU in Article 17.6, sort of curious you know, I don’t think the negotiators thought about this, but it’s 17.6 of the DSU that sets where the standard of review that the Appellate Body is to apply to panels and it’s 17.6 of the Anti-Dumping Agreement that sets out the standard of review, I think that’s just one of those funny little coincidences in life, but 17.6 of the DSU says that the Appellate Body when it is reviewing panels, it is limited to issues of law and legal interpretation and that means that the Appellate Body’s ?? cannot extend to factual findings per say. The standard of review I think in 17.6 of the Anti-Dumping Agreement has been the subject of some confusion I think in terms of the way panels have applied it in the past few years. One of the sources of confusion, I think, comes from the fact that some panels, not all panels but there have been one or two panels, have looked at 17.6 not as an instruction to the panel in terms of characterising the nature of review that the panel must conduct or is limited, limitations on the panel in terms of its review of a government’s action or its investigation, but rather some panels have looked at 17.6 of the Anti-Dumping Agreement as an obligation on the investigating authority itself and I think this has led to some confusion. In other words, there have been some panels which have sort of looked at the language about proper assessment of the facts and have said this is an obligation on the investigating authorities and I don’t think that it is. What it is is it is a provision that specifies the nature or the character of review that a panel is to conduct when it is examining the actual measure imposed by a government or its investigation and trade remedy cases, we mustn’t forget, include not only anti-dumping but also countervailing duty actions and I would say safeguard actions and although the agreements do not specify a special type of standard of review for countervailing duty actions and safeguards actions. My own personal view is that these are trade remedy actions like anti-dumping and some thought should be given by negotiators in the current round to whether you should have similar sorts of standard of review for those types of actions and there may indeed be other types of investigations or even actions of the courts for example pursuant to the TRIPS agreements which should be viewed through somewhat of a different prism. This is an extremely difficult issue but I think it’s an issue that negotiators should look at and consider again in this round. It’s not an easy one but at the same time I think it is one that should be looked at. I said that I would just say a couple of words briefly about burden of proof because I think that that’s another extremely important practice that has been developed by the Appellate Body. I’m almost out of time so I’ll say two words about it. The Appellate Body has developed a distinction between a positive rule and an exception and it is said that if you have a positive rule the burden is on the complaining party to establish that particular case. If it is an exception, the burden is on the responding party but the latest case on the issue, the ECGSP case, I think muddies the water somewhat. In that case the Appellate Body held that the enabling clause is an exception and that the burden of proof lies on the responding party but the Appellate Body then went on to find that this exception is special in nature and therefore must be specifically pleaded by the complaining party as part of its claims. I think this is a bit confusing but it also leaves I think litigators in the future a bit confused as to how to approach burden of proof in future cases. That’s all I have to say, my time is up.
Valerie Hughes: Very good. I was going to stop you now that you are after my guys, but anyway I will let it go. Joanne Scott, please.
1g. Joanne Scott, University of Cambridge
OK, well, I will make a point of being very kind to all of the guys in that case.
Valerie Hughes. We have a woman now, actually.
Joanne Scott. Yes absolutely, Merit Janow. I just want to pick up very briefly on one aspect of Claus-Dieter Ehlermann’s presentation. He seemed to me, in his presentation, to make a proposition. I may state it too strongly and he can qualify it. The proposition is that there is, and ought to be. a link between the process according to which decisions are reached and the standard of review which is applied. The illustration - it’s a very nice illustration - which he gives to support that proposition is the trade remedies case law. The fact of the conducting of an investigation prior to the adoption of a decision is such to militate in the direction of greater deference on the part of the “judicial organs” and he also highlights the relevance of SPS and calls SPS a kind of interim example because it also mandates certain procedural requirements for member states in the form of the requirement that they conduct a risk assessment. This basic proposition that comes out of his talk seems to me to be very interesting and very important. It also seems to me to be in lots of respects an extremely enticing proposition. The idea that one uses the discipline which accrues through process as a means of off-setting the need for as much discipline when it comes to substance; so a higher level of scrutiny of procedural requirements in the course of adoption of decisions, contested decisions, and a lower level of scrutiny of the substantive compatibility of those decisions with the agreements and this kind of play-off between process and substance is something which is very familiar from domestic discussions about judicial review and I think kind of taking us back to that domestic analogy for that reason alone as well as other reasons is extremely useful. The kind of recourse to process has been something that has been used repeatedly as a way out of what people speak of as the counter-majoritarian difficulty. The recourse to process has been presented as something which can help square the democracy circle when it comes to the very controversial institution of judicial review. In brackets I put the question of whether is it helpful to think of what the Appellate Body is doing as judicial review here? Is that an analogy which is helpful or does it raise as many problems as it solves? So it seems to me that this basic proposition of the link between process and standard of review is extremely helpful and extremely attractive and its attractiveness is, I think, exemplified by virtue of the fact that so many courts and so many legal systems would accept this. One just needs to look at a series of recent cases before the European Court of Justice to get a sense of the importance of this. In a series of cases concerning a very controversial risk assessment decisions, the European Court places considerable emphasis in very detailed terms upon the procedural requirements which bind decision makers but is relatively hands off when it comes to the actual substance of the risk assessment decisions or the risk decisions which have been adopted. One can also, I think, find evidence within the WTO system of this trade-off being in play quite apart from the examples which Claus-Dieter Ehlermann gave and I would point just to two examples of this kind of trade-off in circumstances where the trade-off is not mandated by the text of the WTO Agreement, although the WTO Agreement is sufficiently open and permissive to allow it to happen. One example would be the very famous Shrimp Turtle example of course where the Appellate Body in construing the chapeau to Article 20 instantiates a series of procedural requirements attaching to member states which lay a kind of disciplinary backdrop in terms of process as opposed to a disciplinary backdrop in terms of substance. That’s a well known example. A second example would be the case that Debra [Steger] just referred to, the GSP case, where I think again we could probably make a reasonably credible argument that procedural discipline is being used as a means of allowing greater deference in terms of the substance of the decisions which are being reached and then GSP for example, transparency and adaptability type criteria are being deployed by the Appellate Body in evaluating the legitimacy of the particular aspect of the EU scheme which was at issue. And just the fact of this proposition and the fact that it seems instinctively an attractive one – together with the fact that one can come up with lots of evidence of it being in play in different legal systems already - invites us to put on the table in a very direct way the broader question which flows for me from Claus-Dieter Ehlermann’s talk. And I suppose the question is quite simply: to what extent would it be appropriate for the Appellate Body to go down the road of endorsing this kind of trade-off between process and substance even in areas where the treaty, where the WTO agreement does not specifically mandate the procedural requirements which are binding upon the decision makers so there is no treaty based mandate to carry out an investigation of a particular kind? And this question seems to me to have great importance in a number of different areas of WTO law, and we won’t have time to go into this. Obviously it has relevance for looking at member state decisions and their compatibility with the agreement but it also seems to me potentially to have ramifications in other spheres. Think, for example, of the role of standards in various of the WTO covered agreements, TBT, SBS and so on. The Appellate Body is in certain respects called upon to play a gate keeper role in relation to international standards. Might these kinds of process based question not also be relevant in considering the manner in which the standards reach into the agreements and the role which they ought to be entitled to play within them. So I would just invite us to take from the very interesting talk we heard that challenge of considering to what extent this falling back on process as a reason for enhanced deference is a possibility within the WTO bearing in mind of course that in the WTO, in a multilateral system such as the WTO, we don’t start from a position where we have a shared prior conception of what politics ought to be and therefore we don’t have a shared prior conception of what right process ought to be. So it seems to me to be an enticing proposition, a potentially fruitful route for analysis, but one which is also challenging because of the diverse nature of the political order within which the WTO operates. Thank you.
Valerie Hughes: I think if you allow me, just before I open the floor to questions, I think it would be fair to allow both Claus and Gary to respond to some of the comments that have been made if you can do it in two minutes each before we open the floor.
Discussion
Claus-Dieter Ehlermann: Right, that’s a clear challenge. Thank you very much. With respect to Eric [White]’s remarks, and to also to Debra [Steger]: I don’t make a fundamental distinction between the three trade remedy agreements, with the only exception of course of 17.6 of the Anti-Dumping Agreement. I am inclined to believe that the standard of review under the Safeguard Agreement is not stricter than the standard under the Agreement on Subsidies and Countervailing Duties. The Anti-Dumping Agreement contains of course the special provisions of Articles 17.6.
With respect to Debra’s remark: is Article 11 of the DSU really a standard of review provision? I remember my personal embarrassment when the issue was raised for the first time in the Hormones case. I was happy that we were collectively able to find a solution in Article 11 of the DSU, even if this provision was not intended to serve as a standard of review yardstick.
The remarks by Joanne [Scott] open a wide debate. It is not possible to deal with them in two minutes. However, the comparison with what is going on before the European Court of Justice is extremely revealing. It would be a wonderful PhD thesis to compare what the Court of Justice does with respect to Commission decisions reached in a highly structured process, e. g. in antitrust cases, and what panels and the Appellate Body do in trade remedy cases. My conviction is that, with rare exceptions, the Court of Justice pays more deference to the Commission under the heading “complex economic appreciation” than panels and the Appellate Body do with respect to competent national investigation authorities in trade remedy cases. A very recent exception is the judgment of the Court of First Instance in Airtours, but the Commission has appealed this judgment before the Court, and we will see what the Court will say.
This observation is striking and somewhat counterintuitive. You would normally expect that the judiciary in a highly integrated legal and political system like the EU would be stricter in its review of the actions taken by the executive that the quasi-judicial bodies in an international system like the WTO. The observation also signals to me that something is not totally right in Luxembourg.
I believe that there is a difference in standards of review that is probably linked with questions of burden of proof with respect to the type of evidence that a court has to review. Take the examination of economic issues and compare them to the analysis of scientific issues, as they arise in matters involving public health and safety or the environment.
My last point is related to a particularity of WTO law, i.e., the absence of the principle that national remedies have to be exhausted before relief is sought though international dispute settlement. If WTO were to require the prior exhaustion of national remedies, like in public international law in general, the standard of review question might look differently. In such a situation, panels and the Appellate Body would not review the acts of national administrative or legislative bodies but of national court decisions. When we talk about standard of review in the WTO, we talk normally about the review of normative and administrative measures, instead of court decisions. Unless you go into the very tricky question of interpretation of national law which none of us touched today. What is that? A question of fact? A question of law? Or a mixed question of law and fact?
Gary Horlick: Very quickly, Eric [White]’s comment on the panellists’ selection was a very good description of a litigant’s view of panel selection, which is exactly why I think it has to be changed. You do not want a system where it appears that the result was dictated by panellists who are not truly independent and as I said, right now you have a system where most of the panel members work for governments with views on most issues, so I think we are headed for trouble, and inertia could take us there quite soon.
In terms of standard of review, since I can’t resist and have about a minute left, from a political science perspective it is perfectly understandable that national governments will get together and agree to defer to each other. This is normal international discourse. But it is not in the text. The only exception, the only standard of review in the text, is Article 17.6 of the Anti-Dumping Agreement, which is not the deferential standard of review that the US expected -- for which Debra [Steger] can take some of the credit.
On the question of obligation, ADA Article 17.6(i) does put an obligation, implicitly at least, on the authorities to conduct an unbiased investigation. Well, that will shake up a lot of authorities if it’s ever applied, and I speak as a litigator. ADA Article 17.6(ii) is not what the US proposed. It is more or less circular. Peter Sutherland knew what he was doing. But when I read the assumption by the Appellate Body that parties are operating in good faith, visibly most of the measures with which the Appellate Body has dealt so far were not taken in good faith, so we are dealing with normal international law but one can’t ignore that reality. Thank you.
Valerie Hughes: Thank you very much. It’s now time for you to get your chance to put your questions to I think the entire panel so there is a microphone. I would like you to announce yourself, who you are before you pose your question, and indicate to whom your question is directed.
Asif Qureshi from Manchester University. I have one general question and one specific question but before I make that query, I just want to say I’m very pleased to have been the subject of what is essentially a European and American appraisal of dispute settlement jurisprudence so I’m better informed of that. My general question is this firstly. We seemed to have focused on essentially two issues here. One is how panellists are constituted and the other is the standard of review and I would generally ask the question is there a developing country perspective here and is there a legitimate input that developing countries can make in the context of standard of review and how panels are constituted? My other question, specifically, I understood Joanne Scott to say that progressing from simply describing the relationship between process and substance to go on to say that perhaps one should if the process is good then deference should be more. To my mind, I mean I live in the Western Hemisphere and it is my impression that it is embedded in European and American mentality that developing country processes are deficient. Whether or not they are in fact deficient, OK? So this troubles me if we go on to that kind of approach. What is process, what is good process, who is going to evaluate process, will this result in less deference to developing country judgements? Thank you.
Gary Horlick: Most of the countries I have advised in GATT and WTO proceedings have not been the US. USTR doesn’t hire outside counsel and only once was I counsel to the EU, although there was one other European country. Mostly it has been developing countries or Asian countries and I lived in developing countries for 3 years so I understand the point, It actually shows up in the very first case on anti-dumping where Guatemala visibly didn’t have the resources to do it right, but note that the case was brought by Mexico which did have the resources so I think there’s a size element as well as developed versus developing country status. In terms of a specific perspective, from talking to the officials of the governments I advised, I don’t perceive one. Brazil and India have been GATT members since day one, I think, or shortly thereafter so the point you raise is one that should be raised continually because there is a tendency to look at it purely through US or EU eyes. The answer to your question is, I haven’t seen that different a perspective precisely because major developing countries have been in the GATT from the beginning.
What I have seen is a poor small-country problem. The quote I always use, so some of you have already heard it, is from Anatole France, “the rich and the poor alike have the same right to sleep under the bridges of Paris” but you don’t see many rich people there. So there is definitely a small developing country problem in the WTO in dispute resolution and indeed in the normal operation of the Agreements where the ability of small developing countries to handle these matters is just too small to keep up with the large countries, especially the US and the EU, but in terms of dispute resolution even small developing countries do quite well statistically as plaintiffs.
Joan Scott: It is a very interesting and important point and one I think that needs to be taken on board and the challenge is to find a thin enough conception of politics that it can transverse different kinds of approaches to decision making but not so thin that it becomes meaningless. I do think that GSP is interesting though from this point of view in the sense that there you have a developed country, you have the EU being taken very firmly to task by virtue of a procedure that was blatantly and manifestly flawed in relation to their treatment of developing countries, so I don’t think that one could argue that this perspective would play out in any particular way in favour of any particular type of countries because I think that is a very good and clear example of how this kind of approach also can result in very serious disciplines being imposed on the developed world.
Claus-Dieter Ehlermann: My experience with advising clients on WTO dispute settlement is much more limited than Gary’s. However, I have learned quickly that this advice is expensive. The procedures imposed on WTO Members by the covered Agreements, particularly by the three trade remedy agreements, are by nature at least as, if not more, expensive.
I wonder whether it is right, from the point of view of the developing world, that these procedures are exactly the same, irrespective of the degree of development of the WTO Members which want to apply these procedures. But that question goes to the substance of the respective agreements and - perhaps – to future negotiations.
Valerie Hughes: Debra then Eric.
Debra Steger: I just have a very quick point because when we were talking about standard of review, burden of proof and general concepts of deference or lack of deference to governments in WTO dispute settlement I said earlier that I thought a lot of the approach that the Appellate Body has taken has been largely judge made except for the interpretation application 17.6 of the Anti-Dumping Agreement because it is so precise in its language and there I think, Asif, that the composition of the Appellate Body does reflect the geographic distribution of the membership and it has been important in developing the approach that the Appellate Body has taken and therefore please don’t forget that the Appellate Body has always had at least three out of seven members that were from developing countries and at one particular point there were four developing country members on the Appellate Body and so people from those jurisdictions played a strong hand in determining the approach the Appellate Body was going to take, including in the Hormones case, so thank you.
Eric White: Just a couple of comments. First of all, there is a curious provision in the DSU – Article 8.10 – which states that where a developing country is a party to a dispute, one of the members of the panel should be from a developing country, if that party so requests. In fact, such requests are not often made, which is also perhaps an answer to the question. But one can also ask what is the purpose of that provision? Some people may think the provision is there so that the developing country member of the panel can say “don’t apply too strict a standard of review on this developing country, take account of its capacity.” Another view of the purpose of that provision, and probably the more correct view, is to bring developing countries into the dispute settlement system and provide their officials, their people, with experience in dispute settlement. The reason why I prefer the second view is that it is very hazardous to simply rely on panellists to apply a less strict standard for developing countries than for non developing countries without providing them a legal basis for doing so. It is too subjective. And one may wonder whether India, say, deserves more deference than Lichtenstein. Does Lichtenstein have the resources to carry out an anti-dumping investigation properly? Well one can see that you could come to all sorts of different judgments. The solution is to have specific provisions in the agreement providing for more favourable or differential treatment for developing countries and that exists for example if you look in the SPS Agreement. That contains a provision that says that account should be taken of the development status of the country in assessing risk assessments. Thank you.
Valerie Hughes: Thank you. I would make one observation in this context. Dr. Frieder Roessler, Executive Director of the Advisory Centre on WTO Law, which provides assistance to developing countries in WTO dispute settlement, has written that his experience is that developing countries choose not to use the special provisions accorded to developing countries in the DSU because, among other reasons, there is a view that this could undermine the legitimacy of the final decision. In other words, there is concern that a case in which special and differential treatment rules are accorded to a developing country party would not be regarded as having general application or precedential value.[8]
Cliff Stevenson, Mayer Brown Rowe and Maw. I have a question and a very quick comment. Gary made the point about a human element almost to the way that panels conduct their work. Would you agree that the standard of review on anti-dumping cases, where we do have a lot of case, law has actually changed over time because for a long period you really felt the panels were being very aggressive, being very thorough, really turning over every stone in looking at applying the Anti-Dumping Agreement and in the last year, perhaps a little bit longer, we’ve really seen a change. When you read the panel decisions they are definitely not as aggressive in my opinion, so do you agree with that? And secondly this point on the distinction between process and substance and I think Dr Ehlermann actually made the point, but I would like to endorse it that there is a clear difference between economic issues and non-economic issues because if you are reviewing the way an authority has conducted an anti-dumping investigation, just because they have really applied all the right, done all the right things and had a good process, it still may be a really bad decision in terms of the substance of the rules. Now if we compare with the European Courts, which I think is a very interesting comparison, it’s so weak. The decisions are so pathetic really when you read them on substance, the court is so deferential on, you know, complex economic issues as to make it really unsatisfactory I think as an arbitrator. The panels have been much better, really prepared to go into the meat, without I think going outside of the 17.6 brief.
Gary Horlick: Yes, I think the panels and to some extent the Appellate Body have become more deferential in anti-dumping cases. I think the Appellate Body is dead wrong to categorise dumping as “unfair”. The text never says that. You could argue that prohibited subsidies are in some sense unfair but the GATT rejected attempts to discipline dumping and therefore it is hard to see how dumping is “unfair”. The “unfair” terminology is a result of a U.S. and EU propaganda campaign which has even sunk in in Geneva apparently. What is interesting, I fear, is that the criticisms by the US in particular but also by the EU of the panels and the WTO as a whole on anti-dumping are having an effect on the Appellate Body. What’s bizarre is that if you go to the US courts, the deference to the Commerce Department and now the ITC in the US courts is close to zero or even negative. You have a doctrine of deference but as I said you can use up your credibility, it takes about 10 years, and after that, the Commerce Department got virtually no deference in the US courts. The courts recite the relevant deferential standard but if you look at the application in practice of the doctrine, the court goes in and decides whether it should have been 1% or 2% (even though there is law saying you can ignore anything up to 1%), so the practice in the US is actually non-deferential.
Claus-Dieter Ehlermann. Just on the same line. I don’t want to be too provocative.
Gary Horlick. I do!
Claus-Dieter Ehlermann. That makes all your success wherever you appear! One interesting comparison is indeed between WTO panels and the Appellate Body, on the one side, and the European Court of Justice, on the other. With respect to the European Court of Justice, one has to make a distinction. The judges in Luxembourg apply a double standard. The standard is strict when they examine national measures. The standard is generous when they look at measures taken by the EU institutions, in particular measures adopted by the European Parliament and the Council, but also measures taken by the Commission. This attitude is theoretically explainable, but it is nevertheless a double standard.
Valerie Hughes: We have encroached considerably on the time scheduled for the coffee break so I suggest that we wrap up the panel. Thank you once again to our panellists for their very interesting and thoughtful presentations.
Papers:
1. Claus-Dieter Ehlermann– slides to go with his presentation.
1 Claus- Dieter Ehlermann and Nicolas Lockhart, Standard of Review in WTO Law, in A True European - Essays for Judge David Edward, Hart Publishing, Oxford and Portland Oregon (2003), pp.267-296; republished as a separate article “Standard of Review in WTO Law”, 7 Journal of International Economic Law 3 (September 2004), pp 491-521.
2 See footnote 18.
3 EC – Hormones, WT/DS26/AB/R, WT/DS48/AB/R.
4 Ibid., para. 133.
5 United States – Steel Safeguards, WT/DS248/AB/R, WT/DS249/AB/R, AB/DS251/AB/R, WT/DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R., para. 498.
6 Claus-Dieter Ehlermann, “Six Years on the Bench of the ‘World Trade Court’”, in Federico Ortino & Ernst-Ulrich Petersmann (eds.), The WTO Dispute Settlement System 1995-2003 (Kluwer Law International, 2004).
7 Robert Howse and Kalypso Nicolaidis, “Legitimacy through 'Higher Law'? Why Constitutionalizing the WTO Is a Step Too Far”, in Thomas Cottier and Petros C. Mavroidis (eds.), The Role of the Judge in International Trade Regulation: Experience and Lessons for the WTO (Ann Arbor, Mich.: Univ. of Michigan Press, 2003).
8 F. Roessler, "Special and Differential Treatment of Developing Countries under the WTO Dispute Settlement System" in F. Ortino and E.-U. Petersmann, eds.: The WTO Dispute Settlement System 1995-2003 (The Hague: Kluwer Law International, 2004), pp. 87-90.