Abstract
Recent debates on the operation of the WTO’s dispute resolution mechanism have focused primarily on the Appellate Body (AB). We argue that this neglects the first-order issue confronting the rules-based trading system: sustaining the principle of de-politicized conflict resolution that is reflected in the negative consensus rule for adoption of dispute settlement findings. Improving the quality of the work of panels by appointing a roster of full-time professional adjudicators, complemented by reforms to WTO working practices that reduce incentives to resort to formal dispute settlement, can resolve the main issues that led to the AB crisis. Effective, coherent, and consistent WTO dispute resolution need not include an AB. An appropriately redesigned single-stage process can serve just as well, if not better.
Highlights
The quest by Uruguay Round negotiators when they crafted what became the WTO DSU (Dispute Settlement Understanding) was to design an effective system to resolve trade disputes
We argue that the goals and interests of WTO members, as reflected in the substance of the rules negotiated in the Uruguay Round and the institutional arrangements put in place to implement the various agreements and monitor trade policies, can only be served if negative consensus for adoption of rulings is maintained
In Article 17.6 of the DSU, they pointed in the direction of de facto precedential value of Appellate Body (AB) reports, when stating that: An appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel
Summary
The quest by Uruguay Round negotiators when they crafted what became the WTO DSU (Dispute Settlement Understanding) was to design an effective system to resolve trade disputes The mechanism they crafted, the means to achieve this end, had two fundamental components: (i) a two-instance adjudication regime; and (ii) a negative consensus decision-making rule that made it impossible for any of the parties to a dispute to block the formation of a dispute settlement panel or the adoption of a ruling by the adjudicators.
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