WTO Appellate Body Research Articles

The Gang that Couldn't Shoot Straight: The Not so Magnificent Seven of the WTO Appellate Body

The WTO Appellate Body (AB) has produced a volume-wise important body of case law, which is often difficult to penetrate, never mind classify. Howse (2016) has attempted a very lucid taxonomy of the case law using the standard of review as benchmark for it. His conclusion is that the AB is quite cautious when facing nondiscriminatory measures, especially measures relating to the protection of human life and health, while it has adopted a more intrusive (into national sovereignty) standard when dealing with trade measures (like antidumping), which are by definition discriminatory as they concern imports only. In my response, I share his basic conclusion with no buts and ifs. I simply add that this approach is not the outcome of a process that mandates this standard of review, but simply a political (e.g., nonlegal) reaction aimed at placating its clientele, the WTO membership.

WTO Panel Report (WT/DS400/R, WT/DS401/R of 2013) and Appellate Body Report (WT/DS400/AB/R, WT/DS401/AB/R) in EC – Seal Products case: public morality meets the World Trade Court

WTO Panel Report (WT/DS400/R, WT/DS401/R of 2013) and Appellate Body Report (WT/DS400/AB/R, WT/DS401/AB/R) in EC – Seal Products case: public morality meets the World Trade Court

United States Blocks Reappointment of WTO Appellate Body Member

United States Blocks Reappointment of WTO Appellate Body Member

China and the wto Appellate Body’s Rule of Law

The World Trade Organization is no longer just seen through intergovernmental lenses. Rule of law is part of the vocabulary of the wto and is developed by the Appellate Body. However, the concept of rule of law is a hazy concept, laden with normative challenges with an Eurocentric base in a globalized world. This article addresses how China approaches rule of law at the wto level. Rule of law in a Chinese context has specific Chinese traits and the question is how it corresponds with wto rule of law. The article claims that China recognizes rule of law at wto level and accepts the methodological approach by the Appellate Body. However, a wto rule of law has not been challenged with human rights issues and it needs further refinement. So far it has served Chinese interests which might be a reason behind the Chinese approach.

When Popular Decisions Rest on Shaky Foundations: Implications of Selected WTO Appellate Body Jurisprudence

This chapter argues that the WTO Appellate Body has not been consistent in applying Article 31 of the VCLT and considering the context of the relevant treaty text in light of its object and purpose. It has instead either been overly mechanistic in its textual interpretation or has strayed from the text, sometimes with the appearance of preferring an outcome-based result. Part I of the chapter discusses the appropriate role context should play in interpreting the WTO agreements. Parts II through IV critique aspects of the Appellate Body’s jurisprudence in the zeroing cases; the 1916 Act dispute; and the early safeguards cases, as generating interpretive difficulties by failing to give enough attention to real-world context and object and purpose. Part V explores possible reasons for these departures by the Appellate Body from a contextualised textual analysis, and identify some systemic implications of these decisions.

WTO and Non-Trade Issues: Inside/Outside WTO

There is no doubt that John Jackson had tremendous foresight. He foresaw that the GATT would become a crucial institution and that the WTO would need to be soundly established. International economic law was the prism through which he would distill his analysis of international law. For him, WTO law was ‘the central illustration of legal jurisprudential developments influenced by phenomena of our contemporary world’. His vision of the role of the WTO was always as an institution that was perceptive of the changes to come, most notably of the complexity introduced through the globalization of markets, communications, and transport. Institutions and rules needed to evolve to accommodate reactions and responses to this phenomenon. Jackson saw that non-trade policies had to be considered in connection with the trade policies of the WTO. The WTO should not be considered as omnipotent and would always need partnerships to be most effective. Complementarity is crucial to respond adequately to the challenges of a globalized and interdependent world. This complementarity can be understood in two ways: on the one hand, it implies ‘externalizing’ the regulation of some of the ‘trade and . . .’ issues outside the WTO; on the other, it calls also for ‘internalizing’, within the WTO, regulatory approaches which have been negotiated in other fora. The case law of the WTO Appellate Body has laid the foundations for such an approach. The Shrimp–Turtle decision of the Appellate Body in particular has highlighted the need to address WTO law within the broader framework of the international legal system. Some WTO agreements contain explicit references to international norms and standards adopted in other fora.

Trade in Environmental Goods: A Review of the WTO Appellate Body's Ruling in US‒Countervailing Measures (China)

AbstractIn this paper we claim that, in the WTO Appellate Body (AB)'s ruling in US‒Countervailing Measures (China), the AB decision has not put in question the practice of imposing countervailing duties (CVDs). While the US has formally ‘lost’ the case, a change in the procedures and tests used to motivate the CVD will allow the US to continue using this policy tool on the specified products. From an economic point of view, this is not welcome news since CVDs have the standard distortionary effects of tariffs and could go against environmental goals. From a political-economy point of view, the CVDs in this case appear driven by pressure of domestic manufacturers of clean energy technology and products.

Understanding Agricultural Price Range Systems as Trade Restraints: Peru–Agricultural Products

AbstractAn agricultural price range system (PRS) aims to stabilize local prices in an open economy via the use of import duties that vary with international prices. The policy is inherently distortionary and welfare-reducing for a small open economy, at least according to the canonical economic model. We offer an explanation for why a government concerned with national welfare may nevertheless implement such a policy when faced with risk aversion and imperfect insurance markets. We also highlight open questions arising out of the Peru–Agricultural Products dispute for the WTO's Appellate Body to address in order to clarify how a PRS consistent with WTO rules could be designed. Finally, we discuss the possibility that a WTO member might resort to a free trade agreement (FTA) to preserve its flexibility to implement a PRS and how an FTA provision of this sort ought to be treated in WTO litigation.

Understanding Agricultural Price Range Systems as Trade Restraints: <i>PeruuAgricultural Products</i>

An agricultural price range system (PRS) aims to stabilize local prices in an open economy via the use of import duties that vary with international prices. The policy is inherently distortionary and welfare-reducing for a small open economy, at least according to the canonical economic model. We offer an explanation for why a government concerned with national welfare may nevertheless implement such a policy when faced with risk aversion and imperfect insurance markets. We also highlight open questions arising out of the Peru – Agricultural Products dispute for the WTO's Appellate Body to address in order to clarify how a PRS consistent with WTO rules could be designed. Finally, we discuss the possibility that a WTO member might resort to a free trade agreement (FTA) to preserve its flexibility to implement a PRS and how an FTA provision of this sort ought to be treated in WTO litigation.

Investment Arbitration Appellate Mechanism Options: Consistency, Accuracy, and Balance of Power

For policymakers exploring appellate mechanism options for the international investment law regime, the competing interests of efficiency and finality will receive due consideration. But two additional — and possibly overlooked — risks also merit close analysis.First, gains in the consistency of treaty interpretation by a standing, permanent appellate body would not guarantee corresponding gains in the accuracy of treaty interpretation. As illustrated by two lines of case law applying denial of benefits provisions under a number of investment treaties, consistent treaty interpretation does not ensure accurate treaty interpretation. Second, a shift from an ad hoc to a more institutionalized international investment dispute settlement regime would significantly impact the balance of power between States and adjudicators. In general terms, standing, permanent tribunals are associated with greater levels of independence than ad hoc tribunals. The experience of the WTO Appellate Body illustrates how standing, permanent tribunals can develop as institutions through bold acts of independence. Greater levels of tribunal independence give rise to a greater need for control mechanisms to address the risk of tribunals exceeding their mandate. That risk is heightened in the context of the international investment arbitration, where, even under the current ad hoc regime, the level of tribunal independence is significant. Legitimate policy arguments — based on goals of achieving greater consistency, coherence, and predictability — can be made in favor of the development of one or more appellate mechanisms within the international investment law regime. But policymakers exploring appellate mechanism options should give careful consideration to all competing policy interests, which are not limited to the goals of efficiency and finality. The two additional risks analyzed in this article — the gap between consistent and accurate treaty interpretation, and the balance of power consequences of greater institutionalization — should be part of the policy discussion. That policy discussion also should include consideration of control mechanism options to address such risks.

The Public Morals Exception After the WTO Seal Products Dispute: Has the Exception Swallowed the Rules?

The public morals exception to the World Trade Organization (“WTO”) trade rules was explicitly invoked for the third time in the trade regime’s history in the WTO dispute over seal products. While shedding further light on the public morals exception, the WTO Appellate Body’s decision in this dispute has raised concerns about an overbroad public morals doctrine that could provide a cloak for protectionism. Some commentators argue that the decision has left the exception with no boundaries, leaving the door open for validation of otherwise illegal trade-restrictive measures disguised as measures intended to protect a public moral. This Note addresses such concerns about the unforeseen but far-reaching implications of the European Communities—Measures Prohibiting the Importation and Marketing of Seal Products (“EC—Seal Products”) decision, and argues that the Appellate Body properly and necessarily left the definition and scope of what constitutes a public moral to the discretion of individual WTO member countries. In discussing the WTO’s treatment of the public morals exception in the context of the trade-morality conflict, this Note argues that the implications of the EC—Seal Products decision are not as severe as they may seem. Given the increasingly diverse values, beliefs, and morals that exist among WTO member countries, as well as the crucial role of the WTO as adjudicator among them all, this Note argues that the decision necessarily protects member countries’ sovereignty as well as the trade regime’s legitimacy and resilience.

The Use of Scholarship by the WTO Appellate Body

The Use of Scholarship by the WTO Appellate Body

The Governance of International Courts and Tribunals: Organizing and Guaranteeing Independence and Accountability - A Appeal for Research

International courts and tribunals have by now become well-established institutions. Many books and articles have been published on the law and practice of, for example, the International Criminal Court, various international criminal tribunals - notably those for the former Yugoslavia and for Rwanda - the International Tribunal for the Law of the Sea (ITLOS), the Appellate Body of the World Trade Organization, international administrative tribunals (dealing with complaints of staff of international organizations), regional courts in Europe, Africa and America (such as the European Court of Justice (ECJ) and the European Court of Human Rights (ECtHR)). At the same time, significantly less research has been done into the law and practice of those international organs (‘governance institutions’) that carry out the necessary governance functions over all these international courts and tribunals. Examples of such organs are the Assembly of States Parties (the governance institution for the ICC), the Meeting of States Parties to the UN Convention on the Law of the Sea (‘SPLOS’, for ITLOS), the Dispute Settlement Body of the WTO (for the WTO Appellate Body), the Committee of Ministers and the Parliamentary Assembly of the Council of Europe (for the ECtHR). These governance institutions elect the judges of international courts and tribunals, adopt their budgets, supervise the implementation of judgments and take other decisions that are of fundamental importance for the way in which international courts and tribunals can carry out their judicial tasks independently. This paper is an appeal for more research into the law and practice of what I will call international judicial governance institutions (injugovins).

The Right of States to Regulate in Risk-Averse Areas and the ECtHR Concept of Margin of Appreciation in the WTO US-Cool Article 21.5 Decision

This paper aims to explore the constituent grammars of the margin of appreciation as a concept, and the way it is used by world trade judges, as well as the reasons for, and the immediate and potential outcomes directly and indirectly arising from, the plea to the concept when deciding WTO disputes relating to domestic societal regulation. In doing so, it is particularly important to demonstrate, through a detailed analysis of GATT and WTO jurisprudence, that GATT/WTO judges have applied the necessity test in order to follow different political agendas at different times – and also using the necessity narrative in various ways, including the hypothetical aim to ‘discipline’ members to regulate in the least trade-restrictive way possible. Until the US-COOL Article 21.5 decision, under the TBT, world trade adjudicators, and especially the Appellate Body, added nuances to the necessity test with considerations related to the right of WTO members to regulate in order to set their own level of protection. The latest relevant interpretative development in US-COOL Article 21.5, namely the WTO Appellate Body’s plea for the margin of appreciation concept, may have interesting implications for future WTO jurisprudence. At least two scenarios are possible. Either the Appellate Body has tacitly suggested in this ruling that members have certain discretion in considering what could constitute a legitimate objective of a particular regulation. Or the Appellate Body’s interpretation implies that the permissible degree of regulatory discretion of members actually rather depends on the importance of the objective to a member, and not – or to a lesser extent – on its legitimacy, so the latter should not be placed under strict scrutiny.

Just Between You and Me: Mutual Recognition Agreements and the Most-Favoured Nation Principle

AbstractMutual recognition agreements present unique legal issues in the application of the most-favoured nation obligations flowing from Article I:1 of GATT 1994 and Articles 2.1 and 5.1.1 of the TBT Agreement. Mutual recognition agreements come in two types – those recognizing the equivalence of technical regulations, and those recognizing the equivalence of conformity assessment procedures. Both carry potential trade advantages for state parties, but both also carry the potential to create unintended trade consequences for state parties if combined with a broad application of the most-favoured nation principle. The WTO Appellate Body has touched on a number of the relevant legal issues in a series of reports culminating in the May 2014EC–Sealsdecision, but many questions remain. This article seeks to provide states and practitioners with a guide to the issues and the way in which the Appellate Body would most likely address the remaining questions, based on the existing jurisprudence.

RECONCILING ENVIRONMENTAL PROTECTION WITH NATURAL RESOURCES TRADE IN INTERNATIONAL LAW: A PERSPECTIVE FROM CHINA — RARE EARTHS

This article intends to shed light on key legal issues that emerged from the recently released WTO Appellate Body’s adjudication over China — Rare Earths dispute, exploring possible policy options for China to reach its environmental goals on natural resources in a WTO-consistent manner. The article first spotlights positive variations in the Appellate Body’s interpretative approach regarding the applicability of GATT general exceptions to defend the violation of WTO-Plus commitments under China’s Accession Protocol; second, given the fact that the Appellate Body, pursuant to the elements inscribed in GATT Article XX(g), confirmed the Panel’s objective assessment based on the design and structure of the challenged measures of GATT, this paper provides reflections and recommendations on China’s domestic environmental legislation. The third part probes into the interface between the principle of permanent sovereignty over natural resources and the WTO legal regime, with an attempt to offer thought-provoking ideas on how to reconcile potential conflicts between the two.

The Scope of Regulatory Autonomy of WTO Members Under Article III:4 of the GATT: A Critical Analysis of the Jurisprudence of the WTO Appellate Body

Article III:4 of the GATT requires the Members of the WTO to accord imported products treatment no less favourable than that accorded to like domestic products. Article 2.1 of the TBT Agreement imposes the same obligation in respect of technical regulations. In a series of cases, the Appellate Body has ruled in essence that imported and domestic products are ‘like products’ within the meaning of Article III:4 of the GATT if they directly compete in the market and that the imported product is accorded ‘less favourable treatment’ within the meaning of that provision if it is accorded less favourable competitive opportunities.Regulations that distinguish between different types of products and accord one of them less favourable treatment are typically adopted precisely because the market does not make the distinction that the regulator considers necessary. Many, if not most, regulations are thus likely to be inconsistent with Article III:4 according to the Appellate Body’s jurisprudence. The ten policy goals listed in Article XX of the GATT do not comprise all legitimate policy goals that Members pursue through measures covered by Article III. There is consequently a range of perfectly legitimate internal regulations that are not applied so as to afford protection but are nevertheless not justifiable under Article XX. This includes all regulations that distinguish between competing products for the purpose of harmonising standards, improving the efficiency of production, reducing transaction costs for consumers or preventing deceptive practices. They distinguish between groups of competing products, treat one group less favourably than the other and serve a purpose not listed in Article XX. The Appellate Body’s market-oriented approach renders all of them inconsistent with Article III:4 and gives Article XX a function that it cannot fulfill.

Indian Trade Lawyers and the Building of State Trade-Related Legal Capacity

This paper examines the growing role of Indian lawyers in the transformation of Indian trade policy through the development of trade-related legal capacity. By trade-related legal capacity we mean, broadly, the ability of a country to use law to engage proactively in the development and defense of international and domestic policy. Such capacity is critical for the drafting and interpretation of international legal agreements, the adoption of domestic regulation within those agreements’ constraints in order to defend policy space, the monitoring of foreign commitments, and the development of legal arguments in formal international litigation and informal dispute settlement. Through developing legal capacity, public and private actors work together to open export opportunities abroad and defend domestic policy measures at home. While others have written of the legalization of international trade through the increased role of the WTO legal secretariat and the emergence of the WTO Appellate Body in international dispute settlement, this paper addresses the growing role of lawyers in the development of trade policy at home in one of the world’s rising powers, India.The paper builds from years of field research in India and Geneva, involving semi-structured interviews with over fifty Indian officials and stakeholders. The interviewees included former Ambassadors, members of the bureaucracy, private lawyers, private trade association and industry representatives, researchers in think tanks, academics, and news reporters. We complemented these interviews with participant observation in Geneva and in New Delhi, and reviewed our findings against primary and secondary documents.

For Whom the Bell Tolls: The EU ETS in Aviation under the TBT Agreement

This article outlines the non-product-related process and production method (NPR-PPM) controversy, focusing on the current interpretation by the WTO Appellate Body and panels as background for an analysis of the EU ETS in aviation. In order to assess the possible application of the TBT Agreement to the EU ETS in aviation, the measures laid down in Directive 2008/101/EC, as well as in the recently adopted amending Regulation, are qualified as measures affecting trade in goods. Such a finding leads us to consider whether they fall under the definition of ‘technical regulation’ laid down in Annex 1.1 of the TBT Agreement. To that effect, the three-tier test in EC-Asbestos and EC-Sardines is applied in light of the recent findings in EU-Seals. Finally, practical implications can be drawn in both senses. Should it be deemed inapplicable, GATT would continue to apply. Should it be considered to come within the scope of the TBT Agreement by virtue of Annex 1.1, an assessment of compatibility with Articles 2.1 and 2.2 of the TBT Agreement would be required.

Trade in Environmental Goods: A Review of the WTO Appellate Body's Ruling in US Countervailing Measures (China)

In this paper we claim that, in the WTO Appellate Body (AB)’s ruling in US-Countervailing Measures (China), the AB decision has essentially left unchanged the practice of imposing countervailing duties (CVDs) on environmental goods. While the US has formally “lost” the case, a change in the procedures and tests used to motivate the CVD will allow the US to continue using this policy tool. From an economic point of view, this is not welcome news since CVDs have the standard distortionary effects of tariffs and could go against environmental goals. From a political-economy point of view, the CVDs in this case appear driven by pressure of domestic manufacturers of clean energy technology and products.