Beyond notions of diplomacy and legalism: building a just mechanism for WTO dispute resolution

I. INTRODUCTION

The early development of the General Agreement on Tariffs and Trade (1) could be described as halting at best. Nevertheless, over the past five decades the GATT has been amended and expanded through additional agreements to the point that few products and services escape its influence. From bananas to beef, from trademarks to taxation, the trading arrangements administered through the World Trade Organization (2) have come to have a tremendous impact on the growth of trade among nations. (3)

As with many other aspects of the GATT regime, the process by which disputes among the Contracting Parties to the GATT are resolved has changed markedly as the demands on the GATT have grown. Early procedures relied heavily on negotiation among states. Over time, those parties seeking legalistic mechanisms as a means of enhancing effectiveness have challenged the diplomatic approach. To a great extent, the implementation of legalist principles has had a salutary effect on the regime. Dispute resolution procedures have become more formal and independent, and benefit from increased legitimacy. Even so, the ever-increasing demands of international trade on the system have made dispute resolution a continuing challenge for the international community. The process remains bedeviled by delays, problematic enforcement of decisions, and unbalanced access to the process that undermines legitimacy and inadequate promotion of GATT policy objectives.

Part II of this article recounts the historical background of the GATT and the WTO as it pertains to the adjudication of trade conflicts. Part III explores the present international regulatory structure affecting dispute resolution under the WTO in the context of its efficiency, equity and impact on the relations among states. The final part of this article examines the problems that currently hinder adjudication procedures and the prospect for improving the dispute resolution process through a number of structural changes, including further emphasis on formal procedures and stringent enforcement mechanisms that establish incentives designed to conform national interests more closely with the needs of the international community as a whole.

II. HISTORY

The end of the nineteenth century was, by many measures, a golden age for the exchange of goods among nations. This era, however, was destined to be short lived. Two world wars and the related domestic economic responses to them severely battered world trade. Near the end of World War II, it had become obvious that international frameworks were necessary to support individual national economies and the global economy as a whole, and reduce the possibility of yet another armed conflagration. (4)

This perception culminated in the 1944 conference at Bretton Woods, New Hampshire that created both the International Monetary Fund (5) and the International Bank for Reconstruction and Development. (6) The IMF was designed to promote the stability of monetary exchange rates and economic growth. The World Bank was established to improve the economic prospects of developing nations by financing particular projects. It was clear, however, even at Bretton Woods that such international efforts, though beneficial, would not be sufficient to defuse nationalistic tensions in the area of trade. (7) Shortly thereafter, work began through the nascent United Nations Economic and Social Council to craft a multinational institution, the International Trade Organization, that would address the barriers associated with trade among states. (8) The completed charter of the ITO, (9) however, was never submitted for congressional approval. (10)

The demise of the ITO, though it would have a significant impact on the course of trade liberalization for the next half century, did not derail the process entirely. During the ITO debates, 23 nations negotiated significant tariff reductions and a set of trade principles designed to discourage the imposition or reintroduction of (or at least manage) tariffs. (11) The final document, known as the General Agreement on Tariffs and Trade, was never intended as a permanent institution, but rather was construed as an interim arrangement pending the final ratification of the ITO Charter. The ultimate rejection of the ITO nevertheless left the GATT as the preeminent multilateral instrument guiding world trade.

From its inception, the development of dispute resolution mechanisms under the GATT has been influenced by the tension between those parties desiring to implement a more flexible, negotiation based paradigm and those states preferring dispute resolution mechanisms which are derived from clear written standards and are applied in an objective manner through independent adjudication mechanisms. (12)

The provisional nature of the initial agreement strongly advanced the position of advocates of the diplomatic approach, at least at the outset. The provisions relating to the settlement of disputes under the General Agreement clearly evidence the cavalier approach of the drafters. Articles XXII (13) and XXIII (14) provide only the most cursory guidance for the contracting parties. Consultation and negotiation were preferred over more formal adjudicatory approaches. Where such approaches were ineffective, the matters were referred to working groups that would in turn render recommendations to the Contracting Parties. The function of the working parties was similar to that of a mediation organization.

By the early 1950s, more formal procedures began infiltrating the process. The working parties became more akin to arbitral panels. The panel reports more closely approximated adjudicated decisions than negotiated settlements. For a time, the basic GATT procedure operated with some success. From 1952 until 1958, 40 complaints were processed through the system. (15)

Throughout the 1960’s and 1970s, however, dispute resolution mechanisms were increasingly perceived as being ineffective. The concerns were manifold. Delays were endemic at all stages of the process. The panel procedure, in particular, suffered from delays in the appointment of panel members, in setting the terms of reference relating to the adjudication, during investigation of complaints, and in issuing and adopting the reports of the panels. In addition, objections were raised with regard to potential bias of panel members. Perhaps most importantly, because the GATT system relied heavily on consensus (16) in rendering decisions, those nations against whom complaints were filed could readily obstruct the process and make enforcement of any panel recommendations virtually non-existent. (17)

These difficulties were primarily the result of the inherent tension between the practical necessities associated with operating the dispute resolution process and the prevailing consensus standards of the international community. Specifically, as panel procedures increasingly adopted a more adversarial, rules-based set of procedures for evaluating complaints of contracting parties, the mechanisms for adopting and enforcing panel reports continued to employ a diplomatic, negotiated approach. Typically, cases determined by the panels would leave at least one of the interested parties unwilling to accept adoption by the body of contracting states. The authority embodied in the legitimacy of the GATT simply was not sufficiently influential to overcome the parochial interests of the affected nation, especially when, as here, the letter of the process was observed. Even absent such conflict, however, the process of consensus building had become extremely unwieldy as membership in the GATT grew.

Although some modest attempts were made to improve dispute resolution procedures during the Tokyo Round of negotiations which concluded in 1979, the final instrument relating to the issue that emerged, the Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance, (18) largely served to codify existing practice. (19) Though the process of codification may be construed as an improvement over the existing customary practice, the substantive changes to procedures were marginal. The fundamental difficulties remained. The power of the Contracting Party in violation of GATT hales to obstruct adoption of a panel report remained intact. Panel recommendations, once made, received minimal oversight. The concerns over enforcement remained as great as before adoption of the 1979 Understanding.

Additional difficulties emerged as well. The legal status of the 1979 Understanding was ambiguous, thereby muddling the operation of the dispute resolution process. (20) Operations were to some extent a victim of the trade successes of the Tokyo Round. Formalized dispute procedures were applied on an individualized basis to each new area of coverage under the GATT. (21)

It was not until 1989 that significant progress would be made towards correcting the basic flaws in GATT dispute resolution procedures. (22) The Decision of 12 April 1989 on Improvements to the GATT Dispute Settlement Rules and Procedures (23) was an interim step towards the final agreement which would ultimately become a part of the Uruguay Round of negotiations that had begun three years earlier. The 1989 amendments made significant efforts towards time limits on many aspects of the dispute process, including the time periods for responding to a request for consultations, (24) myriad aspects of mediation and conciliation should such preliminary actions be desired, (25) panel selection, (26) and the overall duration of panel review. (27) In addition, third parties could now become involved in proceedings, although such third parties appeared to hold lesser status. (28) Provision was also made for monitoring the implementation of panel decisions. (29)

III. OPERATION OF DISPUTE RESOLUTION UNDER THE WTO

It would be another two years before the interim rules were incorporated into the Understanding on Rules and Procedures Governing the Settlement of Disputes. (30) Under the DSU, the process is administered by a single Dispute Settlement Body, (31) which is responsible for the duties previously undertaken by the GATT’s General Council and a myriad number of committees under the variety of specialized trade agreements. The DSB oversees disputes relating to the WTO Agreement, (32) and the various agreements pertaining to trade in goods, (33) services (34) and intellectual property. (35) Where the parties agree, the DSB also oversees disputes relating to the agreements on civil aircraft, (36) government procurement, (37) dairy products, (38) and bovine meat. (39) Some texts, such as the Agreement on Textiles and Clothing (40) and some portions of the Agreement on Subsidies and Countervailing Measures (41) remain beyond the purview of the DSU. (42)

Though the pragmatic and informal approach to dispute settlement has by no means been abandoned, the process outlined in the DSU (43) represents the most significant step yet from the traditional, diplomacy based paradigm and towards the legal approach. (44) For example, though a confidential, negotiated settlement obtained either through direct consultation (45) or mediation (46) is preferred under the DSU, (47) strict timetables have been imposed on the use of these mechanisms. In the event a member state has concerns over the conduct of another member state or states concerning the operation of any of the agreements covered by the DSU, the complaining member state issues a request for consultations with such other states. (48) Any response to a request for consultations must be issued within ten days of receipt of the request and the consultation process must commence no later than thirty days from receipt of the request. (49) Should no response be forthcoming, the complainant Member State can immediately thereafter request that a panel be convened to review the claim. (50)

If the consultation process fails, the complaining member can request that the DSB convene a panel to resolve the matter. The creation and operation of such panels are subject to similarly regimented timetables. The DSB must act within fifteen days of a request for a special meeting of the DSB to convene a panel. (51) Terms of reference are to be set within twenty days of the creation of the panel. (52) The selection of the standard three-member panel (53) is similarly subjected to stringent time limitation. If the participating state members fail to select the panelists within twenty days of the establishment of the panel, the Director-General, in consultation with other appropriate WTO officials, will select the panel members. (54) The panels are themselves encouraged to set strict timetables for the submission of written applications. The period from panel formation until issuance of a report should not exceed six months (55) and, in the case of perishable goods, three months. (56) If the time required for the issuance of a final report is to exceed six months, the panel must notify the DSB of the delay together with the reasons for that delay and an estimated time frame for completion of its task. (57) Regardless, all panel reports must be submitted within nine months of panel formation. (58) Appeals from panel reports should typically be heard within sixty days of notification by the parties of an intention to appeal. (59) Adoption of panel reports takes place no more than sixty days from the date the panel report has been distributed to the Members for consideration. (60) In the event of an appeal, adoption of appellate reports occurs not more than thirty days following distribution. (61) In total, the DSU mandates that, barring agreement on extensions of time among the parties, the entire process from panel formation to the final determination should not exceed a year and a half. (62)

The current settlement system, however, contains several other examples of the encroaching legalist paradigm beyond the imposition of formalized, stringent time limits. The creation under the DSU of a standing appellate body consisting of qualified persons sitting for four year terms is itself one such example. (63) The preference for government panelists under the 1989 Understanding has been eliminated. (64) Most significant has been the consistent effort to alter the basic presumptions affecting the dispute resolution procedure. Where once the formation of a panel required the approval of the state members by consensus, the DSU panels are automatically formed upon the request of the complaining party absent a consensus finding by the DSB not to establish a panel. (65) Similarly, the adoption of panel reports (66) and appellate rulings (67) is automatic absent consensus rejection by the DSB members.

Measures regarding oversight of panel reports and appellate rulings have been greatly expanded. The party affected by the adopted panel report must report to DSB within thirty days on the remedial actions that it intends to take. (68) Once the affected party has made its proposal, it must be approved by consensus by the DSB. If a consensus is not forthcoming, the matter is sent to binding arbitration. (69)

Last, enforcement procedures have been formalized. Guiding principles on the means of enforcement have been added under the DSU. (70) Enforcement can either take the form of compensation for the harm caused by the state member in violation or withdrawal of trade concessions made by the affected state. (71) Once the time period for bringing any violation into compliance has passed, the parties enter into negotiations regarding whether the violator will provide compensation. (72) If after twenty days from the final date of compliance no settlement has been reached, the affected state can request permission from the DSB to withdraw concessions. (73) Those concessions are subject to guidelines limiting their type (74) and scope. (75) Arbitration is available if there is a question as to the appropriateness of the concessions withdrawn either as a result of the quantity withdrawn or a problem involving the procedures used. (76)

IV. EVALUATING THE DISPUTE RESOLUTION PROCESS

Though it is tempting to infer otherwise, the half-century transition from a diplomatic approach to a legalistic one does not, in and of itself, indicate whether the present formulation is ideally suited to the needs of the international community or indeed whether the current dispute resolution mechanism even represents an improvement over past approaches. Value in the current system is dependent upon the underlying criteria used as a standard of measurement. Different criteria dictate different rules and procedures. (77)

Effective dispute resolution is not a goal independent of other objectives. Adjudication is by its nature designed to support other ends. The adjudicatory standard for the WTO is no exception, as the DSU makes clear: The dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. The Members recognize that it serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law. (78)

The goal of the DSU, therefore, is to maximize the objectives of the WTO as a whole. (79) Those objectives include the promotion of trade among all nations with a view towards increasing the production of goods and services and the incomes and opportunities of individuals. (80) The trading system should be consistent and sustainable. (81) The trade objective should be accomplished in a manner commensurate with environmental notions of sustainable development (82) and supportive of developing states. (83)

Not all the goals of the World Trade Organization are explicitly enumerated within the original GATT Agreement or the Final Understanding of the Uruguay Round of Negotiations. For example, improvement in international relations, though presumably an important means of enhancing international trade, is a vital goal independent of its role in support of trade among nations.

It is primarily by fostering the principles of efficiency that the DSU promotes these objectives. A dispute among the members represents a transaction cost in the operation of the underlying trade agreement. The more costly the process, the less likely it will be that valid challenges to the contravening acts of members will be brought. This is particularly true of those challenges involving incidences relating to smaller trade valuations. Perhaps more importantly, efficiency in procedures and effective enforcement reduce the prospect of violations before they occur. Assuming that the specific substantive rules of the WTO Agreement correctly support the general goals enumerated in the instrument, (84) the central role of dispute resolution is to manage such disputes in a cost effective, timely manner and to diminish the prospect for disputes.

On its face, the legal approach tends to be more efficient than the diplomatic. The clearly specified rules and standards increase predictability. (85) By providing a common set of principles, state members can more accurately calculate the costs and benefits of mounting a challenge to what is perceived violation of GATT

principles. The vagaries of outcome due to disparate negotiation skill are curtailed as a result of the limited latitude afforded by the specified standards. The prospect of a dispute is less likely as common standards reduce misunderstandings that arise out of differing interpretations of treaty goals.

Similarly, standard rules tailored to maximize communal goals further reduce inefficiency by diminishing the impact of national power on a dispute. National interests must be addressed within the strict confines of community interests rather than solely based upon parochial perspectives.

An efficient system is one that, all other interests being equal, achieves its objectives as rapidly as possible. The uncertainty occasioned by a dispute between state members can present a costly dilemma for international traders in affected sectors given the tendency for disputed national actions to involve trade routinely valued at millions, and occasionally billions, of dollars. The shorter the duration of a dispute, the more quickly private actors may optimize their operations to account for state member behavior, regardless of outcome.

In addition, legal standards improve perceptions of legitimacy. Like most international organizations, direct enforcement of principles is difficult. The WTO is more fortunate than most international regimes in that it can enforce its standards to some extent through the withdrawal of concessions that it has afforded to its State Members. It does so, however, at the cost of undermining the very principles it seeks to encourage. Thus, it would be preferable if a member in violation of WTO principles more readily accepted the determination of the DSB without recourse to direct enforcement methods. Acquiescence is most likely to occur where the state member in violation perceives the process as clear, fair, and stable. The member may more comfortably recognize that its long term interests lie in supporting the international standard rather than risk violating it to the benefit of its short term interests. The organization relies upon the ability of enumerated criteria to greatly enhance the perceptions of legitimacy of the World Trade Organization as a whole. (86)

Efficiency is an extremely powerful tool for optimizing total benefit to a community. An efficient outcome, however, does not assure that such benefit will be distributed to the community in an equitable manner or in a manner consistent with community morality. To some degree, it can be argued that a redistributive mechanism contained in the international trade system is efficient in that it corrects inherent inefficiencies in the flow of labor and capital caused by the existing international arrangement of nation states. Since corrective market forces are impeded by language, immigration barriers, the relative competence of local political systems and cultural redistributive mechanisms, such corrections, though not ideal, might represent an acceptable proxy for market efficiencies. Perhaps more cynically, redistribution of benefits mitigates political opposition to still greater substantive reductions in tariff and nontariff barriers. In the case of dispute resolution mechanisms, this argument can be highly effective for many applications of the equity principle given the relatively low costs of supporting the participation of developing states in actions before the DSB. Such an argument, though, is dependent upon equivalence between the political power of developing states and the needs of those states within the trade regime.

The pragmatic, diplomatic approach to dispute resolution is not entirely devoid of benefit. As an ad hoc mechanism, it is extremely flexible. As a system dependent upon negotiation rather than formal proceedings, it is available to all state members no matter how limited the expertise of each member’s representatives. It is usually inexpensive. The impact on international relations and trade is mixed, however. The process of negotiation can be beneficial at reducing trade tensions and trade misbehavior, but the process is prone to abuse. States may be tempted to negotiate based upon relative power of the participants rather than the relative merits of the dispute itself. The perception that agreement was reached as a result of such an application of power would serve to undermine the legitimacy of the trade system and potentially inhibit the ability of the system to promote trade growth. The states in negotiation may find the issue of trade merely one of many issues before them. The possibility that trade efficiencies might be sacrificed for the benefit of other foreign policy considerations would also be deleterious to the trade enhancement goal. Most damaging to the prospect of sole use of negotiation mechanisms is that the legal approach need not completely foreclose the use of negotiation as a viable means of dispute resolution.

By all measures and in virtually every phase of the process, the system embodied in the DSU represents a marked improvement over past mechanisms. Efficiency considerations have received substantial support through time limits on operations. First, the imposition of a deadline for the consultation phase limits the ability of a member in violation to forestall the adjudication process. Consistently, decision points that had previously permitted a member challenged for violation to delay or completely derail the process have been modified so as to encourage progress. For example, where once a single state member could block the establishment of a panel, the presumption of panel creation has been reversed so that a complaining party is entitled to the formation of a panel absent a consensus to the contrary. Similarly, disagreement over the composition of a panel had the potential to create further delays. The stringent time limits contained in the DSU eliminate this as a concern.

For the period from 1979 until 1986, the average time from establishment of a panel until adoption of the report was thirteen months. (87) Despite the fact that such time frames compared favorably with other procedures, (88) there had been some concern that even when the state parties to the proceeding were willing to participate in the panel process, the delays at many steps in panel operation warranted explicit limitation. The provisions of the DSU ostensibly cut the time to adoption of panel reports by half.

The legitimacy of the system has benefitted most by the changes under the DSU. Under past models GATT contracting parties have often felt helpless to enforce the trade principles against powerful members of the organizations. (89) The consensus presumptions regarding creation of panels and adoption of panel reports have done much to undermine the ability of violating members to act as scofflaws without consequence.

Legitimacy interests are further served by inclusion of the requirement that settlements must be filed with the DSB and available as a matter of public record to the state members. (90) This provision has a number of consequences. The policy encourages settlement at an earlier phase of the process, as the parties would face losing potential bargaining leverage at the commencement of formal dispute procedures. Operational costs to all parties would be saved as a result. Public filing of settlements diminishes the tendency of the parties to bargain away free trade principles at the expense of unrelated foreign policy goals. Moreover, the dispute settlement mechanism would be perceived in the international community as an instrument devoted to objective adjudication of trade related disputes rather than a proxy for wide ranging diplomatic initiatives.

Under past GATT regimes, legitimacy had been weakened by the occasional assertion that panels suffered from inherent bias. (91) Though such concerns have faded, Article 8 of the DSU has explicitly detailed criteria that help to ensure the quality and objectivity of each panel. (92) Article 8(1) includes a descriptive list of classes of individuals suitable for participation in DSB panels. (93)

The creation of the Appellate Body further increases confidence in panel interpretations of GATT principles–particularly in light of the still informal process of panel selection. The appeal process serves as a check on ill-considered panel decisions whether due to bias, inexperience or incompetence. Appellate review also discourages panels from exceeding their authority. In each case, confidence in the efficacy of the process is enhanced, albeit at the potential cost of additional delays in implementation of valid panel decisions. Legitimacy is also fostered by the fact that, unlike the panel bodies, the Appellate Body is a permanent institution composed of members that serve for fixed terms. This structure increases outcome predictability, thereby increasing efficiency. In addition, though a formal stare decisis norm is ostensibly not part of the international adjudicatory process, the inclusion of a standing body increases the prospect that past decisions of the Appellate Body will be deemed more persuasive for future members of the organization.

On its face, the DSU has markedly improved the prospects of developing states in the dispute process. There are several provisions of the DSU in which the needs of developing states receive special consideration. During the consultation phase, Members are admonished to take the needs of developing states into special consideration. (94) Similarly, the DSB may consider other actions in conjunction with the surveillance and implementation of panel rulings. (95) In the event that the complaint is brought by a developing state, the DSB is authorized to consider the economic impact those supplemental actions might have on the developing state. (96) The Secretariat is responsible for supplying, upon request, any developing state with a legal expert from WTO technical cooperation services. (97) The assistance of such expert is confined to methods that will ensure the Secretariat’s impartiality. (98)

More specifically, pursuant to Article 3(12) of the DSU, (99) a developing country Member may, in lieu of the consultation and panel procedures contained in Articles 4, 5, 6, and 12, employ the provisions contained in the Decision of 5 April 1966. (100) Under the Decision, the developing state is entitled to the use of the good offices of the Director-General and expedited time frames for panel operations. (101) Where the panel process involves measures taken by a developing state, the period set under Article 12 of the DSU for completion of panel operation may be extended so as to afford the developing state the time to properly make its argument. (102) Developing states can request that at least one panel member be from a developing state. (103) The consultation period included during the panel phase may also be extended where, in the opinion of the Chairman of the DSB, the parties would reach a potential settlement with the benefit of more time. (104)

Beyond the protections afforded to developing states, those Members classified as least-developed, are granted additional considerations. During the consultation phase, least developed states are entitled to receive assistance in the form of good offices, conciliation and mediation from the Director-General or the Chairman of the DSB. (105) All State Members are instructed to exercise restraint before exercising their rights under the DSU. (106) This same restraint is mandated in the event that enforcement measures in due course become available against a least developed state Member. (107) Such consideration applies whether the enforcement sought takes the form of compensation or suspension of concessions. (108)

V. CONCERNS WITH THE OPERATION OF THE DSU

The success of the changes in the dispute resolution system would appear to be demonstrated in the increased use of the regime since its creation. More than 200 matters have been brought under the DSU process through June of 2000. (109) This represents roughly a trebling of matters brought under the older, GATT system. (110) The statistics, however, overstate the benefits accorded to the international community. Among developed states, disputes brought under the DSU have not grown significantly. (111) Moreover, growth in disputes strongly correlates with the growth in WTO membership rather than representing an increase in use of the mechanism by each State Member. (112)

For all its improvements over past mechanisms, the DSU retains many of the flaws that have beset GATT dispute resolution. Nominal provisions to the contrary, the process remains difficult for developing states to employ effectively. The enforcement question, in particular, remains a prominent obstacle to truly effective adherence to WTO principles.

New difficulties have also begun to surface as a result of the modifications made, and in some cases, the successes achieved during the Uruguay Round. For example, though panel procedures are, in many cases, far more likely to reach an adopted conclusion and receive expedited consideration as a result of changes in adoption procedures, the increased reliance on legal rules has afforded some parties the opportunity to exploit the process to achieve delays measured in years. (113) The dispute among the United States, European Union and a host of banana producing states was settled more than six years after initiation of procedures under DSB auspices. (114) Despite repeated rulings in favor of the United States and Caribbean exporters and provisions within the DSU purportedly limiting the maximum time for resolution of disputes, the Europeans successfully managed to maintain their preferential standards for bananas imported from former European colonies even in the face of such rulings.

Even the ostensible increases in resort to formal procedures might represent evidence of the problems of the system rather than its improvement. State Members may recognize that alternatives to the mechanism established under the DSU are limited at best and potential violators could perceive that the current system is open to abuse. (115) For all of the difficulties posed to the settlement system by the current trade environment, the operation of the DSB has thus far benefitted from a limited spate of challenges. The integration into the WTO of the People’s Republic of China will introduce into the system a new class of member which is not economically or politically weak as in the case of developing states, has less faith in the power of law in guiding institutions, and does not embrace many of the same general perspectives as the developed world on the value of free trade. (116)

A. Delays in Adjudication

Despite the emphasis placed upon speeding the resolution of disputes, delays in the process remain common. Few panels conclude their responsibilities within the six-month standard specified in the DSU. (117) Some delays may reflect an insufficient allocation of resources to a task rather than flaws in the dispute regime. For example, the estimated period anticipated for translation of panel reports is 3 weeks. (118) The actual time typically required for translation of such reports is 4 to 8 weeks. (119) Greater investment in translation services would presumably reduce such delays.

Such an additional fiscal outlay, however, is probably inappropriate in light of flaws in the goal to which the translation services are directed. Theoretically, the panel and appellate process has no true legal authority. Rather, it is the authorization process of the State Members that gives effect to the dispute resolution mechanisms. The approval system, despite its dramatic alteration, retains this theoretical underpinning. While it is evident that the reversal of the presumption governing the convening of panels and the adoption of panel reports represents a significant enhancement in the effectiveness of panel operations, there appears to be little remaining practical policy rationale for provisions that sacrifice timely adjudication for the remote possibility of consensus rejection by the DSB. The operational authority has been effectively vested in the adjudication stage. At both the panel establishment and report approval stages, significant delays are introduced into the process. In total, two and one half months are dedicated to tasks that the reversal of presumption has effectively made superfluous. Since consensus is required to prevent the establishment of a panel and adopt reports, any attempt at consensus is thwarted by the member most interested in continuing and seeing the process to its conclusion. Given the broad ability of state members to participate in disputes, the party or parties most interested in sustaining the dispute resolution process should in all reasonable instances be a complaining party. (120)

The reliance upon a theory derived from civil law traditions creates other difficulties. The traditional notion in public international law that judicial decisions in the international arena have no precedential value is one example. (121) In practice, the tendency to treat judicial reasoning in earlier cases as persuasive has, in the case of the WTO, already produced a body of principles that can best be described as de facto precedent. (122) Like member authorization, the traditional antagonism towards the literal principle of stare decisis (123) has a considerable effect upon efficiency. As the process is currently constructed, formal adoption of stare decisis as an operative principle would have little impact on the efficacy of the process. The greatest value of precedent, however, lies in the enabling effect it would have on possible modifications to the current system. This effect is most noticeable in summary proceedings and the standing of non-governmental parties in DSU proceedings.

As the docket for disputes continues to grow, it is reasonable to expect that an increasing number of complaints will be patently without merit. Political considerations, reduced costs of pursuing a claim or perhaps a desire to harass the defending party may be the primary objective of such suits rather than a desire to resolve legitimate questions under the WTO Agreement. Alternatively, parties defending against a complaint should not be permitted to abuse the DSU procedure for the purpose of fostering delays in enforcement of standards. Regardless of the motivation, the inclusion of procedures within the DSU that permit parties to challenge the positions of parties summarily as a matter of law would be highly valuable from the perspective of efficiency. Though challenges based upon WTO texts are theoretically available as a basis for a summary judgment action, the extremely high standard of proof would limit its availability absent resort to the more complete pronouncements of law found in authoritative panel and appellate court judgments. The authority embodied in de facto principles of stare decisis is likely insufficient to meet a summary judgment standard. words, there is an excessive resort to litigation as a substitute for negotiation. This trend is dangerous in itself. The obligations which WTO members assume are properly for the member governments themselves to negotiate. Arthur Dunkel–Director-General, GATT, 1980–1993, Peter Sutherland–Director-General, GATT/WTO, 1993–1995, and Renato Ruggiero–Director-General, WTO, 1995-1999, Joint statement on the multilateral trading system http://www.wto.org/english/news_e/news01e/jointstatdavos_jan01_e.htm. (visited Sept. 4, 2001). Such a statement expresses too much concern for the encroaching role of adjudicated decisionmaking. Though increasing use of stare decisis as an alternative to clear, treaty-based substantive and procedural norms may represent evidence of needed reform to the text of the trade agreements, advocacy of full application of stare decisis does not in any form reject the notion of preeminence of state negotiated principles.

B. Personal Jurisdiction

What authority does a party have to initiate a complaint under the DSU system? The scope of this authority can have a significant impact upon the efficiency, legitimacy and equity of the dispute process. Under the American common law system, efficient operation of adjudicatory process is dependent in no small measure on the stake that a party has in the outcome of a justiciable controversy. Known as standing, the doctrine exists to ensure that the party pursuing a matter has the proper incentive to pursue an adversarial proceeding with due diligence. (124) Standing also serves to limit the number of specious or less significant cases that would be heard. Under past GATT dispute system structures, the notion of standing held little significance. Though on the whole less efficient than the current standard, the negotiation-based dispute resolution paradigms were less sensitive to efficiency losses occasioned by the potential participation of parties that had less than direct interests in correcting a dispute over GATT standards. All contracting parties kept their own counsel on whether a fellow state’s action constituted a potential threat to the GATT regime. This increased emphasis on an adversarial legal approach has left the dispute resolution system vulnerable to efficiency losses occasioned by lax standing criteria.

The position of the WTO on the issue of standing is rather broad. The United States successfully withstood repeated challenge to its standing in the recently settled banana dispute. (125) Both the original panel and the Appellate Body determined that the very nature of violations to global trade standards imbues each state member with standing even where, as in this instance, the product involved was not exported from the United States. (126)

As broad as standing is under the DSU, the population of potential complainants is limited to the population of state member governments. It is this restriction which unduly limits the ability of the DSU to fulfill WTO objectives. In a very real sense, decisions on whether or not to bring suit under the DSU are not based solely, or in many cases even primarily, upon the validity of a claim under the WTO Agreement or the other covered instruments. Other national interests, particularly among developing and least developed states, frequently dictate restraint in bringing claims. Similarly, the economic costs of violating WTO standards are borne most directly by the citizens of state members

No matter the underlying cause, the effect of such behavior is to limit the overall number of legitimate complaints that may be brought under the DSU. Allowing private parties to bring actions against state members would greatly improve the ability of the adjudicatory system to maintain fealty to WTO standards. Standing would be strictly limited to those parties that have suffered economic loss as a result of behavior by state members contrary to the standards set under the WTO agreements. Such economic loss is a critical prerequisite. It reduces the number of specious suits and ensures that the parties will be diligent in pursuing their claims.

As private parties, the complainants would be far less prone to self-censorship. The conflicts of national interest that diminish state claims have no strong parallel among private parties. (128) Though large industrial entities have some multinational allegiances that might limit the desire to bring a claim, their self-interest is far less subject to extraneous countervailing needs. Where the issue is significant enough to the private party, economic need might prompt such a party to bring suit against their own host country thereby ensuring compliance with WTO norms. (129) Private parties will also be more likely to bring a claim given that the costs of lobbying for national action would likely greatly exceed the costs of direct litigation of a claim under the DSU. Even when claims prompted by private parties are brought by national governments, the delays occasioned by the need to mobilize government action are extensive. Privately brought claims would eliminate such delays.

Beyond the benefits to efficiency, international relations are significantly enhanced. Criticism of the formal, legal approach has often centered on the adversarial nature of the process. This argument is overstated, but it is not entirely without merit. The adjudicatory process does encourage the parties to take more extreme positions during the proceeding, but such positions, though less prone to the careful language of diplomacy, are not necessarily any less extreme than those taken during the early phase of a negotiation. The legal process, however, can create stress on international relations among state members for the same reason that it is so desired for other reasons. The impartial, rule based process allows the state parties to satiate local constituencies with hard line rhetoric while safe in the knowledge that the adjudicatory procedures will produce an equitable outcome. The inclusion of private entities as potential complainants reduces in large measure the negative intergovernmental consequences of an adverse ruling. Any derogatory assertions lack the force of governmental authority behind them. Counterargnments by defending states lack the broad implications for relations with the complainant’s governmental parent.

Other objections have been raised as to the appropriateness of such a broad measure for standing before the DSB. (130) Concerns have been expressed that a private right of action would lead to use of the dispute system by well financed special interests, (131) that the increased number of complaints generated by the larger pool of available complainants would place too great a strain on the WTO infrastructure, and that such a process reduces the ability of State Members to flexibly manage trade relationships. (132) None of these complaints, however, withstands scrutiny. Participation by well financed industries, though hardly indigent victims, would merely serve to increase observance of WTO norms and expand the opportunity for the generation of principled rulings. Withholding private participation does nothing to increase the likelihood that the needs of poorer interests will be addressed. To the contrary, assuming that the budgets of national government advocates remain constant in the aftermath of an amendment to standing, private rights of action may actually provide an additional opportunity for less well connected industries to have their arguments brought by government proxy on their behalf as powerful industries take up their own cases instead of taking up government time and resources. While the limits of personnel and financing for adjudication is perhaps understandable albeit not excusable, limiting the availability of access on the basis of standing rather than more efficacious policy rationales is not justifiable. Similarly, there may be benefits to international relations that result from maintaining flexibility by states to pursue or refrain from the pursuit of individual complaints. The benefits to international relations, however, are minimal in light of the limited impact private actions should have on relations between states, the ability of state members to influence trade policy at the treaty level and the potential costs to legitimacy that are created with inconsistent application of trade policy norms.

There are also limits to enforcement under a private right of action. Though declaratory judgments by panels and assessments of harm could be obtained with relatively little disturbance to the existing enforcement mechanisms, reliance purely upon the legitimacy of the international instrument will likely have limited effect upon the behavior of a violating state member. Even absent a strong enforcement option, principles of stare decisis can make it more cost effective and less time consuming for state members to bring enforcement actions against the violating state member on the issue in question. Effectiveness of the process would be enhanced by eliminating the second procedure in its entirety by allowing private parties to bring domestic actions for the imposition of enforcement in line with favorable panel rulings. Such authority, however, presents a formidable challenge to national sovereignty.

C. Transparency

Principles of efficiency, legitimacy and equity are dependent not merely upon a tribunal formulating a just result but also upon the ability of the international community to observe that the result was achieved in a just manner. To that end, any international adjudicatory procedure should be as transparent as possible, subject to valid countervailing interests of the panel, the parties and the international community as a whole. The provisions of the DSU, however, do little to encourage transparency in the panel process. Article 14 of the DSU, for example, broadly enumerates principles of confidentiality for the panel members. (133) Panel deliberations are confidential, reports are drafted without the presence of the parties and final panel opinions are expressed without any indication of the individual contributions of the panel members. (134) The working procedures of the panels describe policies that are only slightly less protective of secrecy. Panels meet in closed session (135) and all statements made by one party to a dispute to another are to be held in confidence. (136)

There have been some overtures toward openness. Members are permitted to divulge pertinent information concerning their own positions in a dispute. (137) Unclassified summaries of panel submissions must be supplied upon a member’s request. (138) Finally, all oral proceedings of a panel are to be conducted in the presence of all the parties to that action. (139)

Confidentiality considerations extend even to pre-panel consultation procedures. (140) Appellate body reports have made clear that the settlement discussions of the parties remain in strict confidence, though evidence presented during the consultation phase and directly relating to the dispute is open to inspection. (141)

These provisions, taken in total, establish procedures that create a shell of confidentiality that goes far beyond that which is necessary to safeguard the legitimate interests of the panel and the parties. The deliberations of the panel members deserve the full protection of confidentiality. Panel members should be free to debate among themselves the questions before the panel without the fear that opinions in the process of formation will be overly scrutinized. There are no reasonable policy considerations that completely shield submissions to the panels. Unless the submissions include information that raises legitimate national security concerns or constitutes trade secrets, those submissions represent a fully formed position of a member. Potential public scrutiny of these statements will serve as a check on the content of such submissions. The policy builds public confidence in the process and helps to ensure cogent and pertinent analysis by the members.

Under past iterations of the dispute resolution process, the notion of anonymous panel reports had some merit. Previous GATT dispute resolution structures had no effective means of enforcing panel decisions outside of the force of the panels’ own legitimacy. In that context, a panel report that contained a dissenting opinion invited objections to adoption by the contracting parties. The DSU, however, has instituted far more efficacious means of enforcing panel decisions than have existed previously. Since legitimacy is no longer the sole or even the primary means by which individual decisions are enforced, the rationale for anonymity is severely weakened. Considerations promoting the issuance of dissents rise in importance. Dissents provide the contracting parties with a more accurate and nuanced view of the issue before the panel. As with dissents in domestic court decisions under common law, a dissent can often be a guide indicating the future direction of adjudication on an issue or set of issues.

Ironically, the submission of opinions that are attributed to particular panelists rather than anonymously is a less obvious benefit. Signed opinions allow the authors to be held up more readily to public scrutiny. This scrutiny, in turn, promotes greater responsibility on the part of the authors when drafting their opinions. Signed opinions also provide a public record by which state members can more accurately gauge the future position of a panelist on similar matters. The current mechanism for selection of panel members, however, will be subject to allegations of abuse as each state participating in the selection advocates candidates that the other parties to the dispute and the international community at large clearly recognize as having a manifestly favorable position towards the member submitting the panelist for consideration. The most common result of authored opinions under the current panel selection mechanism is that the process will end in deadlock and the selection of panel members will fall to the Director-General at the conclusion of the statutory selection period.

There is some uncertainty concerning whether transparency interests should be extended to include the consultation phase of the process. Legitimacy is enhanced through public disclosure of the negotiations that take place among the parties prior to the panel process. Disclosure can serve to focus the discussion of the parties and promote settlement through a need to court public opinion. An argument can be made that public disclosure is appropriate given the existence of alternative general fora for the settlement of international disputes and that the overarching goals of the World Trade Organization are best served by confining the dispute process at all stages to issues solely related to the covered agreements. The benefits of transparency, however, appear to be less significant than at other stages of dispute settlement. This is due in part to the fact that the consultation phase is a negotiated process rather than an adjudicatory one. There is far less incentive to protect general notions of justice. The authority of the international institution is not threatened. The primary objectives of the negotiation phase are to reduce international tensions and conclude potential disputes rapidly and inexpensively whenever possible. The perceived loss of legitimacy is miniscule when compared to the benefits to operational efficiency and the international community afforded by the informality of the consultation phase. It may even be argued that the public filing requirements may impose excessive costs at the consultation phase. The added flexibility afforded to the parties to include issues not directly pertinent to WTO principles should not be discounted. This benefit also serves as an added incentive to the parties to conclude a settlement prior to the commencement of the panel phase.

D. Panel Selection

The selection of panel members on an ad hoc basis is one of the few significant remnants of past dispute settlement mechanisms under the GATT. Unlike the members of the Appellate Body, each dispute requires the selection of a new panel. The process as enumerated under the DSU was intended to operate relatively smoothly. The Secretariat is tasked with nominating qualified panel members. (142) The parties to the dispute are expected to approve the choices of the Secretariat. A party may, however, reject a proposed panelist for “compelling reasons.” (143)

Parties have increasingly used their authority under the DSU to reject broad classes of panel participants. (144) Parties have often rejected prospective panel members having the same nationality as the party’s adversary and who have participated in past disputes. (145) Prospective panelists having ruled against a party are rejected as a matter of course. (146) Frequently, parties have supported panel composition based upon geographic distribution of individual members. (147) Rejection of qualified candidates based upon profession is also not unusual. (148) Presumably, such actions represent gross proxies intended to generate unbiased appointments, but they imbue the selection process with significant inefficiencies. Broad challenges to prospective panel members often create delays in panel selection, which trigger automatic selection of panels by the Director-General. More significantly, the criteria presently employed by the parties preclude large numbers of qualified and unbiased potential panelists, thereby jeopardizing the speed of the proceedings and quality of rulings. The nationalist criteria also serve to undermine legitimacy and international relations under the guise of advocacy. Support of panel member challenges on the basis of nationality promotes parochial sentiment over the rule of law.

The ambiguous standard for rejection of panel members should be replaced with a more specific standard in which the party challenging a prospective panelist demonstrates improper behavior on the part of the would-be panel member or the appearance of such impropriety. Mere nationality would not constitute a compelling reason for objection, nor would a past negative ruling absent clearly demonstrable evidence that such ruling was the result of bias. A set of clearly delineated standards for panel selection would alleviate many of the difficulties occasioned by the current standard. Limits on rejection would speed panel selection. WTO standards and internationalist perspectives would be endorsed as qualified candidates rendered cogent rulings regardless of national affiliation.

More rigorous standards for the rejection of panel candidates do present some difficulties, however. Panel candidates from state members with weak notions of the rule of law or which present a strong prospect of sanction for panel members that rule counter to state policy might merit rejection solely on that basis. The prospect of geographic discrepancies, even those occasioned by legitimate criteria, increases the likelihood of international friction and limits future cooperation. There is also the possibility that prospective panelists might be subject to “capture” by wealthy parties or third parties. Behavior based upon potential future benefits to the panel member is, by definition, far more difficult to ascertain. The problem can be compounded where the party undertaking the examination of a panel member is a developing state with limited financial and personnel resources.

In order to compensate for these consequences, the importance of detailed reporting by potential panel members as it relates to the impending proceeding can not be underestimated as a means of lowering the overall cost of investigation. The Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes contains reasonable mechanisms for obtaining basic information pertaining to potential conflicts of interest. (149) Should additional investigative measures be needed, it may be prudent to provide financial and technical assistance to developing states for this purpose.

The Rules of Conduct create only a modest measure of protection against conflicts of interest. The instrument serves to protect against those violations of independence, impartiality or confidentiality that are material. Only those inappropriate actions that impair the operation of the dispute settlement process are actionable. (150) As a result, only conduct that constitutes a significant act of impropriety is subject to sanction. “Minor” improprieties or acts that present the appearance of impropriety are not. It is debatable whether the threshold crafted by the Rules of Conduct strikes the appropriate balance between the benefit of reaching a rapid and equitable decision and the cost to the legitimacy of the decision itself. It is difficult, however, to justify the current standard when the long-term costs to the legitimacy of the dispute settlement system are included in the calculation. Though the sanction associated with an appearance of impropriety need not be equivalent to those penalties for more serious violations, the damage posed by such lesser acts should not be dismissed as a matter of law.

Enforcement of ethical obligations is minimal. To the extent that enforcement exists, it is broadly directed towards eliminating improprieties from particular disputes. Deterrence of future impropriety is limited at best. For example, where the conduct of a panel member is under review, upon a finding of a material violation by the Chair of the DSB in consultation with the Director-General and a number of Chairs of the appropriate Council or Councils, the appointment of the panel member is revoked only with the approval of the parties. (151) The limited sanction of appointment revocation provides an insufficient deterrent to malfeasance by panel members. Even where such conduct precludes selection of such a panelist to future panels, the penalty does little to discourage other prospective panelists from exercising their personal biases. The somewhat variable composition of the body making the evaluation of panel members makes the possibility of predicting a consistent policy towards panel member conduct difficult at best. Clearly, more severe penalties for egregious acts of impropriety are appropriate. In addition, consistency can be enhanced through the use of an evaluating authority with a more stable membership.

The procedures for dealing with potential improprieties of Appellate Body members appear to be more effective. The standing nature of the appellate entity elevates the potential cost of sanction. The increased deterrent diminishes the possibility that the perceived individual benefits of partiality will prompt such behavior. Unlike the process for the evaluation of complaints against panel members, however, a consistent population, the Standing Appellate Body itself, undertakes the review. (152) This presents its own difficulties as under some conditions the Standing Appellate Body is being asked to stand in judgment of one of its own members. Replacement of the Appellate Body with a more disinterested entity, possibly the DSB, as adjudicator would go far towards enhancing the legitimacy of the review process.

For questions of impropriety concerning the Appellate Body, its staff, or members of the Secretariat, the Rules of Conduct are silent regarding the consequences of a violation. Actions to be taken against violators from the Secretariat are left to the judgment of the Director-General. (153) The responsibility for crafting sanctions against improprieties undertaken by an Appellate Body member or staff lies with the Appellate Body. (154) Though these measures provide substantial flexibility to the evaluating bodies, the ambiguity inherent in such provisions leaves open the possibility that the affected individuals will either forego individual benefits, even where those benefits have no significant consequences for the legitimacy of the system, or act in ways which cost the parties to a dispute substantial delay and greatly undermine the legitimacy of the process in the mistaken belief that the anticipated sanction will be less than that actually imposed by the evaluating authority.

Even with detailed investigation, broader criteria for ethical standards and clearer, more stringent enforcement of standards, uncertainties in the allegiance of panelists is likely to remain, especially among the less experienced panel candidates. Perceived legitimacy of the system can be improved further through modest confidence building measures designed to engender confidence in the impartiality of panel members. The perspectives and interests of prospective panel members should be exposed in a manner that presents the lowest potential risk to the operation of the system. Consequently, the Secretariat should take into consideration the total economic value or other measure of significance of the dispute when proposing prospective panelists. Those individuals that have demonstrated reasoned analysis in matters of lesser value would be worthy of more significant deliberations. Panelists gain experience in managing the WTO dispute process and the parties gain confidence in the panelists through the generation of a public record.

The benefits that accrue to the system through reform of the panel selection process are magnified further when the panel process includes the creation of a set of standing panel members. Panelists have further incentive to hone their ability to administer disputes. The tendency to undermine WTO principles is also lessened as individual career goals are more closely tied to WTO rather than national interests.

E. Standing Panel Membership

There are limits to the efficiency of a process that relies upon the selection of panel members on a case by case basis. There is some question as to whether ad hoc, part time panel members are able to devote the requisite time and energy to the administration of disputes. (155) It has become ever more difficult to find a sufficient number of qualified panel members (156) even absent needed reforms that promise to restrict the available pool of applications still further. The selection process itself introduces delays into the process that would be eliminated with a set of standing panel members. (157) The experience gained by panel members from repeated exposure to management of proceedings would likely increase the efficiency of each succeeding complaint procedure. (158) In addition, the availability of permanent panel members would increase the efficiency of the evidence gathering process. (159) Last, concerns over partiality of panel members would be reduced. (160) The relative permanence of the panel positions would lessen the prospects of panel member capture.

Other modifications to the process are rendered still more effective when employed in conjunction with standing panel membership. For example, transparency objectives, as embodied in attributed panel reports, are made more effective where a panel member’s opinions can be measured by a far larger body of work than would otherwise be available with the current ad hoc selection process.

The prospect of a standing set of panel members was suggested early in the life of the WTO. (161) The proposal by the European Union included provision for a rotating pool of 15 to 24 independent members with balanced geographical distribution but no absolute strictures on nationality. (162) Ultimately, no action was taken on the proposal though the debate surrounding the possible adoption of standing panel mechanisms engendered considerable attention during the 1999 review of the DSU. (163) Moreover, at least one commentator has suggested that the entire panel process be eliminated and their role absorbed by a larger standing Appellate Body. (164) Whatever the means of establishing a standing panel, it is likely that the selection of panelists will become more time consuming and divisive. (165) Fortunately, unlike the present process of panel selection, the selection of standing panelists need not delay the administration of complaints.

F. Equity

Despite a host of changes designed to promote participation by developing states, the results over the early years of WTO operation have not been encouraging. The statistics present a rather bleak picture for developing nations. Under the GATT, developing states comprised thirty-one (31%) percent of all parties presenting complaints. (166) Thus far, the number of complaints brought by developing states under the auspices of the DSU has actually declined slightly to twenty-nine (29%) percent. (167) When the statistics are adjusted to control for variables such as market power and trade dependence, developing states are one third less likely to file a complaint against a developed state than under the 1989 Improvements. (168) In contrast, filings by developed states against developing nations have risen from 19 to 33 percent. (169) When compared with the 1989 improvements, developing states under the DSU are five times more likely to be a defending party in a dispute. (170) The view for the least developed states is even grimmer. For example, during the first four years of DSU operation, not a single complaint was filed by any nation in sub-Saharan Africa. (171)

The numbers, however, likely do not paint the entire picture. The relative discrepancy in participation may be explained, at least in part, by perceptions of renewed effectiveness of the dispute resolution regime. (172) The data may simply reflect a renewal of interest in enforcing principles that, until the revisions, were not worthy of pursuit. Developing states, lacking the financial and professional resources needed to mount large numbers of actions, are incapable of quickly challenging perceived past violations of WTO standards. Regardless of such growing pains, though, there is little question that the added complexity and cost of the new procedures severely undermine the ability of developing states to achieve equitable access to effective dispute resolution.

Though a laudable attempt at redress for developing states, it is readily apparent why the preferences under the DSU have been insufficient to significantly encourage the participation of such states. First, a number of provisions are less concerned with establishing direct measures for the benefit of developing states than in making vague statements of support. The references contained in Article 4(10) and Article 21(2) are the most obvious examples of this position. Although there may be some intangible benefits accorded to developing states as a result of the language in the text, such benefits are clearly insufficient to overcome basic issues of dispute resolution expense and procedure.

Even in situations in which developing states participate in the process, the preferences remain greatly underutilized. No developing state has made use of the Decision for expedited review. (173) No developing state has requested supplemental oversight under Article 21(7). (174) No panel has indicated that it has allotted additional time for consultation pursuant to Article 12(10) (175) or acted in accordance with the reporting provisions of Article 12(11). (176) No least developed state has filed an action under the DSU

Other provisions, such as that pertaining to the responsibilities of the Secretariat to developing states, are unduly limited owing to conflicting responsibilities. The Secretariat, as the administrative arm of the DSB, must maintain its impartiality. As a result, any special assistance it provides to developing nations pursuant to Article 27(2) is severely constrained. The European Union has advocated providing additional financial resources to the Secretariat for Article 27(2) support. (178) It is unlikely, given the Secretariat’s conflict of interest, that substantial improvement in complaint management would have resulted.

Regardless of the efficacy of the equity measures presently implemented, they engender unwarranted damage to the dispute process by diminishing efficiency and legitimacy excessively. The ability of developing states to require the presence of a panel member from a developing country is one example. Though the presumed benefit to equity makes the provision somewhat more defensible than general party challenges to panelists based upon nationality, the harm to the equanimity of the process is considerable. The very presumption that a panel member of a particular nationality is necessary to balance potential bias or communicate understanding of a developing state perspective to the other panel members is extremely harmful to legitimacy of the panel process. The objective of ensuring panel consideration of issues and interests that are critical to a developing state party is certainly laudable, but it can be achieved without resort to mechanisms that damage legitimacy. The Secretariat, for example, in accordance with its responsibilities under Article 2, might be required when dealing with a dispute involving a developing state to propose only those panel members that have experience or are otherwise familiar with the trade issues affecting developing states.

Though the provisions of Article 12(10) concerning special time consideration for developing states ostensibly would have little impact on the maximum time allotted for the conclusion of panel and appellate actions, (179) panel and appellate operations appear to regularly exceed the limits set by the DSU. Even where the time limits are strictly obeyed, the additional time periods afforded developing states nonetheless sacrifice efficiency to garner modest benefits to equity. Permitting delays in process is only effective where the presumed lack of experience or limited competence of representatives of developing states can be overcome through additional preparation and presentation time. Given that the opportunity exists for delays in all matters involving developing states despite the fact that the equitable objectives of such a provision are only served in a relatively small percentage of possible actions, Article 12(10) should be omitted in its entirety.

Rather than make concessions to the process that merely adapt procedures to the weaknesses of developing states and undermine other primary goals of the DSU, the equitable principle should be given effect through procedures which enable developing states to overcome the twin hurdles of cost and complex procedure without recourse, to the extent feasible, on differential procedures. Some efforts have already been made in this direction. The Appellate Body has already made clear in European Communities–Regime For The Importation, Sale And Distribution Of Bananas that any state member may be represented by private counsel if it so chooses. (180) In doing so, however, the Appellate Body was careful to limit its ruling to actions before itself. (181) The use of private counsel did not necessarily apply to panel actions. Despite this caveat, panels have since permitted the use of private counsel in matters before them. (182) The uncertainties over the validity of private counsel representation suggest that developing states would benefit from a more formal codification of this right–particularly with regard to panel operation.

At the general level, UNCTAD has proposed a general training program on managing trade issues for officials in developing countries. (183) This program, though potentially beneficial over the long term in training local experts capable of handling trade disputes, is unlikely to be of substantial direct, short-term benefit to developing states.

Of greater promise is the Advisory Centre on WTO Law (hereinafter the “Advisory Centre”). (184) The Advisory Centre is an independent international entity composed of sponsoring members from both developed and developing states. (185) Officially opened on October 5, 2001, (186) the Advisory Centre is designed primarily to provide reduced cost and pro bono legal assistance and training to developing and least developed states in the pursuit and defense of trade related complaints before the WTO. (187) Located in Geneva, (188) the tiny organization (189) offers the very services that overcome serious trepidations by developing and least developed states regarding the cost and procedural concerns of defending and pursuing complaints under the DSU. Though all states are permitted to join the Advisory Centre and make contributions to its endowment fund and annual budget, only developing and least developed states may employ its services. (190) Developing states are required to contribute to the organization one-time endowment contributions on a sliding scale based on the state’s proportion of world trade. (191) Least developed states need make no payments to the endowment or annual budget. (192) The services of the Advisory Centre are open to all developing and least developed states whether they are members of the organization or not. Members, however, receive substantial discounts on the hourly legal fees charged by the Advisory Centre. (193) Least developed states pay as little as one-tenth the standard rate. (194)

The Advisory Centre neatly avoids many of the pitfalls associated with past proposals. It is not exclusively an educational institution. It can therefore provide immediate and direct assistance to those states in need of trade defense or personnel to prosecute a challenge to potential violations of WTO norms. Unlike support provided by the Secretariat, there is no concern over potential damage to legitimacy as a result of conflicts of interest. Since services are provided on a discounted basis, they are within the reach of poorer states. The graduated scale of contributions serves to discourage specious use of DSU processes.

It is far too early to measure whether the Advisory Centre will be successful in raising participation by developing and least developed nations. Given the proportionately small number of cases involving developing and least developed states, one may presume that the problems that will challenge the Advisory Centre will be those associated with addressing the burgeoning needs of its clients with a limited staff and budget. Increased staff and budgets for the Advisory Centre are by no means guaranteed. Other mechanisms may serve similar, supplemental functions while avoiding possible international political obstacles.

The European Union proposal promoting the Secretariat as a support organization, can, with some modification, provide an additional source of assistance for less developed nations. First, if the Secretariat is to have a proper role in advocacy support, Article 27(2) should be amended to take account of this new role. A clear distinction, both rhetorical and structural, must be made between the administrative responsibilities of the Secretariat and the advocacy mission of any new division of that body. Even with such protections in place, the benefits of possible budgetary support must be balanced against any potential loss of legitimacy to the WTO. If necessary, a body separate and distinct from the Secretariat yet under the auspices of the WTO may be warranted. Alternatively, if the role of private party participation in panel proceedings is sufficiently clarified, no supplemental organization may be needed at all. Ultimately, the dilemma facing developing states is one of economy. Impoverished nations can overcome the expertise issue by hiring private advocates on their own, assuming the expense of advocacy is subsidized. Provided that support for such a program can be garnered, the distribution of subsidies can be made through the Secretariat according to a standard formulated along the lines of that employed by the Advisory Centre. The subsidy approach has the added benefit of doing nothing to raise conflict of interest issues and thus undermine legitimacy of the organization.

The heavy subsidies afforded to least developed states under the Advisory Centre approach, however, should result in an increase in unwarranted complaints. Assuming, however, that summary judgment measures are included in DSB procedures, such specious claims should not be a significant concern.

G. Remedies

The value to complaining parties of simply reaching the enforcement stage of the adjudication process should not be underestimated. The mere presence of a legitimate counter-measure represents a substantial advance over past GATT procedures. Nevertheless, the most significant indictment against the present dispute settlement regime is that it is insufficient to deter state members from acting in a manner that is contrary to the principles of the WTO agreements. The benefits that accrue as a result of appeasing local constituencies typically far exceed the consequences of an adverse ruling from the DSB. An additional consequence of inadequate remedial measures is that the parties have an insufficient incentive to settle disputes until the denouement of the panel process. As of July 2000, only 32 of 203 matters had been settled prior to a final panel decision. (195) Of these, only seven disputes were settled prior to the commencement of panel formation. (196) In addition, losing parties have used the grace period allotted under Article 21 as a means of delaying compliance rather than using the time to adhere to panel decisions. (197)

The economic incentives that encourage violations and the deferral of resolutions are readily apparent. The measures outlined in the DSU are not designed to act as a remedy, but rather as an enforcement mechanism. Substantial parochial benefits can accrue to a scofflaw even in the presence of WTO enforcement mechanisms. For example, calculations of harm to an aggrieved state are based upon the expected annual damage to the complainant’s citizenry. Past harm from the effective date of any regulations or policies until the date of final implementation of concession withdrawal is not included in the calculation. (198) Consequently, though legitimacy remains a moderating influence, any potential violator has no economic incentive to settle a dispute. The violating state may continue to reap the local benefits of its measures until final enforcement. At a minimum, Article 22(4) should clearly mandate that any calculation of concession withdrawal should include harm caused to the affected state from the point in which the violating provisions were put into effect plus an adjustment for interest charges. Such past harm measures would be incorporated into the first year’s assessment of concession withdrawal as a means of ensuring prompt compliance. If the state found to be out of compliance remains so for longer than a year, the measure of concession withdrawal would be reduced to a level commensurate with the estimated annual harm caused by the violating measure.

Other commentators have suggested that the preferred mechanism for assuring rapid compliance with panel rulings is the prompt imposition of compensation or withdrawal of concessions in lieu of immediate compliance. (199)

Though considerably more modest in its impact, the provisions of Article 21 (3)(c) would benefit from the replacement of the maximum suggested reasonable period for compliance of 15 months with language that simply encourages the establishment of a time frame for compliance as short as possible for the purposes of implementing rulings under the DSU. (200)

Though the inclusion and prompt application of past harm in any withdrawal of concessions should increase the likelihood of rapid enforcement and enhance deterrence to some extent, the focus on enforcement unduly limits the deterrence objective. Those states that merely seek short term advantage would be able to institute policies contrary to the WTO, participate in a drawn out adjudication and wait until concession suspension is implemented before bringing its actions into compliance with the panel rulings before suffering harm as a result of any such concession suspension. In light of such a possibility, it may be appropriate to allow the suspension of concessions due to past harm to remain in effect despite compliance with panel rulings by the violating state member. This amendment to the process would eliminate the economic and political benefits of rulings favorable to local interests that contravene international standards. Moreover, the potential violating state party would have added incentive to negotiate a settlement as a means of avoiding costs associated with unavoidable withdrawal of concessions. Just as importantly, state members would have no economic incentive to prolong proceedings under the DSU as potential violators would derive no benefit from tactics that prolong the process.

In either case, the imposition of measures based upon past harm is likely to engender substantial political opposition–some of it warranted. Concern over long standing policies that have not been adjudicated might leave states open to crushing countervailing duties. Moderating the effects of such past harm measurements will probably be necessary. For example, those policies instituted prior to the adoption of a past harm measurement standard would likely be exempt. Even for new policies, however, the danger of devastating economic burdens remains. International political considerations by state members could encourage members to refrain from bringing actions, thereby permitting potential charges against the violator to build. The ability of aggrieved private parties to bring complaints before the WTO would reduce this possibility. Whether or not private party action is available, a term limitation on the availability of recourse to past harm measures is advisable.

A preferable supplemental mechanism for mitigating catastrophic economic consequences and reducing political tensions could be a form of preliminary injunctive relief. Under an expedited hearing procedure a petitioning State Member would be required to demonstrate to the reviewing authority that the petitioner will likely prevail after a full hearing using DSB procedures. Any domestic regulatory action found to be in violation of GATT norms would, as a consequence, be delayed pending the resolution under the DSB process.

Preliminary relief of this type has the advantage of forestalling harm to the international trade system before it can occur. Should a State Member continue its implementation of the regulation found to be in violation of the injunction, the date of issuance of that injunctive order could serve as a rational point at which sanctions could be imposed should the State Member be found in violation at the conclusion of the full hearing. More importantly, absent the economic incentive supplied by the probable violation by the offending State Member, the parties are more likely to resolve their dispute expeditiously and in an environment that does not pose continuing harm to the international trade system during the settlement process.

Even when procedures more fully capture the harm caused to a complaining State Member should they be employed to their fullest extent, efficiency, equity and international relations considerations are undermined by circumstances that often limit the availability of such enforcement mechanisms. Developing State Members lack the quantity of trade adequate to mount an enforcement threat through the withdrawal of concessions. (201) As early as 1965, developing states have proposed collective retaliation as a means of counteracting the effect of such trade imbalances (202) permitting developing states as a group to act against violations by developed state members. Collective retaliation addresses the power imbalance between developed and developing states in a manner that sacrifices efficiency. To the extent that effective joinder of complainants and de jure stare decisis is available, the need for such collective retaliation is markedly diminished. Even in the absence of such mitigating policies, the approach has proven to be politically untenable. The proposal was vehemently opposed by developed states and was never adopted. (203)

While more stringent enforcement mechanisms promise to reduce the prospect of future disputes markedly, increase the likelihood of negotiated settlement and improve adherence to panel judgments, the implementation of concession withdrawal will remain a necessity. This reality represents a fundamental challenge to the DSB and the WTO as a whole. Panel enforcement mechanisms accomplish their objective through means that are contrary to the basic economic efficiency principles that the organization seeks to enforce. Moreover, given that the means of enforcement impose very real costs on the complaining state member, the actual imposition of concession withdrawal is less likely.

One possibility is the prevalent use of trade barrier reduction as a sanction. (204) The primary advantage of such a sanction is that it is consistent with the basic economic goals of the WTO. Short of complete elimination of trade barriers, this sort of sanction, however, creates a disincentive for state members to reduce barriers completely in the expectation that at some point, each state member may be required to reduce barriers further in response to a complaint. Though such a response may not be viable as a blanket remedy, the technique might be useful in providing supplemental sanction as a means of encouraging compliance. (204) Such aproposal, however, begs the underlying questions of which goods or services should be subject to additional concessions and the means by which the additional sanction will be enforced. One can envision the necessity of requiring the withdrawal of additional concessions for the failure of the violating state member to reduce barriers in accordance with panel sanction.

If the WTO is to become more effective in achieving its goals, rulings must incorporate remedial approaches in addition to those that promote deterrence and enforcement. It is important to ensure, however, that the remedial techniques are tailored to advance the deterrence and enforcement objectives. The most basic of these remedial approaches does not require international coordination but rather mere legislative action at the national level. Where a State Member has received approval to impose a withdrawal of concessions, the tariff proceeds collected from the state member might be dedicated to the industry originally affected by the violating state member’s policies. Funds ideally would be allocated based upon a demonstration of harm caused. Where the proven claims exceed tariff revenue, the moneys would be distributed on the basis of the fraction of revenue collected to claims made. Should the amount collected exceed the proven claims, the excess would return to the general fund. The advantage of such a measure is that it provides an additional deterrent against politically powerful special interests in the state member in violation. Absent such a provision, elites within State Members might be tempted to establish deleterious policies even where they are economically neutral in an effort to garner political benefit. The transfer of concessions to international competitors of the special interest group promoting the protectionist policy eliminates any lasting economic benefit to the interest group. Without the incentive, the interest group will be less likely to promote protectionist policies to their national government.

Direct compensation offers the most elegant means of ensuring compliance while placing the parties in their rightful position. Its use does not jeopardize trade objectives of the WTO Agreement. There are fewer international relations repercussions associated with compensation when compared with concession withdrawal. Compensation also increases the availability of the dispute resolution mechanism where complaining parties do not have effective recourse to concession withdrawal.

Though state members have demonstrated a willingness to craft norms and abide by mechanisms that impose modest penalties on behavior that contravenes those norms, the members’ willingness to subsume their respective national sovereignty has its limits. The compensation remedy, because it limits the ability of state members to operate effectively outside the bounds of WTO standards, has proven difficult to adopt. It may therefore be necessary to integrate a compensation remedy slowly into the array of enforcement approaches. To some extent, that process has already begun. The ability of parties to a dispute to arrange for compensation, though entirely voluntary, evidences a willingness to employ compensation as part of an enforcement strategy. Compensation might be further integrated into the enforcement process by permitting its use as a last resort in the event that concession withdrawal is insufficient to make a complaining party whole. This would have the advantage of encouraging developing states to participate more effectively in the dispute resolution process. Next, compensation could be deemed available for private parties bringing actions against state members. The benefit of making such compensation available to private parties is that such successful claims might be set off against any concession withdrawal imposed by the state of which the private party is a citizen. Though the authority to recognize panel and appellate decisions of the WTO in national courts represents a marked advance for the WTO, the revenue neutral nature of the measure should make its adoption more palatable to the state members. Once the international community achieved a sufficient level of comfort with the use of compensation for limited purposes, the remedy might be expanded to become the designated preferred enforcement mechanism over concession withdrawal. This preference would at first be limited to certain types of compensations such as past harm, but could be expanded to include both past and future harms. With such broad-based compensation available, private parties eventually will be able to sidestep enforcement through national government proxy entirely.

VI. CONCLUSION

It has been said that the wheels of justice grind slowly. For the administration of disputes under the GATT, it has taken over 50 years to achieve a mechanism that provides a reasonable expectation of a just result largely consistent with the goals of the WTO. Despite such gains, the process has remained slow, costly, limited to a select number of participants and uncertain with regard to enforcement. Many of the problems associated with the dispute resolution process are amenable to modest correction. Others, such as enforcement, exist because of the challenge that a more vibrant international system would pose to current conceptions of national sovereignty. It can only be hoped that as the value of trade continues to grow within each state member, the recognized need for continued economic benefits from the international system prompts the gradual adoption of standards that produce more rapid and effective adjudication.

(1) General Agreement on Tariffs and Trade, opened for signature Oct. 30, 1947, 61 Stat. A5, 55 U.N.T.S. 187 (entered into force Jan. 1, 1948) [Hereinafter the “GATT”].

(2) Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, opened for signature Apr. 15, 1994, 1867 U.N.T.S. 4 (entered into force Jan. 1, 1995). [The agreement is hereinafter referred to as the “WTO Agreement.” The body created under the WTO Agreement is hereinafter referred to as the “WTO.”].

(3) Trade growth has been immense. From 1950 until 1999, trade in manufactured goods alone increased nearly fortyfold. WTO, INTERNATIONAL TRADE STATISTICS 2000 26 (2000).

(4) See AN ANATOMY OF THE WORLD TRADE ORGANIZATION 1 (Konstantinos Adamantopoulos ed., 1997).

(5) Articles of Agreement of the International Monetary Fund, opened for signature Dec. 27, 1945 (entered into force on Dec. 27, 1945) 60 Stat. 1401, 2 U.N.T.S. 39. [hereinafter the “IMF”].

(6) Articles of Agreement of the International Bank for Reconstruction and Development, July 22, 1944, 60 Stat. 1440, 2 U.N.T.S. 134, amended Dec. 16, 1965, 16 U.S.T. 1942, 606 U.N.T.S. 294. [Hereinafter the “World Bank”].

(7) 1 Bretton Woods Proceedings at 941.

(8) [hereinafter the “ITO”] JOHN H. JACKSON, THE JURISPRUDENCE OF GATT & THE WTO: INSIGHTS ON TREATY LAW AND ECONOMIC RELATIONS 454 (2000).

(9) United Nations Conference on Trade and Employment, held at Havana, Cuba, from November 12, 1947, to March 24, 1948, Final Act and Related Documents (Havana, Cuba, Mar. 1948). Reprinted in Havana Charter for an International Trade Organization, Mar. 24, 1948, Dept. of State publication 3117, Com. Pol’y Series 113.

(10) STERLING GARDNER, DOLLAR DIPLOMACY 378 (1956).

(11) Adamantopoulos, supra note 4 at 1.

(12) JACKSON, supra note 8, at 120.

(13) Article XXII states:

Each contracting party shall accord sympathetic consideration to, and shall afford adequate opportunity for consultation regarding such representations as may be made by another contracting party with respect to any matter affecting the operation of this Agreement.

2. The CONTRACTING PARTIES may, at the request of a contracting party, consult with any contracting party or parties in respect of any matter for which it has not been possible to find a satisfactory solution through consultation under paragraph 1.

See http://www.mac.doc. gov/Tcc/DATA/commerce_html /TCC_3/ WTO_Multilateral_Agreements_on_Trade_GATT /WTO_Multilateral_ Agreements_on_ Trade_GATT.html (visited Aug. 18, 2001).

(14) Article XXIII states:

1. If any contracting party should consider that any benefit accruing to it directly or indirectly under this Agreement is being nullified or impaired or that the attainment of any objective of the Agreement is being impeded as the result of

(a) the failure of another contracting party to carry out its obligations under this Agreement, or

(b) the application by another contracting party of any measure, whether or not it conflicts with the provisions of this Agreement, or

(c) the existence of any other situation, the contracting party may, with a view to the satisfactory adjustment of the matter, make written representations or proposals to the other contracting party or parties which it considers to be concerned. Any contracting party thus approached shall give sympathetic consideration to the representations or proposals made to it.

2. If no satisfactory adjustment is effected between the contracting parties concerned within a reasonable time, or if the difficulty is of the type described in paragraph 1 (c) of this Article, the matter may be referred to the CONTRACTING PARTIES. The CONTRACTING PARTIES shall promptly investigate any matter so referred to them and shall make appropriate recommendations to the CONTRACTING PARTIES which they consider to be concerned, or give a ruling on the matter, as appropriate. The CONTRACTING PARTIES may consult with contracting parties, with the Economic and Social Council of the United Nations and with any appropriate inter-goveromental organization in cases where they consider such consultation necessary. If the CONTRACTING PARTIES consider that the circumstances are serious enough to justify such action, they may authorize a contracting party or parties to suspend the application to any other contracting party or parties of such concessions or other obligations under this Agreement as they determine to be appropriate in the circumstances. If the application to any contracting party of any concession or other obligation is in fact suspended, that contracting party shall then be free, not later than sixty days after such action is taken, to give written notice to the Executive Secretary to the CONTRACTING PARTIES of its intention to withdraw from this Agreement and such withdrawal shall take effect upon the sixtieth day following the day on which such notice is received by him. See http://www.mac.do c.gov/Tcc/DAT A/commerce-html /TCC_3/WTO_Multilateral_Agreementson_TradeGATT /WTO_Multilateral_ Agreements_on_Trade_GATT.html (visited Aug. 18, 2001).

(15) Miquel Montana I Mora, A GATT With Teeth: Law Wins Over Politics in the Resolution of International Trade Disputes, 31 COLUM. J. TRANSNAT’L L. 103, 118 (1993). Despite the measure of confidence in the system evidenced by these actions, uncertainty remains with regard to its efficacy. There is no indication of the numbers of complaints that were compromised or never raised owing to perceptions that compliance would not be forthcoming. See ROBERT E. HUDEC, GATT LEGAL SYSTEM AND WORLD TRADE DIPLOMACY 185 (1993).

(16) The concept of consensus was never formally defined under the GATT. It retains characteristics similar to unanimity in that any state member present has a veto authority. Consensus is unaffected by abstentions or absence. Norio Komuro, The WTO Dispute Settlement Mechanism: Coverage and Procedures of the WTO Understanding, 12 J. INT’L ARB. 81, 105-06 (1995), citing Pierre Pescatore, The GATT Dispute Settlement Mechanism 27 J.W.T. 1, 13 (1993).

(17) For the first forty years of operation, only once did the Contracting Parties invoke sanctions on the defending state. In the 1955 U.S. Dairy Quotas decision, American quotas on milk products were deemed in violation with consequent harm to the Netherlands. The United States acquiesced in permitting sanctions. The penalties, however, had no impact on American dairy policy

(18) Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance, Nov. 28, 1979, 26 B.I.S.D. 210 (1980). [hereinafter the “1979 Understanding”].

(19) The 1979 Understanding set forth specific time limits for the creation of a panel once the Director-General has made a recommendation to convene a panel. It delineated the criteria to be used in forming panels. Panel reports were to be adopted by consensus in an expeditious manner and once accomplished, such adoption made the panel reports binding on the parties to the dispute.

(20) Miquel Montana I Mora, supra note 15, at 123.

(21) Miquel Montana I Mora, supra note 15, at 122. See also generally, Robert E Hudec, GATT Dispute Settlement After the Tokyo Round: An Unfinished Business, 13 CORNELL INT’L L.J. 145 (1980) and John H. Jackson, Gatt Machinery and the Tokyo Round Agreements in TRADE POLICY IN THE 1980’S 159 (W.R. Cline ed., 1983).

(22) Two instruments of relatively minor import were produced between 1979 and 1989. The Thirty Eight Session at Ministerial Level: Ministerial Declaration, 29 BISD 9 (1983), primarily reinforced the changes made under the 1979 Understanding. In the Action Taken on 30 November 1984: Dispute Settlement Procedures, 31 B.I.S.D. 9 (1985), panel participation was opened to qualified individuals not affiliated with the governments of state parties. Preference was maintained for government representatives, however. Miquel Montana I Mora, supra note 15, at 136.

(23) Decision of 12 April 1989 on Improvements to the GATT Dispute Settlement Rules and Procedures, 36 B.I.S.D. 61, Apr. 12, 1989. [hereinafter the “1989 Improvements”].

(24) 1989 Improvements, Section C, Paragraph 1.

(25) 1989 Improvements, Section D, Paragraph 1.

(26) 1989 Improvements, Section F, Paragraph (c), Subparagraph 5.

(27) 1989 Improvements, Section F, Paragraph (f), Subparagraph 6.

(28) For example, though the submissions of third parties were to be automatically submitted to the original parties, third parties were required to obtain approval of the presiding panel before the written submissions of the original parties were to be delivered to those third parties. 1989 Improvements, Section F, Paragraph (e). (29) 1989 Improvements, Section I.

(30) Understanding on Rules and Procedures Governing the Settlement of Disputes, 33 I.L.M. 112 (1994) reprinted in http://www.wto.org/english/docs_e/ legal_e/28-dsu.pdf (visited Aug. 14, 2001) [Hereinafter the “DSU”].

(31) [Herelnafter the “DSB”].

(32) See DSU, Art. 1.

(33) Final Act, Agreement Establishing the World Trade Organization, Annex 1A: Multilateral Agreements on Trade in Goods, 33 I.L.M. 28 (1994), reprinted in http://www.wto.org/english/docse/legal_e/final_e.htm. (visited Aug. 14, 2001).

(34) General Agreement on Trade in Services, opened for signature Apr. 15, 1994 (entered into force Jan. 1, 1995), 1869 U.N.T.S. 183, 33 I.L.M. 1168.

(35) Agreement on Trade Related Aspects of Intellectual Property Rights, opened for signature Apr. 15, 1994 (entered into force Jan. 1, 1995), 1869 U.N.T.S. 299, 33 I.L.M. 1197.

(36) Agreement on Trade in Civil Aircraft reprinted in http://www.wto.org/english/docs_e/legal_e/air-79.pdf (visited Sept. 3, 2001).

(37) Agreement on Government Procurement, opened for signature Apr. 15, 1994, (entered into force Jan. 1, 1996), 1915 U.N.T.S. 103.

(38) International Dairy Agreement reprinted in http://www.wto.org/english/docs_e/legal_e/ida-94.wpf (visited Sept. 3, 2001).

(39) International Bovine Meat Agreement, Marrakesh, opened for signature Apr. 15, 1994, entered into force Jan. 1, 1995, Austl. T.S., 1995 No. 21 reprinted in http://www.wto.org/english/docs_e/legal_e/ibma-94.wpf (visited Sept. 3, 2001).

(40) Agreement on Textiles and Clothing, opened for signature Apr. 15, 1994 (entered into force Jan. 1, 1995), 1868 U.N.T.S. 14.

(41) Agreement on Subsidies and Countervailing Measures, opened for signature Apr. 15, 1994 (entered into force Jan. 1, 1995), 1869 U.N.T.S. 14.

(42) See Special or Additional Rules and Procedures Contained in the Covered Agreements, DSU, App. 2.

(43) See Figure 1.

[FIGURE 1 OMITTED]

(44) ERNST-ULRICH PETERSMANN, THE GATT/WTO DISPUTE SETTLEMENT SYSTEM: INTERNATIONAL LAW, INTERNATIONAL ORGANIZATIONS AND DISPUTE SETTLEMENT 85 (1997). See also Thomas J. Dillon, The World Trade Organization: A New Legal Order for World Trade?, 16 MICH J. INT’L L. 349 (1995), and Kim Rubenstain & Jenny Schultz, Bringing Law and Order to International Trade: Administrative Law Principles and the GATT/WTO, 11 ST. JOHNS J. LEGAL COMMENT. 271,279 (Spring 1996).

(45) DSU, Art. 4.

(46) DSU, Art. 5.

(47) DSU, Art. 4, subsec. 5.

(48) DSU, Art. 4.

(49) DSU, Art. 4, subsec. 3. Where the subject of the claim concerns perishable goods, the time periods are expedited. Consultations must begin within 10 days of receipt of a request for consultations and a panel may be requested after 20 days from receipt of the initial request. DSU, Art. 4, subsec. 8.

(50) DSU, Art. 4, subset. 8.

(51) DSU, Art. 6.

(52) DSU, Art. 7, subsec. 1.

(53) The participating state members can, if they mutually agree, choose to employ a 5 member panel if they so request it within 10 days of the establishment of the panel. DSU, Art. 8, subsec. 5.

(54) DSU, Art. 8, subsec. 7. The office of the Director General has 10 days to inform the parties to the dispute of its selections. Id. (55) DSU, Art. 12, subsec. 8.

(56) Id.

(57) DSU, Art. 12, subsec. 9.

(58) Id.

(59) DSU, Art. 17, subsec. 5. Appeals may last as long as 90 days provided that appellate panel files notice with the DSB indicating the rational and the expected date for completion. Id.

(60) DSU, Art. 16, subsec. 4.

(61) DSU, Art. 17, subsec. 14.

(62) The eighteen month figure includes the possibility of an appeal. In the event that no appeal is taken by the parties to the dispute, the time period is reduced to 15 months. DSU, Art. 21, subsec. 4.

(63) DSU, Art. 17.

(64) DSU, Art. 8, subsec. 1.

(65) DSU, Art. 6, subsec. 1.

(66) DSU, Art. 16, subsec. 4.

(67) DSU, Art. 17, subsec. 14.

(68) DSU, Art. 21, subsec. 3. If the affected party claims that remedies can not be undertaken immediately, the affected party has a reasonable time in which to come into compliance with the decision of the panel. Article 21 outlines the procedures for determining what constitutes a reasonable period under the circumstances.

(69) The matter is returned to the panel which issued the original report whenever possible. DSU, Art. 21, subsec. 5.

(70) DSU, Art. 22.

(71) DSU, Art. 22, subsec. 1.

(72) DSU, Art. 22, subsec. 2.

(73) Id.

(74) Art. 22, subsec. 3 states in part:

In considering what concessions or other obligations to suspend, the complaining party shall apply the following principles and procedures:

(a) the general principle is that the complaining party should first seek to suspend concessions or other obligations with respect to the same sector(s) as that in which the panel or Appellate Body has found a violation or other nullification or impairment

(b) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to the same sector(s), it may seek to suspend concessions or other obligations in other sectors under the same agreement

(c) if that party considers that it is not practicable or effective to suspend concessions or other obligations with respect to other sectors under the same agreement, and that the circumstances are serious enough, it may seek to suspend concessions or other obligations under another covered agreement

(d) in applying the above principles, that party shall take into account:

(i) the trade in the sector or under the agreement under which the panel or Appellate Body has found a violation or other nullification or impairment, and the importance of such trade to that party

(ii) the broader economic elements related to the nullification or impairment and the broader economic consequences of the suspension of concessions or other obligations

DSU, Art. 22, subsec. 3.

(75) The total value of the concessions suspended must not exceed the level of harm caused to the affected state. DSU, Art. 22, subsec. 4.

(76) The entire arbitration concerning a challenge to withdrawal of concessions must be complete within 60 days of the end of the period set for abiding by the original panel report. DSU, Art. 22, subsec. 6.

(77) For example, different rules exist for the various systems of American criminal justice than for civil adjudication in comparable jurisdictions because the objectives of the two systems are disparate. Though both systems are concerned with procedural fairness, the criminal adjudicatory approach addresses issues of the relationship of government power to the individual to a far greater extent than the civil system.

(78) DSU, Art. 3, subsec. 2.

(79) It is conceivable that the objectives of the World Trade Organization are themselves seriously flawed. The likelihood, however, that such a significant change is appropriate is small. The possibility that such a change will have an impact on the dispute resolution mechanism is still smaller. As a consequence, any discussion of such a possibility is an exercise in speculation and outside the scope of this article.

(80) The Parties to this Agreement, Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income mad effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development, WTO Agreement, Preamble.

(81) “Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system …” Id.

(82) Id.

(83) Recognizing further that there is need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development, …. Id.

(84) The substantive rules contained within the WTO Agreement have engendered considerable discussion in the literature. See, e.g., Joel P. Trachtman, The Domain of WTO Dispute Resolution, 40 HARV. INT’L L.J. 333 (1999)

(85) PETERSMANN, supra note 45, at 85.

(86) PETERSMANN, supra note 45, at 85.

(87) Komuro, supra note 16, at 103.

(88) ERNST ULRICH PFTERSMANN, Strengthening the GA TT Dispute Settlement System, in THE NEW GATT ROUND OF MULTILATERAL TRADE NEGOTIATIONS: LEGAL AND ECONOMIC PROBLEMS 330 (Petersman & Hilf eds., 1988).

(89) For example, in 1955 the United States government was able to obtain a waiver concerning restrictions on agricultural products despite the direct violation of GATT principles given the perception that the agreement’s largest trading partner would be forced to abandon the GATT or act openly as a scofflaw. See Jon G. Filipek, Agriculture in a World of Comparative Advantage: The Prospects for Farm Trade Liberalization in the Uruguay Round of GATT Negotiations, 30 HARV. INT’L L.J. 123, 137-38 (1989). The U.S. example resulted in a general deterioration of GATT principles in the agricultural sector. Miquel Montana I Mora, supra note 15, at 120.

(90) DSU, Art. 3, subsec. 6.

(91) Komuro, supra note 16, at 103.

(92) DSU, Art. 8.

(93) Panels shall be composed of well-qualified governmental and/or non-governmental individuals, including persons who have served on or presented a case to a panel, served as a representative of a Member or of a contracting party to GATT 1947 or as a representative to the Council or Committee of any covered agreement or its predecessor agreement, or in the Secretariat, taught or published on international trade law or policy, or served as a senior trade policy official of a member. DSU, Art. 8, subsec. 1.

(94) DSU, Art. 4, subsec. 10.

(95) DSU, Art. 21, subsec. 7.

(96) DSU, Art. 21, subsec. 8.

(97) DSU, Art. 27, subsec. 2.

(98) Id.

(99) DSU, Art. 3, subsec. 12.

(100) Decision of 5 April 1966, B.I.S.D. 14S/18 [hereinafter the “Decision”].

(101) Id.

(102) DSU, Art. 12, subsec. 10.

(103) DSU, Art. 8, subsec. 10.

(104) DSU, Art. I2, subsec. 10.

(105) DSU, Art. 24, subsec. 2.

(106) DSU, Art. 24, subsec. 1.

(107) Id.

(108) Id.

(109) WTO, Trading into the Future–disputes overview, http://www.wto.org/english/thewto_e/whatis_e/tif_e/displ_e.htm (visited Sept. 15, 2001).

(110) Bernard M. Hoekman and Petros C. Mavroidis, WTO Dispute Settlement, Transparency and Surveillance, p.2 (Nov. 19, 1999) http://www1.worldbank.org/wbiep/trade/papers_2000 /whatis_e/tif_e/displ_e.htm

(111) Marc L. Busch and Eric Reinhardt, Testing International Trade: Erapirical Studies Of GATT / WTO Dispute Settlement, p. 10 (Nov. 22, 2000) http://userwww.service.emory.edu/~erein/research/titl.pdf.

(112) Id.

(113) James C. Hecht, Part I: Review Of The Dispute Settlement Understanding (DSU): Panel I B: Stage II–Operation of Panels: Operation of WTO Dispute Settlement Panels: Assessing Proposals for Reform, 31 L. & POL’Y INT’L BUS. 657,660 (Spring 2000).

(114) Anthony DePalma, U.S. and Europeans Agree on Deal to End Banana Trade War, N.Y. TIMES, Apr. 12, 2001, at CI.

(115) Hecht, supra note 113, at 660.

(116) Id.

(117) John Kingery, Part I: Review Of The Dispute Settlement Understanding (DSU): Panel I B: Stage II–Operation of Panels: Commentary: Operation of Dispute Settlement Panels, 31 L. & POL’Y INT’L BUS. 665, 667 (Spring 2000).

(118) DSU, “Working Procedures,” App. 3, para. 12, subsec. (k).

(119) Kingery,, supra note 117, at 667.

(120) There may be circumstances in which state parties may choose, in the interests of international relations or cost, to remain outside of a particular panel proceeding yet strongly desire to see other state members move a complaint to its conclusion. The policy benefits of this approach, however, are tenuous at best. Changes to the approval process that encourage state members to resolve their trade disputes in a transparent manner should be supported. In addition, the financial costs of participating as a party in such situations are relatively nominal as other, wealthier states would be carrying the predominant burdens of mounting the challenge.

(121) RESTATEMENT (THIRD) OF THE FOREIGN RELATIONS LAW OF THE UNITED STATES, [section] 102 at 24 (1987). See also U.N. CHARTER art. 92, 59 Stat. 1055, 1060, 3 Bevans 1179, 1186.

(122) For a more complete discussion of the implications of de facto stare decisis see Raj Bhala, The Myth about Stare Decisis and International Trade Law (Part One of a Trilogy), 14 AM. U. L. REV. 845 (1999). See also Adrian T. L. Chua, Precedent and Principles of WTO Pand Jurisprudence, 16 BERKELEY J. INT’L L. 171 (1998).

(123) Opposition to stare decisis doctrine extends in some influential quarters beyond the notion of traditional stare decisis to the de facto variation practiced by the WTO.

We are struck by the very high level of trade dispute settlement cases being handled in the WTO. In one sense, this is a sign of the success and effectiveness of the new system which emerged from the Uruguay Round. It is notable that developing countries are making increased use of the system as complainants. Our concern is that the dispute settlement system is being used as a means of fining out gaps in the WTO system been put in place by its member governments or, second, are the subject of differences of interpretation. In other

(124) “‘Standing to sue’ means that [a] party has sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy.” Sierra Club v. Morton, 405 U.S. 727, 92 S.Ct. 1361, 1364, 31 L.Ed.2d 636 (1972).

(125) WTO Panel, EC–Bananas WT/DS27/R/ECU, WT/DS27/R/GTM, WT/DS27/R/MEX,WT/DS27/R/USA (May 22, 1997)

(126) Id.

(127) Andrea K. Schneider, Democracy And Dispute Resolution: Individual Rights In International Trade Organizations, 19 U. PA J. INT’L ECON. L. 587,609 (Summer 1998).

(128) Id. at 627.

(129) Id.

(130) Philip M. Nichols, Participation Of Nongovernmental Parties In The World Trade Organization: Extension Of Standing In World Trade Organization Disputes To Nongovernment Parties, 17 U. PA J. INT’L ECON. L. 295 (1996).

(131) Id. at 327.

(132) Schneider, supra note 127, at 632-37.

(133) Article 14 states:

1. Panel deliberations shall be confidential.

2. The reports of panels shall be drafted without the presence of the parties to the dispute in the light of the information provided and the statements made.

3. Opinions expressed in the panel report by individual panelists shall be anonymous. DSU, Art. 14.

(134) Id.

(135) DSU, App. 3, Para. 2.

(136) DSU, App. 3, Para. 3.

(137) Id.

(138) Id.

(139) DSU, App. 3, Para. 10.

(140) DSU, Art. 4, Para. 6.

(141) See Jeffrey Waincymer, International Economic Law: Transparency of Dispute Settlement within the World Trade Organization, 24 MELB U. L. REV. 797 (2000)

(142) DSU, Art. 8, Para. 6.

(143) Id.

(144) Kingery, supra note 117, at 666.

(145) Id. at 667.

(146) Id.

(147) Id.

(148) Id.

(149) Working Procedure of the Appellate Body of the WTO, “Working Procedures for Appellate Review,” Annex II, Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement of Disputes, Article V, WT/DSB/RC/1 (96-5267), 11 Dec. 1996. Reprinted in PETERSMANN, supra note 44, at 331,332 http://www.wto.org/english/tratop_e/dispu_e/rc_e.htm. (visited Sept. 15, 2001). [hereinafter the “Rules of Conduct”].

(150) Rules of Conduct, Art. VII, subsec. 2.

(151) Rules of Conduct, Art. VII, subsec. 8.

(152) Rules of Conduct, Art. VII, subsec. 14-17.

(153) Rules of Conduct, Art. VII, subsec. 12.

(154) Rules of Conduct, Art. VII, subsec. 16.

(155) Robert E. Hudec, The New WTO Dispute Settlement Procedure.” An Overview of the First Three Years, 8 MINN. J. GLOBAL TRADE 1, 34 (Winter 1999).

(156) Id. at 36.

(157) Kingery, supra note 117, at 669.

(158) Id.

(159) Id. at 669-71.

(160) Id.

(161) Id. at 665.

(162) Id.

(163) Id. at 666.

(164) Hudec, supra note 155, at 33-34.

(165) Id. at 37.

(166) Busch & Reinhardt, supra note 111, at 13.

(167) Id.

(168) Id.

(169) Id.

(170) Id.

(171) Bernard M. Hoekman and Petroc C. Mavroidis, WTO Dispute Settlement, Transparency and Surveillanre, Nov. 19,1999 http://www1.worldbank.org/wbiep/trade/papers_2000/dispute_settlement.pdf. (visited Sept. 7, 2001).

(172) Hudec, supra note 155, at 24-25.

(173) T.R.A.D.E., Developing Countries and the Dispute Settlement Mechanism under the WTO (Jan. 1999) http://www.southcentre.opg/publications/trade/trade-04.htm.

(174) Id.

(175) Id. It should be noted, however, that panels and parties have been rather accommodating in affording additional time for the consultation process and thus there may have as yet been little need to invoke formally the provisions of Article 12(10).

(176) Id..

(177) Id.

(178) Thaddeus McBride, Rejuvenating the WTO: Why the U.S. Must Assist Developing Countries in Trade Disputes, 11 INT’L LEGAL PERSP. 65, 92 (Spring 1999).

(179) Any action taken pursuant to Article 12(10) either due to consultation delays or delays occasioned by the need to accommodate preparation and presentation by developing states shall not affect the absolute time limits set for the conclusion of panel operations under Article 20(1) or combined panel and appellate procedures under Article 21(4). DSU, Art. 12, subsec. 10.

(180) European Communities–Regime For The Importation, Sale And Distribution Of Bananas, WT/DS27/AB/R, Sept. 9,1997, at 11.

(181) Id.

(182) Indonesia-Certain Measures Affecting the Automobile Industry, Report of the Panel Indonesia-Certain Measures Affecting the Automobile Industry, WTO doc. WT/DS54/R (July 2, 1998).

(183) McBride, supra note 179, at 93.

(184) Agreement Establishing The Advisory Centre On WTO Law (Seattle, signed Nov. 30, 1999, entered into force July 17, 2001) http://www.itd.org/links/char1611.doc. (visited Sept. 30, 2001).

(185) An Advisory Centre on WTO Law http://www.itd.org/links/acwlintro.htm. (visited Oct. 3, 2001).

(186) Official opening of the Advisory Centre for WTO Law (Oct. 5, 2001) http://www.wto.org/english/news_e/spmm_e/spmm71_e.htm.

(187) 1. The purpose of the Centre is to provide legal training, support and advice on WTO law and dispute settlement procedures to developing countries, in particular to the least developed among them, and to countries with economies in transition.

2. To this end, the Centre shall:

–Provide legal advice on WTO law

–Provide support to parties and third parties in WTO dispute settlement proceedings

–Train government officials in WTO law through seminars on WTO law and jurisprudence, internships and other appropriate means

–Perform any other functions assigned to it by the General Assembly. Agreement Establishing The Advisory Centre On WTO Law, Art. 2.

(188) Agreement Establishing The Advisory Centre On WTO Law, Art. 10(2).

(189) The Advisory Centre is composed of an Executive Director, four attorneys and associated support personnel. An Advisory Centre on WTO Law, supra note 185.

(190) Id.

(191) Agreement Establishing The Advisory Centre On WTO Law, Annex II.

(192) Agreement Establishing The Advisory Centre On WTO Law, Art. 7.

(193) Agreement Establishing The Advisory Centre On WTO Law, Annex IV.

(194) Id.

(195) WTO, Trading into the Future–disputes–overview, http://www.wto.org/english/thewto_e/whatis_e/tif_e/displ_e.htm. (visited Sept. 15, 2001).

(196) Olin L. Wethington, Part I: Review Of The Dispute Settlement Understanding (DSU): Panel 1 A: Stage I–Operation of Consultations, Deterrence And Mediation.” Commentary on the Consultation Mechanism under the WTO Dispute Settlement Understanding During Its First Five Years, 31 L. & POL’Y INT’L BUS. 583, 585 (Spring 2000)

(197) Carolyn B. Gleason and Pamela D. Walther, Part I: Review Of The Dispute Settlement Understanding (DSU): Panel 1 D: Stage IV–Operation of the Implementation Process: The WTO Dispute Settlement Implementation Procedures.” A System in Need of Reform, 31 L. & POI,’Y INT’L BUS. 709 (Spring 2000). Though by no means universal, there has been an unfortunate tendency for arbitration to allot the suggested fifteen month maximum time period for compliance with panel rulings and Appellate Body decisions. Id.

(198) FRIEDL WEISS, IMPROVING WTO DISPUTE SETTLEMENT PROCEDURES: ISSUES AND LESSONS FROM THE PRACTICE OF OTHER INTERNATIONAL COURTS AND TRIBUNALS 382 (2000). The GATT has resorted on occasion to calculations that are based upon measures of past harm. They involved panel decisions made between 1985 and 1995 and typically concerned matters relating to anti-dumping or countervailing duties. Id. at 384-85.

(199) Gleason & Walther, supra note 197, at 733-34. See also Serge Frechette et al., Comments: Performance of the System III: Appellate Body, 32 INT’L LAW. 747,750 (1998)

(200) Gleason & Walther, supra note 197, at 734.

(201) Weiss, supra note 198, at 392.

(202) Id.

(203) Id.

(204) Joost Pauwelyn, Enforcement and Countermeasures in the WTO.” Rules Are Rules Toward a More Collective Approach, 94 AM. J. INT’L L. 335, 347 (Apr. 2000).

(205) Id. at 344.

Lawrence D. Roberts, Assistant Professor, Legal and Ethical Studies, Fordham University