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The WTO dispute settlement system: administration, court or tertium genus?


It is an undeniable reality that some organizations exercise their powers beyond and over national governments. Most of these supranational bodies (the World Trade Organization (WTO), the World Bank, and the Codex Alimentarius Commission) have to comply with a universal set of public law principles. (2) Their action is supposed to be consistent with the principles of natural justice, their decisions have to be reasonable and fair, and the decision-maker has a duty to give reasons, and so on. The application of these principles constitutes one of the effects of a rule-oriented development of these international bodies, and it can be considered the outcome of the judicial process of their original international paradigm.

The growing role of the rule of law in this context is also reflected in the creation of more and more sophisticated dispute settlement bodies, which perform their adjudication powers applying procedural and substantive rules of the Western legal tradition. They make their decisions using techniques that are not so different from those used by national courts and tribunals. Looking at these features, some of these international organizations are commonly called global or international administrations. (3) However, there is no concordance on this definition yet. Namely, international mechanisms and relationships existing between the parties involved do not seem to be consistent with the supposed administrative nature of the organizations; furthermore, it is difficult for sovereign national governments to accept the idea of administration by an international organization.

This project aims at analyzing the status of the judicial process in the WTO in order to verify if it is possible to find a typical administrative law relationship between the Member States and the international organization. Specifically, I will try to single out what kind of power is exercised, its possible classification (adjudicatory function, judicial power, or something else?) and the mechanisms of the implementation of the Dispute Settlement Body (DSB) decisions.

As the WTO does not have proper executive powers, and because of the persistent prominent role of its members in the lawmaking process, my research focuses on the adjudication proceedings of the Dispute Settlement System (DSS) in order to verify if--when member states are addressed by WTO decisions--the exercise of typical administrative powers occurs. Moving from the fundamental features of the system, this project aims at answering the following questions: 1) can the decisions adopted in the DSS be considered administrative decisions; 2) do we have to consider them judicial decisions; or 3) do we have other choices beyond these alternatives?

To answer these questions, we have to address a preliminary methodological question, clarifying the concepts of "administration" and "court" in order to apply them in this context.

In the global dimension, we need to consider different contents and definitions of administration, from the civil law concept (connected to the idea of authorities invested in the protection of public interest) to the common law concept (a neutral and arbitral administration that adjudicates with formalized procedures between conflicting interests), looking for a universal definition that includes both normative and adjudicatory elements. (4)

The same has to be done with the concept of court: domestic law and international law single out different features or patterns of the idea of court, but for our goals we conventionally consider a court an independent body that applies the law on the ground of legal arguments and whose decisions produce binding effects on the disputing parties.

A. The World Trade Organization and Its Dispute Settlement System: A Brief History

The history of the WTO begins in 1994, but the transformation of the world trade regulation occurred over the entire forty-seven year General Agreement on Tariffs and Trade (GATT) operation (from 1947 to 1994). (5) Nevertheless, the 1994 WTO Treaty was very important because it led to the institutionalization of the GATT and it established the foundation for a new organization with legal personality, the WTO. (6)

Before this institutionalization, no administrative machinery existed; yet in 1947, GATT articles XXII and XXIII established that if a violation of an agreement occurred, the contracting parties had to mutually settle any disputes without the possibility of applying before a court or another dispute settlement body. The Interim Commission of the International Trade Organization (ITO) provided the administrative services, and the intergovernmental meetings between the contracting parties were responsible for direction and oversight. (7)

The GATT system was like a club, in which contracting parties mutually recognized principles and rules, settling their disputes diplomatically. (8) In 1952, panels were introduced for the first time, and consequently, disputes were assigned to these impartial bodies with the exclusion of the litigant parties. The use of panel proceedings marked an important shift in the GATT dispute settlement history, even though for a long period of time the member states were reluctant to show a significant amount of confidence in this new legal mechanism.

The introduction of panel practice constituted an effort to give WTO members more objectivity in dispute resolution and to strengthen their legal obligations. During the Tokyo Round, some proposals were made from the United States to improve the panel procedural rules and to increase the predictability of the DSS. However, most of the limits of the prior GATT system remained and the Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance, (9) adopted on November 28, 1979, did not bring about a real systemic reform.

Nevertheless, from this moment until the Uruguay Round, the question of the nature of the dispute settlement system became a crucial issue in the debate within the WTO. Two opposite directions were emerging. On one hand, the supporters of procedural legalism wanted to strengthen the system's judicial process with more formalized procedural rules, introduce a general duty to give reasons, create modified appointment mechanisms for panellists, and so on. On the other hand, supporters of the diplomacy paradigm tried to obtain more procedural flexibility and proposed to facilitate political and diplomatic assessment of the disputes.

With the Uruguay Round, the procedural legalism direction prevailed, and the Understanding on Rules and Procedures Governing the Settlement of Disputes improved the legal standards of the proceedings. The powerful expression of this trend was highlighted by the creation of a permanent Appellate Body in the dispute settlement system. (10) More specifically, deficiencies and faults of the panel process were corrected, rigorous terms were established for the assessment of the panel, and the entire dispute system was streamlined. Most importantly, the right to veto the establishment of a panel or the adoption of its rulings was eliminated, and the Dispute Settlement Understanding (DSU) demanded a negative consensus of all members in order to block the process. (11)

The judicial process of the panel procedures and dispute settlement mechanisms has not been completed: it must face the continued importance of the diplomatic habits and consequent practices of the WTO players. (12)

Notwithstanding this diplomatic ethos, the DSU created a dispute settlement system that is based on third and impartial bodies, which shifted the adjudicatory function partially away from and beyond the WTO members. (13)

B. The Dispute Settlement System Structure

1. A Two-Stage Process of Dispute Resolution

There are two stages in the DSS. In the first stage, the dispute is assigned to a panel; in the second stage, an appeal from the panel's decision may be made to the Appellate Body. (14)

Nevertheless, the dispute may be settled before a panel is established, within a process of consultation created ad hoc in order to negotiate a mutual solution. Article 3(7) of the DSU gives the DSS a positive and consensual definition of the case, and states that "a solution mutually acceptable to the parties ... is clearly to be preferred." (15) The idea that negotiated solutions are preferred is reflected by the fact that an attempt at conciliation must be made before the panel process may begin. (16) Yet, in order to prevent the possibility that these consultations may delay the process coming before the panel, the DSU establishes strict deadlines for the conciliation attempt. (17)

The failure of conciliation entitles the complaining party the right to apply for the appointment of a panel. (18) The Dispute Settlement Body (DSB) plays a crucial role in the decision-making process of both the panel and the Appellate Body. This body is nothing more than the General Council in a different guise. Beyond its panel establishing power, it has the authority to adopt and supervise the panel's decisions and recommendations, and to authorize the suspension of concessions and other obligations of the WTO. (19)

In this way, the dispute resolution taken by the adjudicatory bodies, temporary excluded from the Members negotiation circuit and given to third and neutral judicial bodies, comes back to the decision-making power of the contracting parties. Moreover, the subordination of the panel reports to the substantial approval of the governments was real in the widespread practice of the GATT agreements, in which the necessary conditions for the adoption of the decisions were possible only with the unanimous approval by all of the states in the DSB. However, the actual order was completely changed after the Uruguay Round negotiations. A decision of the panel or the Appellate Body is adopted by the DSB unless there is a unanimous vote against its adoption. (20)

Reversing the consensus criteria from assent to dissent made the right of adoption of the decisions finally possible in practice. Before the reversal, it was almost always impossible to adopt a decision due to the presence of the winning member in the needed assent unanimity. This also allowed the panel to gain independence from the judicial function that it and the Appellate Body exercise in the political-negotiatory dimension. (21)

2. Panel and Appellate Body Composition and the Secretariat's Role

The Secretary General nominates panel components (members) and chooses three individual panelists from a list of experts. (22) There is a considerable degree of discretion when choosing components that is conditioned only by a few stipulations. One of these relates to the inclusion criteria in the panel that is deciding a dispute between two developed countries of a component coming from a developing country. (23) This political-diplomatic dimension of the nomination, together with the fact that most panel members are chosen among diplomats (with little legal background), prohibits a full correspondence between the system's judicial process and the underlying legal culture. (24)

The Appellate Body is a different matter. Its seven components have recognized authority, expertise in the field of international trade law, and have been nominated by the DSB. Each nomination lasts for four years with the possibility of being reappointed only one time. Decisions are made by bodies composed of three components. The Appellate Body's different nomination and membership conditions ensure a greater independence from the interested disputing countries and from the political-diplomatic Secretariat representatives. Not surprisingly, there is much argument over whether the Appellate Body can be likened to a true international court. (25)

3. Fundamental Features of the Panel Process: Standing, Evidence, Burden of Proof

Standing is a useful reference to measure a judicial system's degree of openness. In the DSS field, the standing necessary to request the establishment of a panel is recognized when an interested party believes that there has been a violation of an agreement, even between other parties, and judges that some usefulness will be derived from the panel. (26) According to the Appellate Body's jurisprudence, a country should have considerable discretion when evaluating whether a usefulness connected to the undertaken action exists or not (self-regulation). (27) The Bananas case is emblematic of this approach whereby the Appellate Body used such criteria to admit the United States as a claimant to show that it could be a "potential banana exporter," even though the European Community raised a lack of standing argument because the United States had never exported bananas into the European Community.

When observing the case law on standing, it is not necessary to show any actual damage; rather a WTO member need only demonstrate a strong possibility that damage may take place. (28) The request to the panel must be written in such a way as to identify the contested measures (in reference to the violated provisions) and to illustrate the legal arguments of the claimant. The clear and unambiguous indications of the violation (terms of reference) appear fundamental for two reasons. One, it is necessary in order to allow an efficient defense for the counter-party (due process), and secondly, to identify panel jurisdiction. Thus, the indication cannot be unspecific, but rather must pertain to the specific violated dispositions. In fact, the panel must decide only on the dispositions contemplated by the party, without having to discover any other dispositions of the agreements.

In light of this request, the panel should proceed to fact-finding and add its conclusions to allow the DSB to formulate its own recommendations and decisions about the case. Technically, the panel assists the DSB in fulfilling its responsibilities according to a model that brings to mind the justice retenue of the French conseil d'etat. (29) In fact, the panel is the body that provides the legal consultation that is necessary to resolve cases under DSB jurisdiction.

The burden of proof is on the complaining party according to the principle established by the Appellate Body in the Shirts and Blouses case, (30) which references the general principle that is applicable in the context of national and international courts. The panel has a considerable margin of discretion over the allegations of the parties. The panel's only limitation is when it makes an insufficient consideration or a misrepresentation of the facts, which is considered an egregious error that demonstrates bad faith. (31)

Even if the panel does not take into consideration certain elements of the evidence, the fact findings are not subject to Appellate Body review, which gives substantial deference to the factual conclusions reached by the panel. If we use the categories that are customary in the jurisdictional field, we could say that the Appellate Body assumes the role of a "cassation court" rather than as a court of appeal in regards to the panel's work. Moreover, the Appellate Body only makes substantial revisions of questions of law that were decided by the panels. (32)

4. The Power of Review of Legal Issues of the Appellate Body

If the level of deference of fact finding seems high, to the point that the appealing body cannot be considered a court of appeal, the review of the questions of law becomes more intrusive, even if in principle it extends only to the legal arguments that were developed by the panel and contained in the final report. (33)

This supervision over the errors of law by the panels, similar to that practiced by the court of appeals over the inferior courts of the United States' system, (34) evidently assigns the Appellate Body an important role in interpreting the rules of the agreements. In fact, because of its apical position in the DSS, the Appellate Body assures dispute resolution, and therefore, a protection of the natural rights guaranteed in the agreements, but also acts as a guarantor of the certainty and predictability of international trade rules. (35) This suggests an interpretive role of the Appellate Body that is similar to the role assumed by the European Community's Court of Justice in creating the fundamental principles and features of international trade law. (36)

But such an analogy cannot be substantiated. In fact, Article 9(2) of the WTO agreement assigns the ministerial conference and the General Council "the exclusive authority" to interpret WTO agreements and the other multilateral commercial agreements, (37) which, in these terms, denies the Appellate Body the role of institutional interpreter. In practical terms, however, regardless of the abstract recognition of this interpretive power of the General Council, the complexity of the political decision making process and the difficulty to reach a three quarters majority by the Member states, assigns de facto to the Appellate Body the power to definitively interpret the agreements' dispositions. (38)

Moreover, the Appellate Body can review the legal significance of facts taken by the panel. According to the decision taken by the Appellate Body in the Hormones case, while a substantial deference is reserved for the factual conclusions reached by the panel, the legal significance of the facts (the mixed questions of law and fact) would be subject to review. (39)

When discussing decisional power, Article 17(13) of the DSU establishes that the Appellate Body can confirm, modify or reform panel decisions. (40) Remand to the panel, however, does not seem possible, so that the Appellate Body has definitive dispute resolution power. (41) The fact that the Appellate Body does not have the power to remand may cause inadequate outcomes if a procedural error occurred before the panel, for example, if a fact, which was relevant to the decision, was missing. At this point, it would be difficult for the Appellate Body to reach the fact findings of the dispute because of its role as a "cassation court." (42)

5. Open questions: Amicus Curiae Briefs and the Confidentiality Problem

The panel and the Appellate Body proceedings present several analogies to court proceedings. All the same, some features of the procedural discipline prove problematic and are not subject to legal logic. One element of differentiation, which is actually frequently debated, is constituted by the functional limitations in order of the admissibility of amicus curiae briefs. (43) A second element is the fact that the proceedings have a tendency to be confidential, rather than open to the public.

Regarding the first question, the position the Appellate Body in the Shrimp case took was fundamental. (44) In fact, the panel's conclusions were subject to Appellate Body review because the panel had not considered, at the end of its decisions, some elements that a non-governmental organization presented in an amicus curiae brief. (45) In particular, according to the Appellate Body, having not considered these elements relevant, the panel had failed to fulfill its obligation to objectively verify the facts necessary to make a decision. (46)

The impact of the DSS's decisions and their importance in representing the interests of the dispute resolution process is significant; prior to the system, it was not possible for non-WTO member subjects to participate in a dispute or even to influence a possible decision. (47)

Nevertheless, looking at the case law, the amicus curiae brief was admitted with caution into the dispute resolution system, most likely due to a WTO General Council recommendation. If, in fact, amicus curiae briefs were admissible in panel proceedings, their relevance would be above all guaranteed, letting the panel have discretion to accept them and decide whether to consider them in the final report. Therefore, whoever (an individual or non-governmental organization) wants to submit a brief as amicus curiae to the panel has neither a legal right for it to be accepted into the process nor, once accepted, a guarantee that it will bear on the fate of the dispute. (48)

Furthermore, according to the Appellate Body's clarification of the Asbestos case, (49) the party who wants to present an amicus curiae needs to request leave through a process that seems significantly burdensome for the interested party. (50) In fact, the requesting party must specify its interests in the dispute, the nature of its activity, its financial sources, the specific legal question that it wishes to address, a declaration that explains how any possible conclusions could contribute to the dispute, and why it would not be repeating the parties' conclusions and, finally, a declaration concerning a possible conflict of interest. (51) Moreover, the other parties of the dispute have a full right to reply to the amicus curiae arguments and conclusions.

The cautious conditions for admitting amicus curiae to be admitted in the DSS most likely expresses the pursuit of a balance between the opposing interests existing inside the system. (52) On one hand, the Member states want to deny the entry of interested third parties into the disputes in order to avoid a potential politicalization of the decision arena, or moreover, an overload of the dispute settlement system. On the other hand, the more that the DSS decisions affect not only trade interests and prove to have a global impact, the more it becomes difficult to justify that these decisions are formed without the intervention of new players with special interests (environmental, health, etc.). (53)

In regards to the second question, concerning the public or private nature of the proceedings, the dispute resolution system follows different rules than the jurisdictional bodies. National and international courts generally form their decisions after public hearings with witnesses and evidence, and at the end of the process, they adopt their decisions in documents subject to publicity. (54) The panel and Appellate Body, on the other hand, do not abide by these rules. The deliberations of the panel are confidential and the final report is written without the presence of the litigant parties. (55) Article 17(10) does not provide for public hearings, establishing that the proceedings before the Appellate Body remain confidential and that the report be made without any assistance from the parties. Furthermore, the opinions of the panel and Appellate Body components must remain anonymous. (56)

The reasons for this opacity most likely come from the negotiable and diplomatic features of the dispute resolution system. The level of secrecy of the proceedings could be justified by the preference for a conciliatory decision of the dispute. (57) It seems questionable, however, that this feature is compatible with the dimension and scope assumed by the DSS or with the ultracommercial importance and changed context of the disputes. As previously mentioned, in a rising number of cases the decisions adopted by the DSS, when applying the rules of the agreements, are not limited to individualized findings of whether a particular piece of behavior conformed to international trade law, but end up evaluating national and international policies in various fields, which facilitates or penalizes the specific values that these fields incorporate. (58) In this case, market regulation should not be the only objective in mind. Instead, it should intertwine with the need for solutions that are just for other interests and people that are affected by the decisions. The fact that the reports are circulated among all WTO members in order to solicit any eventual comments does not seem to sufficiently guarantee the system's transparency or an understanding of the WTO circuit from abroad.

6. The Crucial Issue of the Enforcement Proceedings and the Reemergence of the Diplomatic Ethos

The dispute resolution system has an exclusive and obligatory nature, (59) which is typical of its jurisdictional function. The governments have, in fact, an obligation to address the DSS when declaring a violation of a WTO agreement disposition and cannot resort to other national or international courts. (60) When a panel or Appellate Body reaches a decision, the shortcomings of the jurisdictional features of the system surface because until a decision is adopted by the DSB (the political body that represents the governments), it is not binding. In other words, the panel and Appellate Body recommendations become obligatory only when the DSB adopts them. The DSB must first adopt a decision and then address its recommendations to the losing party in order to enforce State compliance with the DSS's ruling. (61) In that sense, even if the DSB does not have the direct power to revise or modify panel and Appellate Body decisions, it is only after its formal deliberation to adopt a decision that the dispute resolution procedure comes to a close producing a binding outcome. The definition of the controversy, accordingly, is assigned to third party arbitrators--who, other than establishing the obligations of the parties, can suggest to the losing party, even in a nonbinding manner, the concrete way by which to comply--but formally refers to a political body, the DSB, which makes the rulings obligatory and surveys their implementation. (62)

From a jurisdictional point of view, this feature of the dispute resolution system is obviously not easily reconcilable. Although the international courts, in general, do not have the power to enforce their decisions, the binding nature of their decisions is beyond doubt.

The executive phase is regulated by Articles 21 and 22 of the DSU, which provide two distinct cases: the voluntary implementation of the recommendations, and the procedure for coercive implementation. A prompt compliance with the recommendations is considered a fundamental condition for the proper functioning of the system: (63) the losing party has to communicate to the DSB, within 30 days of the report's adoption, its intention regarding the recommendations. If a state is unable to immediately comply with the recommendations, it may be granted a "reasonable period of time" in order to carry them out. (64)

The adequacy and compatibility of the losing state's implementation may be contested in the same dispute resolution system with an appeal to the compliance panel, which may possibly coincide with the original panel that decided the disagreement. (65) After the losing party receives the ruling, it has 90 days, unless a different period is set by the DSB, to express its reasons for any further delays. (66) Furthermore, each WTO member has the right to go before the DSB, which acts as a special watchman over the execution of the decisions, and to question the adequacy of the implementation by the losing state. Moreover, the DSB continuously monitors the losing party and performs an initial check on the state of compliance six months following the fulfillment date. (67)

If a state voluntarily disregards a DSB ruling, Article 22 provides provisional measures (compensation, concession suspension and other obligations deriving from the agreements) in order to remediate a situation of non-fulfillment. (68) In particular, if a losing member does not comply with the requested implementation measures (by the deadline), the state must negotiate, on request by the interested party, a compensation with the winning party within 20 days of the expiration date. Furthermore, if this agreement is not respected, the interested party can ask the authorities to impose countermeasures, such as concession suspensions or other obligations provided by the WTO agreements. (69)

It is not clear if the request for the authorization of the countermeasures presupposes or not a decision from the compliance panel, which assesses the inadequacy of the losing state's compliance. (70) While waiting for an amendment that will clarify Article 21(5) (compliance panel's mandate) and Article 22(6)(the DSB's authorization of countermeasures) it has been suggested to distinguish between the case in which the losing state does comply with the implementation measures and the situation in which the state did, indeed, at least make an attempt to follow the decision. (71) In the first case of total inertia of the state, it is possible to address the DSB to request countermeasure authorization, while in the second case, it is first necessary to go to the compliance panel in order to determine if the party's compliance was or was not adequate in respect to the obligations provided in the recommendations.

In either case, the countermeasure authorization will be approved, unless the DSB unanimously opposes it. Nevertheless, if the interested state contests the level of the suspensions or a lack of respect for the procedure and principles found in Article 22(3) (72) (principle of gradualness), the question will be assigned to an arbitrator (the original panel if possible, or an arbitrator that has been nominated by the Secretary general), who will decide within 60 days of the compliance deadline. (73) This implicates that the panel, which originally decided the dispute, can subsequently find itself with the responsibility to act as the compliance panel, which decides on the adequacy of the losing state's implementation. Moreover, the panel may also end up as the arbitrator, under Article 22(6), that decides the proportionality, gradualness and compatibility of the countermeasures put into effect by the winning state due to the disregard for the implementations of the initial recommendations by the losing state. The object of the panel's decision, in this case, is to balance the positions of the disputing parties. After the arbitrator's decision, the DSB must be quickly informed and, if requested by the interested party, can authorize the suspension of the concessions or of the obligations contemplated in the agreement, unless there is a unanimous dissent.

7. Modification Propositions and Possible DSS Developments

The analysis of the dispute resolution system and its mechanisms of action confirm that it has reached an elevated degree of "juridification." The creation of a two layer system of judicial review, on the degree of jurisdiction of the arguments developed by the judging bodies and on the substantial necessity and binding character of the decisions (made thanks to the consensus rule) bring to mind a system that protects jurisdictional features. (74) However, the passage towards a global trade court has not been reached and it is not certain that it will ever be accomplished. Several elements of the system remain that provide evidence of the original negotiatory and diplomatic features, and the reform propositions in discussion today reveal uncertain future developments.

After the 1997-98 negotiations and following the 2003 Doha Round, a revision of the DSU (75) was put on the agenda, but so far it has proven quite troublesome to complete. The difficulty of agreeing on the system's modifications reflects the diverse, fundamental philosophies of the negotiators, which reside in a balance between an ulterior strengthening of the jurisdictional nature (rule-oriented) and a substantial reinvigoration of the negotiation and diplomatic model (power-oriented). (76)

To strengthen the juridical process, several propositions have been made: substantial juridification of the conciliations, which would make them transparent the provision of remedies in case of violation; creation of a permanent panel, like a court of first instance, that would make the first level of judgment independent, exempting decisions from member interference through the Secretariat resolution of the problems presented by Articles 21(6) and 22 of the DSU with regard to the implementation recommendations (sequencing issue); strengthening of the executive phase, with importance placed on balancing rights and party obligations; greater interior and exterior transparency (also achieved through the strengthening of third party rights); and assignation of the power of remand to the Appellate Body panel. (77)

While there has been a move toward an expansion of the negotiation and diplomatic roles of the dispute system, other measures moving in the opposite direction have also been proposed. One such measure is an automatic time limit for making the request, or more manageable conditions for its withdrawal, which would turn the complaint into an important tool on the negotiations table. Another measure proposes to introduce separate panellist opinions with consequences relevant to their independence from the national governments. The United States and Chile, moreover, have asked to give parties the right to consensually eliminate the panel and AB conclusions (thus returning the dispute to the parties' will), to diminish the importance of the judging bodies and to further reduce the transparency of the procedures. It is also proposed that the parties have the possibility to suspend an appeal, to arrange for procedural terms, and to intervene in the procedures, according to the mutual agreement rule, which would make it more flexible in respect to the political-diplomatic power of the negotiations. (78)

If these last modifications are realized, a better balance between the rule-oriented and power-oriented components would be constructed. According to Thomas A. Zimmermann's observations, "the relative success and well-functioning of the dispute settlement system with its adjudicate bodies on the one hand, and the weakness of the consensus-based political decision-making in the WTO on the other, is leading to a serious imbalance."

C. Court, Arbitrator or Tertium Genus?

On one hand, the difficulties of the DSU reform process express the uncertainty on the right direction to follow, and on the other hand, a clear level of satisfaction from the obtained results, which leads to procrastination and makes the modifications and adjustments less urgent. When one observes today's dispute resolution system, however, the image is not an accurate individualization or representation of its true nature, even if a few details and features seem adequately in focus and recognizable. One thing that is plainly discernable is the existence of a process in action which has a subject in motion that has an uncertain shape.

Several of the DSU rules give the impression, due to the formerly examined reasons, that we are in an international jurisdiction centered on an appellate body that is the permanent judging body of appeal regarding the panel's decisions and its role as privileged interpreter of the WTO agreements. (79) Many other features, however, reject that the system has a jurisdictional connotation. There is, in fact, a lack of essential elements.

Above all, the independence of the judging bodies is not assured. The panel's nomination mechanisms do not guarantee independence. Even if the AB nominations follow rules that appear more capable of assuring impartiality and independence, the panel has the last word on the fact finding and the appellate body grants substantial deference. (80)

The entire structure of the system then seems formally contrived, when viewing the panel and appellate body as special dispute consultants rather than judges; they formally assist the DSB that represents the member states when exercising its function to resolve the conflicts. If the rule of negative consensus makes adoption of recommendations from the judging bodies of the DSB automatic, the overall establishment will not be easily reconcilable with the idea of an international court. In this sense, the adjudicatory function is substantially allocated outside of the negotiatory-diplomatic circuit of the litigating parties, even if the member states, acting as DSB, decide to be the formal dominus of the function of the definition of the controversies. (81)

Particularly strong is the adversarial character of the disputes. It is the parties, not the judge, who lead the process, and no superior public interests seem capable of influencing the progress of the proceedings. The complaining parties can, at any time during the process, come to an agreement, decide to give up for any reason, or consensually modify the procedural rules. These accusatory features, which have consequences beyond the bilateral nature of the dispute, seem inadequate in regards to the multilateral and complex nature (in terms of involved interests) of the multilateral public interest nature of the system. (82)

If, in fact, it is true that a certain level of confidentiality characterizes the action of other international courts, (83) the secretive nature of the proceedings appear anachronistic even under the light of the actual ultra-commercial dimension of the disputes. It is, moreover, evident that an adequate level of openness from the dispute settlement system to the outside could improve the quality of the decisions (with the admittance of amicus curiae briefs relevant to the disputes and capable of influencing them) and increase the external legitimization and accessibility of the system in the global context.

A look at the enforcement of dispute resolution decisions reveals inefficient and ineffective features. Several parties have denounced the limited prospective of forward looking remedies. (84) The violation of international obligations does not produce any consequences for the violating state by forcing them, for example, to pay for damages, but instead translates exclusively into an obligation to eliminate the illegal conduct in the future.

The system of countermeasures, then, shows its limits when a dispute is between states with different economic and commercial strength and appears incapable of guaranteeing effective protection of countries with weak economies. (85) Despite the constant preoccupation to ensure, during the implementation phase, the proportionality between countermeasures and loses, which were endured due to the violation, the system does not take adequately into account the strong discrepancies that are present at the starting point. This may be the reason that, in the face of an increase in the comprehensive number of complaints presented to the DSS, there is a decrease of complaints submitted by developing countries. (86)

D. The WTO System and Its DSS: Some Summary Reflections

In the WTO environment, it is the community of states that has the function of rule-making: the state community imposes international trade rules by negotiating agreements and modifies them according to procedures and processes that are typical of a power-oriented decisional system. The permanence of these standards constitutes a limit on an individual state's actions, not only with respect to trade, but also national politics in areas such as health, the environment, national security, and the like. (87) The member states are asked to adopt national behaviors that conform to, and are compatible with, the agreement rules. (88) In this limited sense, it is the national governments' duty to implement the rules of the WTO system. (89

Until now, the WTO has not differed from several other international organizations, originating from international agreements between national states. Particular features of the WTO come to light when a violation of an agreement occurs because the dispute is assigned to an organization, specifically the dispute settlement system, which is responsible for the adjudicatory function. In pursuit of this specific adjudicatory function, the WTO is arranged as a remedial structure, which is based on two levels of judgement that are confided to neutral bodies assigned the power to resolve disputes. As previously mentioned, this system is obligatory and exclusive. Although the remedial structure is characterized by logic and negotiatory-diplomatic features, it appears strongly juridified. The remedial structure has "emerged" from the political-negotiatory circuit dominated by the national governments. The member states have, in this sense, delegated to the DSS a central role in dispute resolution, so that it acts as a kind of "adjudicatory administrative agency" that, thanks to the particular expertise of its bodies and to the formalization of its procedures, is best equipped to decide the disputes. (90) The rigorous respect for rules and principles in terms of due process, burden of proof, and evidence, guarantees procedure very similar to that of other national and international jurisdictions. (91)

Nevertheless, for the reasons mentioned above, the rulings that resolve disputes cannot be considered judicial decisions, but rather binding rulings in the form of DSB deliberation. The DSS bodies must apply the rules of agreements when resolving disputes, interpreting and clarifying their range and significance; in this way, they are acting like judges. In light of the ambiguity of the rule, they refer to the literal interpretation and theological criteria, and often apply the principles established in the Vienna Convention. (92) Beyond providing an interpretive role then, the structure of dispositions preludes real and true balancing between opposing interests and values, which are sent to the judging bodies. According to Article XX of the GATT agreements, for example, the states can assume restrictive measures if it is necessary to protect: (a) "public morals," (b) human, animal or plant life and health, (c) patents, trademarks and copyrights, or (d) the prevention of deceptive practices. Other paragraphs pursue market limiting measures in relation to the conservation of exhaustible natural resources and products of prison labor. Analogous possibilities of market restriction are provided in other WTO agreements.

When deciding a dispute in which the interests of free trade are facing the interests connected to the protection of the environment and health, the panel and AB employ balancing techniques and a proportionality test that end up shaping the development of WTO rules. (93) It is evident that through the adoption of dispute settlement decisions, the comparison and prioritization of the interests in play are realized, and consequently, the DSS becomes a decisional forum that is crucial in deciding the fate of the system, with its openness towards extra-commercial interests and its more or less representative structure in regards to the values present in the global context. (94)

The technique of proportionality controls causes the panel and AB to consider market limitations and to disapprove as unreasonable (and thus inadmissible) those market restrictions that taken in the name of the national interests, nevertheless seem disproportional (95) because the protected value can be safeguarded with a different measure that is less restrictive (e.g., the 1990 Thai Cigarettes case (96)). In these terms, the affirmation according to which "proportionality review ... is inescapably an exercise in applied policymaking," (97) seems sharable. When the rules of the agreements disclose this type of proportionality test, the dispute resolution suggests a conspicuous degree of discretion that brings to mind the constitutional courts and, for other aspects, the public administrations' power of balancing interests. If the AB ends up to be, in substance, the last maker of policy choices due to the inefficiencies in the rulemaking processes of states that rend them unable to correct the decision adopted by the dispute settlement system then we must address the problem of legitimization and accountability of the system. This is true not only regarding member states, the direct recipients of the rulings, but also regarding other subjects (consumers, businesses, the nations' citizens) whose interests are variously touched by the adopted decisions. (98)

Consequently, it will be necessary to see if the judicial process, which has already produced significant results on the legitimacy front (with the creation of the appellate body, the prevision of impartial and expert decision makers, the respect for the fundamental principles of due process, participation, duty to give reasons and reasonableness), will continue to strengthen. If the judicial process will not strengthen, perhaps diverse development logics, characterized by the reinforcement of the negotiatory-diplomatic mechanisms, will prevail. (99)

In conclusion, the management of the disputes within the World Trade Organization has amply surpassed the first dyadic and horizontal level of dispute settlement, founded on the states' management of the disputes. The dispute settlement achieved a triadic stratum, (100) in which the disputes are obligatorily distributed to neutral bodies, chosen by the administration, that decide according to extremely formalized procedures, which are also inspired by due process.

A superior level of constitutional dispute settlement, characterized by an emancipation of the system towards a jurisdictional structure that is called upon to decide the rights and obligations of the parties deriving from a higher international law, however, cannot be located. It is not even clear if that last level will ever be formed.

Barbara Marchetti (1)

(1) I am particularly grateful to professor Giandomenico Falcon, University of Trento, and to professor Martin Shapiro, University of California, Berkeley, for their helpful comments and suggestions.

(2) Carol Harlow, Global Administrative Law: The Quest for Principles and Values, 17 EUR. J. INT'L L. 187, 207 (2006) ("a universal set of administrative law principles, difficult in any event to identify, is neither welcome nor particularly desirable; diversity and pluralism are greatly to be preferred"); see also Francesca Spagnuolo, Principi e regole del giusto procedimento tra ordinamenti nazionali, diritto comunitario e World Trade Organization: verso una "global procedural fairness"?, in, LE TUTELE PROCEDIMENTALI, PROFILI DI DIRITTO COMPARATO 367 (Alberto Massera ed., 2007) (discussing national, international laws of due process).

(3) See Benedict Kingsbury et al., The Emergence of Global Administrative Law, 68 LAW AND CONTEMPORARY PROBLEMS, 15 (2005) (discussing global administrative bodies); STEFANO BATTINI, AMMINISTRAZIONI SENZA STATO, PROFILI DI DIRITTO AMMINISTRATIVO INTERNAZIONALE (D. Giuffre ed., 2003) (discussing international administrative law); Sabino Cassese, Gamberetti, tartarughe e procedure. Standards globali per i diritti amministrativi nazionali, 3 Riv. trim. dir. pubbl. 657 (2004) (discussing global administrative law); Sabino Cassese, Il diritto amministrativo globale: una introduzione, 2 Riv. trim. dir. pubbl. 331 (reviewing global administrative law); SABINO CASSESE, OLTRE LO STATO. VERSO UNA COSTITUZIONE GLOBALE? (Editoriale Scientifica 2006) [hereinafter OLTRE LO STATO] (describing global administrative law); Giandomenico Falcon, Internationalisation of Administrative Law: Actors, Fields and Techniques of Internationalisation--Impact of International Law on National Administrative Law, 18 EUR. R. PUB. L. 217, 228 (2006) (discussing international regulation of states); Giancinto della Cananea, Paper Presented at the Meeting on La Cittadinanza Globale: Il diritto amministrativo globale e le sue Corti (Oct. 30, 2003) (describing global aspect of administrative law).

(4) Kingsbury et al., supra note 3, at 17. In the global context, the institutional landscape is more variegated than in the domestic law; even so, we can adopt a conventional definition of administrative action as "rulemaking, adjudications, and other decisions that are neither treaty-making nor simple dispute settlement between parties." Id.

(5) See Joost Pauwelyn, The Transformation of World Trade, 104 MICH. L. REV. 1, 18-21 (2005) (tracing GATT's effect on world trade).

(6) See MICHAEL J. TREBILCOCK & ROBERT HOWSE, THE REGULATION OF INTERNATIONAL TRADE 112 (2005) (noting GATT served as basis for WTO dispute settlement). The GATT initially included twenty-three contracting parties and aimed to promote free trade with the elimination of nationalistic and protective measures. Starting in the 1970's with the Tokyo Round, trade liberalization was also pursued by monitoring internal trade barriers, which were established to guarantee environmental and public health interests. See id. at 114.

(7) See TREBILCOCK & HOWSE, supra note 6, at 112 (describing GATT dispute resolution pre-WTO); ROBERT E. HUDEC, THE GATT LEGAL SYSTEM AND WORLD TRADE DIPLOMACY 68 (2nd ed. 1990) (outlining procedure set forth by GATT).

(8) See J.H.H. Weiler, The Geology of International Law--Governance, Democracy and Legitimacy, 64 HEIDELBERG J. INT'L L. 547, 554-555 (2004), available at (describing evolution of international dispute resolution). Viewing the development process of international law, we find an "initial stratum of horizontal dyadic, self-help through mechanisms of counter-measures, reprisals and the like," and over it, a "triadic stratum--through the mechanisms with which we are all familiar--arbitration, courts and panels and the like." Id. at 550. This thickening is not only due to the creation of a dispute settlement system (DSS) in which neutral and third bodies decide the disputes, but also to the related juridification process, based on the compulsory nature of the system. Id.

(9) World Trade Organization, Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance, L/4907 (1979), available at

(10) In 1981, a Legal Office was constituted in the Secretariat, as evidence of the increased role of the legal dimension in comparison with the diplomatic dimension. Pauwelyn, supra note 5, at 19; ROBERT E. HUDEC, ENFORCING INTERNATIONAL TRADE LAW. EVOLUTION OF THE MODERN GATT LEGAL SYSTEM, 70-71 (1993) [hereinafter ENFORCING INTERNATIONAL TRADE LAW]; Robert E. Hudec, The Role of GATT Secretariat in the Evolution of WTO Dispute Settlement Procedure, in THE URUGUAY ROUND AND BEYOND: ESSAYS IN HONOR OF ARTHUR DUNKEL 114 (Jasdish Bhagwatt & Mathros Hirsch eds., 1998) [hereinafter Role of GATT].

(11) This means that only with the opposition of all members can the assessment of a panel or the adoption of report be avoided (automatic right to the establishment of panel and to the adoption of ruling).

(12) Despite the transformed WTO, "the diplomatic ethos which developed in the context of the old GATT dispute settlement tenaciously persists." J.H.H. Weiler, The Rule of Lawyers and the Ethos of Diplomats: reflections on the Internal and External Legitimacy of WTO Dispute Settlement 3 (Harvard Jean Monnet Working Paper 9/00, 2000).

(13) See Pauwelyn, supra note 5, at 17-34 (discussing growth in dispute settlements); Giorgio Sacerdoti, Il sistema di soluzione delle controversie dell'organizzazione mondiale del commercio a dieci anni dalla sua istituzione, 3 LA COMUNITA INTERNAZIONALE 434 (2005) (noting through DSU we shifted from multilateral unorganized power-based system to rule-based system).

(14) It must be noted that the formal notice to the DSB of the decision to appeal impedes the DSB from adopting the decision thus making it binding for the parties. Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, Marvakesh Agreement Establishing the World Trade Organization, Annex 2, Legal Instruments--Results from the Uruguay Round, 33 I.L.M.1125 (1994) [hereinafter DSU].

(15) DSU, supra note 14, art. 3(7). The mutual dispute solution has to be consistent with the covered agreement. However, it must be shown that it did not come from any WTO body or mechanism and it must be verified as compatible with the WTO rules regarding mutual solutions. A different approach can be found in the European Community system, in which a treaty's guardian role is conferred on the European Commission.

(16) See DSU, supra note 14 (explaining procedural requirements). Technically the dispute could be considered unripe for the establishment of a panel if a consultation has not occurred. See Appellate Body Report, Mexico-Anti-Dumping Investigation of High Fructose Corn Syrup From the United States, WT/DS132/AB/R (Nov. 21, 2001) (finding panel process completed correctly). In this case, the Appellate Body established that the panel process was ripe and correctly constituted, despite the missed consultations, if the parties conduct was such to be over its right to consultations.

(17) See DSU, supra note 14, art. 4(3). Article 4(3) provides that a party has to reply to a consultations proposal within ten days from its receipt and has to enter into consultation within 30 days. Id. If it does not take part in the consultations within a mutually fixed term, the claimant has a right to apply for the establishment of the panel process. Id.

(18) See id. art. 6 (discussing procedures for establishing panels).

(19) See id. art. 2 (delineating responsibilities of DSB). Cf. Sacerdoti, supra note 13, at 438. The strengthening of the role of the political body in the WTO constitutes not a weaknesses in the system but a strength because formally the decisions declaring violations of agreements and imposing restoration were recommendations in this sense, which came from, however, a political body. Consequently, the judicial body is not the only subject that has to decide and to condemn, because the DSB, representing all the members, assumes the paternity and the responsibility of the decisions, becoming the source of compliance proceedings.

(20) See DSU, supra note 14, art. 16(4) (explaining adoption procedure for panel reports). Within 60 days from the circulation date of the decision among the Member states, that the decision, "shall be adopted at a DSB meeting unless a party to the dispute formally notifies the DSB of its decision to appeal or the DSB decides by consensus not to adopt the report." Id. (emphasis added). It is interesting to point out that the modification of the consensus rule was agreed upon following a threat from the United States to make use of section 301, which provides for unilateral commercial sanctions, arranged by internal law, every time that a state violates an agreement. The enforcement of these unilateral sanctions (laid out by Congress in 1988) is justified, according to the United States, by the extreme weakness and sluggishness of the WTO dispute settlement mechanisms. In response to this criticism, the Member states reached an agreement in 1991 to adopt the new DSU, which designed a more rigorous and restrictive dispute resolution system, which would start on the first of January, 1995. Robert E. Hudec, Broadening the Scope of Remedies in WTO Dispute Settlement, (discussing adoption of WTO dispute settlement procedure contained in DSU).

(21) Sacerdoti, supra note 13, at 435-456. Giorgio Sacerdoti writes that the lack of adoption by the Dispute Settlement Body constitutes a purely hypothetical case that has never been verified, and a security valve in the case where the conclusions of the judicial branch would be unanimously rejected with the accord of the winning state, or for the absurdity of a judgment or for some undetermined reason or political evolution of the general interests. Id. at 439. Moreover, according to P. Picone and A. Ligustro, the inversion of the consensus rule makes the recommendations formulated by the panel and the Appellate Body mere propositions, even if formally conceived, since the DSB normally assumes the final recommendations with which the parties in the controversy must comply. P. PICONE & A. LIGUSTRO, DIRITTI DELL' ORGANIZZAZIONE MONDIALE DEL COMMERCIO (Cedam 2002).

(22) The nomination is not usually contestable by the parties unless for compelling reasons. The experts are sometimes diplomatic, former Secretariat officers or trade law experts from national administrations. They need to ensure independence from judgement--they should not represent interested parties--and to guarantee varied orientations and backgrounds. TREBILCOCK & HOWSE, supra note 6, at 124.

(23) Weiler, supra note 12, at 10. Altogether the Secretariat maintains a key role in the nomination of the panelists. Id. In the author's opinion, in order to avoid too great a range of choices, some elements have to be guaranteed: a stable and limited list of nominations, the promotion of an automatic majority of the selection and the abandonment of the nationality rule that forbids that a component of a panel, which is called upon to decide particularly important questions, comes from one of the Member states in the dispute. Id. at 12; see also Patricia M. Wald, The Judicial Evolution of the WTO Appellate Body (unpublished working paper, on file with Columbia University), available at (analyzing WTO's resolution bodies from perspective of U.S. appellate judge).

(24) See Weiler, supra note 12, at 9 (commenting on dissonance).

(25) See Wald, supra note 23 (providing an interesting analysis of the WTO appellate body as compared to domestic and international courts); Weiler, supra note 12, at 10-17 (explaining WTO Appellate Body and the transition from diplomacy to law).

(26) DSU, supra note 14, art. 3(7); General Agreements on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194, art. XXII [hereinafter GATT].

(27) See TREBILCOCK & HOWSE, supra note 6, at 121 (discussing selfregulating nature of WTO members when determining if action is "fruitful").

(28) This is a very large legitimization that does not coincide with the received notion, in the adversarial process of common law. See Lawrence D. Roberts, Beyond Notions of Diplomacy and Legalism: Building a Just Mechanism for WTO Dispute Resolution, 40 AM. BUS. L.J. 511, 537-39 (2003) (discussing doctrine of standing). It does not coincide with the generally received notion of civil law either, in which an actual break in party interests is generally requested. The question of what is susceptible to generate a violation of the agreements and therefore is contestable in front of the panel, is moreover revealed. The violation can, in fact, be a product of a national legislation if this rule obliges the administration to violate the rights protected by the WTO agreements (mandatory legislation). In this case, the act undertaken that contests the legislation will be considered ripe. On the contrary, if the legislation defers judgment to the administration (discretionary legislation) and it is the concrete administrative act that affects the rights protected by the agreements, then the act will be proposed only after following the exercise of administrative activity.

(29) See, OLTRE LO STATO, supra note 3, at 47 (discussing French precedence justice retenue).

(30) Appellate Body Report, United States--Measures Affecting Imports of Woven Wool Shirts and Blouses from India, WT/DS33/AB/R (May 23, 1997). TREBILCOCK & HOWSE, supra note 6, at 128 (discussing aspects of Shirts and Blouses case).

(31) In the Thai Cigarette case, the panel violated Article 11 of the DSU by failing to take a document into consideration that was presented by the World Health Organization. See Panel Report, Thailand--Restrictions on Importation of and Internal Taxes on Cigarettes (DSIO/R-375/200) (Nov. 7, 1990) (outlining Panel's findings in case); see also Appellate Body Report, Canada--Certain Measures Concerning Periodicals, [paragraph][paragraph] 22-23, WT/DS31/AB/R (June 30, 1997)(describing Appellate Body's analysis in this case. The Appellate Body established that the conclusions on questions of law must be founded on an adequate appreciation of the facts, which comes from the preliminary instruction conducted by the panel, specifically when faced with mixed questions of fact and law, in which the judicial question appears particularly connected to the factual context.

(32) TREBILCOCK & HOWSE, supra note 6, at 132 (noting Appellate Body's adherence to factual conclusions reached by panel). This process constitutes a feature of the system that ends up favoring interests that promote market liberalization, with little consideration given to the other interests in play. Id.; Wald, supra note 23, at 23-24 (claiming that this attitude on deference is unjustifiable). Making a comparison between the deference agreed upon by the court of appeal and the district court of the United States, Wald individualizes fundamental differences. While district courts are afforded deference in fact finding due to their "superior ability to see and hear witnesses first hand," the very same circumstances do not take place in the WTO system. Id. at 24. Moreover, the panel has the responsibility to make the most agreeable solutions possible for disputes, and its nominations guarantee less independence in comparison with those of the Appellate Body. Id. All of these factors combine to make the Appellate Body's attitude on deference inappropriate in regards to the panel's factual conclusions. Id.; see also Konstantin J. Joergens, True Appellate Procedure or Only a Two-Stage Process? A Comparative View of the Appellate Body under the WTO Dispute Settlement Understanding, 30 LAW & POL'Y INT'L BUS. 193, 211 (1999) (discussing purpose of appellate review). "Like domestic appellate courts in common law countries and higher courts in civil law countries, the Appellate Body engages only in the interpretation of law." Id.

(33) See DSU, supra note 14, art. 17(6) (establishing limitations of appeals). Article 17(6) establishes, in fact, that "an appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel". Id. The appeal may regard an eventual act by the board in violation of the DSU or other rules relating to the system. The terms and procedure for the hearing are contained in the Appellate Body's Working Procedures for Appeal. Appellate Body Report, Working Procedures for Appeal, WT/AB/WP/W/9 (Jan. 4, 2005). The AB Working Procedures do not explicitly contain a distinction between questions of fact and of law. Id. In Hormones, the Appellate Body specified that they review both questions of fact and questions of law. Appellate Body Report, European Communities-Measures Concerning Meat and Meat Products, WT/DS26/AB/R, WT/DS48/AB/R (Jan. 16, 1998) (adopted Feb. 13, 1998) [hereinafter Hormones]; see Tania S. Voon & Alan Yanovich, The Facts Aside: The Limitation of WTO Appeals to Issues of Law, 40 J. OF WORLD TRADE 239 (2006).

(34) GARY LAWSON, FEDERAL ADMINISTRATIVE LAW 499 (Thomson West ed., 2001) (1998). The same thing happens in the community with the Court of Justice's review of the decisions made by the First Instance Court, which may limit review to the questions of law.

(35) See DSU, supra note 14, art. 3(2) (noting functions of WTO dispute settlement system).

(36) Joergens, supra note 32, at 205-10.

(37) Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, 33 I.L.M. 1125, 1148 (1994) [hereinafter WTO Final Act]. The disposition fixes the majority to three quarters of the members needed for the adoption of the authentic interpretation.

(38) Joergens, supra note 32, at 213. "The current WTO Agreement . . . does not provide for a speedy decision-making process, due to the need to obtain the support of such a large number of member countries to either overrule the report (in response to a 'wrong' ruling) or approve of the report (in response to a 'right' ruling)." Id. In fact, this circumstance assigns the Appellate Body a unique position that differentiates it from the Court of Justice and the Superior Courts, which work in an international context. Id. at 205-11. The Appellate Body's role as interpreter of law is not efficiently balanced, as it happens in the community and national contexts by executive and legislative power. Id. See THOMAS A. ZIMMERMANN, NEGOTIATING THE REVIEW OF THE WTO DISPUTE SETTLEMENT UNDERSTANDING 221 (Cameron May Ltd. 2006) available at (discussing a weakening of adjudication system).

(39) ENFORCING INTERNATIONAL TRADE LAW, supra note 10, [paragraph] VIII. "The consistency or inconsistency of a given fact or set of facts with the requirements of a given treaty provision is, however, a legal characterization. It is a legal question". Id.; see Voon & Yanovich, supra note 33, at 246.

(40) See DSU, supra note 14, art. 17(13) (describing Appellate Body's authority over panel decisions).

(41) Appellate Body Report, U.S.-Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R (Oct. 12, 1998) [hereinafter Shrimp Products]. The Appellate Body noted that "[r]eversal of a panel's finding on a legal issue may require us to make a finding on a legal issue which was not addressed by the panel." Id. [paragraph] 123. In this case, the Appellate Body proceeded to define the dispute (completing the analysis) applying their own legal arguments to the fact findings. See Ernest-Ulrich Petersmann, How to Promote the International Rule of Law? Contributions by the WTO Appellate Review System, 1 J. INT'L ECON. L. 25 (1998).

(42) Joergens, supra note 32, at 207-08.

(43) As it is well-known, amicus curiae is a figure in U.S. legal proceedings with the power to bring interests other than those represented by the parties to the proceedings when the decision may produce effects that reach beyond those of the parties. The presentation of amicus curiae briefs must be authorized by a judge. Petros C. Mavroidis, Amicus Curiae Briefs Before the WTO: Much Ado About Nothing 2-3 (Jean Monnet Owrking Paper, Paper No. 2/01, 2002); Marco M. Slotboom, Participation of NGOs Before the WTO and EC Tribunals: Which Court is the Better Friend?, 5 WORLD TRADE REV. 69, 69 (2006) (discussing differences between EC and WTO).

(44) See, Dispute Settlement Commentary for U.S.Shrimp (AB), at 4, available at (characterizing Appellate Body's findings on amicus submissions as important procedural and systemic issues).

(45) Id. at 4.

(46) Id. at 4-5. The panel had excluded the right to consider amicus curiae briefs by referring to Article 13 of the DSU, which states that it is the panel that should research the necessary information to resolve a dispute and that any unrequested information would be inadmissible. Id. The Appellate Body reached a different conclusion on the same point considering that the panel can authorize in its discretion the presentation of amicus curiae if it does not cause a considerable delay, and, if possible, after it had consulted with both parties of the dispute. Id. at 5. In this case, "for all practical and pertinent purposes, the distinction between 'requested' and 'non-requested' information vanishes." Shrimp Products, supra note 41, [paragraph] 107. In particular, according to the Appellate Body, once the panel had accepted the brief, from that moment on, it could no longer refuse to consider it, although it had the discretion to refuse to accept the brief when it was initially presented. Id. [paragraph] 91; see Movroidis, supra note 43, at 6 (criticizing Appellate Body's decision regarding amicus curiae).

(47) See TREBILCOCK & HOWSE, supra note 6, at 6. The presentation of amicus curiae briefs seems desirable in a system that aims to represent the point of view of subjects, other than the member states, that have interests affected by the rulings of the disputes without having to go through the national administration filters. Id.; see also Mavroidis, supra note 43, at 8-9 (observing all non-U.S. members disagree about the decision to admit briefs from non-governmental organizations into the decision making process, which may influence ruling of dispute). Allowing these briefs would grant these subjects greater rights and potentialities than Member states. The risk would be, moreover, to weigh down the panel with work and to increase the political character of the decisions.

(48) It is interesting to point out that following the Asbestos case, the Appellate Body has never granted leave, rejecting requests to present

amicus curiae briefs because of their irrelevance to the question.

(49) Appellate Body Report, E.C. Measures Affecting Asbestos and AsbestosContaining Products, WT/DS135/AB/R (Mar. 12, 2001).

(50) See Appellate Body Communication, E.C. Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/9 (Nov. 8, 2000) (announcing additional procedure adopted pursuant to Rule 16(1) of Working Procedures for Appellate Review); Andrew L. Stoler, Suggestions for Enhancing the Operation of the WTO Panel Process and Appellate Review 5-6 (Apr. 6, 2006) (WTO at 10 Conference at Columbia University, Working Paper, 2006) available at (detailing Appellate Body's adoption of an "additional procedure" for handling amicus curiae briefs).

(51) Stoler, supra note 50, at 6-7. The conditions to present amicus curiae briefs are substantially the same established by Article 29 of the Federal Rules of Appellate Procedure of the United States.

(52) Weiler, supra note 12, at 13. "The modus operandi established by the Appellate Body seems a perfect example of the interplay between external and internal legitimacy." Id.

(53) See Wald, supra note 23, at 10 (discussing transparency and non-party participation affecting DSS decisions). Wald notes, "the age of sovereign nations as the exclusive players may be passing in trade as well as in individual human rights." Id. at 31. This reflects a tendency that is found in many cases of international public law, which contribute to a transition "from a jurisprudence based on relations between states to one dealing with the rights of individuals within those states." Id.; Lance Bartholomeusz, The Amicus Curiae before the International Courts and Tribunals, 5 NON-STATE ACTORS & INT'L L. 209 (2005).

(54) Wald, supra note 23, at 27-28. Publicity constitutes one of the principal guarantees needed for impartial justice. Id. The secrecy of proceedings can only be justified if witnesses need protection or for matters of national security. Id.

(55) DSU, supra note 14, art. 14.

(56) The parties' conclusions, again, are reserved, unless otherwise indicated by the parties themselves. Moreover, Rule VII of the rules of conduct attached to the DSU establishes that "each covered person shall at all times maintain the confidentiality of dispute settlement deliberations and proceedings together with any information identified by a party as confidential. World Trade Organization, Rules for the Understanding on Rules and Procedures Governing the Settlement of Disputes, WT/DS13/RC/1 (1996).

(57) Weiler, supra note 12, at 12. Weiler states that "the secrecy of the procedures is a throwback to the diplomatic phase of GATT development." Id. According to the author, however, even though before a panel is fixed a considerable level of secrecy is justifiable, once the panel has been established that justification becomes invalid. Id. at 11-12. "It is only the fact that WTO discourse has been dominated for its entire life by civil servants to whom confidentiality and secrecy is both second nature and a source of empowerment and self-importance that this practise has continued to date." Id. at 12. On the same point is G. Sacerdoti, who believes that making the proceedings public does not constitute a necessary prerequisite of international jurisdiction, while its absence seems, however, to characterize an arbitrary procedure. Sacerdoti, supra note 12, at 44445.

(58) TREBILCOCK & HOWSE, supra note 6, at 115-16 (noting international dispute settlement can affect global social systems); see also Wald, supra note 23, at 28 (stating, "[a]n organization which has exclusive dispute jurisdiction in so vital an area as international trade has to enlist the trust of third parties and the public, and secrecy would seem to operate in the opposite direction").


(60) DSU, supra note 14, art. 23 para. 1 (stating, "when Members seek the redress of a violation or other nullification or impairment of benefits under the covered agreement or an impediment to the attainment of any objective of the covered agreements, they shall have recourse to, and abide by, the rules and procedures of this Understanding").

(61) See Valeria Di Comite, L'esecuzione delle decisioni del Dispute Settlement Body dell'OMC, in LA COMUNITA INTERNAZIONAL, 536-39 (2007). It should be pointed out that the term "recommendation," in the GATT/WTO context, means "legally binding order" once adopted by the dispute settlement body. See Robert Hudec, Broadening the Scope of Remedies in WTO Dispute Settlement, at 10, available at (explaining unique definition of "recommendation" in GATT/WTO jurisprudence).

(62) See Giorgio Sacerdoti, Il sistema di soluzione delle controversie dell'organizzazione mondiale del commercio a dieci anni dalla sua istituzione, La Comunita Internazionale Fasc., 435, 449 (2005) (describing DSB gives formal mandatory effect to decisions of fact and law); TREBILCOCK & HOWSE, supra note 6, at 146 (explaining process of state compliance enforcement).

(63) DSU, supra note 14, art. 21(1) (establishing that "prompt compliance with recommendations or rulings of the DSB is essential in order to ensure effective resolution of disputes to the benefit of all Members.").

(64) This period of time can be fixed, according to Article 21(3) of the DSU or by a suggestion made by the state itself if approved by the DSB with a positive consensus; or following an agreement between the parties, reached within 45 days of the adoption date of the report; or, in the case that no agreement is reached, with a binding arbitration within 90 days of the adoption of the decision. DSU, supra note 14, art. 21(1). In the third hypothesis, the period of time indicated by the arbitrator cannot exceed 15 months, even if specified by the disposition. Id. That period of time may be longer or shorter depending on the circumstances of the case. Id.

(65) ALDO LIGUSTRO, LE CONTROVERSIE TRA STATI NEL DIRITTO DEL COMMERCIO INTERNAZIONALE: DAL GATT ALL'OMC 544 (1996) (explaining a principle of opportunity of general validity in international law, according to which a controversy related to a secondary obligation of compensation must be judged on the base of the questions of facts and law connected with the primary rule, and therefore are preferably assigned to the competent body from the original controversy).

(66) Comite, supra note 61, at 536-37 (commenting abundantly on compliance panel legislation and noting how an appeal to panel is, nevertheless, unanimously considered admissible); see DSU, supra note 14, art. 21(5).

(67) DSU, supra note 14, art. 21(6). The implementation question remains on the dispute settlement body's agenda "until the issue is resolved." In addition, the same political body has the discretional power to promote specific interventions if the question of the adequacy and compatibility of the implementation measures are raised for a developing country. Id. art. 21(7). In this case, the DSB will take into account the impact that the implementation measures will have on the economy of the interested country. Id. art. 21(8).

(68) Id. art. 22. The provisionary and instrumental nature of the countermeasures established in Article 22 of the DSU and explicated in paragraph 8 of the same Article establishes that:
   the suspension of concessions or other obligations shall be
   temporary and shall only be applied until such time as the measure
   found to be inconsistent with a covered agreement has been removed,
   or the Member that must implement the recommendations or rulings
   provides a solution to the nullification or impairment of benefits,
   or a mutually satisfactory solution is reached.


(69) See TREBILCOCK & HOWSE, supra note 6, at 140. The countermeasures can be contested in front of an arbitration panel, which will evaluate the adequacy and proportionality regarding the amount of damage caused due to the lack of implementation. See id. at 140-41 (discussing contesting countermeasures in front of arbitration panel).

(70) Comite, supra note 61, at 531, 550 (discussing problem of sequential relationship). The problem of "the sequential relationship appears, at least temporarily, resolved, thanks to the solutions that are made between the parties themselves," even if the question of the relationship between the two rules/laws remains problematic and risks undermining the certainty and predictability of WTO rules during the implementation phase of dispute settlement system decisions. Id.

(71) See Petros C. Mavroidis, Remedies in WTO Legal System: Between a Rock and a Hard Place, 11 EUR. J. INT'L L. 763, 781 (2000); TREBILCOCK & HOWSE, supra note 6, at 141 (agreeing with the solution); see also Comite, supra note 61, at 545 (discussing surveillance of the panel's countermeasures and their adequacy and compatibility).

(72) DSU, supra note 14, art. 22(3). The proposed countermeasures by the winning state must respect some fixed principles in Article 22(3): the countermeasures must tendentially pertain to the same trade sector as the principal violation; if that is not practicable or efficient, the countermeasures may pertain to a different trade sector found in the same agreement. Finally, if even this change is not efficient or practicable and sufficiently serious circumstances exist, the countermeasures may pertain to an even different sector than the ones contained in the WTO agreement. In response to this, Trebilcock and Howse mention how this third hypothesis was verified in the Bananas case, in which Ecuador consented to withdraw its concessions not only relating to the GATT agreements, but also to TRIPS, because a reprisal in the trade sector would not have been efficient due to the fact that it would have suspended half of the European export, much of which consisted of essential goods for Ecuador's economy. TREBILCOCK & HOWSE, supra note 6, at 141; see also Appellate Body Report, European Communities Regime for the Importation, Sale and Distribution of Bananas Recourse to Arbitration by the European Communities under Article 22(6) of the DSU, WT/DS27/AB/R (Mar. 24, 2000).

(73) Article 22(7) specifies that an arbitrator does not examine the nature of countermeasures unless "the level of such suspension is equivalent to the level of nullification or impairment" as well as in the light of WTO agreements. DSU, supra note 14, art. 22(7). The arbitrator's decision regarding the adequacy and compatibility of the countermeasures cannot be appealed to the appellate body and the question cannot even be presented for a second arbitration, insomuch as it is tendentially defined. Id.

(74) These elements confirm that the general observation, in the international scene, that "the traditional distrust of the states to accept that its controversies can be submitted with unilateral appeal to a court or tribunal that makes binding decisions" is valid even for the World Trade Organization. See Treves, supra note 59, at 6-7. "In other words, the obligatory solution to controversy is now accepted more diffusely among the states, which are therefore more inclined to recognize both the right of the other party in the controversy to unilaterally submit to a jurisdictional or arbitrational body and the binding nature of the decisions made by that body." Id.

(75) See generally Zimmermann, supra note 38 (writing extensively about the revision process in existence).

(76) Id. at 204.

(77) There is no room for discussing other reforms raised by some states, among which the question of compensation for damages caused by the illegal conduct and that of amicus curiae briefs. See Robert E. Hudec, Broadening the Scope of Remedies in WTO Dispute Settlement, in IMPROVING WTD DISPUTE SETTLEMENT PROCEDURES, 345 (Friedhl Weiss & Jochem Weirs, eds., Cameron May 2000); Joost Pauwelyn, Enforcement and Countermeasures in the WTO: Rules are Rules--Toward a More Collective Approach, 94 AM. J. INT'L L. 335 (2000).

(78) Zimmermann, supra note 38, at 221. The imbalance created from the juridification process of the dispute settlement system could be, according to the author's report, redeveloped in two ways: weaken the third and legal component of the dispute resolution mechanisms, or significantly improve the decisional, political processes to grant the power to amend texts and the power to interpret the agreements, as stated at the Ministerial Conference and General Council of the WTO. WTO Final Act, supra note 37, art. IX.2. According to Zimmermann, weakening the dispute resolution system for the purpose of recognizing a greater relevance of political-negotiatory power would be an inadequate solution, because it would reduce the predictability of the entire WTO system. See Zimmerman, supra note 38, at 234 (arguing "major repoliticisation" of system would reduce predictability). Apropos of the machinery of the WTO decisional processes, the sovereignty ideal held by many states poses a serious institutional problem for the WTO because it causes states to oppose the expansion of international law. See J. H. Jackson, The Changing Fundamentals of International Law and Ten Years of the WTO, 8 J. INT'L ECON. L. 3, 11-12 (2005).

(79) In the same sense, Article 3(2) of the DSU provides that it is up to the dispute settlement system to clarify the provisions of agreements, by looking to the customary rules of international public law to ensure the certainty and predictability of the multilateral system of agreements and to protect the rights and obligations of the parties to those agreements. DSU, supra note 14, art. 3(2). See generally Peter Van Den Bossche, The Making of the "World Trade Court": The Origins and Development of the Appellate Body of the World Trade Organization, in KEY ISSUES IN WTO DISPUTE SETTLEMENT: THE FIRST TEN YEARS, 63, 70 (Rufus Yerxa & Bruce Wilson eds., 2005) (arguing in favor of jurisdictional nature of DSU).

(80) See John Kingery, Commentary: Operations of Dispute Settlement Panels, 31 LAW & POL'Y INT'L BUS. 665, 666-67 (2000) (acknowledging litigating parties increased demands to exclude panelists of same nationality as counter party or who previously ruled against one of current parties).

(81) Petros C. Mavroidis, Legal Eagles? The WTO Appellate Body's First Ten Years (WTO at 10 Conference at Columbia University, Working Paper, Apr. 6, 2006) available at In the same sense, Article 3(7) of the DSU specifies that, as previously seen, a negotiated conclusion of the dispute is clearly the preferred and desired solution to the dispute. DSU, supra note 14, art. 3(7).

(82) See Joost Pauwelyn, The Limits of Litigation: "Americanization" and Negotiation in the Settlement of WTO Disputes, 19 OHIO ST. J. DISP. RESOL. 121, 129-33 (2003). The author sees in the adversarial nature of the WTO's dispute resolution system the result of the influence of the United States. This is due to three factors: the significant influence of the United States during the formation phase of the agreements and the DSU; the strong U.S. presence in the disputes as a litigating party; the American legal background of several lawyers who work in the Secretariat and the WTO system. Id. at 121.

(83) See generally TREVES, supra note 59.

(84) See Hudec, supra note 77, at 16. (commenting that in light of the request by developing countries to modify DSU by awarding compensation for damages to the winning party of a dispute, developed states have countered that the question of monetary compensation is "simply outside the realm of possibility." On the theme of remediation see Tarcisio Gazzini, The Legal Nature of WTO Obligations and the Consequences of their violation, 17 EUR. INT'L L. 723 (2006).

(85) See Hudec, supra note 20, at 20-21. (regarding countries with weak economies, the effectiveness of the WTO system is guaranteed more from the political pressure by the community of states than by the solution of disputes).

(86) See Kingery, supra note 80, at 665 for a discussion on WTO reform to promote neutrality, efficiency, and effectiveness. Since adoption of the DSU, not a single sub-Saharan state has brought a dispute before the DSS. Henrik Horn & Petros C. Mavroidis, The WTO Dispute Settlement System 1995-2004: Some Descriptive Statistics, Jan. 31 2006, 4692321107449512766/HornMavroidisWTODSUDatabaseOverview.pdf (examining consequences of DSU adoption). At the end of an attentive analysis of the WTO Dispute Settlement System Data Set statistics, the authors formulate three general observations. The first observation involves the evident absence in the DSS of developing countries in the two Least Developed Countries (LDC) categories and of several countries included in the Developing countries other than LDC category. Id. at 34. Second, the statistics reveal the particularly active role of a few industrialized countries (China, Korea, Mexico and Turkey, in particular). Id. at 35. The third observation extracted from the accumulated data regards how the United States and the European Community are not dominating in the DSS, although they frequently participate in the system as agreeing parties (rather than as playing parties). Id. at 36. Further, these G2 countries do not seem to influence the nomination of panelists. Id. This is not meant, however, to discuss "the weight of these countries in the organization, but just to point out how our members come out." Id.

(87) Patrizia Nanz, Democratic Legitimacy and Constitutionalisation of Transnational Trade Governance: A View from Political Theory, in CONSTITUTIONALISM, MULTILEVEL TRADE GOVERNANCE AND SOCIAL REGULATION, 59 (Christian Joerges & Ernst--Ulrich Petersman eds., 2006).

(88) Giandomenico Falcon, Ordine giuridico e ordine politico nel diritto amministrativo globale, in ORDINE GIURIDICO E ORDINE POLITICO, 171, 175 (Paola Carta & Fulvio Cortese eds., 2008). "Through their decisions, the national authorities undoubtedly act according to their national law, but that law, in turn, is bound to comply with internationally established requirements, both in rulemaking/normative activity and, more properly, administrative activity." Id. In this sense, eventual restrictive trade measures must be adequately justified and their adoption must follow the procedural rules established in the agreements. In the Safeguards Agreement, for example, substantial and procedural rules were fixed that impose significant criteria of proportionality, adequacy and motivation for restrictive action and procedural rules. This is intended to guarantee publicity and procedural participation, from which it is not difficult to retrace a nucleus of universally recognized administrative law principles.

(89) John H. Jackson, The WTO Dispute Settlement Understanding Misunderstanding on the Nature of Legal Obligations, 91 AM. J. INT'L L. 60, 62 (1997). See Battini, supra note 3, at 127-28 (explaining balancing act in environmental laws by international organizations).

(90) Some similar aspects exist between the adjudication function exercised by the DSS of the WTO and that exercised by some administration agencies in the United States. In the United States, the independent agencies serve as implementation tools for the rules established by Congress and their adjudicatory function is justified by the expertise of the decision makers. The final decisions, adopted by an administrative law judge, are consequently made by agency superiors, who adopt the final order. The lack of democratic legitimation of the independent agencies, derived from the partially independent nature of the executive power, made the adoption of the Administrative Procedure Act (APA) in 1946 possible. The APA notably formalized these adjudicatory procedures, including the applicability of due process and judicial review. The WTO's adjudicatory function (or dispute settlement), previously in the hands of member states, is now exercised by neutral bodies that apply the rules of international agreements to controversies. Decisions are made by the Dispute Settlement Body, a body within the organization that represents all member states. See Benedict Kingsbury, Nico Krisch & Richard B. Stewart, The Emergence of Global Administrative Law, 68 LAW & COMTEMP. PROBS. 15, 44 (2005) (explaining Dispute Settlement Body ensures effective implementation of WTO agreements against administration of member states). See generally Richard. B. Stewart, U.S. Administrative Law: A Model for Global Administrative Law? (NYU School of Law, Working Paper No. 05-09, 2006) (discussing exportability of U.S. administrative law model in global context).

(91) Once these functions are given to an organization, a strong procedural process is developed, which is aimed to legitimize decisions made by bodies that, even if neutral with respect to the litigant, may seem to lack democratic legitimacy.

(92) Christiane Gerstetter, The Appellate Body's Response' to the Tensions and Interdependencies Between Transnational Trade Governance and Social Regulation, in CONSTITUTIONALISM, MULTILEVEL TRADE GOVERNANCE AND SOCIAL REGULATION, 111, 115 (Christian Joerges & Ernst-Ulrich Petersmann eds., 2006).

(93) Alec Stone Sweet & Jud Mathews, Proportionality Balancing and Global Constiutionalism, 47 COLUM. L. REV. 72, 154-55 (2008). The same AB, after all, explicitly recognized the abstract equivalence of values contemplated from such provisions (societal values) compared to those with a trade nature incorporated in the agreements.

(94) Gerstetter, supra note 92, at 120 (examining balancing techniques used by Appellate Body in Shrimp-Turtles case).

(95) The criteria of proportionality would, after all, be used extensively in three Treaty-based regimes that can be considered constitutional: the European Union, the European Convention on Human Rights and the World Trade Organization. "Proportionality-based rights adjudication now constitutes one of the defining features of global constitutionalism, if global constitutionalism can be said to exist at all." Sweet & Mathews, supra note 93, at 72.

(96) GATT Panel Report, Thailand--Restrictions on Importation of and Internal Taxes on Cigarettes, DS10/R (Nov. 7, 1990), GATT B.I.S.D. (37th Supp.) at 200 (1991). For criticism on this decision see Sungjoon Cho, Toward an Identity Theory of International Organizations, 102 AM. SOC'Y INT'L L. PROC. 157 (2008).

(97) Sweet & Mathews, supra note 93, at 154-55. According to which, however, "it also fits the mission of modern trustee courts, who govern political rulers by regulating the exercise of lawmaking authority in light of higher law norms, that are assumed to be both constitutive and permanent." Id. In an analogous sense, "the international body of review can, therefore, like domestic administrative judges, develop a sort of judicial legislation, capable to compress even further the liberty of the actions of the states in the administrative sphere, furthermore, by means of rules produced without their consensus." STEFANO BATTINI, AMMINISTRAZIONI NATIONALI E CONTROVERSIE GLOBALI 134 (A. Guiffre ed., 2007).


(99) Patricia Nanz, Democratic Legitimacy and Constitutionalisation of Transnational Trade Governance: A View from Political Theory, in CONSTITUTIONALISM, MULTILEVEL TRADE GOVERNANCE AND SOCIAL REGULATION, supra note 92, at 68. The author states "the democratic legitimacy of international governance depends on the openness of its (political) deliberations to public scrutiny." Id.

(100) Weiler, supra note 8, at 552. The individualization of the different geological layers of dispute settlement is also recalled by Sabino Cassese. CASSESE, supra note 3, at 37-38.
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