Published online by Cambridge University Press: 17 September 2019
The World Trade Organization was established in 1995 and brought together countries from around the world for the purpose of fairly regulating the trade of goods, services, and intellectual property between its member states. While treaties and other trade agreements have existed between countries for hundreds of years, the WTO's most significant innovation is its dispute settlement process through the Dispute Settlement Body. Countries agree to be bound to the decisions of the DSB upon their admittance into the WTO. The DSB is a two-tiered adjudicative system consisting of the lower panels and the higher Appellate Body.
The United States, under both the Obama and Trump administrations, has blocked the appointment of AB judges. This tactic has limited the number of active judges to three. The AB normally has seven members. The United States has listed a number of reasons for their boycott of the system, among them is that the AB is functioning as if its reports are to be binding precedent on the lower panel and to future DSB cases, in a manner similar to stare decisis. This issue has been observed over the years and there is conflict between interpretations of precedent under Article 3:2 of the Dispute Settlement Understanding and Article IX:2 of the WTO Agreement. Caselaw of the DSB from over the years has also raised interesting questions and the appearance of the use of precedent.
This article will be examining the historical fundamentals and use of precedent and the doctrine of stare decisis. It will then turn into an examination of the institutional and regulatory framework of the WTO, particularly Article 3:2 of the DSU and Article IX:2 of the WTO Agreement, and whether it allows or leaves room for a system of binding precedent. Finally, jurisprudence of the DSB will be surveyed for evidence of this system. Reports that will be examined are Japan-Alcoholic Beverages, India-Patents, India-Autos, and Australia-Plain Packaging Tobacco.
© Zachary Flowers 2019. The author is Staff Editor, Mississippi Law Journal; J.D. Candidate 2020, University of Mississippi School of Law.
2 Manfred Elsig, Legalization in context: The design of the WTO's dispute settlement system, British J. of Pol. And Int'l Rel. 304 (2017).
3 Id.
4 Id at 305.
5 Simon Nixon, Trump Puts the WTO on the Ropes, Wall St. J. (Jul 11, 2018), https://www.wsj.com/articles/trump-puts-the-wto-on-the-ropes-1531340083.
6 Id.
7 U.S. Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report, 24–28 (2018), https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF.
8 Manfred Elsig, Legalization in context: The design of the WTO's dispute settlement system, British J. of Pol. And Int'l Rel. 304, 305 (2017).
9 The GATT years: from Havana to Marrakesh, https://www.wto.org/english/thewto_e/whatis_e/tif_e/fact4_e.htm (last accessed Nov. 11, 2018).
10 Id; GATT 1994: General Agreement on Tariffs and Trade 1994, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994).
11 Manfred Elsig, Legalization in context: The design of the WTO's dispute settlement system, British J. of Pol. And Int'l Rel. 304, 305–06 (2017).
12 Understanding the WTO: Settling Disputes, https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm (last accessed Nov. 11, 2018).
13 Id.
14 Gabrielle Zoe Marceau, The primacy of the WTO dispute settlement system, Questions of Int'l L., Vol. 23, 3, 4, (2015).
15 Understanding the WTO: Settling Disputes, https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm (last accessed Nov. 11, 2018).
16 Id.
17 DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes, Marrakesh Agreement Establishing the World Trade Organization, Art. 4.7, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994).
18 Understanding the WTO: Settling Disputes, https://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm (last accessed Nov. 11, 2018).
19 Id.
20 Id.
21 Id.
22 Joost Pauwelyn, Minority Rule: Precedent and Participation Before the WTO Appellate Body, Jud. Authority in Int'l Econ. L., 3 (2015).
23 U.S. Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report, 26–28 (2018), https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF.
24 Ihara, WTO Dispute Settlement Body-Developments in 2017, https://www.wto.org/english/tratop_e/dispu_e/ihara_17_e.htm (last visited Nov. 13, 2018); WTO Members Intensify Debate Over Resolving Appellate Body Impasse, https://www.ictsd.org/bridges-news/bridges/news/wto-members-intensify-debate-over-resolving-appellate-body-impasse (last visited Nov. 13, 2018).
25 Stare decisis, Black's Law Dictionary (10th ed. 2014).
26 Lile, William M. et al. , Brief Making and the Use of Law Books, 321 (Roger W. Cooley & Charles Lesley Ames eds., 3d ed. 1914)Google Scholar.
27 Jurisprudence constante, Black's Law Dictionary (10th ed. 2014).
28 Olav A. Haazen, Review, Precedent in the World Court, 38 Harv. Int'l L.J. 587, 601 (1997).
29 Id.
30 STATUTE OF THE INTERNATIONAL COURT OF JUSTICE, Annex to the U.N. CHARTER, Article 59.
31 Id at Article 38.
32 Legal status of adopted/unadopted reports in other disputes, https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c7s2p1_e.htm (last visited Nov. 15, 2018).
33 Id.
34 Id.
35 Vienna Convention on the Law of Treaties art. 31.2, opened for signature May 23, 1969, 1155 U.N.T.S. 331.
36 WTO Agreement: Marrakesh Agreement Establishing the World Trade Organization, Article IX:2, Apr. 15, 1994, 1867 U.N.T.S. 154, 33 I.L.M. 1144 (1994).
37 DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes, Marrakesh Agreement Establishing the World Trade Organization, Article 3.2, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994).
38 Id at Article 3.9.
39 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS79/R (adopted Sept. 22, 1998).
40 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS50/R (adopted Jan. 16, 1998); Appellate Body Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS79/AB/R (adopted Sept. 22, 1998).
41 Id at 55.
42 Id; “If a third party considers that a measure already the subject of a panel preceding nullifies or impairs benefits accruing to it under any covered agreement, that Member may have recourse to normal dispute settlement procedures under this Understanding. Such a dispute shall be referred to the original panel wherever possible.” DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes, Marrakesh Agreement Establishing the World Trade Organization, Article 10.4, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994).
43 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS79/R (adopted Sept. 22, 1998).
44 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, 57, WTO Doc. WT/DS79/R (adopted Sept. 22, 1998).
45 Appellate Body Report, United States-Final Anti-Dumping Measures on Stainless Steel from Mexico, WTO Doc. WT/DS344/AB/R (adopted May 20, 2008).
46 Id at ¶ 160.
47 Raj Bhala, The Myth about Stare Decisis and International Trade Law (Part One of a Trilogy), 14 Am. U. Int'l L. Rev. 845 (1999); Raj Bhala, The Precedent Setters: De Facto Stare Decisis in WTO Adjudication (Part Two of a Trilogy), 9 J. Transnat'l L. & Pol'y 1 (1999); Raj Bhala, Power of the Past: Towards De Jure Stare Decisis in WTO Adjudication (Part Three of a Trilogy), 33 Geo. Wash. Int'l L. Rev. 873 (2001); Ann Scully-Hill & Hans Mahncke, The Emergence of the Doctrine of Stare Decisis in the World Trade Organization Dispute Settlement System, 36 Legal Issues of Econ. Integration 133 (2009).
48 Henry Gao, Dictum on Dicta: Obiter Dicta in WTO Disputes, World Trade Review 17:3, 509 (2018).
49 Panel Report, Japan-Taxes on Alcoholic Beverages, WTO Doc. WT/DS8/R, WTDS10/R, WTDS11/R (adopted July 11, 1996); Appellate Body Report, Japan-Taxes on Alcoholic Beverages, WTO Doc. WT/DS8/AB/R, WTDS10/AB/R, WTDS11/AB/R (adopted Nov. 1, 1996); Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS50/R (adopted Sept. 5, 1997); Appellate Body Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, ¶ 36, WTO Doc. WT/DS50/AB/R (adopted Dec. 19, 1997); Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS79/R (adopted Aug. 24, 1997); Panel Report, India-Measures Affecting the Automotive Sector, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001 Appellate Body Report, India-Measures Affecting the Automotive Sector, WTO Doc. WT/DS146/AB/R, WT/DS175/AB/R (adopted Mar. 19, 2002); 49 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.1825–7.1853, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
50 Panel Report, Japan-Taxes on Alcoholic Beverages, ¶1.1–1.11, WTO Doc. WT/DS8/R, WTDS10/R, WTDS11/R (adopted July 11, 1996).
51 Id at ¶7.1–7.2.
52 GATT 1994: General Agreement on Tariffs and Trade 1994, Article III:2, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994).
53 Id.
54 Id at ¶6.19–6.22; Panel Report, United States - Taxes on Petroleum and Certain Imported Substances, WTO Doc. WT/DS8/AB/R (adopted May 20, 1996).
55 Panel Report, Japan-Taxes on Alcoholic Beverages, ¶6.10, WTO Doc. WT/DS8/R, WTDS10/R, WTDS11/R (adopted July 11, 1996).
56 Appellate Body Report, Japan-Taxes on Alcoholic Beverages, WTO Doc. WT/DS8/AB/R, WTDS10/AB/R, WTDS11/AB/R (adopted Nov. 1, 1996).
57 Id at 12–15.
58 Id at 13 (quoting Marrakesh Agreement Establishing the World Trade Organization, Art. IX:2, Apr. 15, 1994, 1867 U.N.T.S. 154 [hereafter WTO Agreement]).
59 WTO Agreement, Art. IX:2.
60 Appellate Body Report, Japan-Taxes on Alcoholic Beverages, 14, WTO Doc. WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R (adopted Nov. 1, 1996).
61 Id at 32.
62 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS50/R (adopted Sept. 5, 1997); Appellate Body Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS50/AB/R (adopted Dec. 19, 1997); Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS79/R (adopted Aug. 24, 1997).
63 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, ¶8.1, WTO Doc. WT/DS50/R (adopted Sept. 5, 1997).
64 Id.
65 Report of the Panel, Italian Discrimination Against Imported Agricultural Machinery, ¶12–13, (Oct. 23, 1958), GATT BISD (7th Supp.), at 60; Report of the Panel, United States - Taxes on Petroleum and Certain Imported Substances, ¶ 5.22, (June 17, 1987), GATT BISD (34th Supp.), at 136; Report of the Panel, United States - Section 337 of the Tariff Act of 1930, ¶ 5.13, (Nov. 7, 1989), GATT BISD (36th Supp.), at 345.
66 Appellate Body Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, ¶ 36, WTO Doc. WT/DS50/AB/R (adopted Dec. 19, 1997);
67 Id at ¶ 97.
68 Id at ¶ 83.
69 Id at ¶ 96.
70 Id at ¶ 94.
71 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, WTO Doc. WT/DS79/R (adopted Aug. 24, 1997).
72 Id at ¶ 1.2.
73 Id at ¶ 7.7.
74 Id at ¶ 7.9.
75 Id.
76 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, ¶ 7.15, WTO Doc. WT/DS79/R (adopted Aug. 24, 1997).
77 Id at ¶ 7.25.
78 Id.
79 Id at ¶ 7.30.
80 Id at ¶ 7.34, 7.41, 7.42, 7.45, 7.60, 7.67
81 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural Chemical Products, ¶ 9.1, WTO Doc. WT/DS79/R (adopted Aug. 24, 1997).
82 Panel Report, India-Measures Affecting the Automotive Sector, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001).
83 Id at ¶ 1.4.
84 Id at ¶ 2.1–2.3.
85 Id.
86 Id at ¶ 2.3.
87 Panel Report, India-Measures Affecting the Automotive Sector, ¶ 2.3, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001).
88 Id at ¶ 4.27.
89 Id at ¶ 4.31.
90 Id at ¶ 4.55.
91 Id at ¶ 4.44.
92 Panel Report, India-Measures Affecting the Automotive Sector, ¶ 7.42–7.104, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001). (The panel did not resolve if res judicata was applicable to the WTO DSB, since it was determined that it was not applicable in this case.)
93 Id at ¶ 7.150.
94 Id at ¶ 7.175–76; Panel Report, Canada-Autos, WTO Doc. WT/DS139/R, WT/DS/142/R (adopted June 19, 2000).
95 Panel Report, India-Measures Affecting the Automotive Sector, ¶ 7.184–186, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001); Panel Report, Canada-Autos, ¶ 10.73, WTO Doc. WT/DS139/R, WT/DS/142/R (adopted June 19, 2000).
96 Panel Report, India-Measures Affecting the Automotive Sector, ¶ 7.204, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001).
97 Id at ¶ 7.220; Report of the Panel; Canada-FIRA, ¶ 5.14 (Feb. 7, 1987), GATT BISD.
98 Panel Report, India-Measures Affecting the Automotive Sector, ¶ 7.245–253, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001); Report of the Panel, Japan-Semi-conductors, ¶ 106 (May 4, 1988), GATT BISD (35th Supp.), at 116.
99 Panel Report, India-Measures Affecting the Automotive Sector, ¶ 8.1, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001).
100 Id.
101 Id at ¶8.65.
102 Appellate Body Report, India-Measures Affecting the Automotive Sector, WTO Doc. WT/DS146/AB/R, WT/DS175/AB/R (adopted Mar. 19, 2002).
103 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
104 Id at ¶ 7.15, 7.1733, 7.1776, 7.1914, 7.2052, 7.2131, 7.2607, 7.2797, 7.2873, 7.2960.
105 Id at ¶ 7.16.
106 Id at ¶ 7.243.
107 Id at ¶ 7.31, 7.32, 7.40; Appellate Body Report, United States-Measures Concerning the Importation, Marketing, and Sale of Tuna and Tuna Products, WTO Doc. WT/DS381/AB/R (adopted June 13, 2012); Appellate Body Report, United States-Certain Country of Origin Labeling (COOL) Requirements, WTO Doc. WT/DS384/AB/R, WT/DS386/AB/R (adopted July 23, 2012).
108 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.31–7.46, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
109 Id at ¶ 7.182.
110 Id at ¶ 7.1726.
111 Id at ¶ 7.1732.
112 Id at ¶ 7.1733–1735.
113 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.1736, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
114 Id at ¶ 7.1763.
115 Id at ¶ 7.1760–1775; Appellate Body Report, United States-Section 211 Omnibus Appropriations Act of 1998, WTO Doc. WT/DS176/AB/R (adopted Feb. 1, 2002).
116 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.1774, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
117 Id at ¶ 7.1778.
118 Id at ¶ 7.1816.
119 Id.
120 Id at ¶ 7.1823.
121 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.1825–7.1853, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
122 Appellate Body Report, United States-Section 211 Omnibus Appropriations Act of 1998, ¶ 154, WTO Doc. WT/DS176/AB/R (adopted Feb. 1, 2002) (emphasis original).
123 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.1857, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
124 Id at ¶ 7.1912.
125 Id at ¶ 7.2961.
126 GATT 1994: General Agreement on Tariffs and Trade 1994, Article IX:4, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1867 U.N.T.S. 187, 33 I.L.M. 1153 (1994).
127 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.2961, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
128 Id at ¶ 7.2972.
129 Id at ¶ 7.3027; Appellate Body Report, United States-Certain Country of Origin Labeling (COOL) Requirements-Recourse to Article 21.5 of the DSU by Canada and Mexico, ¶ 5.356, WTO Doc. WT/DS384/AB/R, WT/DS386/AB/R (adopted May 29, 2015).
130 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.3027, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
131 Appellate Body Report, United States-Certain Country of Origin Labeling (COOL) Requirements-Recourse to Article 21.5 of the DSU by Canada and Mexico, ¶ 5.356, WTO Doc. WT/DS384/AB/R, WT/DS386/AB/R (adopted May 29, 2015).
132 Panel Report, Australia-Certain Measure Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging, ¶ 7.3027, WTO Doc. WT/DS435/R, WT/DS441/R, WT/DS458/R, WT/DS467/R (adopted June 28, 2018).
133 Id at ¶ 7.3038–7.3039.
134 Id at ¶ 7.3068.
135 Id.
136 U.S. Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report, 28 (2018), https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF.
137 Charles H. Koch, Jr., The Advantages of Civil Law Judicial Design as the Model for Emerging Legal Systems, 11 Ind. J. Global Legal Stud. 139, 139 (2004).
138 Id.
139 Nuno Garoupa & Carlos Gomez Ligurre, The Evolution of the Common Law and Efficiency, 40 Ga. J. Int'l & Comp. L. 307 (2012).
140 Id at 319.
141 DSU, Dispute Settlement Rules: Understanding on Rules and Procedures Governing the Settlement of Disputes, Marrakesh Agreement Establishing the World Trade Organization, Article 20, 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994).
142 U.S. Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report, 24–25 (2018), https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF.
143 See generally Panel Report, India-Measures Affecting the Automotive Sector, WTO Doc. WT/DS146/R, WT/DS175/R (adopted Dec. 21, 2001); Panel Report, Mexico-Tax Measures on Soft Drinks and Other Beverages, WTO Doc. WT/DS308/R (adopted Oct. 7, 2005).
144 Appellate Body Report, United States-Final Anti-Dumping Measures on Stainless Steel from Mexico, ¶ 160, WTO Doc. WT/DS344/AB/R (adopted May 20, 2008).
145 Id at ¶ 162.
146 U.S. Trade Representative, 2018 Trade Policy Agenda and 2017 Annual Report, 28 (2018), https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20FINAL.PDF.
147 Communication from The European Union, China, Canada, India, Norway, New Zealand, Switzerland, Australia, Republic of Korea, Iceland, Singapore And Mexico to the General Council, WTO Doc. WT/GC/W/752 (Nov. 26, 2018).
148 See generally Communication from The European Union, China, Canada, India, Norway, New Zealand, Switzerland, Australia, Republic of Korea, Iceland, Singapore And Mexico to the General Council, WTO Doc. WT/GC/W/752 (Nov. 26, 2018).
149 Id at 2–3.