4 - WTO dispute settlement practice 1995–2005: lessons from the past and future challenges

Summary

Lessons from the past

Most dispute settlement procedures of the General Agreement on Tariffs and Trade (GATT) and of the World Trade Organization (WTO) resulted from previous dispute settlement practices and were progressively codified (for instance, in 1966, 1979, 1982, 1989, and in 1994) in response to particular GATT and WTO legal problems.1 The frequent use of ‘constructive ambiguity’ as a diplomatic method for facilitating political consensus on the conclusion of broadly framed GATT and WTO agreements, as well as the compulsory jurisdiction provided for in the WTO Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU) as a means to ‘clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law’ (Article 3.2 of the DSU), entail a far-reaching delegation of (quasi-)judicial powers to WTO dispute settlement bodies. Negotiating incomplete agreements and delegating the future clarification of contested treaty interpretations to an interdependent system of WTO dispute settlement bodies reduced bargaining costs and enhanced the effectiveness of collective bargaining. Yet, many WTO governments remain reluctant to admit the systemic consequences of this ‘judicialization’ of WTO rules for the future evolution of the ‘member-driven’ WTO system. Past WTO case-law confirms that the WTO jurisprudence of independent international judges may differ from the views of national trade officials.

Most trade diplomats continue to perceive the WTO as a separate trade regime that must remain focused on national interests, trade liberalization, and promotion of economic development through trade.