Precedent in the WTO: Advantages of De Jure Stare Decisis

AuthorEoin Gubbins
PositionB.A. University of Limerick, LLM Candidate, Trinity College Dublin
Pages70-90
PRECEDENT
IN
THE
WTO:
ADVANTAGES OF
DE
JURE
STARE
DECESIS
EOIN
GUBBINS*
The
1994
Agreement establishing
the
World
Trade Organisation
(WTO)
was
the
result
of
the
Uruguay Round
of
multilateral
trade
negotiations.
It
represented
an
attempt
to
cure
the
"birth
defects"
of
the
General
Agreement
on Trade and Tariffs
(GATT)
and
create
an
organisation
that
would
be
a
United Nations
specialised
agency with
an
organisational
structure and
dispute
settlement
system.' The
successful
completion
of
the
Uruguay Round
was
widely applauded.
Sutherland,
former
Director-
General
of
the
GATT, observed
that
the
new
system
was
a
great
improvement
for
members
and
gave
smaller nations
new
assurance
that
the
commitments
contained
within
it
are
secure
and
enforceable.
2
Annex
2
to
the WTO
agreement
is
the
Understanding
on
rules
and
procedures
concerning
the
settlement
of
disputes
(DSU).
It
has
been
hailed
as
a
huge
improvement
on
the
diplomatically based
dispute
settlement
system
in
the
GATT. 3
The
DSU
created
a
broader,
more
efficient,
predictable,
and
reliable rule-based dispute resolution
system.
4
One
commentator
has
described
the
DSU
as
perhaps
the
most
significant
achievement
of
the
Uruguay
Round
of
negotiations.
5
Thus
the
WTO
now
incorporates
a
single,
integrated,
and exclusive dispute
settlement
system
"
B.A.
University
of
Limerick,
LLM
Candidate,
Trinity
College Dublin.
The Author
gratefully
acknowledges
the
contributions
of
Sarah
Holland
and
E6in
Mac
Domhnaill
in preparing
this
article
for
publication.
'
Jackson,
Restructuring
the
GATT
System (Council
on
Foreign Relations
Press,
1990),
at
38-
41.
See,
Matsushita,
Schoenbaum, and Mavroidis,
The
World
Trade Organisation:
Law,
Practice
and
Policy
(Oxford
University
Press,
2003),
at
7;
see also,
Petersmann,
International
Trade Law
and
the
GATT/WTO
Dispute
Settlement
System
(Kluwer
Law
International
1997),
at
10-11.
2 Address
by
Peter
Sutherland, GATT Director-General,
to the
Australian-New
Zealand
Business Council,
Auckland,
29
September
1994.
See,
Van
Dijck,
and
Faber,
eds.,
Challenges
to
the New
World
Trade
Organisation
(Kluwer
Law
International,
1996),
77-91.
3 Mercurio,
"Improving Dispute
Settlement
in
the
World
Trade Organisation:
the
Dispute
Settlement
Understanding
-
Making
it
Work?"(2004)
38
(5) J
World
Trade
795-854.
4
Ibid.,
at
796.
5
Palmeter,
"The
WTO
as a
Legal
System"
(2000-
2001)
24
Fordham
Int
71L
J,
444.
©
2006 Eoin Gubbins
and
Dublin University
Law
Society
Precedent
in
the
WTO
under
which
members
are
required
to
use
the
rules
and
procedures
of
the
DSU
to
solve
their
disputes.'
In
fact,
the
DSU
has
been
so
successful
that
many
have
called for
an
expansion
of
its
judicial
scope, arguing that human
rights,
environmental
issues, labour
standards,
and
other
issues
should
be
incorporated
into
its
framework.
7
Despite
the
success
of
the
DSU
many
problems
still
remain.
This
article
will
focus
on
two
issues
in
particular. First,
there
is
uncertainty
regarding
the
position
of
previous
panel
and
Appellate
Body reports.
It
is
vital
that
users
of
a
legal system can clearly
establish
its
sources
of
law. At
present
a
de
facto
form
of
stare
decisis
appears
to
exist but
there
is
a
reluctance to
recognise
its
existence
and
thereby
formalise
the
doctrine
of
precedent.!
It
has
been
suggested
that
there
is
no
better
way
for
a
lawyer
to
get to
the
heart
of
a
legal
system
than
to
ask how
it
handles precedent.9
Therefore
the
treatment
of
previous decisions
is
of
fundamental
importance
and
has
wide-ranging
implications for
all
parties who
use
the
system.
Secondly, while
the
treatment
of
developing
states has
steadily
improved
it
still
leaves
much to
be
desired. " With
the
advent
of
globalisation
it
has
become clear that international organisations
must
be
for
the
benefit
of
all
and
not
just
those who
have
enough money
to
protect
their
rights.
It
is
argued that
formalising
the doctrine
of
precedent will
improve
the
situation
of
developing states. This
article will
look
at
how
this
should
be
done and
analyse
the
benefits
of
incorporating
de
jure
stare
decisis.
6
Marrakesh
Agreement
Establishing
the
World
Trade
Organisation
[hereinafter
WTO
Agreement],
Annex
2
Dispute
Settlement
Understanding
[hereafter
DSU],
Article
23.
1.
7
Thomas,
"Should
the
World
Trade
Organization
Incorporate
Labor
and Environmental
Standards?,"
(2004)
61
Was.&
Lee
L
Rev,
347.
See
also
Chamovitz,
"Promoting
Higher
Labour
Standards,"
(1995)
18
(3)
The
Washington
Quarterly,
167.
See
also,
Petersmann
"The
'Human
Rights
Approach' Advocated
by
the
UN
High
Commissioner
For
Human
Rights
and
by
The
International
Labour
Organisation:
Is
It
Relevant
for
WTO
Law
and Policy?",(2004) 7
J
Int
'l
Econ
L,
605.
8
See
generally,
Palmeter,
and
Mavroidis
"
The
WTO Legal
System:
Sources
of
Law,"
(1998)
92
Am
Jlnt
7
L, 398.
9
Bhala,
"The
Myth about
Stare
Decisis and International
Trade
Law
(Part 1
of
a
Trilogy)."
(1998
-
1999)
14Am
UInt'lL
Rev
845.
10
Busch,
and
Reinhardt, "Developing
Countries
and
Trade/World
Trade
Organisation Dispute
Settlement,"
(2003)
37
(4) J
World
Trade,
719.
2006]

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