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The WTO Case Law of 2003
Download all figures. In Dominican Republic — Import and Sale of Cigarettes , the Appellate Body stated that measures creating disparate effects would not be judged inconsistent, if the rationale for the adoption of measure was unrelated to the origin of the good. This case law cast doubt on the generic relevance of the deference standard to domestic policies. Deference was effectively limited to cases where human health is at stake EC — Asbestos and not when other societal preferences are advanced.
In Korea — Various Measures on Beef , the Appellate Body outlawed a non-discriminatory measure dual retailing that, in its own admission, was genuinely aiming at protecting the stated regulatory objective. If the intent was legitimate, and disparate trade effects were absent, 30 on what evidence was the measure judged to be GATT inconsistent?
In EC — Hormones , the Appellate Body accepts the zero-risk policy whatever it means practised by the European Union EU and goes so far as to suggest that the precautionary principle is not confined to Article 5. In Japan — Apples , the Appellate Body found nothing wrong with the risk assessment supplied by the defendant, but it outlawed the measure because it considered it unnecessary.
The Appellate Body cannot be accused of having provided a clear methodology that will enable it and subsequent panels to distinguish the wheat from the chaff. The deferential standard towards measures aiming to protect public health is a knee-jerk reaction to what is the highest value — the quintessential human right.
Although disputes regarding tariff treatment have been infrequent in the GATT, case law in anti-dumping has provided a lot of ammunition for heated discussion across the membership. Case law in anti-dumping and countervailing, in particular, stands for the proposition that remedies in this context should be retroactive. In fact, as Robert Hudec explains, the introduction of retroactive remedies was a reason why the rate of adoption of GATT panel reports fell in the s.
Avesta a Swedish company had bought a mill in Indiana and, consequently, was selling to the US market through its Indiana site and. The Appellate Body adopted interpretations that made recourse to contingent protection burdensome. It set aside the expressed intent of the instigators of the standard of review embedded in Article It took the causality requirement seriously; correctly so. Anything can affect the trade outcome, and a trigger happy investigating authority is often happy to attribute to dumped, or subsidized, or increased imports if the injury is inflicted by other factors.
The Appellate Body requested the evidence of genuine and substantial relationship between cause and effect before the recourse to duties has been made. This standard requires attribution of injury to increased imports, and the evidence of non- attribution of injury to increased imports, when other factors have caused it. It requests WTO members to examine their conclusions in light of other alternative explanations and to decide on the imposition of duties only when they have done so. Sykes, reading the case law, has gone so far as to ask whether it will ever be possible for an elaborate investigating authority to meet the test established in the case law?
Howse is certainly right in pointing the discrepancy in this direction. We explain in what follows. Under the circumstances, it is quite odd that the Appellate Body refused to see a caus ality requirement in sunset reviews. Why is it the case that one needs to show that dumping causes injury in the original investigation and not so at the sunset stage?
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The Appellate Body has pointed to the absence of specific language to this effect. But does the absence of specific language lead to the conclusion that, whereas only injurious dumping can be sanctioned at the stage of original investigation, non-injurious dumping can be counteracted at the sunset stage?
Had the Appellate Body investigated even briefly the negotiating record, it would have realized that the introduction of sunset reviews was a hard fought victory for its proponents. The whole idea was that duties lapse, unless a sunset review points to the recurrence of injury in the case of withdrawal. Negotiators have a small window for the continued imposition of duties. The Appellate Body has turned it into a wide avenue. Indeed, Howse and Robert Staiger have expressed their profound disagreement with this statement and have argued for a comprehensive legal test that could be applied in order to sustain the plausibility of continued impositions.
The Genesis of the GATT (The American Law Institute Reporters Studies on WTO Law)
WTO panels, with one exception, have consistently held that remedies are prospective. This is a major concession to the members that defended this view during the Uruguay Round and that did not manage to persuade the rest of the membership on this score. There are numerous inconsistencies in the case law on trade instruments, and, in this respect, the Appellate Body has reproduced the record of its case law under domestic instruments. To provide but one illustration, I will refer to the case on pass through, which is a major issue in subsidies.
The Appellate Body dealt in quick succession with two cases regarding pass through, both discussed by Gene Grossman and Mavroidis. Both findings cannot be right; one of them has to be wrong. And, yet, the Appellate Body did not even bother to address the inconsistency between the two reports. Errare humanum est , and it does not diminish the credibility of a court to state that it has erred. The Court of Justice of the European Union certainly did not suffer when the judgment in its notorious Keck and Mithouard explicitly distanced itself from the prior case law.
There is worse. The Appellate Body never explained in its second decision under what conditions payment of market price exhausts benefits. And it did not ask the correct question in either of the reports, which, as Grossman and Mavroidis show, is whether the investment has or has not become infra-marginal. Amazingly, the proof of confusion has been reflected in an Appellate Body report. Eric Stein offers this wonderful passage when trying to explain the merits of keeping the court — a decisive court — away from the public eye:.
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What will the Appellate Body members think of reports that are pages long only to announce at the end that they could not decide the issue before them? What will they think of the confusion they have created through hundreds of pages where the same issue is discussed from all sorts of unnecessary angles only to confirm a decision they have reached in the first paragraph of the discussion?
The typical scenario when dealing with domestic policies would be a case where Home knows the rationale for regulating and has little incentive to inform Foreign about it. If Home reveals the truth regulation is meant to protect the domestic matador , it goes to jail. If Home lies, then it might avoid jail. The question for the judge will be to devise a test that will provide Home with the incentives to reveal the true information.
Wise courts would, in the face of uncertainty, avoid committing a false positive. What did the Appellate Body do? There is nothing more to it. To avoid misunderstandings, I am not suggesting that the Appellate Body should view a measure aiming to protect health in the same way it reviews the legality of anti-dumping. Assuming the propensity to commit mistakes is the same across WTO-covered agreements, errors when a health policy is outlawed can be devastating, whereas, in the case of anti-dumping, they will be limited to pure trade damage.
I am suggesting though, that, in the name of avoiding costly errors, the Appellate Body cannot do away with its self-imposed requirement to issue reasoned reports. Overall, the members of the Appellate Body can take pride in the fact that they have not caused a major upheaval.
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Bar the issue of providing a stage for amici curiae — a rather inconsequential decision that surprisingly provoked a heated debate across the membership — no decision by the Appellate Body has provoked a quasi unanimous hostile reaction. Furthermore, the membership has not voted with its feet. Disagreements do occur, but no one has requested total recall. To perform this function, judges must privilege methodology over political sensitivity or any other similar concern. This is where the Appellate Body has failed, as the examples provided above have attempted to show. The negotiators of the Uruguay Round did not spend too much time thinking about the Appellate Body.
It was thought of more as a counterweight to the automaticity in establishing panels and adopting their reports than anything else. This book is part of a wider project that aims to propose a model GATT that makes good economic sense without undoing its current basic structure. It asks: What does the historical record indicate about the aims and objectives of the framers of the GATT?
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Mavroidis , Douglas A. To what extent does the historical record provide support for one or more of the economic rationales for the GATT? The book supports that the two main framers of the GATT were the United Kingdom and the United States; developing countries' influence was noticeable only after the mids.
The framers understood the GATT as a pro-peace instrument; however, they were mindful of the costs of achieving such a far-reaching objective and were not willing to allocate them disproportionately. This may explain why their negotiations were based on reciprocal market access commitments so that the terms of trade were not unevenly distributed or affected through the GATT. Review this product. Do you have any questions about this product? Ask a Question.
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