The European Journal of International Law Vol. 27 no.

1
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The World Trade Organization

20 Years On: Global Governance

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by Judiciary
Robert Howse*

Abstract
This article presents a narrative about the building of an effective, legitimate judicial system
in the World Trade Organization (WTO) through a period of intense diplomatic and political
divisiveness and prevailing perception of impasse and malaise in the Organization. At the centre
of the narrative is the Appellate Body of the WTO, a standing body of seven jurists charged
with deciding appeals of law. The Appellate Body, as will be elaborated, responded to the politi-
cal conflict and paralysis at the WTO by distancing itself from the Organization and making
a number of crucial jurisprudential moves that led to its transformation into an independent
court, which has often decided controversial questions in balanced or deferential ways that dis-
play, at best, neutrality to the neo-liberal ‘deep integration’ trade agenda reflected in the Uruguay
Round of multilateral trade negotiations and many of its results, such as the WTO Agreements
on Intellectual Property and on Technical Barriers to Trade, for example. In the early years, the
Appellate Body’s deviation from some of the basic tenets of the trade insiders at the WTO led to
an open conflict with the trade policy elite, including the delegates of the Members who sit as
diplomatic representatives of the membership in Geneva. The end result, however, was the accep-
tance of the Appellate Body’s authority. The same consensus practice of political and diplomatic
decision making at the WTO that made negotiating breakthroughs elusive also made it essen-
tially impossible for the Members to threaten or pressure the Appellate Body effectively since,
ultimately, overruling any of its decisions, either through the amendment of a WTO treaty or
through an ‘authoritative interpretation’, could not be done absent a consensus of the Members.

* Lloyd C. Nelson Professor of International Law, School of Law, New York University, New York, USA.
Email: rlh8@nyu.edu. I am grateful for excellent research assistance from Radha Raghavan. I presented
many of the major ideas in this article at a workshop at the Lauterpacht Centre, University of Cambridge
in fall 2015. Thanks to Lorand Bartels and other participants for useful exchanges. I presented an earlier
version of this article at the Institute for International Law and Justice Colloquium at New York University
and am grateful to Benedict Kingsbury and Gráinne de Búrca and student participants in the colloquium
for useful comments and suggestions. Conversations and or email exchanges on some of these issues
with Antonia Eliason, Joanna Langille, Petros Mavroidis, Kalypso Nicolaidis and Andrew Lang have been
exceedingly helpful in forming and refining my thoughts. Ruti Teitel read the entire manuscript with
great care and perception, offering many useful corrections.

EJIL (2016), Vol. 27 No. 1, 9–77 doi:10.1093/ejil/chw011

10 EJIL 27 (2016), 9–77

1 Introduction
The judicialization of international law through specialized tribunals is an often
remarked trend of the last decades. For some, judicialization merely increases anxiet-
ies about fragmentation; for others, it inspires hopes that international law, as law,
will finally enjoy the institutional thickness that it traditionally lacked when tethered

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to diplomatic or political arrangements. One would expect judicialization of interna-
tional law to be a reflection of the enhanced legitimacy and dynamic evolution of sub-
stantive norms and the political and diplomatic processes that generate them, which
is the story that Ruti Teitel persuasively tells in Humanity’s Law with respect to human
rights and the law of war.1
The World Trade Organization (WTO) presents an alternative and, at first glance,
perhaps puzzling counter-narrative. The WTO was conceived at the height of neo-
liberalism or the Washington consensus.2 But by the time that Uruguay Round was
complete and the WTO was born, the atmosphere had changed. The legitimacy of the
‘deep integration’ bargain struck in the Uruguay Round of negotiations and reflected
in the WTO treaties came into question almost as soon as the ink was dry, so to speak.
It was the riots of Seattle that made the WTO a household name, and it became famous
or notorious as a target for the anti-globalization movement.3 But the rioting outside
was only part of the story. A legitimacy crisis within the WTO was already brewing
with developing countries feeling buyer’s remorse about the result of the Uruguay
Round, where, in areas such as trade in services and intellectual property rights, they
had made considerable concessions, with (as some developing nations increasingly
felt) little concrete action in return. After numerous attempts to conclude a new round
of negotiations, which involved the launch of the Doha Round of development in the
shadow of the 9/11 attacks, the talks were finally abandoned late in 2015 at the
conclusion of the Nairobi WTO Ministerial. According to conventional wisdom and
despite agreements on information technology and trade facilitation (customs formal-
ities), the official acceptance of the collapse of the Doha Round constituted almost two
decades of political paralysis.
Yet if we turn from the political and diplomatic setting to the dispute settlement sys-
tem of the WTO, we see a judicial branch in full evolution through this entire period,
entertaining hundreds of claims and producing a vast jurisprudential acquis. Despite
the deep division among WTO Members about the future of the multilateral trading
system, the continuing salience of critiques of economic globalization, the many other
events that might be seen as destabilizing international economic order (for instance,
the financial crisis of 2007–2011), the sensitive issues often involved in WTO legal

1
R. Teitel, Humanity’s Law (2011). Teitel shows how the International Criminal Tribunal for the Former
Yugoslavia adopted a broad teleological interpretation of its powers, based upon the compelling nature of
the aims and values that it was purportedly designed to serve and the need progressively to realize these.
See also Weiler, ‘The Transformation of Europe’, 100 Yale Law Journal (YLJ) (1991) 2403, on the relation-
ship of the European court as a central actor in the transformation of Europe to the political process.
2
See D. Rodrik, Has Globalization Gone Too Far? (1997).
3
See S.A. Aaronson, Taking to the Streets: The Lost History of Public Efforts to Shape Globalization (2001), ch.
6, at 7.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 11

disputes (environment, animal welfare, preferences for developing countries, subsidies

for renewable energy and the management of scarce natural resources) and the major
challenges to binding dispute settlement in other areas of international economic law
(investor–state arbitration), the WTO judicial system has been largely spared attacks
on its legitimacy.
The question of what makes an international judicial system effective, successful or

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legitimate goes to the much debated issues about the meaning of ‘compliance’ in inter-
national law,4 the relationship between empirical or factual legitimacy and normative
legitimacy and, ultimately, the interaction of politics and law in international rela-
tions.5 For now, without prejudging what, or, indeed, whether there are, satisfactory
or satisfying answers in these respects at the level of general theory, one can speak in
a common sense way of the achievement or success of the WTO judicial system over
the last two decades, which has excited admiration and even envy in international
legal scholars and practitioners. One does not have to be Donald Trump to see that per-
ceived ‘success’ and legitimacy do have some significant positive relation. Aside from
the sheer number of disputes that the states parties (Members) have been prepared to
submit to judicialized dispute settlement,6 which, increasingly so, is itself some sort
of sign at least of empirical legitimacy, one can point to the relative lack of instances
where Members have, upon losing a ruling, explicitly chosen not to implement it (ulti-
mately on pain of retaliatory sanctions). While losing parties and sometimes other
WTO Members have criticized individual rulings, including by the Appellate Body,
these critiques have rarely challenged the overall authority or legitimacy of the WTO
judicial mechanism. In the early years of the WTO’s judicial system, some critics, from
academia and think tank-type policy institutions,7 did question whether in light of
apparent judicial activism by the Appellate Body some kind of political or diplomatic
control needed to be re-established over judicialized dispute settlement, but these calls
never developed lasting traction among WTO Members.
Finally, as already mentioned, in cases involving sensitive issues of policy space,
such as trade and environment disputes, the WTO judicial system largely succeeded
in avoiding becoming a target of anti-globalization activists or constituencies more
generally concerned with non-trade values that could easily be seen to be in conflict
with what insiders would regard as the central, liberalizing, if not neo-liberal, mis-
sion of the WTO. Only recently has one WTO Member, the USA, launched a persistent
attack threatening the Appellate Body’s independence. It has attacked the Appellate
Body’s judgments on a seemingly very technical, but sensitive, issue (‘zeroing’), which
concerns the application of WTO legal disciplines on a form of unilateral trade action,
4
Howse and Teitel, ‘Beyond Compliance: Rethinking Why International Law Really Matters’, 1 Global
Policy (2010).
5
A synoptic treatment that remains one of the most insightful is Helfer and Slaughter, ‘Toward a Theory
of Effective Supranational Adjudication’, 107 YLJ (1997) 273.
6
P.C. Mavroidis, Dispute Settlement in the WTO: Mind over Matter (2016) (manuscript on file at European
University Institute (EUI), Florence). Mavroidis notes that 500 disputes had been submitted to the World
Trade Organization (WTO) dispute settlement system between the creation of the WTO and November
2015.
7
C. Barfield, Free Trade, Democracy, Sovereignty (2001), most notably.
12 EJIL 27 (2016), 9–77

anti-dumping duties,8 even attempting to politicize the process of appointment and

reappointment of Appellate Body Members.
This article is aimed at presenting a narrative about the building of a judicial sys-
tem in the WTO through a period of intense diplomatic and political divisiveness
and prevailing perception of impasse and malaise in the Organization. At the centre
of the narrative is the Appellate Body of the WTO, a standing body of seven jurists

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charged with deciding appeals of law.9 The Appellate Body, as will be elaborated, has
responded to the political conflict and paralysis in the WTO by distancing itself from
the Organization and making a number of crucial jurisprudential moves that have
led to its transformation into an independent court, which has often decided con-
troversial questions in balanced or deferential ways that indicate neutrality or even
caution in regard to the neo-liberal ‘deep integration’ trade agenda reflected in the
Uruguay Round of multilateral trade negotiations and many of its results, such as the
WTO Agreements on Intellectual Property and on Technical Barriers to Trade (TBT
Agreement), for example.10
In the early years, the Appellate Body’s deviation from some of the basic tenets of
the trade insiders at the WTO led to an open conflict with the trade policy elite, includ-
ing the delegates of Members who sat as diplomatic representatives of the member-
ship in Geneva. The end result, however, was the acceptance of the Appellate Body’s
authority. The same consensus practice of political and diplomatic decision making
at the WTO that made negotiating breakthroughs elusive also made it essentially
im­possible for the Members to threaten or pressure the Appellate Body effectively,
since overruling any of its decisions, either through amendment of a WTO treaty or
through an ‘authoritative interpretation’, ultimately could not be done absent a con-
sensus of the Members. Appellate Body Members were well aware of this situation.
Publicly, at least, some Members actually expressed a wish that their rulings could be
politically adjusted more easily, implying that the Appellate Body had to accept too
much of a burden for the legitimacy of the WTO as a legal system, especially since
there were gaps or ambiguities in the legal text.
At the same time, however, it is clear that the Appellate Body was empowered or
protected as an independent judiciary because of the obstacles that the consensus
decision-making practice, combined with the general context of divisiveness within
the Organization, that made it such an effort to change course. The Appellate Body,

8
See C. Bown and T.J. Prusa, U.S. Antidumping: Much Ado about Zeroing, Working Paper, World Bank
Policy Research (2010).
9
Members of the Appellate Body are appointed for a four-year term that is renewable once. They are
expected to spend half of their time on Appellate Body business and are compensated with a salary on
that basis. They may participate in other professional activities as long as they make themselves available
when necessary to decide appeals and there is no conflict of interest that arises from the other activities.
Candidates are put forward by their home countries and considered by a Selection Committee of WTO
insiders, the director-general and member state delegates with senior positions in the various political
and diplomatic councils of the WTO. However, the ultimate decision about appointments is by the con-
sensus of the membership.
10
Agreement on Trade-Related Aspects of Intellectual Property Rights 1994, 1869 UNTS 299; Agreement
on Technical Barriers to Trade (TBT Agreement) 1994, 1868 UNTS 120.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 13

through case law that may often appear inconsistent – at least where various shifts
in approach are inadequately explained11 – has nevertheless developed a number of
judicial policies, which have, overall, oriented adjudication towards maintaining a
balance between trade liberalization and the right to regulate, i.e., domestic regula-
tory autonomy. It is very conscious of the legitimacy issues that arise when it passes
judgment over domestic policies in sensitive areas of public interest, carefully avoiding

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the appearance that the Appellate Body is the agent, much less the avant-garde of the
neo-liberal project represented by the Uruguay Round, or inspired by the ‘deep liber-
alization’ telos reflected in agreements such as the TRIPs Agreement.12 The Appellate
Body has taken pains to practise an unobtrusive or light review of the main lines of
the policies and has tried to be deferential to the policy objectives that are sought as
well as to the domestic choice of the degree of fulfilment of those objectives. The evolu-
tion of these elements of jurisprudence is the major substance of the following narra-
tive. Part of the balance, however, has not only been this deference in sensitive cases
but also the meaningful, if often procedural, discipline of unilateral trade remedies
as well as the careful scrutiny of the fine detail of public policies for arbitrariness or
protectionist abuse in implementation. In the Conclusion, this article considers the
durability of the edifice constructed by the Appellate Body in the face of the current US
attack and whether it is likely to provoke others of a similar kind.

2 The Setting: The Birth of the Appellate Body out of the

Troubled GATT-to-WTO Transformation
To understand the judicialization of the WTO, we have to understand not only the dis-
pute settlement procedures of the WTO but also the regime out of which those proce-
dures emerged – the General Agreement on Tariffs and Trade (GATT).13 Understanding
the regime entails not only an awareness of its main substantive norms but also some
awareness of the informal norms, practices and understandings that are not reflected
in the legal texts as well as ‘soft law’ declarations or guidelines. Then we have to con-
sider both the way the dispute settlement procedures and the regime were transformed
with the creation of the WTO.
The GATT was born from the failure of an ambitious project for a global trade regu-
latory agency, the International Trade Organization. While it is a one state–one vote
international Organization, where decisions including the amendment of the treaty

11
For criticisms along these lines, see F. Roessler, Changes in the Jurisprudence of the WTO Appellate Body
during the Past Twenty Years, Working Paper no. RSCAS 2015/72 (2015) (on file at Robert Schuman
Centre for Advanced Studies, Global Governance Programme, EUI).
12
Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement) 1994, 1869
UNTS 299.
13
General Agreement on Tariffs and Trade (GATT) 1994, 55 UNTS 194. The following borrows freely from
earlier work, especially Howse, ‘From Politics to Technocracy and Back Again: The Fate of the Multilateral
Trading System’, 96 American Journal of International Law (AJIL) (2002) 94; Howse and Nicolaidis,
‘Enhancing WTO Legitimacy: Constitutionalization or Global Subsidiarity?’, 16 Governance (2003) 73. See
also A. Lang, World Trade Law after Neoliberalism: Reimagining the Global Economic Order (2011).
14 EJIL 27 (2016), 9–77

and the creation of new obligations are decided by consensus, the original GATT was
dominated by the USA and its post-war partners.The Communist countries were,
generally speaking, not GATT members during the Cold War, and with increasing
decolonization, developing countries joined the GATT, but by the 1960s, they were
increasingly critical of some of the structures of the GATT and were, hence, not
viewed as full partners in decision making.

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At the start, the GATT was little more than a bare bones structure for progressive
negotiated reduction of tariffs on a reciprocal basis among sovereign states, subject to
most favoured-nation and national treatment rules. Thus, there was no requirement
in the GATT to eliminate tariffs at any given rate or pace. A paramount goal was the
avoidance of a protectionist summum malum – the situation where domestic social or
economic pressures lead some states to increase or reinstate barriers to trade, thus
triggering a ‘tit-for-tat’ response by other states and, eventually, a freefall into discrimi-
natory protectionism that is disastrous for the global economy. This sort of behaviour
was widely perceived by the founders of the Bretton Woods system to have led eventu-
ally to perilous instability in the interstate system and economic catastrophe in the
interwar years, and these phenomena were seen as having contributed to the climate
that made fascism, and World War II itself, possible.
In the GATT, allowance was made for a temporary balance of payments-based import
restrictions (Articles XII–XV), for safeguards in response to the injury to domestic
industries from sudden surges of imports (Article XIX) and for the negotiated rebalanc-
ing of concessions (Article XXVIII). The national treatment obligation (Article III),14
along with Article I on the most favoured nation, was a means of preventing member
states from instituting discriminatory domestic policies that would distort competition
between domestic and imported products (in other words, cheat on the negotiated bar-
gain), not a mechanism for liberalization per se. Some kinds of domestic policies received
explicit, but ambiguous, treatment under the GATT – subsidies were recognized not
only as potentially (and illegitimately) trade distorting but also as being in principle not

14
The main provisions of Article III read as follows:
Article III: National Treatment on Internal Taxation and Regulation
1. The contracting parties recognize that internal taxes and other internal charges, and laws, regula-
tions and requirements affecting the internal sale, offering for sale, purchase, transportation, distri-
bution or use of products, and internal quantitative regulations requiring the mixture, processing or
use of products in specified amounts or proportions, should not be applied to imported or domestic
products so as to afford protection to domestic production.
2. The products of the territory of any contracting party imported into the territory of any other con-
tracting party shall not be subject, directly or indirectly, to internal taxes or other internal charges of
any kind in excess of those applied, directly or indirectly, to like domestic products. Moreover, no con-
tracting party shall otherwise apply internal taxes or other internal charges to imported or domestic
products in a manner contrary to the principles set forth in paragraph 1 …
4. The products of the territory of any contracting party imported into the territory of any other con-
tracting party shall be accorded treatment no less favourable than that accorded to like products of
national origin in respect of all laws, regulations and requirements affecting their internal sale, offer-
ing for sale, purchase, transportation, distribution or use. The provisions of this paragraph shall not
prevent the application of differential internal transportation charges which are based exclusively on
the economic operation of the means of transport and not on the nationality of the product.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 15

illegal or illegitimate. In response to this studied ambiguity, the GATT explicitly permit-
ted, under certain constraints, self-help in the form of countervailing duties.
Second, the GATT did not, generally, require that the member states constrain pri-
vate restrictive business practices, but ‘dumping’ (selling abroad at lower prices than
in the home market) was disapproved, and the self-help of anti-dumping duties, again
under certain constraints, was made the accepted remedy. Furthermore, even discrim-

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inatory domestic policies might be permitted if they did not entail arbitrary or unjusti-
fied discrimination and could be linked, more or less tightly, to overriding public policy
goals such as the protection of human life or health, the conservation of exhaustible
natural resources or the protection of public morals (Article XX).
At the same time, the dispute settlement practice evolved out of the general lan-
guage in Article XXIII of the 1947 GATT into a system that eventually displayed
important elements of legalization. The new trade policy elite developed professional
working procedures and norms within the GATT, organized the agenda for negotia-
tions and – with very little to go on from the treaty text itself – created and sustained a
relatively effective arbitral mechanism for dispute settlement. As persons with the bent
of managers and technical specialists, they tended to understand the trade system in
terms of the policy science of economics, not in terms of a grand normative politi-
cal vision. A sense of pride developed that an international regime was being evolved
that was not vulnerable to the open-ended normative controversies and conflicts that
plagued most international institutions and regimes, most notably, for instance, the
United Nations, which is well described by Joseph Weiler:
A dominant feature of the GATT was its self-referential and even communitarian ethos expli-
cable in constructivist terms. The GATT successfully managed a relative insulation from the
‘outside’ world of international relations and established among its practitioners a closely
knit environment revolving round a certain set of shared normative values (of free trade) and
shared institutional (and personal) ambitions situated in a matrix of long-term first-name
contacts and friendly personal relationships. GATT operatives became a classical ‘network’.
... Within this ethos there was an institutional goal to prevent trade disputes from spilling over
or, indeed, spilling out into the wider circles of international relations: a trade dispute was an
‘internal’ affair which had, as far as possible, to be resolved (‘settled’) as quickly and smoothly
as possible within the organization.15

Legally oriented dispute settlement in the WTO evolved through referral by the
states parties (contracting parties) of the GATT of disputes under the treaty to ad
hoc panels (initially called working groups), which were made up of various mem-
bers of the insider network just described, who were diplomats, retired diplomats,
trade officials or academics closely associated with the GATT ‘community’. The ad
hoc panel was supported by the GATT bureaucracy, comprising a Secretariat that
eventually came to include legal experts (though the panellists themselves were not
predominantly trained in law). Above all, their expertise included insider knowledge
about the negotiations that had created or modified the legal norms and deliberations

15
Weiler, ‘The Rule of Lawyers and the Ethos of Diplomats: Reflection on WTO Dispute Settlement’, in
R. Porter et al. (eds), Efficiency, Equity, Legitimacy: The Multilateral Trading System at the Millennium (2001)
334, at 334–336.
16 EJIL 27 (2016), 9–77

inside the GATT institution about their meaning. The point was to produce a solu-
tion to a dispute based upon an interpretation of the GATT that was untainted by
national interests of the parties, which both parties could somehow accept. To have
a legally binding effect, the recommendations of the ad hoc panel had to be adopted
by the consensus of the state parties. While a losing party rarely blocked adoption
explicitly, panels nevertheless operated in the shadow of the consensus rule and,

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therefore, would be likely to craft a solution that would make it difficult for a losing
party to block a decision, without appearing to be engaged in cheating or avoiding
its obligations. The solution reflected not just the best legal analysis of the panellists
but, ultimately, the collective wisdom of the institution or, more precisely, its guard-
ians – the insider network.
It was not until the 1970s that the GATT bargain came under sustained stress. The
collapse of the gold standard and, with it, the structure for managed macro-economic
adjustment foreseen by the Bretton Woods system, combined with the recession of
the 1970s and the mounting intellectual and practical (stagflation) challenges to the
Keynesian consensus, led to increasing emphasis on micro-economic interventions of
various sorts for adjustment purposes as well as to new kinds of trade restrictions –
‘voluntary’ export restraints negotiated under threat of unilateral action – of dubious
legality under the GATT. For various reasons, the safety valves for adjustment written
explicitly into the GATT did not prove to have the appropriate kind of flexibility to deal
with the political economy of adjustment in the 1970s. As for the domestic micro-
economic interventions, not only subsidies but also other forms of industrial policy,
these challenged the stability of the non-discrimination norm as a means of distin-
guishing ‘normal’ legitimate domestic policies from ‘cheating’ in the trade liberaliza-
tion bargain. Differences in approach to the mixed economy were to be tolerated under
the embedded liberalism bargain, but under the economic pressures of the 1970s, it
was easy to view activist industrial policies as a beggar-thy-neighbour approach to
declining industries or declining demand (steel, for instance) – that is, as protectionist
cheating on the basic bargain.
Domestic technical regulations gave rise to claims that even facially neutral regu-
latory requirements constituted disguised protectionism, with regulations creating
obstacles to trade by forcing foreign producers to adapt to distinctive requirements of
the importing country, which were not obviously justified by non-protectionist regu-
latory objectives. By the end of the 1970s, it thus became evident that post-war mul-
tilateral trade liberalization needed some fine-tuning so as to sustain the embedded
liberalism bargain under changed economic and political circumstances. Then came
the economic conservative revolution (exemplified by Margaret Thatcher and Ronald
Reagan at the level of political leadership) and, with it, a radically different outlook on
the problems that ailed the multilateral trading system and their solution. The problem
was, at least for the USA, no longer framed in terms of the adequacy of the scope for
adjustment under the existing rules of the game. In fact, the normative basis or inter-
ventionist adjustment policies were put into question by the moral laissez-faire outlook
of the ascendant economic neo-right, aided and abetted by public choice accounts of
interventionism as the payment of rents to concentrated, entrenched constituencies.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 17

It was natural, then, in defining the US interest in rewriting the rules of the game
for multilateral trade to focus on interventionist or otherwise ‘inappropriate’ domestic
policies in other countries as barriers to market access for the USA in areas in which it
had a competitive disadvantage.
The multilateral rules of the game had enabled Germany and Japan, America’s war-
time enemies, to compete successfully in the US market for industrial products. They

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had also enabled the newly industrializing developing countries to compete success-
fully in highly labour intensive industries such as textiles. On the other hand, many
barriers worldwide hampered America in exploiting its apparent contemporary com-
parative advantage in knowledge-intensive industries and services. In some, intellec-
tual property was largely unprotected; in most, competition in network services, such
as in telecommunications and finance, was severely restricted or limited, while many
others still imposed byzantine and archaic regulatory requirements on products, both
imported and domestic. In many cases, a business presence in the other country was
necessary for the full exploitation of comparative advantage, and here American firms
faced severe foreign investment restrictions.
This new agenda, of course, was to become the core of the Uruguay Round agree-
ments, which established the WTO. A common feature was restraint on domestic
public policies that extended beyond the non-discrimination obligation of the GATT,
pushing in the direction of what Dani Rodrik terms ‘deep integration’. What was
required for greater market access was thought, in the predominant economic ideol-
ogy represented by the Washington consensus, to be also good domestic economic
governance: expansive intellectual property protection to spur innovation; de-mono­
polization and deregulation of network service industries such as telecommunica-
tions and finance and scaling down government health and safety and environmental
regulation to what could be strictly justified under cost/benefit analysis and by ‘sound’
science. As Rodrik describes, this outlook, variously referred to as the Washington
consensus or neo-liberalism, ‘combined excessive optimism about what markets could
achieve on their own with a very bleak view of the capacity of governments to act in
socially desirable ways. Governments … had to be cut down to size’.16
The developing countries did sign on formally to the new system. Why did they do
so, if it was not unquestionably welfare enhancing?17 First, due to the debt crisis in

16
D. Rodrik, The Globalization Paradox (2011), at 77.
17
Silvia Ostry, an important Uruguay Round negotiator and Canadian trade official, bluntly describes the
Uruguay Round bargain in the following terms: ‘The essence of the South side of the deal – the inclusion
of the new issues and the creation of the new institution – was to transform the multilateral trading
system. … the most significant feature … was the shift in policy focus from the border barriers of the
GATT to domestic regulatory and legal systems – the institutional infrastructure of the economy. The
barriers to access for service providers stem from laws, regulations, administrative actions which impede
cross-border trade and factor flows. … In the case of intellectual property the move to positive regulation
is more dramatic since the negotiations covered not only standards for domestic laws but also detailed
provisions for enforcement procedures to enforce individual (corporation) property rights. … And, lest we
forget, all this in return for minimal liberalization in agriculture and textiles and clothing.’ S. Ostry, The
Uruguay Round North-South ‘Grand Bargain’: Implications for Future Trade Negotiations (2000), available at
http://sites.utoronto.ca/cis/ostry/docs_pdf/Minnesota.pdf (last visited 22 February 2016).
18 EJIL 27 (2016), 9–77

the 1980s, many of these countries had been required to engage in unilateral trade
and micro-economic policy reform as a condition for International Monetary Fund
support for debt re-scheduling. Second, there was the notion that while developing
countries might ‘lose’ from some of the agreements, they gained from others, such
as commitments to agricultural and textiles trade liberalization. Linkage politics in
the Uruguay Round may even have convinced their leaders that the overall package

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was in their interest, since there was little way to tell. However, perhaps most import­
antly, the alternative to neo-liberal rules in areas such as intellectual property, food
safety regulations and services industries was a further increase in unilateralism in
American trade policy – the use of aggressive unilateral remedies under sections 301
and super 301 in attacking what were perceived as being ‘unfair’ trade practices of
other WTO Members, whether the lax enforcement of intellectual property rights or
the purportedly unnecessary barriers to competition services industries or scientifi-
cally unjustified food safety regulations.18
In the Uruguay Round, the USA agreed to a constraint on unilateralism or self-
help in return for new rules and ‘effective’ multilateral enforcement through WTO
dispute settlement. Part of this constraint on unilateralism was intensely negotiated
disciplines on specific unilateral trade remedies, anti-dumping duties, countervailing
duties, and safeguards; because of dissensus as to whether the underlying practices
being targeted by such unilateral actions are actually unfair, as well as different views
about the extent to which certain interpretations domestic US interpretations of these
remedies were opening the door to protectionist manipulation, the disciplines on trade
remedies had a messy and incomplete character. The US protectionist lobbies feared
having conceded too much; conversely, those concerned about US unilateralism could
not be left somewhat dissatisfied with disciplines that often fell short of articulating
clear substantive legal standards for ‘self-help’ against ‘unfair’ trade.
For developing countries, who had agreed to neo-liberal rules the substantive
legitimacy of which they were questioning throughout, the effectiveness of the
new system in holding back US unilateralism (and perhaps that of the European
Union (EU) as well) was crucial in making the sacrifice even minimally bearable.
In turn, for the USA, or at least the fair trade lobby on Capitol Hill and within the
Beltway, multilateral enforcement of the rules had to be effective in order to justify
their own sacrifice, precisely, of aggressive unilateralism, while at the same time,
this enforcement could not result in overreaching so that the remaining rights to
unilateral remedies, which were so zealously negotiated by the USA in, for example,
the Anti-Dumping Agreement, were still fully protected.19 What would be needed
to maintain this fine line was, to use a line from a Joni Mitchell song, a ‘strong
cat without claws’, a system that could be forceful enough to induce ‘compliance’
through multilateralism and make the constraint of unilateralism meaningful and
justified, while not being overly intimidating to domestic agencies handing out
trade remedies.
18
This is very cogently discussed in Mavroidis, supra note 6.
19
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade (Anti-
Dumping Agreement) 1994, 1868 UNTS 201.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 19

Law-making in the WTO was to remain, as with GATT practice, consensus-based

interstate bargaining, and, indeed as Richard Steinberg has pointed out, this became
more entrenched and formalized.20 No autonomous or independent law-making or
regulating institution was created within the Organization – no equivalent to the UN
Security Council or, perhaps more relevant, the European Commission. On the other
hand, the Uruguay Round produced a dispute settlement of a judicial sort. The ‘legal-

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izing’ or ‘judicializing’ features of the new system – compulsory jurisdiction and auto-
matically binding dispute settlement reports (through the replacement of the positive
consensus with the negative consensus rule), with the ultimate control of dispute
settlement outcomes shifting from the membership (political/diplomatic control) to
the new Appellate Body – have been repetitively invoked, as Weiler notes earlier, to
indicate a rule-of-law revolution or even a constitutional one.
However, in understanding the evolution of the judicial politics of the WTO over the
last two decades, it is just as important to recognize how much things did not change
or, rather, the extent to which the dispute settlement system remained the same as
the one that left the ultimate shape of disputes and their resolution to adjustment by
domestic and international trade politics, while in the shadow of the law as it evolved
through the jurisprudence of the Appellate Body. First of all, no private right of action
was created, nor were WTO Members obliged in a general way, to give direct effect
to WTO rules in domestic law and through domestic courts (with some very specific
exceptions – the TRIPs Agreement, for example, requiring that certain domestic rem-
edies for violations of TRIPs norms be made available). Thus, the Members retained
ultimate control over the filing of the disputes, as well as the dropping of them, and
their out-of-court settlement. Second, while much has been made of the possibility
of enforcement through the authorized withdrawal of concessions (retaliation/coun-
termeasures), the remedial features of the WTO system make it fall short of a true
compliance/enforcement regime.
As has been often noted and, indeed, lamented by free trade hardliners, remedies
are only prospective. If after exhausting the appellate process a Member finds itself
faced with a definitive ruling of violation against it, then its sole obligation is to alter
its measure to bring itself into compliance within a reasonable period of time. There
are no damages, or reparations, for the harm caused by the offending measure up to
the end of the reasonable period of time or whenever it is modified or withdrawn. In
effect, there is a ‘free ride’ to violate WTO obligations for several years, given the length
of time the dispute process takes from beginning to end. Second, there is no obligation
on the adjudicator to order a losing Member to make particular changes to its laws –
indeed, the default understanding is that it is normally up to the losing Member to
decide the appropriate legislative or administrative means to address the violations
found in the panel and or in the Appellate Body reports. Thus, a Member has the flexi-
bility to attempt to address the concerns of the dispute, ruling in a manner that is least
intrusive on its domestic sovereignty. And then there is a further proceeding, under

20
Steinberg, ‘In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the GATT/
WTO’, 56 International Organization (2002) 339.
20 EJIL 27 (2016), 9–77

Article 21.5 of the Dispute Settlement Understanding (DSU), if the winning Member
deems that what has been done is inadequate to address fully the violations in the
original dispute ruling(s).21 There can be several rounds of such Article 21.5 proceed-
ings before the nature of the adequate compliance is properly defined, and, moreover,
Article 21.5 proceedings, even though in theory they are strictly limited to the ques-
tion of what was needed to cure the original violation, can lead to a reshaping, and

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thus a continuation, in a morphed fashion of the dispute well into the future, espe-
cially if the measures taken by the losing Member to comply open up a different set of
issues about WTO law than those raised by the initial measure. One of the notoriously
unclear features of the DSU is at what point the losing Member can simply declare a
losing Member to be in non-compliance and ask for retaliation. The most plausible
answer is that as long as the issue remains whether what has been done is adequate,
Article 21.5 proceedings must run their course.
Finally, as for retaliation, it is limited to a withdrawal of concessions of equivalent
commercial effect. This gives rise to the possibility of what Alan Sykes refers to as ‘effi-
cient breach’.22 Depending on its domestic political economy, and the social and politi-
cal sensitivity of the measures that it has been asked to change, the losing Member
may well choose to accept the retaliation and maintain its measure. It is paying a
‘price’ but not a high enough price to create decisive incentives to bring itself in con-
formity with the law as interpreted by the adjudicator.
While the ‘rule-of-law’ features of compulsory jurisdiction, automatically binding
dispute reports, judicial oversight of implementation, appellate review and sanctions
for non-implementation unquestionably still represent important changes, these
changes have also occurred without a fundamental alteration of the nature of the
ad hoc panel process, which is the first instance of the WTO. While it is clear from
the DSU that the intention was to draw the Appellate Body membership from distin-
guished respected jurists, the panel system was not professionalized.23 Panellists are
mostly low or mid-level trade officials or retired officials, many are not lawyers and
few have trial advocacy experience. The WTO Secretariat remains crucial in orient-
ing the panel reports and motivating them through extensive reasons and citations of
authority. There is essentially no distance or independence of the panellists from the
WTO insider community; legal advisers from the WTO Secretariat are usually pres-
ent throughout the panel’s proceedings and deliberations. By establishing appellate
review only for error of law and giving appellate review a very tight timeline (60 to
90 days), the Uruguay Round negotiators virtually guaranteed that a factual basis

21
Understanding on Rules and Procedures Governing the Settlement of Disputes 1994, 1869 UNTS 401.
22
Sykes, ‘The Remedy for Breach of Obligations under the WTO Dispute Settlement Understanding:
Damages or Specific Performance?’, in M. Bronckers and R. Quick (eds), New Directions in International
Economic Law (2000) 351.
23
The European Union (EU) made a proposal in the stalled post-Uruguay Round dispute settlement negotia-
tions for the professionalization of the panels, but it was not well received by other WTO members, includ-
ing the USA. WTO, Dispute Settlement Body Special Session Document, Contribution of the European
Communities and Its Member States to the Improvement of the WTO Dispute Settlement Understanding,
Doc. TN/DS/W/1, 12 March 2002.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 21

determined by essentially amateur adjudicators and technocrats within the WTO

bureaucracy would be decisive in framing the disputes.
All of these features of continuity, and limits on the strict conception of the ‘rule of
law’, have to be borne in mind as we consider how the Appellate Body chose to carve
out its role, assert its authority and develop the pillars of its jurisprudence.
We now turn to the troubled political setting in which the Appellate Body estab-

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lished itself as a judicial tribunal. As already noted many developing nations had
acquired buyer’s remorse almost by the time they had signed the Uruguay Round
agreements. At the same time, as previously observed, neo-liberal globalization was
already under sustained attack by activists in the USA and Western Europe by 1995.
Those features of the Uruguay Round agreements that pointed beyond the traditional
GATT non-discrimination norm towards forced harmonization or deregulation in the
direction of the neo-liberal model of optimal economic policy for development and
growth were understandably the focus of much of the attack, but also important was
the apparent cessation of the use of trade sanctions against labour and environmental
policies of other countries that threatened human rights and global environmental
goals, which occurred through the unadopted Tuna–Dolphin panel reports in the early
1990s and were strongly supported by the insider trade policy elite and the GATT/
WTO institution, which largely controlled the panel process, as explained above.24 The
neo-liberally oriented trade policy community tended to dismiss the criticisms of the
outsider constituencies as ill-informed or as a simple protectionist backlash against
progress towards the free trade ideal. Developing countries, on the other hand, were
reminded that they had ‘voluntarily’ consented to the deal and that they had much to
gain through a system where they could genuinely enforce the rules judicially against
more powerful trading nations.
In fact, while the attacks on neo-liberalism multiplied and broadened, the devel-
oped country-led trade policy elite, emboldened by the Uruguay Round success but
impatient to move further towards the neo-liberal utopia that was permitted in the
Uruguay Round (where there was a failure to establish rules on investment beyond the
GATT non-discrimination norm, where the TRIPs Agreement still had some excep-
tions and balancing provisions and where service liberalization commitments were
regarded as disappointing), conceived almost immediately of an agenda for new nego-
tiations to push forward where the neo-liberal agenda had been pushed back during
the Uruguay Round. A few within the trade policy elite sounded a note of caution25
– perspicacious in retrospect. Now that the Uruguay Round ‘grand bargain’ was done,
it might be the appropriate time to consider some rebalancing or adjustments to make
the bargain more secure and legitimate in the eyes of those who felt bullied, left behind
or worse off, most notably a significant number of developing countries. The Uruguay
Round required extensive implementation both by Members and through the creation
of new committees and other structures within the WTO. Why the need to push for-
ward immediately with a further ambitious neo-liberal negotiating agenda?
24
WTO, United States – Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products –
Report of the Appellate Body (Tuna–Dolphin), 13 June 2012, WT/DS381/AB/R.
25
E.g., Ostry, supra note 17.
22 EJIL 27 (2016), 9–77

The trade policy insider community surrounding the WTO judged itself, and invited
judgment by others, on its success or, as turned out to be the case, on its relative fail-
ure to succeed with this new agenda for another large bargain. In fact, through the
period in question, the WTO was able to manage two enormously significant acces-
sions – those of China and Russia – to work out a compromise on intellectual prop-
erty rights and access to medicines, negotiate two agreements on the liberalization of

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trade in information technology (albeit on a plurilateral basis but involving the players
that constitute the vast bulk of these markets) and, more recently, an accord on cus-
toms procedures – the Trade Facilitation Agreement (the one item of the Doha Round
agenda to be realized).26 In addition, through the device of a waiver, legal security was
also provided for in the enforcement of the Kimberly Accord on conflict diamonds,
the first time there has been a human rights-related understanding.27 Finally, at the
Nairobi Ministerial in late 2015, where the Doha Round was at last buried, an accord
on the abolition of agricultural export subsidies was reached, a contentious subject
of considerable importance to a number of developing, as well as developed, coun-
tries. Why was the WTO judged ineffective or moribund almost throughout this whole
period and why would its redemption from this damning verdict have to depend on the
eventual achievement of another ‘round’?
Different international organizations have different structures and different needs
for renewal or revision of their legal frameworks. The constant negotiation of new
packages of multilateral treaty norms is not necessarily the test for the health of an
international organization. The mindset of the trade policy elite has been profoundly
shaped, however, by the ‘bicycle theory’ of trade liberalization, a notion usually attrib-
uted to Fred Bergsten, of the neo-liberal-oriented, Washington, DC, think tank, the
Institute for International Economics.28 The theory is that unless one is constantly
moving forward with deeper and wider liberalization, the multilateral trading system
will collapse just like a bicycle that will fall over if you stop pedalling forward. This
hypothesis has never been given any rigorous explanation or justification, either in
economics (as Dani Rodrik has pointed out29) or in international relations theory. Yet
its influence on the trade policy elite has been enormous. Since tariffs were reduced
successfully in repeated rounds of multilateral negotiations, as well as through cus-
toms unions and free trade areas and a significant amount of unilateral tariff reduc-
tion, the remaining tariffs of significance are largely in ‘sensitive’ sectors such as
agriculture, where protection is deeply embedded in domestic political economies,
such that making ambitious offers of concessions is extremely difficult politically.
These political economies do change over time, but the change is hard to impel
through bargaining at the international level. Thus, the emphasis shifts from tariffs

26
See Eliason, ‘The Trade Facilitation Agreement: A New Hope for the World Trade Organization’, 14 World
Trade Review (2015) 643. Agreement on Trade Facilitation, WTO Doc. WT/L/931 (2014).
27
Waiver Concerning Kimberley Process Certification Scheme for Rough Diamonds, Doc. G/C/W/432/
Rev. 1, 24 February 2003.
28
F. Bergsten, Toward a New International Economic Order (1979); J. Bhagwati, Protectionism (1988).
29
D. Rodrik, Trade Policy as Riding Bicycles (2007), available at http://rodrik.typepad.com/dani_rodriks_
weblog/2007/07/trade-policy-as.html (last visited 22 February 2016).
 The World Trade Organization 20 Years On: Global Governance by Judiciary 23

to ‘beyond-the-border’ liberalization, which means subjecting domestic policies to dis-

cipline or harmonization beyond the well-established GATT non-discrimination norm
(a shift enforced by the neo-liberal ideological tendency and the US use of unilateral-
ism against ‘unfair’ domestic policies, which threatens the GATT equilibrium or bar-
gain, as discussed above). The bicycle theory in this world of limited further gains from
negotiated tariff reductions would have to imply that the multilateral trading system

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can never reach a point of equilibrium where the maximum amount of welfare-
enhancing liberalization has been achieved that is consistent with the basic norms of
nation-state democracy and reasonable respect for regulatory diversity. Indeed, one
may even argue that full implementation of the Uruguay Round would already result
in going past this point and, thus, would risk a delegitimizing disequilibrium in favour
of liberalization, so to speak.
This is what many constituencies were saying as attempts were made to launch a
new round in Singapore, then Seattle, Doha and, finally, Cancun. At the Cancun min-
isterial meeting in 2003, the EU, in agreeing to take investment and competition (anti-
trust) out of the negotiating agenda as a price for unblocking a new round, seemed to
be acknowledging that there could be a saturation point beyond which it would make
no sense to demand further liberalization/harmonization at the expense of domes-
tic sovereignty/democracy/regulatory diversity. However, if you have not freed your-
self from the bicycle theory, then you will simply lack any sense of what equilibrium
looks like, let alone that it might well have been reached (at least for some considerable
period of time).
As if the bicycle theory were not enough of a distorting lens through which to
gauge the needs of the WTO system for revision or renewal, another element in the
theology of the trade policy elite has been at work in contributing to the self-con-
demnation of the WTO ‘institution’ as a failure. This is the notion that to keep the
bicycle rolling what is needed is primarily, if not exclusively, new ‘hard’ legal rules,
which are themselves difficult to change, rules that ought to be applied to all WTO
Members equally and enforced through dispute settlement. This idea is based on the
trade policy elite’s superiority complex in relation to the United Nations or other
fora that generate softer kinds of cooperation, norm generation and conflict resolu-
tion, which, among many in the trade policy elite, one often hears derided as ‘talk
shops’.30 Yet these ‘softer’ practices are not simply the result of weak thinking, lack
of intestinal fortitude or dreamy utopianism. They reflect the deep reality of political
disagreement among sovereign states and the delicacy of the process of narrowing
genuine differences in values, perceptions and interests in a large community of
member states and, on the basis, at least in principle, of sovereign equality.31 Again

30
See, e.g., R. Sally, New Frontiers in World Trade: Globalization’s Future and Asia’s Rising Role (2008).
31
On the ethos required to reorient the WTO to such a process, see Howse and Nicolaidis, ‘Towards a Global
Ethics of Trade Governance’, Law and Contemporary Problems (2016) (forthcoming). Mavroidis has rightly
noted: ‘[T]he WTO has a very important mandate anyway which is independent of the success/failure of
rounds: discussions in the various committees manage to produce better communication across trading
nations, and resolve many disputes as well.’ P. Mavroidis, Right Back to Where We Started from (or Are We?)
(2011) (unpublished manuscript on file at EUI, Florence)
24 EJIL 27 (2016), 9–77

and again would the then director-general of the WTO hector Members for lack of
‘political will’ to come to agreement in post-Uruguay Round negotiations. Never for
a minute was it conceded that after the Uruguay Round there were genuine and seri-
ous divergences of perspective and perceived interests among WTO Members about
the future of the multilateral trading system, the need to rebalance the Uruguay
Round result, the size and nature of gains from a successful new round and, indeed,

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the most important subject matter priorities for new agreements (which were not
necessarily reflected in the formal agenda that was crystallized at the Doha minis-
terial meeting, a rump of the neo-liberal-oriented Singapore Declaration in 1996).
Instead of the pressure cooker of large-scale negotiations under deadlines (which
were in reality always missed), it was arguably a time when further norm creation (if,
indeed, it was needed – the point about equilibrium made above) would require long
preparation through more open dialogue and deliberation, new economic research
and careful thinking about the kinds of structures required to advance liberalization
without inordinately burdening developing nations or inappropriately constraining
domestic regulatory democracy. It is to the credit of the current director-general of
the WTO, Roberto Azevedo, that he quickly dropped the pressure-cooker approach of
the French dirigiste bureaucrat Pascal Lamy and, while continuing talks to the extent
possible, did so in a new atmosphere of respect for genuine differences that does not
malign disagreement as deal breaking or obstructive. This outlook did at least pro-
duce the trade facilitation agreement and, most recently, a healthy agreement to dis-
agree – the frank acknowledgement that the differences between WTO Members are
such that it is not fruitful to continue the Doha Round exercise. Indeed, the Trade
Facilitation Agreement resembled in many ways some of the softer approaches pre-
viously held in contempt by the insider trade policy elite, with developing countries
having differentiated obligations and the ability to control in significant ways the
time frame for the implementation of obligations. Thus, there has been some progress
towards a new mentality that is more willing to acknowledge and address openly and
respectfully the significance of the diversity among the WTO’s Members, politically
and economically.
However, overall, from the time that the Appellate Body was first faced with estab-
lishing itself as a legitimate, effective adjudicative body to the present, the WTO
‘institution’ has presented itself and understood itself as being in a state of arrested
normative development, to the point that its future relevance and viability could seri-
ously be questioned. I have tried to explain above that this was, in many respects, a
self-constructed narrative. When the Appellate Body looked inside the WTO building,
it saw an atmosphere of malaise, self-doubt and self-flagellation; when it looked out-
side the window it saw angry protesters attacking the WTO as an anti-democratic
institution threatening social justice, environmental protection and human rights,
a symbol of much that was problematic with neo-liberal ideology. We now turn to
the legitimacy challenges for the Appellate Body in establishing itself and operating
within this frame.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 25

3 The Legitimacy Challenges for the New WTO

Judicial System
What is usually referred to as the judicialization of the multilateral trading system –
compulsory jurisdiction, automatically binding rulings, sanctions for non-compliance
and an Appellate Body – was by its chief architects arguably understood as being part

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and parcel of the project of deepening and widening economic integration on a neo-
liberal model. The features in question would facilitate ‘compliance’ or ‘enforcement’
and, thus, provide a bulwark against vested domestic interests’ pushback against
the liberalization agenda. The Appellate Body would provide a safeguard against the
occasional aberrent decisions made by the ad hoc panels – the kinds of decisions that
under the GATT system were regarded by a consensus of the trade policy elite as being
somehow ‘wrong’ and not in line with the way the insider community understood the
intent of the law and the evolving practice of the community.32
A more ambitious way that the new Appellate Body might have seen its role would
have been as the ultimate guardian of the new WTO system and its neo-liberal values,
adding the rule of law or even, in the more grandiose language of some scholars,
‘constitutionalizing’ the project of economic globalization, orienting its legal interpre-
tations by the norms, practices and professional attitudes of the community that had
managed the GATT and successfully concluded the negotiations that created the WTO
towards the telos of ever deeper integration through further negotiations (the bicycle
theory). The conscious rejection by the Appellate Body of this kind of role is reflected
in a statement by one of its founding Members, James Bacchus, some years later that,
even though he himself was personally committed to the agenda of deeper integra-
tion, it would have been a form of inappropriate judicial activism for the Appellate
Body to see its own role as being in aid of that telos:
I am an outspoken advocate for negotiations that would broaden the scope of the WTO treaty
to bring within it many more ‘twenty-first century’ global economic and commercial concerns.
… To my mind, this must be resolved by negotiation and not by litigation. The responsibilities
of the WTO should only be extended at the instigation of the WTO Members themselves. The
responsibilities of the WTO should not be extended in the context of discrete disputes as a result
of decisions by WTO jurists responding to innovate claims that are beyond the current scope
of the WTO treaty.33

The Appellate Body became activist in a very different sense, creating itself as an
independent, semi-autonomous judicial branch of the WTO system, operating at
a considerable remove from the political and diplomatic institutions of the WTO.
Often the Appellate Body appeared to sympathize with the concerns of typically
32
The view that the negotiators considered the Appellate Body as a kind of ‘afterthought’, a kind of safety
valve against a rare panel ruling that was seriously anomalous in terms of the general institutional
understanding of the legal norms at issue, is well established in the literature. See, e.g., van den Bossche,
‘From Afterthought to Centrepiece: The Appellate Body and Its Rise to Prominence in the World Trading
System’, in G. Sacerdoti, A. Yanovich and J. Bohanes (eds), The WTO at Ten: The Contribution of the Dispute
Settlement System (2006) 289.
33
Bacchus, ‘Not in Clinical Isolation’, in G. Marceau (ed.), A History of Law and Lawyers in the GATT/WTO:
The Development of the Rule of Law in the Multilateral Trading System (2015) 507, at 515–516.
26 EJIL 27 (2016), 9–77

anti-globalization stakeholders or constituencies, rather than with the neo-liberal sen-

sibility of the insider community (that is, when it did not present itself simply as a treaty
interpreter confronting a legal text beyond the fray of the globalization wars). This was
a self-conscious judicial policy. Again, founding Appellate Body Member James Bacchus
says: ‘I think it is important for those out in the world to know that whatever the failings
of the Appellate Body, those failings are not caused by the fact that Members of the

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Appellate Body are narrow-minded trade gurus who wear blinders and thus cannot see
any values other than trade.’34 Thus, the Appellate Body viewed itself as being, in some
sense, accountable to those out in the world, stakeholders representing other values
and interests than those given primacy by the trade policy insiders. This accountability
to outsiders, in terms not only of the manner it balanced values but also in maximizing
stakeholder participation to the greatest extent poss­ible, given the constraints of the
treaties (amicus briefs, open hearings where consented to by the parties), must be set
in contrast or juxtaposition to the view within the Appellate Body that its authority as
a judicial institution depends not merely upon its independence but also upon its dis-
tance from the WTO as an institution. This idea has been most clearly stated by former
Appellate Body Member David Unterhalter: ‘[Members of the Appellate Body] do not
answer to [the membership] … [since its decisions do not have to be adopted by positive
consent of the membership] the Appellate Body is thus removed from political or diplo-
matic engagement with the membership-an essential pre-requisite for independence.’35
One way of understanding the Appellate Body’s reorientation away from the WTO
‘institution’ is to emphasize the clash between the different sensibilities and profes-
sional goals of technocrats and diplomats, on the one hand, and jurists, on the other.36
From this perspective, staffing the Appellate Body with high-level legal professionals
almost guaranteed that the jurisprudence of the WTO would not simply be neo-liberal
trade diplomacy by other means. Along these lines, George Abi-Saab, an Appellate
Body Member who directly succeeded the founding generation, so to speak, has
suggested that:
[while] the Appellate Body was initially conceived as an exceptional recourse to harness the
odd rogue panel, … once established, institutions evolve according to their inner dynamics …
an entity, however ambiguous or lacunary its institutional makeup, once it perceives itself as
entrusted with the exercise of the judicial function, evolves according to a legal genetic code
towards greater judicialization.37

This logic goes a long way to understanding why the Appellate Body would
have taken a judicial, rather than diplomatic, approach to the interpreta-
tion of WTO legal norms. However, it cannot fully explain why the Appellate

34
American Society of International Law, ‘WTO Appellate Body Roundtable’, in Proceedings (2005), at 182
(emphasis added).
35
Unterhalter, ‘The Authority of an Institution: The Appellate Body under Review’, in Marceau, supra note
32, 466, at 469.
36
See the seminal essay of Weiler, ‘The Rule of Lawyers and the Ethos of Diplomats: Reflection on WTO
Dispute Settlement’, in Porter et al., supra note 15, 334.
37
Abi-Saab, ‘The Appellate Body and Treaty Interpretation’, in G. Sacerdoti, A. Yanovich and J. Bohanes
(eds), The WTO at Ten: The Contribution of the Dispute Settlement System (2006) 453.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 27

Body distanced itself so dramatically from the GATT/WTO ‘institution’ and

its acquis of informal norms, practices and interpretive canons. There is ample
room within the interpretive rules of the Vienna Convention on the Law of
Treaties (VCLT) (Articles 31–32) for giving a significant place to this acquis –
by broadly interpreting ‘subsequent practice’ in Article 31, for example, as some
panels did in order to borrow heavily from the GATT acquis.38 As Weiler notes, the

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distancing of the Appellate Body from the GATT/WTO institution went to the point
of ‘sometimes gratuitously scathing [criticism] of panel decisions’.39 As one of the
founding Members of the Appellate Body, Claus-Dieter Ehlermann, notes, the insider
committee charged with the selection of Appellate Body Members sought deliberately
to appoint to the Appellate Body distinguished generalist jurists, not eminent experts
in GATT/WTO law.40 (Only one insider, the late Julio Lacarte-Muro, was appointed to
the founding membership of the Appellate Body, and he was a seasoned diplomat and
trade negotiator, not a legal specialist of GATT/WTO law.)
Along the lines of Weiler’s and Abi-Saab’s suggestions, one view would be that by
appointing jurists who were not WTO specialists one could only expect them to recon-
struct trade jurisprudence using tools and sources from general international law and
notions of what is required for a genuinely judicial organ to function properly in the ser-
vice of the ‘rule of law’. However, another view is also possible. Trade law experts would
be more likely to substitute their own view of the law for that of panels, which by reason
of the guidance of the Secretariat and the practice of the appointment of panels from the
trade policy insider community, represents, in a sense, the accumulated collective wisdom
of the ‘institution’. Conversely, since GATT/WTO law is manifestly highly technical and
complex, generalist jurists with no prior knowledge of the area would feel it appropriate
to correct only manifest legal error, situations where a panel’s reasoning happened to be
impossibly unclear or contradictory, while also controlling for non-objectivity situations
where a panel might have been influenced by the political interests of a particular Member.
This view is consistent with the notion that the drafters really had the risk of a ‘rogue-
panel’ in mind when they created the Appellate Body. And, indeed, often in domestic
legal systems, judicial review by general appeals courts of administrative agencies and
tribunals in technical areas of regulation such as anti-trust, telecommunications, or
food safety has been conceived along the lines of considerable deference to expertise,
including leeway for the expert body in legal interpretation. Two practitioner critics of
the Appellate Body’s choice for a different approach suggest that:
Appellate Body members in particular are, on the other hand, primarily generalist interna-
tional jurists who do not share the same common experiences or understandings as their GATT
predecessors. … Contrary to the predictions of some long-time observers [footnote omitted]
however, the Appellate Body in particular has placed surprisingly little emphasis on drafting
history as a means of understanding the intent of WTO agreements.41

38
Vienna Convention on the Law of Treaties (VCLT) 1969, 1155 UNTS 331.
39
Weiler, supra note 36, at 146.
40
C.-D. Ehlermann, ‘Revisiting the Appellate Body: The First Six Years’, in Marceau, supra note 32, 487.
41
D. Wilson and L. Starchuck, Judicial Activism in the WTO: Implications for the Doha Negotiations,
September 2003, available at http://jpkc.zzu.edu.cn/esjmyzzf/ebook/lw/Judicial_Activism_in_the_
WTO_-_Implications_for_the_DOHA_Negoti.pdf (last visited 22 February 2016).
28 EJIL 27 (2016), 9–77

Overall, the mere choice to create in the Appellate Body a quasi-judicial institution
staffed with generalist jurists – genuine legalists – cannot itself explain or justify the
radical break by which the Appellate Body distanced itself from institutional tradi-
tion and practice within the GATT/WTO, which, indeed, as Robert Hudec, Weiler and
others have rightly noted, had already moved in a legalistic direction during the last
decades of the GATT era.

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This declaration of independence, I believe, is supported by other, specific consid-
erations of legitimacy. As described in the previous section, by the time the Appellate
Body was delivering its first judgments, the neo-liberal project was already embattled
and contested in many countries and the WTO, as represented by the aggressive
Uruguay Round agenda, was at the centre of the controversy. How could the Appellate
Body not become entangled in the globalization battles, as the ultimate ‘enforcer’ of
the WTO neo-liberal agenda, as it was represented in the Uruguay Round agreements,
if it were to be explicitly guided in its jurisprudence and institutional orientation by
the ‘WTO system’ and the liberalization telos it was understood to represent, both by
insiders and enemies?
The negative consensus rule introduced in the Uruguay Round to determine the
adoption, or binding character, of rulings by the panels and the Appellate Body was
oriented, of course, towards ‘enforcement’ or ‘compliance’. However, it had yet another
significance, which is very important to understanding what I call the legitimacy chal-
lenge of the WTO judicial system. As former Appellate Body Member David Unterhalter
emphasizes, there was no longer any political filter, in effect, for dispute settlement rul-
ings in the Dispute Settlement Body.42 These would be adopted, except in the implausible
situation where even the winning party voted against it. With the WTO divided against
itself, and the political impasse surrounding a new round of negotiations, the ‘institu-
tion’ would not have a strong hand to play in disciplining or pressuring the Appellate
Body, much less in attempting to control it. Changing the actual WTO rules to override
the Appellate Body ruling would itself require positive consensus.
The WTO Agreement did contain a provision that allowed for authoritative inter-
pretations of the WTO treaties to be adopted by a supermajority vote of the mem-
bership, but voting was never really practised in the GATT and there was a general
aversion that continued into the WTO era to moving away from the consensus deci-
sion making.43 In sum, by the combined effect of the negative consensus rule for dis-
pute rulings and the positive consensus requirement (at a time of political dissensus, if
not impasse, within the WTO), the insider community of trade diplomats and officials
could not plausibly reverse an approach taken by the Appellate Body that was at odds
with its (typically neo-liberal) view of the WTO system and its purposes. Explicit state-
ments by various Members of the Appellate Body throughout its history indicate an
awareness of the narrative of the WTO as an institution that is blocked or dysfunc-
tional at the political and diplomatic level. In the words of founding Appellate Body
Member Mitsuo Matsushita: ‘In national governments, there is a Supreme Court and

42
Ibid., at 11.
43
Agreement Establishing the World Trade Agreement (WTO Agreement) 1994, 1867 UNTS 154.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 29

also there is the legislature. If the Supreme Court decision is unacceptable for legal
or political reasons, the legislature may be able to adopt a new law or to reverse it.
In the WTO context, the legislature is the ministerial conference. Yet it is not operat-
ing so well.’44 Another founding Member of the Appellate Body, Julio Lacarte-Muro,
summed it up this way: ‘In ten years, the membership of the WTO has never even
made a gesture toward interpreting a provision, let alone approved an interpretation,

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and let alone made an amendment to the WTO Agreements.’45
If the Appellate Body were to be seen by neo-liberal constituencies as being too def-
erential to interventionist government policies, and not sufficiently aggressive as an
enforcer of liberalization, it might disappoint certain claimants, particular the USA
and the EU, whose corporate lobbies pushed for the Uruguay Round deal. But there
were also important anti-globalization constituencies in those Members challenging
neo-liberalism. In response to a perception of excessive deference, pro-liberalization
constituencies might urge trade officials to take unilateral action in response to the
‘enforcement’ failure. However, such aggressive unilateralism was, as Joost Pauwelyn
has pointed out, significantly disciplined in the new WTO system, and unilateralism
would create its own legitimacy problems.46 While an alternative response might be to
shift dispute claims to other forums such as regional trade agreements or reformulate
them as investment disputes (easily possible, as is evidenced by a number of instances
where WTO disputes also resurfaced as investor–state disputes), such exit is not easy.
Article XXIII of the DSU requires that determinations of violations of WTO agree-
ments be made exclusively by the WTO dispute settlement organs. One thus loses any
distinctive advantages from WTO law or jurisprudence by shifting to a regional forum.
Most regional dispute settlement systems are, generally speaking, rather underdevel-
oped (MERCOSUR may be an exception), and, as will be discussed later in this article,
the WTO Appellate Body, in fact, has adopted a policy that is not accommodating of
regional dispute fora operating side by side the WTO dispute settlement system. In
sum, for a dissatisfied claimant, exit from the WTO dispute system would be far from
costless. On the other hand, a ruling seen by the losing Member and constituencies
critical of neo-liberalism or economic globalization as inappropriately intrusive in
domestic sovereignty, especially in sensitive areas such as the environment and human
health, would likely drag the Appellate Body into the legitimacy woes of economic
globalization. The Appellate Body would be embattled, and there would be a possibil-
ity that its effectiveness would become questioned due to ‘civil disobedience’ of the
losing party, refusing to implement the ruling even on pain of retaliatory sanctions.
As the Appellate Body soon found out with the EC–Bananas47 and EC–Hormones48 dis-
putes, such civil disobedience was a real possibility and even considered by some WTO

44
American Society of International Law, supra note 34, at 181.
45
Ibid., at 177.
46
Pauwelyn, ‘The Transformation of World Trade’, 104 Michigan Law Review (2005) 1.
47
WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Report of the
Appellate Body (EC–Bananas), 25 September 1997, WT/DS27/AB/R.
48
WTO, EC Measures Concerning Meat and Meat Products (Hormones) – Report of the Appellate Body (EC–
Hormones), 13 February 1998, WT/DS26/AB/R, WT/DS48/AB/R.
30 EJIL 27 (2016), 9–77

scholars such as Sykes to be legal – a form of ‘efficient breach’.49 Here, the positive
consensus rule for political adjustment of dispute rulings would function against the
legitimacy of the Appellate Body. It could not easily transfer the responsibility for fix-
ing the systemic risks of ‘civil disobedience’ to a functional political decision-making
process.
In sum, non-compliance with its purported binding rulings poses a greater risk on

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balance to the Appellate Body’s legitimacy than perceptions that it is overly deferen-
tial, failing to find violations of WTO rules where it ought. There is a greater down-
side risk from intrusiveness than there is from deference, generally speaking. Insiders
and academic commentators may criticize the latter; but the former is what is likely
to lead to headlines and street demonstrations. It follows also that, even where find-
ing a violation, the Appellate Body would be most likely to avoid serious legitimacy
consequences, where the finding could be couched in terms that express appropriate
deference or sensitivity to non-trade values and institutions as opposed to aggressive
enforcement of neo-liberal globalization or ‘deep integration’. Narrow, as opposed to
broad, grounds of violation might allow a Member to comply through relatively tech-
nical or fine-grained changes to its regulations, leaving in place the main thrust of the
public policy, thus lessening the risk of civil disobedience.
At the same time, repeated or chronic failure of the WTO Appellate Body to sanction
or discipline discriminatory protectionism, especially abuse of unilateral trade remedies
by developed countries, could further exacerbate the legitimacy crisis of the WTO, making
the Uruguay Round bargain even more questionable for developing countries and, in the
longer term, especially under the pressure of global economic or financial crisis, creating
a sense that the constraints are so loose that it is acceptable to revert on a large scale to
the kind of protectionism even the original GATT bargain was intended to constrain. Thus,
the Appellate Body would need to combine a certain kind of deference in cases involving the
dividing line between acceptable domestic policy space and liberalization/integration, while
visibly holding the line against the protectionist abuse of permissible policy space and of per-
mitted unilateral trade remedies. This does not mean providing legal security that Members
will be held to the strict discipline of the law in every case but, rather, it is a matter of overall
confidence in the discipline’s effect over time. The many disputes of a well-functioning adju-
dicative mechanism will provide sufficient confidence to prevent widespread defection or
exit from the system’s restraints and create, as Petros Mavroidis puts it, adopting an expres-
sion from Robert Keohane’s theory of international cooperation, ‘diffuse reciprocity’.50

4 The Declaration of Independence

The Appellate Body’s initial set of moves to separate itself from, and establish its
autonomy in relation to, the WTO as an institution or neo-liberal projects could be

49
See Sykes, ‘The Remedy for Breach of Obligations under the WTO Dispute Settlement Understanding:
Damages or Specific Performance?’ in M. Bronckers and T. Cottier (eds), New Directions in International
Economic Law (2000) 347; EC–Bananas, supra note 47; EC–Hormones, supra note 48.
50
Mavroidis, supra note 6, at 4.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 31

collectively described as its ‘declaration of independence’. More apt perhaps is the

unforgettable image in the great painting by Jacques-Louis David of Napoleon tak-
ing the crown from the pope and crowning himself emperor. By acting like a court
and not as part of the enforcement wing of the WTO institution, the Appellate Body
created itself as a judicial branch in a distant, even potentially contentious or opposi-
tional, relationship with the WTO institution. This came in a range of decisions over

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the roughly three-year period in which the anti-globalization movement was refocus-
ing itself on trade leading up to the 1999 Seattle riots and increasingly affecting trade
politics in a range of countries including the USA, where Bill Clinton lost fast-track
authority in 1997, for example. The following actions were among the ways in which
the Appellate Body declared its independence and distance from the WTO ‘institution’:
• employing normative benchmarks and legal standards and sources from outside
the domain of GATT/WTO law, unrelated to and sometimes in tension with GATT
‘collective wisdom’, these outside norms including general international law and
international environmental law;
• replacing the teleological and functional interpretation characteristic of GATT
panels in the service of trade-liberalizing goals with textualism and formalism
that abstract from the context of the WTO as an institution and the liberaliz-
ing goals of the multilateral trading system and, instead, emphasizing a formal
semantic exercise guided by the VCLT,51 an instrument obviously neutral in terms
of the specific values of free trade;
• developing a doctrine of implicit judicial powers, including to fill gaps (the deci-
sions to allow amicus curiae briefs);
• shouting with a megaphone that the Appellate Body will afford no particular def-
erence or even respectful consideration to decisions of the panel under appeal,
to the point of what Weiler justly calls ‘gratuitously scathing’ criticism of panel
rulings, as noted above;
• rejecting a notion of institutional balance that would require some deference
to political/diplomatic rule-making processes of the WTO, even where they are
given an explicit role in policing certain institutional norms;
• emphasizing the precedential weight of the Appellate Body’s own decisions rela-
tive even to past adopted decisions of GATT panels;
• giving itself a sort of remand authority (completing the analysis) that allows the
Appellate Body to illustrate how its correction of the panel’s legal interpretation
is to be applied to the facts of the dispute;
• allowing argumentation of cases by private legal counsel unaffiliated with trade
officialdom and
• emphasizing consensus rulings by each division of the Appellate Body (avoidance
of dissents) and collegiality (all cases discussed among all seven of the members,
even if the actual disputes are heard by divisions of three). Thus, the Appellate
Body would appear to speak with a single voice in contrast to the political and
diplomatic divisiveness within the ‘institution’.
51
VCLT, supra note 38.
32 EJIL 27 (2016), 9–77

Some of the main ‘articles’ of the Appellate Body’s declaration of independence

were articulated in two very early rulings – Japan–Alcohol52 and EC–LAN Equipment.53
Neither dispute necessarily raised any important systemic issues. The former case con-
cerned non-discrimination (national treatment) in taxation. Japan had taxed much
more heavily classes of alcoholic beverages that were mostly imported and much less
heavily other classes mostly produced in Japan. This was the kind of dispute about

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protective discrimination that had been litigated not infrequently in the GATT era. Not
dissimilarly, EC–LAN Equipment was a classic dispute about the meaning of tariff con-
cessions and the interpretation of classifications – namely were certain products to be
regarded as computing equipment or telecommunications equipment for the purposes
of calculating duties under the EU’s schedule of tariffs? On these kinds of questions,
the GATT acquis offered no lack of guidance, with its panel rulings, working parties,
practices, normative axioms and other material generated inside the ‘institution’. The
panels did not hesitate to draw on this acquis.
Now consider what the Appellate Body did when its jurisdiction was invoked to
review these panel reports. First of all, in Japan–Alcohol, while paying lip service to
‘continuity’ between the GATT and the new WTO system, the Appellate Body rejected
the panel’s notion that prior GATT reports, even if adopted by the WTO membership,
constituted either ‘decisions’ or ‘subsequent practice’ that would somehow be binding
or authoritative for the Appellate Body. Adopted GATT panel reports were merely one
normative source that should be ‘taken into account when they are relevant’.54 The
systemic implications of this move by the Appellate Body were blunted or obscured
by the fact that the Appellate Body, in its textual interpretation of non-discrimination
with respect to taxation, extensively (albeit selectively) cited previous GATT jurispru-
dence, even though it emphasized that its approach was driven fundamentally by the
analysis of the words in the treaty text.
Second, in EC–LAN Equipment, the Appellate Body indicated that the use of the
negotiating history as a basis for interpreting commitments under the WTO should
be strictly disciplined by Article 32 of the VCLT – that is, that such material should
be used solely as a supplementary source of interpretation. In the GATT era, the
negotiating history had often been regarded as controlling by the dispute panels, and
continuation of this approach was regarded as desirable and likely by such GATT era
luminaries as the late John Jackson.
In conspicuously adopting the VCLT as its guiding hermeneutic and strictly and
mechanically applying its provisions to each interpretative issue, but in a manner
that minimized resort to past institutional practice and negotiating history as sources
of interpretation, the Appellate Body risked being taken as the rather unsophisti-
cated judicial body, and numerous critics relished the chance to excoriate the crude

52
WTO, Japan – Taxes on Alcoholic Beverages – Report of the Appellate Body, 1 November 1996, WT/DS8/
AB/R, WT/DS10/AB/R, WT/DS11/AB/R.
53
WTO, European Communities – Customs Classification of Certain Computer Equipment – Report of the
Appellate Body, 22 June 1998, WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R.
54
WTO, Japan – Customs Duties, Taxes and Labelling Practices on Imported Wines and Alcoholic Beverages –
Report of the GATT Panel, L/6216, 10 November 1987, BISD 34S/83, at 13.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 33

literalism of recourse to dictionary definitions and the plodding manner in which

the canons in the VCLT were deployed by the Appellate Body in solving interpretative
questions. But by acting in this manner, the Appellate Body may in fact have been
making a shrewd estimate of the requirements of legitimacy at a time in which the
WTO as an institution, and the neo-liberal ethos of the Uruguay Round, were very
much in question. The Appellate Body’s mission was defined not by the trade liberal-

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ization or ‘deep integration’ telos of the WTO but, rather, by the imperatives govern-
ing treaty interpretation in general international law. Moreover, as former Appellate
Body Member Abi-Saab would note, ‘despite the oft claimed specificity of international
economic law, a thorough look at the jurisprudence (case-law) of the Appellate Body
does not reveal any mention of, or reference, to one or more rules of interpretation to
this particular field that would come to complement or substitute for’ the general rules
of the VCLT.55
Third, in EC–LAN Equipment56 and also in the India–Patents57 case (the first intel-
lectual property dispute in the WTO), the Appellate Body rejected the pro-liberalizing
doctrine that WTO commitments should be read in light of the legitimate or reason-
able expectations of those seeking the benefit of liberalizing disciplines (exporters or
private rights holders in the case of the TRIPS Agreement).58 Legitimate expectations
were presented by the panels as an interpretative principle that emerged from the
GATT acquis. The Appellate Body held that where the claim is one that a treaty provi-
sion is violated the expectations are defined by the treaty provision, read semantically,
rather than vice versa. An important step was also taken towards the rejection of a lib-
eralizing or neo-liberal telos as a basis for interpretation in the case of EC–Hormones,
where the Appellate Body adopted the principle of in dubio mitius, that in case of ambi-
guity or doubt one should adopt the interpretation least constraining of sovereignty.59
In the India–Quantitative Restrictions case, the Appellate Body was faced with argu-
ments that it should display deference to political decision making in the WTO concern-
ing whether delay in a WTO Member removing trade restrictions to protect the balance
of payments was justified by considerations of macro-economic policy and development
policy as set out in the relevant provisions of the GATT.60 In the past, determinations of
this kind had been made by a special committee of WTO delegates, the balance of the
payments committee. In the committee, India had obtained the agreement of many of
its major trading partners on a particular timetable for removing its balance of pay-
ments-based restrictions, but the USA was dissatisfied with what it saw as unnecessary
delay. The USA’s response was to block consensus in the balance of payments committee
and take India to dispute settlement. The situation displayed the intrinsic difficulty with

55
Abi-Saab, supra note 37, at 460.
56
Ibid., at 15.
57
WTO, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products – Report of the Appellate
Body, 16 January 1998, WT/DS50/AB/R.
58
TRIPs Agreement, supra note 12.
59
EC–Hormones, supra note 48, at 12.
60
WTO, India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products – Report of
the Appellate Body, 22 September 1999, WT/DS90/AB/R.
34 EJIL 27 (2016), 9–77

the use of political or diplomatic processes in the WTO to make what might be called
mixed judgments of law and policy concerning the way in which Members use flexibili-
ties under the WTO agreements. A single Member can permanently block any decision,
where its perceived interests are opposed to the general sense of the membership.
Under the old GATT system, considerable restraint in the use of dispute settlement
to deal with these kinds of mixed questions and the disinclination of GATT panels to

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address them arguably created, or at least complemented, an atmosphere of compro-
mise. In the Uruguay Round, a new WTO instrument was negotiated that tightened up
the control on balance-of-payments-based trade restrictions,61 reflecting a compromise
between neo-liberal views and the particular concerns of developing countries to main-
tain flexibilities. In this instrument, the availability of dispute challenges in the case of
‘application’ of balance of payments-based trade restrictions was explicitly affirmed,
while the committee’s process for policing the phasing out of these restrictions was also
maintained. With its complaint against India, the USA was bringing to the fore the issue
of the equilibrium between these aspects of the Balance of Payments Understanding.62
The Appellate Body held that the expression ‘application’ did not in any way con-
strain the competence of the dispute settlement organs to review the underlying
policy justifications for continuing to maintain balance of payments-based trade
restrictions. India’s argument that ‘application’ refers only to issues that arise with the
detailed implementation of trade restrictions, not their general policy grounds, was
summarily rejected. So was India’s argument that the Appellate Body should limit its
competence in such a way as to preserve a meaningful institutional balance between
the dispute settlement organs and the balance-of-payments committee. The Appellate
Body categorically rejected the notion that institutional balance is a ‘principle of WTO
law’. While the Appellate Body suggested that the ‘deliberations and decisions’ of the
balance of payments committee should be taken into account, it did not even indicate
that were there a consensus in the committee the Appellate Body would be bound
to defer, as opposed to coming to its own conclusions about the policy justifications
for trade restrictions. Further, responding to India’s argument in the alternative that,
even if the dispute settlement organs had competence, institutional balance dictated
‘judicial restraint’, the Appellate Body suggested that, where the dispute settlement
organs had competence, ‘judicial restraint’ would be inconsistent with the obligation
to exercise this competence when requested to do so by a claimant.
Not long after the India–Quantitative Restrictions ruling, the Appellate Body, in the
Turkey–Textiles case,63 had the opportunity to reconsider its rejection of the principle
of ‘institutional balance’. Under the GATT, the assessment of regional trade agree-
ments, including customs unions such as the EU, and their consistency with the law
and policy of the multilateral trading system, was a function arguably confided to a
committee of the delegates, known in the WTO era as the Committee on Regional

61
Understanding on the Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade
1994, (WTO, 1995).
62
Ibid.
63
WTO, Turkey – Restrictions on Imports of Textile and Clothing Products – Report of the Appellate Body (Turkey–
Textiles), 19 November 1999, WT/DS34/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 35

Trade Agreements (CRTA). As Mavroidis suggests, the original intent of the GATT
drafters was that ‘the nature of the multilateral review would come close to that of
a merger authority; no [customs union or free trade agreement (FTA)] would be con-
summated absent multilateral clearance’.64 The formal legal conditions for establish-
ing and maintaining a customs union or free trade area are contained in the GATT65
and include the liberalization of substantially all trade between the parties to the

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preferential arrangement and avoidance of greater trade restrictiveness against WTO
Members who are non-parties. Ultimately, it is consistency with Article XXIV that
allows WTO Members to deviate from the most-favoured nation obligation that is a
cornerstone of the multilateral trading system and to treat other parties to the prefer-
ential arrangements better than non-party WTO Members.66
As preferential trading arrangements proliferated and became a major concern
for trade policy scholars such as Jagdish Bhagwati, who were dedicated to the value
of non-discriminatory multilateral free trade, it became particularly clear that what
Mavroidis calls ‘multilateral clearance’ was largely a failure.67 There were few cases
where a FTA or customs union was carefully examined ex ante by the CRTA, much
less where the committee came to a clear conclusion about the consistency of a
particular agreement with the law and policy of the multilateral trading order. In
Turkey–Textiles, the issue was whether an otherwise impermissible particular WTO
restriction that Turkey had imposed on India could be justified as necessary in order
to harmonize Turkey’s external customs regulations in order to fulfil its obligations
under a customs union with the EU.68 It was not especially controversial as a matter
of judicial competence that the dispute settlement organs could review the particular
restriction imposed by India and its nexus to the customs union with the EU. However,
in Turkey–Textiles, the Appellate Body reinforced its approach in India–Balance of
Payments, overturning the view of institutional balance of the panel of first instance
as well as the prior GATT practice and finding that judicial competence extended to
reviewing the overall or per se consistency of the customs union with the conditions
in GATT Article XXIV and not merely the appropriateness of the specific measure.69
The Appellate Body held: ‘[W]e would expect a panel, when examining such a meas­
ure, to require a party to establish [inter alia, whether the customs union fully meets
the relevant requirements of Article XXIV]’. The Appellate Body explicitly linked its
finding here on the broad scope of judicial review to the rejection of the institutional
balance principle in India–Balance of Payments case.70 There can be little doubt that in
Turkey–Textiles, the Appellate Body was making a pointed statement about the wide
extent of its authority over the diplomatic and political organs of the WTO for, as the
Appellate Body noted, it did not need to reach the issue of whether it had jurisdiction
64
P. Mavroidis, The Regulation of International Trade (2016) at 292.
65
GATT, supra note 13, Art. XXIV.
66
Ibid.
67
Bhagwati, supra note 28.
68
Turkey–Textiles, supra note 63, at 22
69
WTO, India – Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products – Report of
the Appellate Body (India–Balance of Payments), 22 September 1999, WT/DS90/AB/R.
70
Ibid., para. 60.
36 EJIL 27 (2016), 9–77

to review the WTO consistency of a customs union as a whole in order to resolve the
appeal.
The Appellate Body rulings in India–Balance of Payments and Turkey–Textiles were
subject to forceful criticism by WTO insiders, most explicitly by Frieder Roessler, a for-
mer director of the GATT legal secretariat, who represented, it should be noted, India
in the former case.71 Yet there was not a major revolt against the assertion of expan-

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sive judicial authority by the Appellate Body. While these decisions reduced the control
of the insider trade policy community, they did so with the effect of strengthening
pro-free trade disciplines and were thus consistent with the underlying substantive
values of the community, even if they were at odds with the taste for diplomacy over
hard legal outcomes. The extent to which the Appellate Body was establishing itself
as an independent judicial authority, operating at a distance from past GATT practice
and from trade policy and trade negotiations, was hardly noticed, save by a rather
small group of experts. At the same time, it is hard to imagine that such judicial self-
assertion would have been so easily tolerated had the political and diplomatic pro-
cesses in the WTO been functioning in a robust and effective manner. As is illustrated
by the remarks by Appellate Body Members Matushita and Lacarte-Muro cited above,
the judges fully understood the vulnerabilities of these processes. They embraced the
predominant narrative of impasse and ineffectiveness, and they could frame their
activism as a response to a reality they neither created nor could solve. What some
criticized as activism was an unpleasant burden imposed by ‘the gap in effectiveness
between the WTO’s political bodies and its dispute settlement system’.72

5 The Shrimp–Turtle Rulings: The Watershed

No jurisprudence is more significant than the Shrimp–Turtle dispute for marking the
evolution of the Appellate Body as a judicial system independent of, and operating at
a distance from, the WTO as an institution and from the ideological and policy orien-
tations that tend to drive it.73 The entire trade/environment debate, with its central
importance of turning the attention of the anti-globalization movement to interna-
tional trade, originated with a GATT case in the early 1990s involving two unadopted
GATT panels – the Tuna–Dolphin rulings74 – which held that trade restrictions in
response to other countries’ environmental policies or practices were per se inconsis-
tent with the GATT. These rulings were without a textual basis in GATT law but based,
instead, on some intuitive notion that allowing trade measures to address global
71
Roessler, ‘Are the Judicial Organs of the World Trade Organization Overburdened?’, in Porter et al., supra
note 15, 13.
72
Ehlermann and Ehring, ‘The Authoritative Interpretation under Article IX: 2 of the Agreement
Establishing the World Trade Organization: Current Law, Practice and Possible Improvements’, 8 Journal
of International Economics and Law (2005) 803, at 813.
73
WTO, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Report of the Appellate
Body, 6 November 1998, WT/DS58/AB/R.
74
WTO, United States – Restrictions on Imports of Tuna – Report of the GATT Panel, 3 September 1991,
DS21/R, DS21/R (unadopted); WTO, United States – Restrictions on Imports of Tuna – Report of the GATT
Panel, 16 June 1994, DS29/R (unadopted).
 The World Trade Organization 20 Years On: Global Governance by Judiciary 37

environmental externalities was somehow countenancing a slippery slope towards

unconstrained green protectionism. In Tuna–Dolphin, the USA had banned tuna prod-
ucts that were caught with methods that led to high levels of dolphin mortality on a
non-discriminatory basis – that is, the ban included tuna of US origin. The infamous
product/process distinction was invented whereby a country could not defend treat-
ing products differently under the GATT based upon their production methods, even

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where different methods led to different environmental or other harms.
The measures in Shrimp–Turtle were closely analogous – the USA had banned
shrimp that was fished with methods that led to high number of deaths of endan-
gered species of sea turtles. Using a different doctrinal conceit than the Tuna–Dolphin
panels, the WTO panel in Shrimp–Turtle nevertheless affirmed the overall GATT-era
approach that had led to the clash between environmentalists and the multilateral
trading system. The panel found that there was a complete incompatibility between
non-discriminatory multilateral trade and measures that conditioned imports on
the environmental policies or practices of other countries. The Appellate Body had
to choose between affirming the orthodox free trader view that prevailed within the
trade policy community or acknowledging in some way and attempting to mitigate
the harm to the external legitimacy of the system from simply excluding even non-
discriminatory trade policies to deal with global environmental problems.
Had the Appellate Body upheld the panel’s approach (or defended the result or a
similar result on another doctrinal grounds), it would have clearly been perceived
as siding with the ‘institution’ on an issue that sharply divided insiders from import­
ant outsider constituencies. To use the language some scholars have deployed, the
Appellate Body would have chosen ‘internal legitimacy’ over ‘external legitimacy’. The
Appellate Body took the opposite course. In Shrimp–Turtle, the Appellate Body revealed
an important implication of its carefully crafted independence of, and distance from,
the ‘institution’. The Appellate Body was quite capable of giving purchase to constitu-
encies characteristically critical of, if not hostile to, the WTO as a neo-liberal or free
trade-driven institution. Yet this revelation was not so easy to see unless one followed
carefully the GATT/WTO legal system, because while opening the door in principle to
process or production methods (PPM)-type measures, the Appellate Body had found
that, under the chapeau of Article XX75 – the preambular paragraph – there were
elements of discrimination in the manner in which US officials had implemented the
75
GATT, supra note 13, Art. XX. The text of Article XX reads as follows: ‘Subject to the requirement that
such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable
discrimination between countries where the same conditions prevail, or a disguised restriction on inter-
national trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by
any contracting party of measures:
(a) necessary to protect public morals;
(b) necessary to protect human, animal or plant life or health;
(c) relating to the importations or exportations of gold or silver;
(d) necessary to secure compliance with laws or regulations which are not inconsistent with the pro-
visions of this Agreement, including those relating to customs enforcement, the enforcement of
monopolies operated under paragraph 4 of Article II and Article XVII, the protection of patents,
trade marks and copyrights, and the prevention of deceptive practices;
(e) relating to the products of prison labour;
38 EJIL 27 (2016), 9–77

legislative ban on turtle-unfriendly shrimp. Thus, the initial reaction of environmen-

tal groups was negative, while consummate insiders such as the late John Jackson
were muted in criticism of the departure from the PPM theology, unsure just how far
the Appellate Body had really intended to go, given that, in the end, it had found sev-
eral violations in the US scheme.
However, there were other elements in the Shrimp–Turtle ruling that signified a nod

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to constituencies and values traditionally understood as being external to the WTO
and its purposes. One of these was the way that the Appellate Body approached the
interpretation of the language ‘conservation of exhaustible natural resources’ in the
Article XX(g) exception on which the USA had sought to rely. The claimants, pointing
to the negotiating history of the GATT, suggested that ‘exhaustible natural resources’
referred only to non-living resources (petroleum, minerals and so on) and, thus, that
the protection of sea turtles was beyond the scope of Article XX(g). Yet case law under
the GATT had already established that living species could be deemed ‘exhaustible’
under Article XX(g).
Instead of simply relying on the precedent of an adopted GATT panel report (that
the Appellate Body mentioned casually in passing), the judges constructed a complex
hermeneutic as if they considered the matter to be one of first impression in the WTO
system. Having eschewed teleology in earlier cases when invited to interpret WTO
disciplines in light of the purpose of the progressive liberalization of trade, they now
endorsed teleology in marking the limits to free trade as articulated in Article XX of
the GATT. ‘Exhaustible natural resources’ needed to be read in light of sustainable
development, a goal stated in the preamble to the framework agreement establishing
the WTO. From this proposition followed the need to bring in the law and policy of
biodiversity as it had evolved in recent decades and the broader canon of evolutionary
interpretation of WTO norms – interpretation that would necessarily vary depending
on how legal regimes outside the WTO themselves changed over time.
The GATT drafting history and the collective memory or wisdom of the ‘institution’
about what the drafters of the GATT meant, and even GATT case law that supported

(f) imposed for the protection of national treasures of artistic, historic or archaeological value;
(g) relating to the conservation of exhaustible natural resources if such measures are made effective in
conjunction with restrictions on domestic production or consumption;
(h) undertaken in pursuance of obligations under any intergovernmental commodity agreement which
conforms to criteria submitted to the CONTRACTING PARTIES and not disapproved by them or which
is itself so submitted and not so disapproved;
(i) involving restrictions on exports of domestic materials necessary to ensure essential quantities of
such materials to a domestic processing industry during periods when the domestic price of such
materials is held below the world price as part of a governmental stabilization plan; Provided that such
restrictions shall not operate to increase the exports of or the protection afforded to such domestic
industry, and shall not depart from the provisions of this Agreement relating to non-discrimination;
(j) essential to the acquisition or distribution of products in general or local short supply;
Provided that any such measures shall be consistent with the principle that all contracting parties
are entitled to an equitable share of the international supply of such products, and that any such
measures, which are inconsistent with the other provisions of the Agreement shall be discontinued
as soon as the conditions giving rise to them have ceased to exist. The CONTRACTING PARTIES shall
review the need for this sub-paragraph not later than 30 June 1960.’
 The World Trade Organization 20 Years On: Global Governance by Judiciary 39

the Appellate Body’s own position, were given short shrift, while external benchmarks
from recent and dynamic fields of non-trade international law and policy were ele-
vated to crucial hermeneutic tools. When responding to criticism by the insider trade
policy community of its methodology in Shrimp–Turtle, Members of the Appellate
Body might have suggested that they were only bringing in non-WTO international
law where it was indispensable for solving interpretative controversy about the mean-

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ing of the WTO agreements. If so, then doing so in Shrimp–Turtle was only indispens-
able because of the Appellate Body’s own decision to give so little weight to the GATT
acquis on this issue that it needed to open it up as being, to repeat, essentially a ques-
tion of first impression. A more plausible, but not inconsistent, reading is that the
Appellate Body purposely treated the issue of exhaustible natural resources in this
way in order to bolster its external legitimacy at a time in which economic globaliza-
tion was under persistent attack by outsider constituencies, including and especially
environmental ones.
This reading is reinforced by the jurisprudential move that led to the most explicit
and vehement reaction by the ‘institution’ to the Appellate Body’s new and inde-
pendent judicial order. The Appellate Body, holding that the panels and, indeed, the
Appellate Body itself, had the authority to accept amicus briefs from non-governmen-
tal actors, including non-governmental organizations (NGOs) from non-trade con-
stituencies such as environmentalism. The Appellate Body gave a textual justification
in the case of the authority of the panels, based upon the right of the panel to seek
information in the DSU. However, the Appellate Body also accepted an amicus brief
that had been submitted to the Appellate Body itself, without any explanation of its
authority to do so. The Appellate Body might have thought that it was exercising an
inherent judicial power, and this would be consistent with many of the other moves
discussed earlier to create itself as an independent judicial branch of the WTO, such
as completing the analysis (acting as a remand authority when one was not provided
for in the DSU). Holding that official account might be taken, even in principle or sym-
bolically, of the views of non-state actors on WTO disputes was the culmination of the
Appellate Body’s declaration of independence. The Appellate Body, as an autonomous
judicial body operating at a distance from the ‘institution’, could enter into a dialogue
with outsider constituencies – one unfiltered and unmediated by the political and dip-
lomatic organs of the WTO.
The attacks on the amicus decision multiplied, spreading from trade experts and
academic commentators to Member delegates, producing a key test of whether the
Appellate Body could withstand sustained political pressure from the ‘institution’. The
Appellate Body’s initial response was to provide a grounding for its initial acceptance
of an amicus brief in a subsequent case, US–Carbon Steel, which was decided shortly
after Shrimp–Turtle:
In considering this matter, we first note that nothing in the DSU or the Working Procedures
specifically provides that the Appellate Body may accept and consider submissions or briefs
from sources other than the participants and third participants in the appeal. On the other
hand, neither the DSU nor the Working Procedures explicitly prohibit acceptance or consider-
ation of such briefs. However, Article 17.9 of the DSU provides [that working procedures are
40 EJIL 27 (2016), 9–77

to be drawn up by the Appellate Body]. This provision makes clear that the Appellate Body has
broad authority to adopt procedural rules which do not conflict with any rules and procedures
in the DSU or the covered agreements [footnote omitted].’76

The fuller response came in the context of a different dispute, EC–Asbestos,77 where
Canada was challenging France’s ban on asbestos, an important public health mea-
sure against a toxic substance that had claimed tens of thousands of victims in a num-

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ber of countries. While the WTO panel had upheld France’s measure under Article
XX(b) of the GATT – the human life and health exception – it had also made a rul-
ing that incensed some public health constituencies by finding that, for the purposes
of analysing discrimination, asbestos and substitute products were to be regarded as
like and in a competitive relationship, even though the substitute products had no
record of being lethal to humans. Despite the acceptance of an Article XX defence by
the panel, the panel’s likeness analysis signalled a certain obtuseness to the values of
human life and health in the assumption that at least at the preliminary stage of the
analysis one could be indifferent to the fact that one of the products was killing large
numbers of people and the other was not.
The Appellate Body thus understandably anticipated the submission of amicus
briefs by outsider constituencies in the EC–Asbestos appeal. It decided to enter into
what might be called an attempted dialogue with its critics in the institution. While
not backing off on its authority to accept amicus briefs, the Appellate Body attempted
to address certain criticisms based on considerations of due process and fairness to the
parties by promulgating a detailed procedure to be followed to obtain leave to submit
an amicus, which would include time and length limits for submissions, and disclo-
sure requirements to address the concern that amicus briefs might be surreptitiously
directed or funded by interests connected to the WTO Members parties to the dispute.
While the procedure appeared to make the consideration of amicus briefs a more
orderly, open and objective process, it led only to an increased vehemence in the
attacks on the Appellate Body by Member delegates. How could the procedure have
made things worse since it simply channelled, and in certain ways provided a restraint
on, an inherent authority that the Appellate Body had already insisted it possessed?
Establishing a procedure ex ante had the appearance of rule making. This was, ulti-
mately, what was intolerable. The Appellate Body’s assertion of competence in India–
Balance of Payments and Turkey–Textiles, where rule making through diplomatic and
political organs of the WTO was blocked or ineffective, had already given rise to anxi-
eties that the Appellate Body was encroaching on the domain of political and diplo-
matic decision making in the WTO.
However, these anxieties became significantly more intense and explicit when
the Appellate Body began to make rules to govern its relationship to actors outside
the ‘institution’. The attacks on the Appellate Body in the Dispute Settlement Body,
the deliberative forum of delegates on dispute system issues, became intense, and
76
WTO, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from
Germany – Report of the Appellate Body, 19 December 2002, WT/DS213/AB/R, para 39.
77
WTO, European Communities – Measures Affecting Asbestos and Asbestos-Containing Products – Report of the
Appellate Body, 5 April 2001, WT/DS135/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 41

the chair even communicated to the Appellate Body the dissatisfaction expressed by
many delegates. Steve Charnovitz, who provides an excellent account of the whole
episode, notes that only the USA defended forthrightly the Appellate Body’s exercise
of jurisdiction to set out the procedure for submission of amicus briefs. Developed and
developing country delegations alike claimed that the Appellate Body had egregiously
exceeded its powers.78 Yet by the time of the General Council meeting at which the

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issue of the amicus procedure was decided and these views had been expressed, the
Appellate Body had rejected all of the applications for leave that had been submit-
ted under the procedure. Having taken such an extraordinary set of steps to declare
its independence and distance from the WTO ‘institution’ or the membership, what
could explain the Appellate Body taking a move that would inevitably be interpreted
as being influenced by pressure from the delegates? Indeed, many commentators
interpreted this move as an indication that the Appellate Body would reverse its
underlying position about its power to accept amicus briefs and not just remove the
procedure or never use it again. In fact, the Appellate Body soon indicated in further
disputes that the admissibility of amicus briefs remained good law.79
However, something happened in the interim. Shortly after the EC–Asbestos amicus
controversy, the director of the Appellate Body Secretariat, Debra Steger, a member of
the insider trade policy elite and one of Canada’s Uruguay Round negotiators, left her
position (it is a secret de polichinelle in WTO circles that this was not an amicable parting
of ways). One may speculate whether Steger, who is described by founding Appellate
Body Member Ehlermann as particularly strong-willed, had any role, and with what
motive, in advising the Appellate Body on the misstep of setting out a procedure and
then appearing to cave to pressure by rejecting all of the submissions made under it.
Then, the Appellate Body was given the opportunity to clarify, if not revise, its ruling
on the substance of the Shrimp–Turtle dispute. As noted, even though the Appellate
Body had found that the overall approach of the US shrimp ban was acceptable under
the WTO, some aspects nevertheless remained violations or contrary to the condi-
tions of the chapeau, or preambular paragraph, of Article XX of the GATT, which
dealt with the application of measures that a WTO Member is seeking justification
for under Article XX. These aspects included inflexibility in the way that the statute
was applied to different countries where different conditions prevailed, the failure to
negotiate with some countries while negotiating with others a turtle protection agree-
ment as an alternative to an embargo and various shortfalls of due process in the way
that decisions were made about import certification. The USA sought to change these
aspects of the application of the US law in order to comply with the ruling. Malaysia,
one of the original complainants, brought a compliance action under Article 21.5 of
the DSU, where it sought to reintroduce arguments about the per se unacceptability of
trade measures to target other countries’ environmental policy.

78
Charnovitz, ‘Judicial Independence in the World Trade Organization’, in L. Boisson de Chazournes, C.P.R.
Romano and R. Mackenzie (eds), International Organizations and International Dispute Settlement (2002) 219.
79
WTO, European Communities – Trade Description of Sardines – Report of the Appellate Body (EC–Sardines), 23
October 2002, WT/DS231/AB/R.
42 EJIL 27 (2016), 9–77

Clearly, there was a belief by some that the Appellate Body, in the face of widespread
criticism within the ‘institution’, would back off on this second round and find a way
to close the door once again to environmentally based trade restrictions. Instead, the
Appellate Body pronounced itself fully satisfied that the USA had addressed its con-
cerns under the chapeau and expressed surprise that Malaysia would, in effect, chal-
lenge the authority of the Appellate Body’s original ruling with arguments apparently

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inconsistent with it. Indeed, the Appellate Body took the occasion to pronounce explic-
itly on the precedential value of the Appellate Body rulings and the expectation that
future panels will follow them.
After the Appellate Body held its ground in the second Shrimp–Turtle ruling, there
was no further concerted effort to apply political or diplomatic pressure on the amicus
or trade and environment issues. Several years later, the Appellate Body found a basis
for opening up its hearings to the public through closed circuit television, by consent
of the participants/parties in the dispute (this had already happened at the panel
level). For the Appellate Body, this decision was arguably an even more activist move
than allowing amicus briefs, as the DSU stated that Appellate Body proceedings are
to be confidential. The Appellate Body got around the confidentiality language in the
DSU through a notion that WTO proceedings are ‘relational’ and, thus, that parties
can agree among themselves to waive aspects of the DSU.80 A number of the Members
who had objected to acceptance of amicus curiae briefs also vehemently opposed open-
ing the hearings to the public, but this time the criticism was barely noticed.
Part of the reason must surely have been that any Member that was a party to a
particular dispute could simply object to open hearings and this would be enough to
ensure confidentiality. However, something else was happening around the time of
the second Shrimp–Turtle ruling. After failing to agree on the launch of a new round
of negotiations at Seattle and then at Cancun, a declaration was achieved at the WTO
ministerial in Doha Qatar on the outlines for a new round. One of the elements of this
declaration was the stipulation of negotiations on the relationship of multilateral envi-
ronmental agreements to existing WTO rules. Another was an agreement to negotiate
reform of the dispute settlement system. The second Shrimp–Turtle ruling had been
circulated just a week before the Doha Declaration. The apparent will at Doha to break
through the impasse led to at least a brief hope by some that the criticized aspects of
Appellate Body judicial activism might be reversed through treaty amendment as part
of the new round. The Appellate Body was given a breathing space from immediate
political pressure, though in fact its second ruling in Shrimp–Turtle was more emphatic
in the break with the GATT’s past than the first had been, in that an environmentally
based trade embargo was found to be without fault whatsoever under the WTO legal
system.
However, it soon became apparent that the Doha Declaration had papered over fun-
damental divisions among the membership about the future orientation of the WTO,
including the very meaning of calling the Doha Round a ‘development’ round. The

80
WTO, United States – Continued Suspension of Obligations in the EC – Hormones Dispute – Report of the
Appellate Body, 16 October 2008, WT/DS320/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 43

major developed country players sought a further thrust towards ‘deep integration’,
only slightly chastened by the broader legitimacy crisis of neo-liberal globalization. In
return, developing countries might receive some additional concessions in sensitive
areas such as agriculture and the textile and clothing trade. Many developing coun-
tries, by contrast, as well as non-governmental constituencies, sought a rebalancing
of the result of the Uruguay Round towards greater policy space and more meaning-

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ful special and differential treatment of developing countries.81 Only on issues per-
taining to the TRIPs Agreement and access to HIV/AIDS medicines was there some
explicit recognition of the need to re-balance the Uruguay Round result away from
neo-liberalism.
As the Doha Round negotiations floundered, new issues were emerging such as the
relationship of the WTO to climate change mitigation measures with trade dimen-
sions, carbon border adjustment and so on. The WTO director-general insisted
inflexibly that new subjects could not be added to the Doha agenda until a success-
ful agreement on the existing items was achieved. This inflexibility and the dirigiste
style of Lamy led to considerable frustration and acrimony in Geneva and a crisis of
confidence in the WTO as an institution. The Members now had enough grievances
with the WTO Secretariat, led by Lamy, and so many renewed or intensified differences
among themselves that any sense of a common will to stand up to judicial activism
largely atrophied. In this setting, the Appellate Body was able to come to maturity
as a judicial body, through twists and turns that moved to solidify and evolve a set of
judicial policies that, overall, with some exceptions, have served reasonably well in
meeting the legitimacy challenges articulated above.
Once the Appellate Body recovered from its brief misstep in the EC–Asbestos amicus
controversy, it became obvious that statements opposing Appellate Body rulings as
excess of powers or illegitimate, no matter how numerous or vehement, would not be
successful in swaying the Appellate Body to shift course. As Members of the Appellate
Body themselves publicly indicated not infrequently, the proper way for the membership
to respond to a ruling that was politically or legally unacceptable to it was to ‘legislate’,
yet they knew full well what this meant given the practice of positive consensus –
the extreme unlikelihood that any decision could be legislatively overruled. The critics
of the Appellate Body then began to focus their criticism on institutional or structural
‘imbalance’ between the political or legislative branch and the judicial branch of the
WTO. However, this was hardly an argument for the Appellate Body to become a weak
court; rather, it was an argument for the ‘legislative’ branch to be strengthened. In
sum, by 2003 or so, some level of optimism about Doha and some level of realism
about the futility of attacking the Appellate Body itself in the ‘shadow’ of the con-
census requirement to change an Appellate Body ruling, allowed the Appellate Body
to operate in an atmosphere of relative confidence of its independent authority as a
judicial body.

81
See the excellent analysis of Grainger-Jones and Primo Braga, ‘The Multilateral Trading System: Mid-
Flight Turbulence or Systems Failure?’ in R. Newfarmer (ed.), Trade, Doha, and Development: A Window into
the Issues (2006) 27.
44 EJIL 27 (2016), 9–77

It is at this point that the Appellate Body began to drop the artifice of a mechan­
ical application of the VCLT, whose first and primary recourse was to the dictionary.
Some Appellate Body Members would even publicly admit, more or less, that it was an
artifice. According to Abi-Saab, for example, ‘[i]n practice [despite the appearance of
strict constructivism] much of the reasoning in interpretation is informed by the object
and purpose, either consciously or subconsciously, … even though they may not figure

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explicitly as such in the analysis’.82 Now the dictionary would become at most a begin-
ning step and the VCLT rules were to be applied in a holistic fashion.83 It has become
clear, if not always entirely explicit, that the Appellate Body has been applying, if not a
judicial philosophy based on an understanding of the appropriate balance or equilib-
rium of rights and obligations within the WTO in light of the legitimacy challenges of
adjudication, at least a set of broad judicial policies that permeate many of its rulings.
The notion that the WTO treaties reflect a kind of fundamental balance or equi-
librium between an inherent right to regulate and specific disciplines on its use in
the trade context, and that the fundamental task of dispute settlement is to preserve
this equilibrium over time, was already nascent in the Appellate Body’s treatment in
Shrimp–Turtle of the relationship of the operative provisions of the Article XX excep-
tion, which protects policy space, to the conditions in the chapeau or preambular
paragraph of Article XX, which prevent discriminatory or protectionist abuse of that
policy space. However, it was in the China–Publications case that it became clear that
this kind of equilibrium was seen by the Appellate Body as being at the core of the
WTO legal system as a whole or at least preserving it was the core of the task of the
Appellate Body.84 In China–Publications, China sought to invoke the Article XX excep-
tion as a defence with respect to obligations in its protocol of accession, even though
Article XX is not explicitly incorporated into the protocol. China argued, however, that
Article XX was implicitly incorporated through the language ‘right to regulate’ in the
protocol. The Appellate Body’s reasoning revealed its philosophy of the WTO legal sys-
tem in general, as seen from the perspective of the adjudicator’s task:
[W]e see the ‘right to regulate’, in the abstract, as an inherent power enjoyed by a Member’s gov-
ernment, rather than a right bestowed by international treaties such as the WTO Agreement.
With respect to trade, the WTO Agreement and its Annexes instead operate to, among other
things, discipline the exercise of each Member’s inherent power to regulate by requiring WTO
Members to comply with the obligations that they have assumed thereunder. … We observe, in
this regard, that WTO Members’ regulatory requirements may be WTO-consistent in one of
two ways. First, they may simply not contravene any WTO obligation. Secondly, even if they
contravene a WTO obligation, they may be justified under an applicable exception.

As participants in the WTO system, in other words, WTO Members have not subordi-
nated their inherent right to regulate to the telos of deep or ever deepening integration

82
Abi-Saab, supra note 37.
83
See, e.g., WTO, European Communities – Customs Classification of Frozen Boneless Chicken Cuts – Report of
the Appellate Body, 27 September 2005, WT/DS269/AB/R, WT/DS286/AB/R.
84
WTO, China – Measures Affecting Trading Rights and Distribution Services for Certain Publications and
Audiovisual Entertainment Products – Report of the Appellate Body (China–Publications), 19 January 2010,
WT/DS363/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 45

but, rather, have agreed to limit the inherent right to regulate through specific legal
disciplines, the contours of which have to be determined by reading the operative
provisions and the exceptions as an inseparable whole to ascertain what is permitted
and what is not. One cannot presume a broad meaning to an obligation and/or that
exceptions are narrow. The kind of equilibrium to be preserved in interpretation is to be
ascertained through the holistic view of the interaction of obligations and exceptions

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in the WTO system, beginning from the notion of the system as a set of fixed, bargained
constraints on an inherent plenary power to regulate. Apart from these fixed, bargained
limits, there is no ‘constitutional’ requirement in the WTO that the right to regulate be
exercised in any particular manner or exercised or not exercised to any particular end.
It almost goes without saying that one would not read a human rights treaty or the UN
Charter in this way. In the WTO, there is no general relativization of sovereignty to a
community normative order held together by a particular shared telos or teloi or vision
of right or good. If there is a community ethos, it is a Hobbesian one of the avoidance
of the summum malum. In this instance, free fall into beggar-thy-neighbour protective
discrimination. A policed equilibrium of rights and obligations sustains enough confi-
dence among Members generally in both the strength and flexibility of the disciplines
to hedge effectively against a cascade of defection to unilateralist protectionism.
If the dictionaries, the textualism and the mechanical use of the VCLT all seemed annoy-
ing to more elevated legal minds, at least they became eventually reassuring to panels and
litigators, who made sure to arm themselves amply with dictionaries and to structure their
pleadings around textual readings under all of the elements of the VCLT. The relaxation
of this artifice has cumulatively led to a new anxiety. Concern that the Appellate Body is
practising a kind of policy-blind formalism has given way to the fear or suspicion that the
Appellate Body has gone into free fall towards a kind of legal realist opportunistic decision
making case by case, often veering widely on ‘doctrine’. On the other hand, the Appellate
Body has been, through twists and turns, working out a number of what I will call judi-
cial policies, which are fairly closely related to the legitimacy challenges described earlier.
Analysis and critique of the WTO’s ‘mature’ jurisprudence could usefully be focused by an
awareness of these judicial policies and reflection on their significance for the WTO as a
whole. The policies have been operating right from the beginning of the Appellate Body’s
decision making but have been often somewhat obscured or not brought to full atten-
tion, due to the overall focus on a rigid constructivist approach. I now turn to the policies
I see most frequently and powerfully at work in the jurisprudence. I do not claim to know
to what extent these policies are pursued consciously or unconsciously by the Appellate
Body, but they do seem to be at work in the manner in which it comes to its findings in
many of the most important and sensitive disputes.

6 Main Judicial Policies of the Appellate Body

A Conditional Deference in the Non-Discrimination Regime
In the Shrimp–Turtle case, the Appellate Body had already signalled that it would
examine the consistency of domestic policies with the WTO treaties through a
46 EJIL 27 (2016), 9–77

different or broader lens than the prevailing outlook in the WTO’s ‘institution’. That
outlook emphasized the progressive liberalization of trade and a suspicion that much
regulation is captured by protectionist interests or a pretext for protectionism, if not
simply irrational by some economic theory about first best instruments for correcting
market failures. It would take many twists and turns in the case law, however, for the
Appellate Body to work out the doctrinal edifice for its approach – one that is more

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sensitive to values that are external to the trade liberalization project (at least in large
measure) and more respectful of the choices and constraints of domestic regulators,
while sending signals that, at the same time, the protectionist abuse of flexibilities is
being effectively identified and constrained.
This doctrinal edifice is what I call the non-discrimination regime. In the non-dis-
crimination regime, the scrutiny of domestic policies is trifurcated. There is, first of
all, typically an examination under the national treatment or most-favoured-nation
(MFN) non-discrimination norms of whether the policies complained of result in less
favourable treatment either of imported products (national treatment) or of imports
from some particular WTO Member(s) (MFN). Consideration of regulatory intent or
of evidence of purposeful discrimination plays no role in this analysis. The adjudi-
cator makes a determination of whether the products are ‘like’ based upon objective
criteria, such as physical characteristics and end uses, while consumer preferences
can also be dispositive, and then undertakes a formalistic (not empirical) analysis of
whether the regulatory intervention in question has detrimental impact on competi-
tive opportunities for imported like products. In this disparate impact or de facto dis-
crimination analysis, there is no apparent room for consideration of outside values or
legitimate regulatory purposes. The approach in effect excuses the WTO litigator from
having to make any substantive judgments about the legitimacy or justification of the
policies in question.
The second stage of the trifurcated regime is what I call rationality review of poli-
cies that have been found to have a detrimental impact on competitive opportunities.
Here, the Appellate Body applies a rather deferential standard of review to determine
whether, given the impact on trade, the defending Member has acted reasonably in
the choice of policy instrument for its chosen objective. Under the GATT, rational-
ity review is undertaken through application of the exceptions in Article XX; under
the TBT Agreement,85 as is explained further in the next section, rationality review is
undertaken through the Appellate Body’s own construct of the notion of a ‘legitimate
regulatory distinction’, which it has read into the non-discrimination norms of the
TBT Agreement in order to reconcile the approach of the Agreement with that of the
GATT. The rationality review is broadly deferential not only to the choice of policy
objectives and the level or strictness of regulation but also to the general form of the
regulation, the basic choice of the policy instrument.
The third or final stage in the non-discrimination regime is the strict scrutiny of spe-
cific or special features of the policies complained of that may lead, again on a formal-
istic analysis, to a detrimental impact on imports in the way in which the regulatory

85
Agreement, supra note 10.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 47

scheme is applied or operationalized in practice. Here, the Appellate Body may find a
flawed procedure, some arcane or anomalous distinction in the fine print of the regu-
latory scheme, which may often lead to under-inclusiveness (exceptions or limitations
on the operation of the scheme that appear to give some advantage to domestic prod-
ucts over imports). This stage of analysis will likely result in the WTO Member being
called on to fine-tune its regulatory intervention, without necessarily having to make

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major changes in the basic choice of policy instrument.

1 Discrimination as Market Disadvantage

The text of the national treatment provisions of the GATT requires that the adjudi-
cator decide whether less favourable treatment is provided for ‘like’ imported prod-
ucts and/or, in the case of taxation measures only, whether dissimilar treatment is
provided for directly competitive and substitutable products. From the outset of its
jurisprudence, the Appellate Body had veered away from an intent-based, or pur-
pose-based, approach to national treatment, which would examine whether any
market disadvantage to imports could ultimately be traced to legitimate public poli-
cies. This latter approach had a basis in the GATT acquis – the so-called ‘aims-and-
effects’ approach to national treatment. ‘Likeness’ of products was to be determined
by seemingly ‘­objective’ market-related considerations, such as physical characteris-
tics, end uses and consumer preferences. If products were alike on the basis of such
criteria, then discrimination – a violation of national treatment – occurred where the
regulation produced some kind of detrimental impact or market disadvantage for the
imported product. This analysis of detrimental impact could be based purely on a for-
mal or hypothetical type analysis. Product A is mostly produced by foreign producers;
Product B is largely produced by domestic producers. They are alike based on physical
characteristics. Product B is taxed at half the rate of Product A. Thus, there is a detri-
mental impact on Product A, the like imported product. No econometrical evidence is
required, no proof of actual substitution by consumers. National treatment protects
equality of competitive opportunities in principle, in the abstract.
The simplicity of this approach – it has an advantage that it requires only mini-
mal analysis of facts, given that it is the panels, which are not made up of profes-
sional adjudicators, who make the findings of fact – was challenged in the EC–Asbestos
case. In assessing France’s ban on both domestic and imported asbestos, the panel
had found that asbestos, a product that had killed or created serious illness in many
thousands of people could be considered ‘like’ to substitute products with no record
of lethality. While France’s ban was upheld by the same panel under the Article XX(b)
health exception, the normative messaging to outsider communities, such as asbestos
victims and the public health community, of considering the products ‘like’ and find-
ing that distinguishing them was discrimination was, to say the least, risky from the
point of view of the WTO’s legitimacy. This situation lent credence to the views of
scholars, such as myself, who warned that there are dangers in impugning as ‘dis-
crimination’ legitimate public policies simply based upon market disadvantage, which
are blind to policy considerations, even if the policies could eventually be held to be
justified under Article XX.
48 EJIL 27 (2016), 9–77

The Appellate Body pulled a rabbit out of a hat, as it were. First, it held that the
panel had not taken into account sufficiently the physical differences between the
two products but, more fundamentally, in responding to the outsider constituencies,
health should have been taken into account in comparing the two products because
the health effects of products influence consumers’ choices. This was a brilliant
improvization. The Appellate Body could say health was relevant, not for public policy

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considerations but, rather, for consumer behaviour considerations and, thus, strictly
speaking, not alter its market-based framework of analysis in response to the legiti-
macy challenge posed in this case. However, for years after EC–Asbestos, the Appellate
Body in occasional decisions had been giving hints that, in appropriate cases, it would
not find treatment less favourable of imports if the market disadvantage came from
some extraneous factor unconnected to the foreign national origin of the imported
group of products. In other words, there was an escape valve of sorts from the market
disadvantage approach where in a particular case it might pose a legitimacy challenge.
With the recent EC–Seal Products decision, the Appellate Body appears to have largely
closed these escape valves, apart from the specific one it invented in EC–Asbestos in
relation to health, consumer behaviour and likeness.86 Significantly, this closure only
occurred once the Appellate Body had consolidated a deferential rationality review
approach under Article XX to a Member’s overall policy intervention. It is to this juris-
prudential development that we now turn.

2 Sliding towards Rationality Review/Deference: The Appellate Body and Article XX

of the GATT
Especially towards the end of the GATT era, when a kind of crude economistic ideol-
ogy and strong deregulatory orientation had come to permeate the insider trade com-
munity, it was notoriously almost impossible to justify public policies under Article XX
of the GATT. It was possible to defeat a defence under Article XX just by dreaming up a
theoretical less trade restrictive alternative policy that could serve the GATT member
state’s objective, regardless of its costs, its feasibility and the degree of certainty or
uncertainty as to whether, in real world conditions, the policy would actually attain
the GATT member state’s objective. Almost always an economist could think of a pol-
icy other than trade restrictions that might, in an ideal world, achieve a given policy
goal. Defending policies under Article XX under these conditions was essentially a
sucker’s game.
The Thai Cigarettes case is a clear illustration.87 Thailand banned imported
US cigarettes but not domestic cigarettes. Here, Thailand argued that, given the
kind of marketing and advertising that were associated with the imported ciga-
rettes, they posed a health risk in terms of attracting young people to cigarette
addiction that did not exist in the case of domestic cigarettes. The GATT panel

86
WTO, European Communities – Measures Prohibiting the Importation and Marketing of Seal Products – Report
of the Appellate Body (EC–Seal Products), 18 June 2014, WT/DS400/AB/R / WT/DS401/AB/R.
87
WTO, Thailand – Customs and Fiscal Measures on Cigarettes from the Philippines – Report of the Appellate
Body, 15 July 2011, WT/DS371/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 49

found that Thailand’s import ban could not be justified under Article XX(b) of the
GATT on the basis that other, less trade restrictive measures, such as control of
advertising, could achieve its public health objective. However, the World Health
Organization representative intervening in the panel proceedings noted that
‘[m]ultinational tobacco companies had routinely circumvented national restric-
tions on advertising through indirect advertising and a variety of other tech-

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niques.’88 The panel simply ignored this evidence, which suggested an important
reason why, for Thailand, advertising regulation might not be a reasonably avail-
able less trade restrictive alternative to an import ban. Starting with some of its
earliest decisions, the Appellate Body transformed Article XX step by step into an
effective means of protecting legitimate policy space under the GATT non-discrim-
ination regime.
In US–Reformulated Gasoline, the Appellate Body considered the precise wording
of the ‘exhaustible natural resources’ exception in GATT Article XX(g) to argue
for rationality review rather than a strict scrutiny approach.89 The requisite con-
nection between the measure and the objective in Article XX(g) was expressed in
the wording ‘related to’, which was different from the language ‘necessary’ in the
other paragraphs of Article XX, which covered matters such as public morals and
human and animal life and health. Then, in the Korea–Beef ruling, the Appellate
Body dropped the other shoe, as it were, and reasoned that ‘necessity’ does not nec-
essarily mean necessary.90 One meaning of necessary was ‘indispensable’, but that
was not the only meaning; a measure could be necessary if it was, on a continuum,
significantly closer to being indispensable than to merely making some contribu-
tion to the Member’s objective. Necessity in this attenuated sense, however, was to
be determined by a holistic judgment based on ‘weighing and balancing’ a series of
factors, including the contribution, the importance of the values and interests pro-
tected by the law or regulation and the impact of the law or regulation on imports
or exports.
Clearly, the older GATT jurisprudence with its dependence on the least trade restric-
tive alternative test had assumed that a measure must be indispensable to be ‘neces-
sary’ in the sense that no other measure other than a trade restrictive one (at least
trade restrictive to that extent) could achieve the same contribution to attaining the
Member’s objective. The notion of ‘weighing and balancing’ undid the doctrinal
purity of least trade restrictive alternative. To some, it implied an alternative propor-
tionality analysis of measures that were asserted to be ‘necessary’, though not ‘indis-
pensable’. That what the Appellate Body was doing was really shifting to rationality
review would only become apparent in a series of later cases, US–Gambling (which
dealt with public morals under the General Agreement on Trade in Services provision

88
Ibid., 16.
89
WTO, United States – Standards for Reformulated and Conventional Gasoline – Report of the Appellate Body, 20
May 1996, WT/DS2/AB/R.
90
WTO, Korea – Measures Affecting Imports of Fresh, Chilled and Frozen Beef – Report of the Appellate Body, 10
January 2001, WT/DS161/AB/R, WT/DS169/AB/R.
50 EJIL 27 (2016), 9–77

that is the functional equivalent of GATT Article XX),91 Brazil–Retreaded Tyres92 and
EC–Seal Products.93
In order to make a prima facie case that its measure is justified as necessary under
Article XX, a WTO Member would only need to show that its measure made a ‘mate-
rial contribution’ to the objective – a material contribution would have to be of a
significant nature, the Appellate Body seemed to be saying, given the level of trade

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restrictiveness of the measure. However, the Appellate Body also held that there is no
need to quantify or measure the extent of the contribution. That a measure of the kind
would address the problem in a meaningful way was a matter of common sense rea-
soning, not empirical proof. To put it bluntly, if you do not quantify or measure a ‘con-
tribution’, it is really impossible to say if it is significantly closer to being indispensable
than to making any including a trivial contribution to the attainment of the Member’s
objective. Once a Member makes a prima facie case of its measure making a sufficient –
‘material’ contribution – then the complainant might raise ‘reasonably available’ less
trade restrictive alternatives. As long as the defending Member, however, can provide
a reasonable explanation of why it did not adopt such an alternative, its justification
would stand. Such a reasonable explanation could include: ‘[The alternative measure]
is merely theoretical … the responding Member is not capable of taking it, or where
the measure imposes an undue burden on that Member, such as prohibitive costs or
substantial technical difficulties.’94 In other words, an Article XX review largely boils
down to assessing the overall reasonableness of the Member choosing the measure
that it uses to achieve its objective, given the trade restrictiveness of that measure.
That this is the logical outcome of the various twists and turns of the Appellate
Body on ‘necessity’ under Article XX becomes very clear in the EC–Seal Products rul-
ing. In this case, the Appellate Body found that the EU’s ban on seal products was nec-
essary for the protection of public morals, which were understood in terms of animal
welfare or countering cruelty to animals. The Appellate Body clarified: ‘We therefore
do not see that the Appellate Body’s approach in Brazil–Retreaded Tyres sets out a gen-
erally applicable standard requiring the use of a pre-determined threshold of contri-
bution in analysing the necessity of a measure under Article XX of the GATT 1994.’95
The Appellate Body further held: ‘[I]n order to qualify as a “genuine alternative”, the
proposed measure must be not only less trade restrictive than the original measure
at issue, but should also “preserve for the responding Member its right to achieve its
desired level of protection with respect to the objective pursued.” The complaining
Member bears the burden of identifying possible alternatives to the measure at issue
that the responding Member could have taken.’96 Finally, the Appellate Body clarified
91
WTO, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, Report
of the Appellate Body (US–Gambling), 20 April 2005, WT/DS285/AB/R. General Agreement on Trade in
Services 1994, 1869 UNTS 183.
92
WTO, Brazil – Measures Affecting Imports of Retreaded Tyres – Report of the Appellate Body (Brazil–Retreaded
Tyres), 17 December 2007, WT/DS332/AB/R.
93
EC–Seal Products, supra note 86.
94
Brazil–Retreaded Tyres, supra note 92, para. 156.
95
Ibid., para. 5.213.
96
Ibid., at para. 5.261 (footnote omitted).
 The World Trade Organization 20 Years On: Global Governance by Judiciary 51

that any substantiated reason why the alternative measure is not ‘reasonably avail-
able’ (not just the reasons listed in Brazil– Retreaded Tyres) may be sufficient to rebut
the complainant’s invocation of hypothetical less trade restrictive alternatives:
[The formulation in Brazil–Retreaded Tyres] does not foreclose the possibility that there may
be other indications that the alternative measure is ‘merely theoretical in nature’. As we see

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it, if there are reasons why the prospect of imposing an alternative measure faces significant,
even prohibitive, obstacles, it may be that such a measure cannot be considered ‘reasonably
available’.97

3 Chapeau or Chapeau-like Strict Scrutiny

If the Appellate Body needed to make assurances of policy space to establish and
enhance its legitimacy in an era where neo-liberal globalization is highly contested,
it certainly also needed to show it could maintain meaningful constraints on protec-
tionist abuse of public policies that undermined the value or integrity of the basic
GATT-like commitments on border measures. From its earliest jurisprudence under
Article XX of the GATT, the Appellate Body underlined the importance of the chapeau
of Article XX in allowing such a balancing act. As explained in the next section, the
Appellate Body has assimilated the norms of the Uruguay Round’s TBT Agreement to
the GATT-based anti-discrimination regime (Articles I, III and XX). Thus, chapeau-
type strict scrutiny also occurs with the Appellate Body’s discrimination termination
under Article 2.1 of the TBT Agreement, which includes both national treatment and
MFN obligations.
What typifies chapeau or chapeau-like strict scrutiny (in the case of TBT) is a focus
on the fine print of the regulatory scheme and particularly on those features that raise
concerns that the way the scheme is applied in practice may entail elements of dis-
crimination – a detrimental impact on like imported products or (in the case of MFN)
like imported products of particular WTO Members. Rationality review displays def-
erence not only to the collective preferences of the society in question but also to the
general form of intervention: a ban, a mandatory labelling scheme, a PPM, no matter.
However, under strict scrutiny of the fine detail, any distinction or classification that
could give rise to a discriminatory impact in the actual operation of the scheme is
suspect and must be explained as being, essentially, indispensable to the regulatory
objective of the scheme as a whole. As with the preliminary analysis of discrimination
under the national treatment or MFN operative provisions (Articles I and III), there
is no need for the complainant to show actual deleterious impact but only a formal
analysis that the distinction or classification could operate in such a way as to disfa-
vour imports or in the case of MFN imports from certain WTO Members.
A dramatic illustration of this scenario is the recent EC–Seal Products case. The EU’s
ban on seal products was accompanied by an exception for indigenous subsistence
seal hunts. Since Greenland had a large indigenous seal hunt, discrimination was
found on the basis that Canada’s and Norway’s commercial sealing industries could
have suffered a deleterious impact. The theory would have to be that demand would

97
Ibid., at para. 5.277.
52 EJIL 27 (2016), 9–77

be shifted from Canadian and Norwegian seal products (banned) to Greenland prod-
ucts (EC origin) that are permitted under the indigenous exception. However, after the
EU ban on non-indigenous hunts, Greenland’s seal industry in fact exhibited a tre-
mendous downturn in sales. There was certainly no empirical evidence that consum-
ers were responding to a ban on commercially hunted seal products by buying more
indigenous products.

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There are a number of ways in which reserving strict scrutiny for the fine print
blunts or mitigates the intrusiveness of putting a Member’s domestic regulations
under a microscope. First of all, in many instances, the ‘fine print’ has been a matter
of regulations or administrative practices, which can be altered without the need to
alter the legislative scheme itself. This was conveniently the case with the problems
that the Appellate Body identified under the chapeau in Shrimp–Turtle. Even if some
legislative change is required, tweaking the details of a complex regulatory scheme
may not raise the kinds of sensitive political problems involved in attempting a major
overhaul.
Perhaps most significantly in case after case where the Appellate Body has found
discrimination at the stage of chapeau or chapeau-like strict scrutiny, the problem
has been under-inclusiveness of one sort or another: in US–Clove Cigarettes, the prob-
lem (under Article 2.1 of the TBT Agreement was that the USA had banned clove
cigarettes but not all other flavoured cigarettes that appeared to raise the same public
health concerns (most notably, menthol);98 in EC–Seal Products, as just mentioned,
the indigenous exception as well as certain other kinds of very limited exceptions; in
Tuna–Dolphin II, strict monitoring and verification of the ‘dolphin-safe’ label had been
extended to the fisheries that applied to the complainant Mexico but not to certain
other Tuna fisheries and in US–COOL, the country-of-origin labelling scheme of the
USA imposed burdensome tracing and record-keeping requirements on operators
who were processing partly foreign origin meat, but the actual information given to
consumers about national origin was less than that generated by the considerable
regulatory burden.99 In each instance, it would clearly be possible to respond to the
finding of chapeau or chapeau-like discrimination by making the regulatory scheme
stricter or more watertight, which is likely to better serve, as opposed to undermining,
the main interests and values behind the regulation.
When the EU closed or narrowed some of the exceptions in the seal ban that had
been found by the Appellate Body to not meet the conditions of the chapeau, the ani-
mal welfare activists who pushed for the ban in the first place understandably cheered.
Their cause had actually benefited from strict scrutiny under the chapeau. Of course,
it is always possible – and this is what the complainants count on perhaps – that the
kinds of adjustments required by the Appellate Body would be unacceptable, given
the alignment of domestic interest groups around the particular regulatory scheme,
pro and con. In the US–COOL case, for example, the USA sensibly responded to the
98
WTO, United States – Measures Affecting the Production and Sale of Clove Cigarettes – Report of the Appellate
Body (US–Clove Cigarettes), 24 April 2012, WT/DS406/AB/R.
99
WTO, United States – Certain Country of Origin Labelling (COOL) Requirements – Report of the Appellate
Body, 23 July 2012, WT/DS384/AB/R / WT/DS386/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 53

Appellate Body ruling by requiring that the full information that operators were
required to collect be provided to consumers. However, this led to some additional
issues for the Appellate Body upon review of US compliance. In this instance, given the
powerful US domestic interests that opposed country-of-origin labelling (though it is
enormously popular with consumers) and the attitude of the Republican-dominated
Congress, mandatory country-of-origin labelling may be abolished altogether, the

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existing law has been repealed. In this case, the WTO complainants may have suc-
ceeded in their objective, even though it was open in principle to the USA to respond to
the chapeau problems identified by the Appellate Body by making the scheme tighter
or stricter.
But consider the incentive effects of focusing chapeau strict scrutiny on features
that are under-inclusive or can be modified by making the scheme tighter or stricter.
A potential claimant runs the risk that it will spend millions of dollars and several
years and receive a positive result from the Appellate Body, only to find out that it is a
Pyrrhic victory or, worse, that the increasing strictness of the new scheme makes it
even harder to achieve the market access that the claimant is seeking.
Another feature of the focus of chapeau or chapeau-strict scrutiny is what
I would call a kind of reverse ‘regulatory chill’ effect. The ‘fine print’ features that
are impugned under the chapeau or chapeau-like strict scrutiny may well be idio-
syncratic features of a particular Member’s regulatory scheme, which another
Member seeking to regulate the same kind of problem using the same sort of general
policy instrument would not need to duplicate or include in their own regulation.
To take the EC–Seal Products example, the concerns of the Appellate Body about
the EU indigenous exception would obviously be irrelevant where a Member had no
indigenous population and thus no need for this kind of exception. By limiting strict
scrutiny to regulatory design or operational features that are likely to be specific to
a particular Member’s situation, the general signal that the Appellate Body sends is
a positive one of policy space, but with a warning not to abuse this policy space for
protectionist ends.

B Assimilation of ‘Post-Discriminatory’ Uruguay Round Norms with

Non-Discrimination
As just discussed at some length, in the presence of a normative dissensus about the
future direction of the WTO and under conditions of continuing contestation over
the neo-liberal approach to trade liberalization, the Appellate Body has understand-
ably shifted the focus of its scrutiny of domestic regulations from second-guessing
substantive domestic policy choices to an emphasis on the prevention of protectionist
abuse or the arbitrariness of domestic regulations, on process norms and, above all,
on the examination of discriminatory elements in the detailed legal, regulatory and
administrative provisions that operationalize the substantive policy choices. However,
the Appellate Body, of course, cannot simply wish away the existence of the Uruguay
Round WTO agreements, which, to no small extent, are informed by a neo-liberal or
Washington consensus outlook, and seek to go beyond the discrimination norm in dis-
ciplining purportedly irrational or inefficient domestic regulations that are viewed as
54 EJIL 27 (2016), 9–77

barriers to market access while not necessarily having any features that discriminate
against imports.
The Agreement on Sanitary and Phytosanitary Measures (SPS Agreement)100 and
the TBT Agreement were clearly seen by their architects as moving well beyond the
basic non-discrimination norms of the GATT – national treatment and MFN – towards
spurring market-friendly regulatory reform or deregulation as well as global regu-

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latory harmonization through the use of international standards. One of the most
remarkable aspects of the judicial activism of the Appellate Body has been to read
(with some zigzagging in its early years) what Hudec calls the ‘post-discriminatory’
provisions in these agreements101 in such a way as to give little opportunity to claim-
ants to challenge measures that either would not violate the non-discrimination pro-
visions of the GATT or would be upheld under the Article XX exceptions.
In the case of the TBT and SPS Agreements, this hermeneutic strategy has been
most explicit. In the US–Clove Cigarettes ruling, the Appellate Body pointed to lan-
guage in the preamble of the TBT Agreement that resembled or reiterated elements
of the GATT non-discrimination regime (including Article XX exceptions) and held:
The balance set out in the preamble of the TBT Agreement between, on the one hand, the
desire to avoid creating unnecessary obstacles to international trade and, on the other hand,
the recognition of Members’ right to regulate, is not, in principle, different from the balance set
out in the GATT 1994, where obligations such as national treatment in Article III are qualified
by the general exceptions provision of Article XX.102

This statement is remarkable. It suggests that the WTO’s judiciary must not read pro-
visions of the TBT Agreement that are different from, and additional to, those in the
GATT in such a way as to create a ‘balance’ that is more liberalizing or more restric-
tive of domestic regulatory autonomy than the GATT itself. In the case of the SPS
Agreement, the Appellate Body, in its very first decision, made the remarkable teleo-
logical pronouncement that the ‘post-discriminatory’ harmonizing features of the
SPS Agreement were merely a means to disciplining discrimination and disguised
restrictions of international trade (as opposed to exhibiting a neo-liberal ‘deep inte-
gration’ objective):
The ultimate goal of the harmonization of SPS measures is to prevent the use of such measures
for arbitrary or unjustifiable discrimination between Members or as a disguised restriction on
international trade, without preventing Members from adopting or enforcing measures which
are both ‘necessary to protect’ human life or health and ‘based on scientific principles’, and
without requiring them to change their appropriate level of protection.103

The text and structure of the TBT Agreement, taken on their own, suggest a greater
limitation on policy space and more second guessing of domestic policy choices than in
the case of the GATT. (This is understandable because the spur for the TBT Agreement

100
WTO Agreement on the Application of Sanitary and Phytosanitary Measures 1994, 1867 UNTS 493.
101
Hudec, ‘Science and “Post-Discriminatory” WTO Law’, 26 Boston College International and Comparative
Law Review (2003) 185.
102
US–Clove Cigarettes, supra note 98, para. 96.
103
Ibid., para. 177.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 55

was the sense that the GATT was inadequate to address regulatory barriers to trade
that were in the form of regulations that might not be discriminatory but were overly
cumbersome or inefficient.) First of all, the national treatment and MFN provisions
of the TBT Agreement (Article 2.1) are not made subject to an Article XX-type pub-
lic policy exception. Second, the provision of the TBT Agreement that at first glance
resembles Article XX of the GATT – Article 2.2 – actually requires justification for all

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of the technical regulations that do not create unnecessary obstacles to trade, regard-
less of whether they violate the non-discrimination or any other provisions of the TBT
Agreement or GATT. Third, Article 2.4 of the TBT Agreement requires WTO Members
to use international standards as a basis for their technical regulations where avail-
able and relevant and appropriate. This kind of regulatory harmonization is nowhere
to be found in the GATT.
Now let us see how the Appellate Body has managed claims under these provisions
so as to ensure that the balance between trade liberalization and regulatory autonomy
remains unaltered from the GATT. First of all, the Appellate Body simply read into
Article 2.1 of the TBT Agreement a kind of Article XX exception. A feature of a tech-
nical regulation found to provide less favourable treatment either to a like imported
product (national treatment) or of some imported products (MFN) could nevertheless
be found not to violate Article 2.1 if this feature stemmed exclusively from a ‘legiti-
mate regulatory distinction’. With respect to Article 2.2 of the TBT Agreement, the
Appellate Body has placed much more emphasis on the language in the second para-
graph that refers to a measure being required to be no more trade restrictive than nec-
essary rather than the ‘unnecessary obstacle’ terminology of the first. In articulating
what trade restrictive means, the Appellate Body refers to a previous ruling that inter-
prets restrictions on trade in the context of Article XI of the GATT, which makes illegal
quantitative restrictions that tend to be inherently discriminatory against imports.
The Appellate Body has given no indication that it can conceive of a measure as
being trade restrictive unless it has the kinds of effects on conditions of competition
that would lead in any case to a finding of a violation of non-discrimination norms in
the GATT. At the same time, overturning findings of violation of Article 2.2 of the TBT
Agreement by the panels in US–Clove Cigarettes and Tuna–Dolphin II, the Appellate
Body has emphasized that applying Article 2.2 involves the same kind of weighing
and balancing exercise as GATT Article XX, with a considerable margin of apprecia-
tion in examining possible alternative measures that a Member might take that are
less restrictive, and that there is no need to quantify the contribution of the measure
or possible alternatives to the Member’s objectives. The Appellate Body has also under-
lined elements in Article 2.2 that point to deference or margins of appreciation – for
example, unlike Article XX of the GATT the initial burden of proof is on the complain-
ant to show excessive trade restrictiveness, and Article 2.2 requires that in determin-
ing whether a measure is more trade restrictive than necessary the nature of the risks
that would occur if its objective were not to be fulfilled must be taken into account.
The overall emphasis is usually on a holistic exercise to determine the reasonableness
of the Member’s policy choice. In light of this inquiry, it could be asked what other
instruments might have been available that could make an equal contribution to this
56 EJIL 27 (2016), 9–77

objective, while being less trade restrictive. Given these jurisprudential moves, it seems
hard to conceive of an instance where a Member could make a successful claim under
Article 2.2 against a measure that did not violate the GATT.
Now let us turn to Article 2.4 of the TBT Agreement, namely international stan-
dards. In an early case under the TBT Agreement, EC–Sardines, the Appellate Body
appeared to lurch in a neo-liberal direction, implying that Article 2.4 implied a large

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measure of regulatory harmonization – a very close fit or relationship between any
technical regulation and the international standard, providing very little flexibility
for regulatory diversity.104 In Tuna–Dolphin II, which addressed the lack of any defini-
tion of an international standard in the TBT Agreement, the Appellate Body – in an
unusual reliance on the work of a WTO committee – outlined a set of criteria that,
cumulatively, very few international standardization initiatives are likely to meet at
present. These criteria include ‘[a]ll relevant bodies of WTO Members should be pro-
vided with meaningful opportunities to contribute to the elaboration of an interna-
tional standard so that the standard development process will not give privilege to,
or favour the interests of, a particular supplier/s, country/ies or region/s’ as well as
complete transparency at the drafting stage. There is ample scope for the Appellate
Body to resist demands for regulatory harmonization through Article 2.4 due to the
burden the complainant faces in proving that the above-mentioned criteria have been
met fully with regard to the standards in question.
In sum, through its readings of Articles 2.1, 2.2 and 2.4 of the TBT Agreement,
the Appellate Body has made it effectively impossible, or at least very unlikely, to
succeed with a claim under the TBT Agreement that would not also succeed under
the GATT. At the very outset, the Appellate Body had established that the TBT and
SPS Agreements were to be applied in parallel with, and not to the exclusion of, the
GATT (although both of the newer agreements should typically be considered first).
The incentives are now considerable for the parties to frame disputes about technical
regulations as being, essentially, GATT disputes about discrimination and/or policy
justifications through the general exceptions. After all, as the Appellate Body itself
pronounced, the balance between trade liberalization and regulatory autonomy
established by the GATT is to be maintained.
The route to this result under the SPS Agreement has been more tortuous. Arguably,
the SPS Agreement goes farther than the GATT towards a ‘post-discriminatory’ order
that judges the rationality of public policies since it appears to demand that the SPS
measures be sustained on the basis of scientific rationality. Article 2.2 of the SPS
Agreement requires that SPS measures be based on scientific principles and supported
by ‘sufficient’ scientific evidence. Article 5.1 stipulates that measures be based on a
scientific assessment of risk. In the first case under the SPS Agreement, EC–Hormones,
the Appellate Body rejected a proceduralist approach that would have interpreted the
science requirements as obligatory inputs into the process of deliberation and decision,
not substantive rationality standards against which the WTO judiciary would judge
SPS regulations. This would have been a very effective and direct route to neutralizing

104
EC–Sardines, supra note 79.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 57

or taming the most legitimacy-threatening neo-liberal ‘post-discriminatory’ elements

of the SPS Agreement. However, the Appellate Body would have had to deal with the
fact that there is no phase-in period for SPS obligations, and they clearly applied to
existing, not just new, measures.
Thus, interpreting the requirements in a procedural way would have produced a
sort of retroactivity problem. It would have also highlighted a legitimacy problem of a

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different nature with the SPS Agreement’s reliance on science. Few developing coun-
tries have the capacity or resources to conduct scientific risk assessments of the kind
seemingly intended by the SPS Agreement, and, thus, they would be penalized if the
requirement of science were a requirement imposed on the domestic regulatory pro-
cess, as opposed to an objective standard that could be fulfilled by pointing to a risk
assessment conducted elsewhere or by an international body, which never was in fact
part of the actual regulatory or political process that produced the measure.
Hence, the Appellate Body found more subtle and indirect ways of avoiding the
WTO judiciary being turned into a science court for domestic regulations. First of
all, the Appellate Body held that science did not necessarily mean mainstream or
majority scientific opinion. It was a sovereign right of a WTO Member to choose
among differing scientific opinions, as long as the scientists were competent and
a methodology corresponding to the scientific method in the broadest sense was
adopted. Nor did risk need to be quantified. Second, in a moment of (relatively rare)
eloquence, the Appellate Body held that the risk to be considered was not only the
kind of risk that could be assessed in a laboratory ‘but also risk in human societies as
they actually exist, in other words, the actual potential for adverse effects on human
health in the real world where people live and work and die’.105 Third, the Appellate
Body insisted on the sovereign right of a WTO Member to determine its own level
of protection. Thus, one took a society’s risk preferences as one found them, and
it would not be unacceptably unscientific for a Member to regulate so as to seek to
attain a level of risk approaching zero, no matter what degree of trade restrictiveness
of the regulation. If a Member’s chosen level of protection was high enough, even
a risk assessment that suggested the risk was very small would be sufficient to meet
the requirements of the SPS Agreement. Fourth, the Appellate Body largely gutted
the regulatory harmonization provision of the SPS Agreement by holding that the
requirement that ‘[m]embers shall base their sanitary or phytosanitary measures on
international standards’ was of an aspirational, soft law character, despite the use
of the word ‘shall’. It did so on the basis that the purpose of the provision was stated
as ‘harmoniz[ing] … on as wide a basis as possible’ and that this had an a ­ spirational
ring to it. Fifth, even though the EU had not invoked a provision of Article 5.7 of the
SPS Agreement that allowed provisional regulations in the absence of sufficient sci-
entific evidence on a precautionary basis, the Appellate Body held that, while it was
not persuaded that there is a precautionary principle in international law with a
normative force that would override SPS treaty provisions, nevertheless as an inter-
pretive matter:

105
EC–Hormones, supra note 48, para. 178.
58 EJIL 27 (2016), 9–77

a panel charged with determining, for instance, whether ‘sufficient scientific evidence’ exists
to warrant the maintenance by a Member of a particular SPS measure may, of course, and
should, bear in mind that responsible, representative governments commonly act from per-
spectives of prudence and precaution where risks of irreversible, e.g., life-terminating, damage
to human health are concerned.106

Finally, the Appellate Body had to reckon with a provision of the SPS Agreement

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that appears to be very intrusive in democratic decision making about risk. Article 5.5
requires WTO Members to avoid ‘arbitrary or unjustifiable distinctions’ in the levels
of protection it seeks in different situations … ‘if such distinctions result in discrimi-
nation or a disguised restriction on international trade’. Reversing the panel, which
had taken the view that the existence of ‘arbitrary or unjustifiable distinctions’ raised
a presumption that there was ‘discrimination or a disguised restriction on interna-
tional trade’, the Appellate Body held that in fact the core of the Article 5.5 obliga-
tion was to avoid discrimination or disguised restrictions on international trade. The
existence of ‘arbitrary or unjustifiable distinctions’ in the levels of protection in dif-
ferent situations merely functioned as one ‘warning’ signal of whether the measure
was discriminatory or a disguised restriction.107 Thus, the latter issue, essentially non-
discrimination, becomes the crucial one for applying Article 5.5. Indeed, as noted at
the outset, the Appellate Body made a revealing statement that harmonization under
the SPS Agreement is merely a means to achieving the goal of avoiding discrimination
or disguised restrictions on international trade, conceptually distancing itself from a
neo-liberal post-discriminatory agenda of imposing a notion of regulatory rationality
or efficiency through the trading system.
Despite all of these elements in reading down the ‘post-discriminatory’ provisions
of the SPS Agreement into something approaching the GATT non-discrimination
regime, the Appellate Body found the EU to be in violation of the SPS Agreement. The
key point was that the EU had more or less admitted the lack of ‘laboratory’ scientific
evidence to support its banning of synthetic growth hormones in meat products but
then argued that the science did not take into account the possibility that doses of
growth hormones were being administered that were much higher than what was
indicated by good veterinary practice. As noted, the Appellate Body was open to real
world risk, not just ‘laboratory’ risk, as a scientific basis for SPS measures, but the EU
had failed to produce any study that showed the presence of this real world risk – that
is, abuses in the administration of hormones to animals, which threatened humans
with much higher exposures to residues than would be indicated by laboratory stud-
ies, supposing proper veterinary practices.
After many years of non-compliance with the Appellate Body ruling, the EU finally
produced some new scientific studies that indeed showed directly the risk from syn-
thetic growth hormones. It is in revisiting the dispute in this context that the Appellate
Body has been able to clarify and reinforce the elements of deference built into its
approach to the SPS Agreement. This clarification was particularly necessary since in

106
Ibid., para. 124.
107
Ibid., para. 213.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 59

two cases in the intervening years the Appellate Body had appeared to accept intru-
sive approaches by panels that put risk assessments under a microscope – as if the
panels themselves were equipped to determine what kinds of scientific inquiry or
methodology were adequate to ascertain the nature or extent of the risk the defend-
ing Member was seeking to regulate (Australia–Salmon; Japan–Apples).108 In the case of
Japan–Apples, the Appellate Body even threatened to undermine the fundamental pil-

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lar of respect for the regulating Member’s chosen level of protection. In that case, the
Appellate Body failed to overturn a finding of the panel, which read a proportionality
requirement into Article 2.2 of the SPS Agreement and held there was a violation
because the measure was ‘clearly disproportionate’ to the risk identified in the scien-
tific studies. (At the same time, the Appellate Body seemed to protect its prior approach
by reading the panel reference to ‘disproportionate’ as a way of expressing the notion
that there was no rational relationship between the risk as determined by science and
the regulation actually adopted, as opposed to a fully blown proportionality analysis.)
In its new ruling, US–Hormones Suspension,109 the Appellate Body reiterated many
of the deferential elements in its original ruling which had been ignored by the panel
in this new phase of the dispute (the acceptability of non-majority, non-mainstream
scientific opinion and the right to regulate based on ‘real world’ risk such as abusive
veterinary practices). However, most importantly, the Appellate Body made a clear
statement that the SPS Agreement does not invite the WTO judicial system to make
its own judgment on the scientific justification of the defending Member’s substan-
tive regulation. The role of science in the adjudication of SPS claims is much more
limited, and apart from the requirement that the defending Member invoke scientific
evidence, essentially the same as a rationality review under the non-discrimination
regime. (Even under the GATT, a defending Member would likely present some kind of
scientific evidence to support its regulation.) Thus, according to the Appellate Body:
it is the WTO Members task to perform the risk assessment. The panel’s task is to review that
assessment. Where a panel goes beyond this limited mandate and acts as a risk assessor it would
be substituting its own scientific judgement for that of the risk assessor … and, consequently,
would exceed its functions under Article 11 of the DSU. Therefore the review power of a panel
is not to determine whether a risk assessment is correct, but rather to determine whether that
risk assessment is supported by coherent reasoning and respectable scientific evidence.110

Anyone familiar with complex tort litigation, or even anti-trust litigation or inves-
tor–state dispute settlement, will know the phenomenon of each party being able to
produce an expert or experts with a stellar curriculum vitae, a teaching appointment
at a leading university and so on, who offers a carefully reasoned study in support
of that party’s position on the scientific facts. The Appellate Body said clearly in EC–
Hormones that all that a Member must do under the SPS Agreement is provide a report

108
WTO, Australia – Measures Affecting Importation of Salmon – Report of the Appellate Body, 6 November
1998, WT/DS18/AB/R; WTO, Japan – Measures Affecting the Importation of Apples – Report of the Appellate
Body, 10 December 2003, WT/DS245/AB/R.
109
WTO, United States – Continued Suspension of Obligations in the EC – Hormones Dispute – Report of the
Appellate Body, 14 November 2008, WT/DS320/AB/R.
110
Ibid., at 3507.
60 EJIL 27 (2016), 9–77

by some competent, respectable scientist (who may well be expressing a minority or

idiosyncratic point of view) that is coherently reasoned and that supports the exis-
tence of the risk against which the Member is regulating. The Member is then free to
take measures against that risk that corresponds to the level of protection that it has
a sovereign right to determine. This does not solve all of the legitimacy concerns with
the science requirement in the SPS Agreement, to be sure, because smaller developing

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countries may well have less capacity to ‘SPS-proof ’ their regulations through elicit-
ing or producing such studies. However, in principle and formally, the Appellate Body
has really minimized – indeed, close to eliminated – any real difference in scrutiny
between the GATT non-discrimination regime and the ‘post-discriminatory’ features
of the SPS Agreement.
The Appellate Body has perhaps been fortunate that it has not often been required
to decide on sensitive issues of policy space on other Uruguay Round agreements that
reflect a ‘Northern’ neo-liberal view of trade and domestic policy – in particular, the
TRIPs Agreement and the Agreement on Subsidies and Countervailing Measures
(SCM Agreement).111 Even in these relatively rare cases, the Appellate Body has found
techniques to afford policy space while disciplining the specifically discriminatory ele-
ment of the policies. The one case where the Appellate Body was faced with applying
the substantive standards of the TRIPs Agreement, US–Havana Club112 raised the issue
of whether the USA could deny trade market protection where the mark was origi-
nally owned by a business that had been confiscated during the Cuban revolution.
The mark was then acquired from the Castro regime by a major Europe-based drinks
conglomerate, Pernod, but in the USA was used by the Bacardi group. The Appellate
Body rejected the very broad reading of trademark protection urged by the EU and,
significantly, held that not only the rights that existed under the Paris Convention for
the Protection of Industrial Property (a treaty under the World Intellectual Property
Organization (WIPO) that long predated the TRIPs Agreement) were incorporated
into the TRIPs Agreement but also all of the flexibilities and exceptions.113
At the same time, the Appellate Body pointed to a gap in the TRIPs Agreement
itself. Nowhere does this agreement specify the domestic regulation of who may own
intellectual property; it only addresses the nature and scope of the rights that must
be protected. In theory, governments could achieve very broad policy goals by plac-
ing conditions or restrictions on the ownership of intellectual property (subject to
discrimination disciplines). The Appellate Body also engaged in chapeau-type strict
scrutiny, finding a violation of the non-discrimination norms in the TRIPs Agreement
because an arcane provision of the US trademark regime appeared to impose on for-
eign persons some kind of additional burden or regulatory step that did not apply to
US persons. The USA had argued that in practice this could not lead to discrimination
because US persons would not in any case have a route available to them for protection
under the provisions in question, due to other aspects of US law. However, exhibiting
111
Agreement on Subsidies and Countervailing Measures (SCM Agreement) 1994, 1867 UNTS 14.
112
WTO, United States – Section 211 Omnibus Appropriations Act of 1998 – Report of the Appellate Body, 1
February 2002, WT/DS176/AB/R, at 589.
113
Paris Convention for the Protection of Industrial Property 1967, 828 UNTS 305.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 61

a typical formalism, the Appellate Body found a violation because this anomaly at
least created an apparent hypothetical possibility of less favourable treatment. This
being said, the general signal sent by US–Havana Club was that the Appellate Body
would read the substantive standards of the TRIPs Agreement narrowly, assuming
no greater degree of harmonization of intellectual property protection than is strictly
indicated by the text of the TRIPS Agreement or the WIPO treaties regime that pre-

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dates TRIPS and the neo-liberal intellectual property agenda.
Perhaps this is one reason why pro-intellectual property interests have not pushed
the USA or the EU to challenge the use of TRIPs flexibilities by developing countries in
WTO dispute settlement, instead preferring pressures tactics such as threats of removal
of the general system of preferences (GSP) (one case was brought against Brazil con-
cerning compulsory licensing and then withdrawn). One of the few instances where
WTO Members have succeeded through negotiation in re-adjusting the Uruguay
Round result towards a more pro-South or less neo-liberal direction is with respect
to issue of access to medicine, where patent rights under the TRIPs Agreement have
been asserted to prevent licensing to provide low-cost medication to poor people in the
South. The accord to adjust the TRIPs Agreement on this issue, which entails con-
siderable administrative obstacles to a developing country compulsorily licensing an
essential drug that is produced in a different country, may have been acceptable to the
USA and the pharmaceutical lobbies in the shadow of the risk that the Appellate Body
might have found even broader flexibilities in the existing text of the TRIPs Agreement
or in the gaps in that text.

C Respect for Collective Preferences

As Mavroidis has rightly observed, the Appellate Body’s rejection of the product/pro-
cess distinction in Shrimp–Turtle signalled an approach of deference or respect for the
goals or objectives of regulation adopted by the WTO Members.114 The Appellate Body
will simply not make a judgment on the preferences of a given society in regarding
what it regulates. This deference extends to the intensity or strictness of regulation.
Thus, as noted above, beginning with the EC–Hormones case, the Appellate Body
affirmed the right of a WTO Member to determine its own level of protection against
a given harm. In principle, a government could seek in its regulation to achieve a risk
of zero. The implication of this level of respect for collective preferences is the rejection
of the notion of proportionality in the evaluation of the relationship between means
and ends, discussed in the last section on the rationality review. As explained, ‘weigh-
ing and balancing’ as practised by the Appellate Body leads to an overall assessment
of whether there are comprehensible reasons behind the policy choices of a WTO
Member, given its own objectives and its obligation under WTO law to avoid unneces-
sary trade restrictiveness. Proportionality, at least in its strict version, could lead to the
114
Mavroidis, supra note 64. This section has been much influenced by my work with Joanna Langille on
‘pluralism’ in the WTO. See Howse and Langille, ‘Permitting Pluralism: The Seal Products Dispute and
Why the WTO Should Accept Trade Restrictions Justified by Non-instrumental Moral Values’, 37 Yale
Journal of International Law (2012) 368. See also Howse, Langille and Sykes, ‘Pluralism in Practice: Moral
Legislation and the Law of the WTO after Seal Products’, 48 George Washington International Law Review
(2015) 81.
62 EJIL 27 (2016), 9–77

invalidation of a policy instrument that makes a contribution towards the achieve-

ment of a given level of protection, where that contribution appears small relative
to the level of trade restrictiveness in question. In other words, with proportionality,
the WTO Member is required to make some sacrifice of the achievement of its chosen
level of protection in order to avoid trade restrictiveness. This kind of trade off is not
consistent with the respect for collective preferences, as the Appellate Body under-

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stands it. (As discussed in the previous section, in one case under the SPS Agreement,
Japan–Apples, the Appellate Body deviated from its otherwise consistent rejection of
proportionality.)
Respect for collective preferences also goes to the relative weight or priority that a
given society attaches to different regulatory objectives. Here, the Appellate Body has
on occasion deviated from its full respect for collective preferences but, notably, only in
order to justify affording an additional margin of deference under rationality review
in cases where human life or health is at stake (EC–Hormones and EC–Asbestos). What
the Appellate Body has never done is to apply explicitly a relatively higher level of
scrutiny in a judgment in which the regulatory objective was less vital, or should be
less vital, for a given society.
An apparent textual difficulty in operating the respect for collective preferences in a
consistent manner is that, with respect to the exceptions in Article XX of the GATT, for
example, only some regulatory objectives are listed but not all. One way of handling
this issue, which is recommended by some scholars including myself, would be to build
collective preferences into the determination of whether a measure is discriminatory
and, thus, required to be justified in the first place under Article XX. Yet as explained
above, in the discussion of the Appellate Body’s non-discrimination regime, while the
Appellate Body did go in this direction in at least one case – EC–Asbestos – where con-
sumer preferences about health were considered in determining whether the treat-
ment of different products could properly be compared for the purposes of an analysis
of discrimination, overall (after the twists and turns in the case law), the Appellate
Body has moved towards an approach where discrimination is found on the basis of an
impact on competitive relationships alone, without regard for the basis of the distinc-
tions in policy choices or collective preferences.
It is perhaps no accident, however, that in the very same case where the Appellate
Body completed or fully articulated its orientation towards an exclusively competition-
based approach to discrimination – EC–Seal Products – the Appellate Body also rein-
forced its resources to ensure the respect for collective preferences under Article XX of
the GATT by reaffirming a broad reading of the meaning of ‘the protection of public
morals’ in Article XX.115 This broad reading, already endorsed in US–Gambling116 and
China–Publications,117 appears to cross-cut all substantive fields of regulation, focusing
on whether the measure in question is deemed by a given society to be derived from the
fundamental beliefs or values of that society.

115
EC–Seal Products, supra note 86.
116
US–Gambling, supra note 91.
117
China–Publications, supra note 84.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 63

The significance of such an approach for collective preferences was perhaps not
fully grasped with US–Gambling and China–Publications because in those cases the
kinds of restrictions at issue, including controls on betting and the censorship of films,
could be seen to be rather pervasive, traditional or conventional forms of ‘moral’ regu-
lation. In EC–Seal Products, what was at issue was animal welfare, namely the preven-
tion of cruelty to seals. While in fact, as Langille, Sykes and I have shown, regulations

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addressing animal cruelty have been an element of public morality for some time
in many societies, in general, the tendency in the trade policy community has been
to make light of the notion of opposing the seal hunt as a genuine moral matter (as
opposed to a sentimental fad stoked by fanatical NGOs and celebrities hungry for more
publicity). For the panel, which grasped properly the respect for collective preferences
already evident in the Appellate Body jurisprudence, and for the Appellate Body itself,
there was no place for an objective inquiry into whether concern for animal welfare
generally, or, indeed, for the suffering of seals in particular, could or should be a matter
of the fundamental beliefs or values of Europeans. This inquiry was essentially a mat-
ter of a declaration or assertion by the EU, speaking for its citizens, who were subject
ultimately to an implicit condition of good faith – that is, that the declaration not be a
sham or pretext for the protection of domestic commercial interests.
Many expected a kind of anti-hypocrisy condition to be put on the invocation of
public morals – if you act against cruelty to seals, to show you are serious that animal
cruelty is a serious moral matter, then you have to demonstrate that you are as con-
cerned for the suffering of foxes, chickens or pigs. The rejection of this kind of argu-
ment (strongly urged by the claimants Canada and Norway) illustrates the consistency
of the respect for collective preferences by the WTO judicial system. Caring more about
some animals than others, or prioritizing some animal welfare causes over others, is
not a question of rationality or irrationality nor does it necessarily raise the spectre of
hypocrisy; it is simply a function of the collective preferences of a particular society,
which the WTO adjudicator has no business second-guessing. Overall, the approach
to public morals in EC–Seal Products should allow the Appellate Body to be consistent
in its respect for collective preferences, providing the possibility of justifying measures
for objectives that are not explicitly stated in the other exceptions in Article XX.
However, there are questions about the respect for collective preferences that are
raised by other aspects of the Appellate Body’s jurisprudence that have been far from
fully answered. The SCM Agreement, a product of the overall neo-liberal orientation
of the Uruguay Round, disciplines subsidies that have certain competition-distorting
effects, but without an exceptions provision such as Article XX of the GATT.118 The
disciplines are essentially indifferent to collective preferences and are a product – in
some significant measure – of the anti-industrial policy/anti-‘picking winners’ bias
of the thinking on regulation and its reform that dominated in the West in the 1980s
and early 1990s, when it began to be seriously challenged. Some have suggested read-
ing Article XX to the SCM Agreement on the grounds that it is a lex specialis to the
GATT that elaborates but incorporates the basic approach in the GATT to policy space.

118
SCM Agreement, supra note 111.
64 EJIL 27 (2016), 9–77

In Canada–Renewable Energy, the Appellate Body was faced with an important chal-
lenge with legitimacy implications.119 All renewable energy markets have historically
been premised on government support; when one does not take into account nega-
tive environmental externalities, the cost of generating renewable energy has been
higher than in the case of fossil fuels. In a competitive marketplace where consumers
only care about the lowest price for a given amount of electricity, no renewable energy

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would be generated.
Yet the SCM Agreement is indifferent to policy objectives, even those that are appar-
ently imperative or vital as to mitigate climate change. In this context, the Appellate
Body had to be extremely creative in finding a way of bringing in respect for collective
preferences. It did so through the concept of a ‘benefit’, as interpreted in the juris-
prudence of the SCM Agreement. The subsidies disciplines depend on a notion that
a benefit has been provided, which is an advantage over the situation of a normal
competitive market. The Appellate Body hypothesized that a market could itself be
the product of collective preferences. In Ontario, the government had constructed a
renewable energy market and structured it to achieve certain policy objectives. One
had to take this framework as a given and ask not whether the price provided to
renewable energy producers provided a benefit in relation to providers of fossil fuel
energy but, rather, whether there were competition-distorting subsidies within the
renewable energy market as created and structured by the Ontario government, based
upon Ontario’s collective preferences. One may well ask whether this approach may
also have implications for the Appellate Body’s choice of a purely competition-based
approach to determining the existence of discrimination. If the government has cre-
ated different markets for two products based upon collective preferences, is it proper
to postulate a competitive relationship between the products as if there were a single
market?
Many observers were surprised by the result in Canada–Renewable Energy. However,
Antonia Eliason and I had suggested years before the complexity of determining a
market benchmark in subsidies disputes related to support for renewable energy.120
Consider, for example, the Appellate Body’s ruling in the US–Foreign Sales Corporations
dispute.121 This dispute concerned the sensitive issue of how the USA approaches the
tax liability of corporations. The USA typically taxes on the basis of nationality rather
than residency, and the result can be that US corporations are faced with double taxa-
tion, where their operations abroad are such that they attract tax liability in other
jurisdictions, which typically tax on the basis of residency. The US foreign sales cor-
porations (FSC) scheme was intended to address in part this problem, by exempting

119
WTO, Canada – Certain Measures Affecting the Renewable Energy Generation Sector/Canada – Measures
Relating to the Feed-in Tariff Program – Report of the Appellate Body, 24 May 2013, WT/DS412/AB/R, WT/
DS426/AB/R.
120
Eliason and Howse, ‘Domestic and International Strategies to Address Climate Change: An Overview
of the WTO Issues’, in T. Cottier, O. Nartova and S.Z. Bigdeli (eds), International Trade Regulation and the
Mitigation of Climate Change (2009) 48.
121
WTO, United States – Tax Treatment for ‘Foreign Sales Corporations’ – Report of the Appellate Body, 20 March
2000, WT/DS108/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 65

certain US entities with particular structures from US tax liability when operating off-
shore. In effect, the FSC scheme could be viewed as allowing the USA to preserve its
sovereign choice for a different approach to tax liability over other countries, without
penalizing its own industries and traders. However, it is unquestionable that Congress
had managed to build various tax ‘loopholes’ in the scheme that provided certain com-
petitive advantages to particular kinds of US entities operating abroad, going beyond

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simply adjusting or compensating to prevent double taxation. The EU challenged the
scheme as an illegal subsidy under the SCM Agreement.
The essential issue became whether the FSC scheme resulted in the USA foregoing
revenue ‘otherwise due’. One view of this expression ‘otherwise due’ is that it indi-
cates a comparison of the particular measure being challenged as a subsidy against
the benchmark of a ‘normal’ tax system, one that achieves the revenue collection
goal without altering competitive relationships, favouring particular industries and
so forth – a Washington consensus view of how a tax system should operate. The
Appellate Body, however, held that the SCM Agreement permitted a Member to adopt
any tax system it wished. Therefore, the comparison in determining whether revenue
was ‘otherwise due’ had to be internal to the Member’s chosen tax system – that is,
the benchmark would be from some general or default taxation rule from which the
Member was alleged to have deviated to provide a particular competitive advantage.
Conveniently, the Appellate Body was able to find such a rule in the case of the USA.
However, there is no necessity to structure a tax system such that differential treat-
ment takes the form of a deviation from a default rule. To see how respect for collective
preferences works, let us return to the example of renewable energy. A WTO Member
can have a policy that taxes renewable energy industries much less than fossil fuels,
which can be expressed simply as two tax rules, one for the renewables sector and a
different one for the fossil fuels sector. There is no revenue foregone that is otherwise
due because the rule for fossil fuels is simply a different rule for a different sector, not
some kind of default or general taxation rule that sets the norm for what is ‘due’.
A different kind of question about respect for collective preferences is raised by the
US–COOL case, where the Appellate Body considered under the TBT Agreement US
regulations mandating that information be provided to consumers through label-
ling about the national origin of certain meat products. The Appellate Body avoided
an inquiry into the policy objectives in providing consumers with the information
in question. Consumers might view national origin as a surrogate for the quality or
safety of meat (which could be rational or could be based on prejudice or misinforma-
tion or some of both). Or they might have preferences against certain countries. Could
facilitating the latter preferences be intrinsically inconsistent with the concept of non-
discrimination in WTO law?
A third question emerges from the way in which the Appellate Body has been
operating its strict scrutiny of discrimination. As noted, the Appellate Body operates
strict scrutiny of discrimination under the chapeau of Article XX by requiring a tight
justification of any distinctions or exceptions in the way that a regulatory scheme is
designed to be applied in practice against the stated objective. The EC–Seal Products
judgment displays the difficulty the Appellate Body has had in imagining a situation
66 EJIL 27 (2016), 9–77

where distinctions or exceptions reflect different objectives – each legitimate – that

need to be traded off to some extent. It was difficult for the Appellate Body to see the
indigenous people’s exception as a reflection of the strength of the collective prefer-
ences for the protection of the traditional way of life of indigenous peoples that could
legitimately limit the fulfilment of collective preferences with respect to the protection
against animal cruelty. The Appellate Body did not exclude the legitimacy of trading

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off these different goals through an exception but required a kind of harmonization,
such that attaining the indigenous objective detracted to the minimum extent neces-
sary from the ‘main’ or ‘principal’ objective of addressing animal cruelty. This seems
to limit the extent to which the regulator can take into account the relative strength or
intensity of different sets of collective preferences in determining how to make trade-
offs within a given regulatory scheme.

D Selective Judicial Minimalism

Where a substantive norm is ambiguous, seemingly not coherent or based on a deli-
cate but elusive historical compromise, the Appellate Body has favoured, selectively,
judicial minimalism. Minimalism can consist of leaving open the meaning of the norm
itself while emphasizing procedural or justificatory steps that Members must take in
order to show they have had the norm somehow in their consideration. The Appellate
Body may weaken the norm into a guidepost, allowing that a Member may satisfy
the obligation if it takes an approach different to the Appellate Body’s guidance as to
what is required – a limited deference to the Member’s own reading of how the obliga-
tion applies in certain situations. As already noted, in the Shrimp–Turtle case, there
was a strongly proceduralist focus in the Appellate Body’s chapeau strict scrutiny. The
Appellate Body faulted the USA for having negotiated with some WTO Members and
not others about an agreement that would forestall a trade embargo, for rigid applica-
tion of statutory criteria that did not take account of conditions in different countries
and for the lack of reasons for decisions on individual importation applications. Since
the general focus of the chapeau analysis, also discussed earlier, is how the measure
is, or will be, actually applied or operationalized, there is a large role for proceduralist
judicial minimalism in that analysis.122 Judicial minimalism as proceduralism, how-
ever, is not without its risks and has been subject to justified criticism.
Strictness with respect to procedures seems legitimate where the defending Member
has a highly developed legal system, a regulatory democracy that is similar to the US or
EU type of model.123 In the case of less developed countries, proceduralism can result
in obligation overload, which is perhaps why, as already noted, the Appellate Body has
rejected a proceduralist turn in some instances and rejected, for example, an inter-
pretation of the risk assessment requirement in the SPS Agreement that would have
required that the actual WTO Member taking the measure itself conduct a scientific
122
Michael Ioannadis has written thoughtfully and significantly on procedural approaches to adjudicative
legitimacy in the WTO. See Ioannadis, ‘Deference Criteria in WTO Law and the Case for a Procedural
Approach’, in L. Gruszczynski and W. Werner (eds), Deference in International Courts and Tribunals:
Standard of Review and Margin of Appreciation (2014) 91.
123
This is a notion that has been developed by my colleagues Kevin Davis and Benedict Kingsbury.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 67

risk assessment. Overall, selective judicial minimalism is a dispute or controversy

avoidance technique that may have positive legitimacy effects in a situation where
there are deep divisions between the membership, even with respect to the WTO’s
aims and future direction. At the limit, though, it can also produce a sense of legal
incoherence that may erode trust in the system and its ability to provide clear guid-
ance as to the meaning of legal rules. The question is whether the Appellate Body’s

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jurido-political intuitions and judgment are up to the requisite selectivity.
An excellent example of the strengths and perhaps also of the risks of selective
judicial minimalism as a means of avoiding controversy concerning the meaning of
legal norms is the GSP dispute.124 One of the most divisive issues between develop-
ing and developed countries that pertains to what it means for the Doha Round to be
a ‘development round’ was that of special and differential treatment of developing
countries. One such kind of treatment has been the provision of tariff preferences to
developing countries – that is, lower rates of tariff than the MFN rate for developing
country exports to developed country WTO Members.125 Such non-reciprocal prefer-
ences represented a partial victory for developing countries in the struggle over a new
international economic order in the 1960s and 1970s. A framework was created to
allow for an MFN exception for these preferences and to encourage individual devel-
oped countries to grant them, but the developing nations failed in their demand that
these preferences were binding. By the time of the Doha Round, many of these prefer-
ences had their special value – or ‘preferentiality’ – eroded by the reduction of tariffs
on many products on a MFN basis as well as by the proliferation of preferential trade
agreements, including between developed countries that had eliminated tariffs to zero
or close.
Furthermore, the preferences, having been granted voluntarily, were increasingly
encumbered by conditions (ranging from anti-terrorism, to the protection of intel-
lectual property rights, to human rights and environmental protection) as well as by
other forms of unilateral decision making, such as whether a country or product had
‘graduated’ from the GSP – that is, had become competitive enough so as to no longer
justify this form of special and differential treatment. The legal instrument under the
GATT and the WTO that allowed a deviation from the MFN in order to operate the GSP –
the Enabling Clause126 – incorporated a number of criteria or desiderata from pre-
existing GATT practices and documents, including that the preferences be operated
124
WTO, European Communities – Conditions for the Granting of Tariff Preferences to Developing Countries –
Report of the Appellate Body, 20 April 2004, WT/DS246/AB/R, at 925
125
The following draws from my previous scholarship on this dispute. See Howse, ‘Back to Court after Shrimp–
Turtle? Almost But Not Quite Yet: India’s Short Lived Challenge to Labor and Environmental Exceptions
to the European Union’s Generalized System of Preferences’, 18 American University International Law
Review (2003) 1333; Howse, ‘Reconciling Political Sanctions with Globalization and Free Trade: India’s
WTO Challenge to Drug Enforcement Conditions in the European Community Generalized System of
Preferences: A Little Known Case with Major Repercussions for “Political” Conditionality in US Trade
Policy’, 4 Chicago Journal of International Law (2003) 385; Howse, ‘The Death of GSP? The Panel Ruling
in the India–EC Dispute over Preferences for Drug Enforcement’, 1 Bridges (ICTSD) (2004) 7; Howse,
‘Appellate Body Ruling Saves the GSP, at Least for Now’, 4 Bridges (ICTSD) (2004) 4.
126
Decision on Differential and More Favorable Treatment,Reciprocity and Fuller Participation of Developing
Countries, 28 November 1979, GATT BISD (26th Supp.) (1980).
68 EJIL 27 (2016), 9–77

in a non-discriminatory manner. However, the drafting of this instrument made it

far from clear whether the criteria were of a legally binding nature or whether they
reflected the ultimate aspiration for what would be achieved through a voluntary pref-
erence scheme. In March 2002, notably a few months after the launch of the Doha
Development Round, India launched a dispute at the WTO challenging conditions
related to labour rights, environmental performance and drug enforcement practices

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that had be incorporated in the EU’s GSP scheme. Meeting these conditions would
allow a developing country to receive the highest margin of preferentiality for its
imports into the EU. India claimed that the conditions violated the non-discrimination
provision of the Enabling Clause, which India argued was ‘hard law’ and prohibited
any distinctions between different developing countries. A successful ruling for India
might have given India and other developing countries a boost to negotiate greater
legal security for this kind of special and differential treatment in the Doha Round,
and this was perhaps the gambit. Yet striking down conditionality on GSP preferences
would have undermined a very strong understanding, especially among legislators in
the EU and the USA, that GSP is a voluntarily conferred benefit to which strings can be
attached. Being prohibited from attaching those strings might well have led to a loss of
interest from legislators in supporting the GSP at all.
As Greg Shaffer and Yvonne Apea summarize, ‘the GSP case represents a lawyer’s
paradise of ambiguous legal provisions interpreted by judicial bodies in a case having
significant political and institutional implications’.127 The judicial minimalism of the
Appellate Body was enabled by India’s own decision to limit its challenge to the drug
enforcement conditions, dropping the claims against labour and environmental con-
ditionality. Given that the Appellate Body had recently affirmed in its second ruling
in Shrimp–Turtle the legitimacy in principle of trade measures that were in response
to other countries’ environmental policies and had apparently empowered in some
measure some of the constituencies critical of neo-liberal trade liberalization, drop-
ping environmental and labour conditions was an understandable choice by India
to reduce the risk of its gambit. However, a feature of the drug enforcement condi-
tionalities was that they were not accompanied by any specific criteria to determine
a country’s entitlement to obtain the preferences. Listing a country was an act of
essentially unfettered bureaucratic discretion, with no requirement to give reasons
or an explanation. This feature made the drug preferences fundamentally different
from those related to environmental and labour conditionalities, which were rather
precisely defined.
The panel below held for India that any conditionality in the granting of GSP
preferences was incompatible with non-discrimination in the Enabling Clause. The
Appellate Body’s approach was quite different. First of all, it agreed with India that
the non-discrimination requirement in the Enabling Clause was a binding hard law
commitment. Not to have done so, arguably, would have sent a very negative message
127
G. Shaffer and Y. Apea, Institutional Choice in the General System of Preferences Case: Who Decides the
Conditions for Trade Preferences? The Law and Politics of Rights (2005), available at http://www.ictsd.org/
downloads/2013/02/institutional-choice-in-the-general-system-of-preferences-case.pdf (last visited 22
February 2016).
 The World Trade Organization 20 Years On: Global Governance by Judiciary 69

about legal security in special and differential treatment and would have made the
atmosphere of the Doha Round even more tense in terms of divisions between devel-
oping and developed countries.
However, having said that non-discrimination applied, the Appellate Body rejected
the panel’s view that any distinction would constitute discrimination. Instead, the
Appellate Body emphasized the importance of transparency and due process to

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the non-discrimination norm and relied heavily on the lack of objective criteria in
the drug preferences. Drawing on the language in the Enabling Clause, the Appellate
Body did impose one substantive discipline: to be non-discriminatory, the conditional-
ity had to make a positive contribution to the development needs of the country con-
cerned. Yet it was very unclear to what extent the Appellate Body would engage in real
scrutiny of the relation between the conditionality and the development need (as long
as tariff preferences in principle could make a contribution and the development need
was related to an ‘objective standard’ such as some multilateral treaty deploying a
concept of development). In any event, the Appellate Body made it rather clear that it
would not be inclined to make its own judgment about the meaning of ‘development’
or development needs.
According to Shaffer and Apea, many developing countries have been deeply disap-
pointed by the Appellate Body ruling.128 In effect, only through future dispute cases
could they test how deferential the Appellate Body intended to be in determinations
of preference-giving developed countries concerning the meaning of the key substan-
tive norm of positive contribution to development needs. Shaffer and Apea themselves
take the view that the Appellate Body was in fact placing a high hurdle in front of a
preference-giving Member and regrets the unwillingness of developing country mem-
bers to test this in further litigation. But by leaving the key substantive norm under-
termined, the Appellate Body made any such effort inherently risky, for it could lead to
a legal baseline unfavourable to efforts to secure greater legal security for preferences,
which is the key objective of many developing countries.
Selective judicial minimalism has loomed large in another area of WTO law that
has presented something of a political minefield – the constraints on unilateral trade
measures that have been traditionally permitted under the multilateral trading order,
including anti-dumping duties and countervailing duties in response to purport-
edly unfair trade practices of other Members and safeguard or emergency action
in response to a crisis in a domestic industry due to a sudden increase in imports.
Negotiations in the Uruguay Round to constrain these forms of unilateralism were
intense and difficult – not only the USA but also the EU placed a considerable weight
on being able to retain the ability to use these instruments, including in response
(implicitly) to demands of protectionist domestic constituencies. Other countries saw
these kinds of unilateralism, especially anti-dumping duties, as being among the most
damaging forms of protectionism remaining, especially given the ease with which
definitions of ‘dumping’ and other legal standards could be manipulated by ‘captured’
domestic agencies. Economists have generally seen the legal standards for imposition

128
Shaffer and Apea, supra note 126, at 32.
70 EJIL 27 (2016), 9–77

of unilateral fair trade remedies as having no sound economic basis (though they can
be explained in positive political economic terms of the demand of domestic interest
groups for protectionism). There is no good economic theory to determine if ‘dump-
ing’ – selling in export markets at a higher price than in domestic markets – is ‘unfair’
or to determine whether a particular subsidy is ‘unfair’ such that it merits a unilateral
response (the neo-liberal orientation towards multilateral discipline of subsidies was

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incorporated in the Uruguay Round’s SCM Agreement, as noted above, but the same
neo-liberal outlook was sceptical of using subsidization as a pretext for a unilateral
protectionist response).
With the substantive standards for disciplining unilateral trade remedies lack-
ing coherence, and the product of a rather brutal power-based negotiation, it is not
surprising that the Appellate Body has tended to resort to selective judicial minimal-
ism in these cases. In the early cases on safeguards – US–Lamb Meat129 and US–Steel
Products130 – the Appellate Body tackled the substantive norms that required that to
apply safeguards the sudden increases in imports must be due to unforeseen develop-
ments and that the increases in imports must have a causal relation to the injury in
the domestic industry. Giving an economics-based meaning to these norms is well nigh
impossible, so the Appellate Body essentially faulted a lack of reasoning or inadequate
consideration of the evidence or a failure to take into account all factors that might
be contributing to the injury. It impugned the quality of the process by which the
domestic agency imposed the safeguards while giving little guidance as to what the
substantive norms that the agency was to apply actually do mean. At some point, the
quantity and quality of reasons given for the decision, and evidence considered, would
be sufficient, but to know at what point this was would require arguably some under-
standing of the substantive norm. The safeguards cases strained the limits of judicial
minimalism, although one can understand the logic of the Appellate Body in resort-
ing to it.131
Another instance of judicial minimalism is a countervailing duties case, US–Softwood
Lumber.132 At issue was a long-standing dispute between the USA and Canada about
the price at which the Canadian government sold timber from government lands. The
US lumber industry argued that this price was lower than that which would result
from a market mechanism to determine prices (for example, auctions of the kind often
used in the USA). The industry’s claim was that the ‘artificially’ lower prices for access
to the trees were in fact a subsidy to Canada’s lumber industry, lowering the prices
of inputs. The WTO SCM Agreement provides that the benchmark for determining
whether the price at which the government sells a good or service is below market and,
129
WTO, United States – Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand
and Australia – Report of the Appellate Body, 16 May 2001, WT/DS177/AB/R, WT/DS178/AB/R.
130
WTO, United States – Definitive Safeguard Measures on Imports of Certain Steel Products – Report of the
Appellate Body, 10 December 2003, WT/DS248/AB/R, WT/DS249/AB/R, WT/DS251/AB/R, WT/
DS252/AB/R, WT/DS253/AB/R, WT/DS254/AB/R, WT/DS258/AB/R, WT/DS259/AB/R.
131
See the critique of A. Sykes, The Safeguards Mess: A Critique of WTO Jurisprudence, Working Paper,
University of Chicago (2003).
132
WTO, United States – Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from
Canada – Report of the Appellate Body, 17 February 2004, WT/DS257/AB/R.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 71

therefore, potentially a subsidy is the market condition in the defending Member – in

this case, Canada. However, the USA argued in the WTO dispute that since the govern-
ment, in fact, dominated sales of timber rights in Canada, even private sales would be
greatly influenced by the government’s administered prices. Thus, there was no genu-
ine market benchmark in the Canada, and the US agency should therefore be able to
use auction prices in the USA as the benchmark. The Appellate Body agreed with the

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USA that the private Canadian prices were inadequate as a market benchmark, but
the alternative benchmark proposed by the USA was one that was not contemplated
by the SCM Agreement. So the Appellate Body simply said to the USA that it could
use another benchmark, if it could justify that benchmark, without indicating what
would or would not be acceptable. In effect, the Appellate Body softened the treaty
benchmark into a form of indicative guidance or a presumptive standard, from which
the Member’s agency could deviate where adequately justified.
In the more recent ‘zeroing’ cases, where the issue is whether the amount of an
anti-dumping duty should be lower to give the dumping firm a ‘credit’ for negative
dumping – that is, for those sales where its price is higher in the export market than in
the domestic market – the Appellate Body has strayed from judicial minimalism with
rather ominous results.133 ‘Zeroing’, which is the failure to count in negative dump-
ing transactions in determining the anti-dumping duty (so as to lower it, and it is so
named because these transactions are simply given zeros) is neither explicitly permit-
ted nor prohibited under the Anti-Dumping Agreement. The Appellate Body began
with something like a judicial minimalist approach, avoiding a hard per se rule against
zeroing in all circumstances and addressing the practice in a case-by-case, contex-
tual manner. Eventually, pressed by further complaints, the Appellate Body found
that the practice of ‘zeroing’ was incompatible with the norms of the Anti-Dumping
Agreement, including the requirement to make a fair comparison of prices and to
determine duties based upon comparing aggregate domestic and export transactions.
Relentless pressure was being applied to the Appellate Body from the US trade repre-
sentative (USTR) to give zeroing a green light. While the USA did implement gradually
the Appellate Body’s rulings in some fashion, it sent a note of criticism to the Appellate
Body itself in two cases. In other cases, panels of first instance refused to follow the
Appellate Body’s approach to the zeroing issue (at the time, the head of the legal sec-
retariat serving the panels of first instance was an American, Bruce Wilson, with a
Washington, DC, insider background). The departure of US Appellate Body Member
Merit Janow from the Appellate Body without seeking renewal for a second term and
the USA’s failure to allow her successor Jennifer Hillman to serve a second term may
well be related to the zeroing controversy.134 Finally, the USTR apparently resolved to
block any appointment of a new Appellate Body Member who is likely to be indepen-
dent of trade insider circles, especially any academic.

133
See the excellent account in C. Bown and T. Prusa, US Antidumping: Much Ado about Zeroing, Working
Paper, World Bank Policy Research (2010).
134
See Elsig and Pollack, ‘Agents, Trustees and International Courts: The Politics of Judicial Appointment at
the World Trade Organization’, 14 European Journal of International Relations (2012) 1.
72 EJIL 27 (2016), 9–77

The politicization of the appointments process, observed by political scientist Mark

Pollack in an important recent article, could be seen as an inevitable outcome of the
Appellate Body’s assertions of independence and authority in a treaty community
that likes to see itself as ‘membership driven’. However, when the USA blocked the
appointment of James Gathii as an Appellate Body Member, most of the community
at first stood up to US pressure, resulting in the failure of the first appointment pro-

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cess, a deadlock where the Appellate Body was not fully staffed for a period of time,
while Kenya finally had little choice but to withdraw Gathii’s candidacy. Significantly,
the individual ultimately chosen was a consummate WTO insider. While the narra-
tive of this article has emphasized how generally the consensus rule has protected
the Appellate Body against effective political interference or pressure, the USTR under
the Obama administration found a way of using the consensus practice to produce
politicization by holding out until a candidate who was seen to be amenable to decid-
ing cases with sensitivity to Member views was finally chosen over one who had the
appearance of an independently minded jurist.
Why could the Appellate Body have not backed off to a judicial minimalist stance
over zeroing, simply stating that where an agency zeroes it has to ensure, or perhaps
give reasons to show, that the practice is ‘fair’ in all things considered? As we have
elaborated, these kinds of minimalist moves have saved the Appellate Body from
becoming immersed in political controversy over other heavily negotiated, but unprin-
cipled, trade-offs in the constraints on unilateral trade remedies. The aggressiveness
with which the USA applied pressure and the relative openness (to show protectionist
domestic constituencies that it was playing tough) probably forced the Appellate Body
to stand completely firm. Even if jurisprudentially defensible (after all, as noted, ‘zero-
ing’ was not explicitly banned and different Members had different views in the nego-
tiations on its compatibility with the overall normative approach of the Anti-Dumping
Agreement), softening its approach would have made the Appellate Body appear to
have been subject to pressure, not from the ‘institution’ or the membership in gen-
eral but, rather, from one Member, the USA. It would have undermined the consider-
ation that, ultimately, probably allowed many other Members to put up with decisions
that were not only independent but also anomalous from a trade insider perspective.
Namely, that, overall, having a judicial organ that can counter to some extent the
power-based nature of the WTO system, with the USA as its most powerful Member,
is worth it. Fortunately, one may question whether the kind of pressure applied in the
zeroing controversy is much more than a reflection of the style of senior members of
the current USTR. More is to be said about this in the conclusion.

E The Autonomy of the WTO Judicial System from Other Trade Fora
As noted above, in its ‘declaration of independence’, the Appellate Body pronounced
that it would interpret the WTO treaties in light of non-WTO public international law,
where relevant, and even in preference to the accumulated collective wisdom of the
GATT/WTO ‘institution’. In contrast to this openness and resistance to ‘fragmenta-
tion’, the Appellate Body has declined to engage in what Teitel and I call ‘cross-judging’.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 73

It has not engaged in dialogue, much less taken a posture of comity or complementar-
ity, in relation to other fora for the settlement of trade disputes. Instead, the Appellate
Body has tried to maintain ‘clinical isolation’ from these other trade fora, to use its
own words, for what it is not doing in relation to international law in general. Article
23 of the DSU stipulates that the WTO dispute settlement system shall be the exclusive
forum for determining violations of the WTO agreements. Article 23 is an important

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element of what was discussed above and an important, if not crucial, element of the
Uruguay Round. The USA, in particular, has accepted constraints on aggressive uni-
lateralism, which includes the option of self-help through trade sanctions or economic
threats where another Member was determined by US authorities to have violated its
WTO obligations, pursuant to section 301-type trade law.
However, Article 23 also implies that WTO Members cannot simply exit the WTO
dispute settlement procedure by migrating their dispute to a non-WTO forum. With
the self-constructed narrative of WTO political failure, the spectre of the WTO simply
becoming irrelevant as Members have more success in moving forward with regional
negotiations has been often raised. The final acknowledgement of the failure of the
Doha Round was preceded by the apparent success of the Trans-Pacific Partnership
negotiations. In cases where aspects of disputes spill over between a regional trade
forum and the WTO dispute settlement system, the Appellate Body has made it clear
that the WTO dispute settlement organs are completely autonomous and have no obli-
gation to facilitate the role of regional fora. The message might be said to be that if
there is a dispute that relates to WTO legal rules, better to bring it to the WTO in the
first place, as the exclusive forum that deals with these rules.
As discussed above, in the Brazil–Retreaded Tyres case, the Appellate Body took a
deferential view of Brazil’s overall scheme of banning imports of retreaded tyres, con-
sidering it to be a rational choice in furthering environmental and health objectives.
However, when the Appellate Body moved to scrutiny under the chapeau of Article
XX, things took a different turn. Brazil had also been sued in the MERCOSUR regional
forum for its tyre scheme and had lost in that forum, possibly because it did not make
the same kind of defence that it had done in the WTO. As a consequence, Brazil had
been obligated under MERCOSUR’s dispute settlement system not to apply the import
ban to MERCOSUR member states. The Appellate Body held that this was unjustified
discrimination because it was unrelated to the environmental and health objective of
the main measure and, therefore, that Brazil’s non-application of its measure to the
MERCOSUR members failed the chapeau. One might think that this whole issue ought
to have been resolved under Article XXIV of the GATT, which, as discussed above, con-
cerns an exemption from the MFN obligation where it is necessary to form, or main-
tain, a customs union or free trade area.
Yet as we saw in the Turkey–Textiles case, the Appellate Body took a strict or narrow
view of the exception, holding that it should be subject to strict judicial scrutiny, not
merely diplomatic oversight, in the relevant WTO committee. Formalistically speak-
ing, Brazil could comply with both its MERCOSUR and its WTO obligations by with-
drawing its measure as opposed to simply not applying it to non-MERCOSUR members.
Thus, arguably, based on the Appellate Body’s strict approach, Article XXIV would not
74 EJIL 27 (2016), 9–77

be available. But the Appellate Body showed no interest in facilitating Brazil’s compli-
ance with both sets of obligations and with the maintenance of a domestic regulatory
scheme that had already passed rationality review. Had the Appellate Body taken a
positive view of the co-existence of regional fora with the WTO dispute settlement
system, it could easily have found that Brazil’s discrimination in favour of MERCOSUR
members was not ‘unjustifiable’ – there is no definition of ‘unjustifiable’ in Article XX

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and no textual basis for confining acceptable justifications to those that pertain to the
main purposes of the general regulatory scheme itself.
In the Mexico–Soft Drinks case,135 Mexico sought justification under Article XX(d)
of the GATT, which refers to measures necessary to enforce laws, regulations and
requirements, for sanctions against the USA to block the formation of a panel under
the North American Free Trade Agreement (NAFTA) to resolve a claim that Mexico
had against the USA under NAFTA.136 The Appellate Body held that ‘laws, regulations,
and requirements’ referred exclusively to domestic law and could not include interna-
tional agreements such as NAFTA. Since many international norms are implemented
in domestic law and in some legal systems with automaticity, the Appellate Body
itself had to acknowledge that this distinction could not easily apply if international
norms were part of a domestic legal system. However, the clear message was that the
WTO dispute settlement system was not available to address gaps or ­ineffectiveness in
regional dispute arrangements. The Appellate Body opined:
Mexico’s interpretation would imply that, in order to resolve the case, WTO panels and the
Appellate Body would have to assume that there is a violation of the relevant international
agreement (such as the NAFTA) by the complaining party, or they would have to assess whether
the relevant international agreement has been violated. WTO panels and the Appellate Body
would thus become adjudicators of non-WTO disputes. … This is not the function of panels and
the Appellate Body as intended by the DSU.137

In other cases, the Appellate Body has held that it could make determinations about
the legal requirements of other legal systems and whether they are met, where needed,
in order to apply a WTO legal rule (in the EC–Bananas dispute,138 the Lomé Convention
in India–Patents139 and India’s domestic administrative and constitutional law). In
Mexico–Soft Drinks, the legal rule was Article XX(d) and the issue of the US ‘compli-
ance’ with NAFTA was a question simply subordinate to whether Mexico’s measures
were required to secure compliance. So the Appellate Body, following earlier case law,
could simply have said that the operative provision being applied was Article XX(d)
of the GATT and finding with respect to NAFTA compliance was merely ancillary
to determining whether Mexico’s measures were consistent with the WTO-covered

135
WTO, Mexico – Tax Measures on Soft Drinks and Other Beverages – Report of the Appellate Body (Mexico–Soft
Drinks), 24 March 2006, WT/DS308/AB/R.
136
North American Free Trade Agreement 1992, 32 ILM 289, 605 (1993).
137
Mexico–Soft Drinks, supra note 134, para. 76.
138
WTO, European Communities – Regime for the Importation, Sale and Distribution of Bananas – Report of the
Appellate Body, 25 September 1997, WT/DS27/AB/R, at 591.
139
WTO, India – Patent Protection for Pharmaceutical and Agricultural Chemical Products – Report of the Appellate
Body, 16 January 1998, WT/DS50/AB/R, at 9.
 The World Trade Organization 20 Years On: Global Governance by Judiciary 75

agreements. So it is not hard to see that there is an implicit judicial policy of ‘clini-
cal isolation’ from regionalism. There may also be a concern that regional fora must
respect the exclusivity of WTO dispute settlement to determine WTO violations, as
required by Article 23 of the DSU – that is, to favour ‘clinical isolation’ from the other
side, as it were, and offer a reciprocal standoffishness.
Finally, in Peru–Agricultural Products,140 Peru argued that Guatemala should be

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barred from making a claim against it for WTO violations where the measures in ques-
tion had been clearly agreed to be permissible under a FTA that had been concluded
between Peru and Guatemala but not yet entered into force. Did the provision in the
FTA constitute, at a minimum, some kind of representation that Guatemala would
not pursue a claim against Peru for maintaining this sort of measure? The Appellate
Body held that the provisions of the VCLT on inter se agreements (Article 41) did not
apply to allow a sub-set of WTO Members to agree to permit among themselves oth-
erwise WTO-inconsistent measures. The WTO’s own rules that related to contracting
out of, suspending or limiting WTO obligations, including rules on waivers and Article
XXIV of the GATT, trumped the VCLT. In effect, the WTO agreements constituted an
­exhaustive lex specialis concerning deviations from WTO obligations applicable among
some, but not all, WTO Members. Again, this ruling has to be understood hand in
hand with the strict or narrow view of the exception for FTAs and customs unions in
GATT Article XXIV.
In sum, common to all of these cases is the reinforcement of the autonomy, if not a
certain kind of supremacy or at least primacy, of the WTO dispute settlement system,
at a time when regional and bilateral agreements and negotiations proliferate, par-
tially in response to the supposed blockage or failure of the political and diplomatic
processes of the WTO. On balance, the Appellate Body makes exit to regional dispute
settlement harder and certainly shows no interest in treaty interpretations that could
accommodate or facilitate harmonious co-existence with regional regimes as opposed
to two or multiple solitudes.

7 Conclusion
While the future of the WTO as an institution is in question or at least in flux, with
no consensus now about what it is able to do or what it should do in the future, the
WTO’s Appellate Body is a formidable engine of global economic governance, prob-
ably the most active and productive of all international courts not only in the number
and range of its decisions but also in the number of disputes that its jurisprudential
guidance has helped to settle, often out of the courtroom. The Appellate Body operates
under many constraints: it is required to decide appeals in a 60-to-90-day time period;
it must ultimately rely on a factual record and findings of first instance from panels
that are not professional adjudicators and are resource-constrained; it cannot award
damages; it must take every appeal brought to it. On the other hand, what is appealed

140
WTO, Peru – Additional Duty on Imports of Certain Agricultural Products – Report of the Appellate Body, 31
July 2015, WT/DS457/AB/R.
76 EJIL 27 (2016), 9–77

and the scope of the appeal is entirely in the hands of states who are the parties to the
disputes. In the presence of backlash against the Uruguay Round result that created
the WTO and more generally the intense contestation of neo-liberal globalization or
‘deep integration’, the Appellate Body sought to discern in the corpus of WTO trea-
ties an equilibrium between domestic regulatory autonomy and trade liberalization
very much inspired by, or anchored in, the original GATT – a respect for regulatory

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diversity and flexibility towards domestic policy interventions that characterized the
GATT in the period when it enjoyed the greatest legitimacy or acceptance (post-war
embedded liberalism).
The Appellate Body has attempted to make sense of, and in a way soften or blunt,
the Uruguay Round treaties that tend to veer in a ‘deep integration’ direction, using
the kind of non-­discrimination prism that was central to the GATT founders’ view
of the dividing line between legitimate domestic policies and those that represent or
threaten cheating on bargained limitations on border measures such as tariffs. In gen-
eral, the Appellate Body has looked not primarily to the intuitions of the GATT/WTO
insider community and its traditions, understanding that there are legitimate public
policies acceptable within the treaty framework, but, rather, to the outside. Thus, it
has been open to curbs on trade that facilitate objectives such as the protection of ani-
mal welfare and climate change mitigation, which have simply not been brought into
the mandate of the WTO as an institution. The equilibrium between domestic regula-
tory autonomy and trade liberalization discerned by the Appellate Body is very much a
construction – one that is normatively stabilizing at a time when there are few agreed
answers about the costs and benefits of globalization or the ideal shape of global eco-
nomic governance in relationship to differing domestic policy paths. For the contes-
tants in these debates on either side, this normative stabilization cannot but seem to
have an element of the arbitrary and artificial to it. Yet it may well have contributed to
a sense that, while the WTO appears to be stalled in its negotiating functions during
this period, there has been some basic durability to the given legal framework and its
enforceability, helping to resist a major reversion to beggar-thy-neighbour during the
financial and economic crisis of 2007–2011. The judicial policies that the Appellate
Body has deployed to navigate along the equilibrium it has constructed deserve to be
articulated explicitly and debated. As I have suggested in this article, they have some-
times been deployed deftly; in other cases, less so or counter-productively, from the
point of view of legitimacy.
The concerns raised by Manfred Elsig and Pollack, among others, concerning the
recent apparent politicization in the Appellate Body are a reflection, more than any-
thing else, of its power. Constituencies try to influence who is on the US Supreme
Court, for example, for the same reason. I believe the Appellate Body will be able to
withstand such efforts, which probably will backfire in the case of tactics as heavy
handed as those used by the Obama administration US Trade Representative (USTR)
in the last few years. There are few exits from the WTO dispute settlement system,
and blocking or threatening to block appointments until the Appellate Body is stacked
with those who will do the bidding of the USTR risks, in the end, jeopardizing the
stature and effective functioning of a system that the USA itself needs for dispute
 The World Trade Organization 20 Years On: Global Governance by Judiciary 77

settlement, given its legal commitment to not revert to unilateralism and given the
relatively underdeveloped regional fora. Recently, US Appellate Body Member Thomas
Graham was re-appointed without difficulty. It is notable also that in the Trans-Pacific
Partnership, the USA has accepted that the dispute settlement institutions for that
mega-regional organization must take into account the jurisprudence of the WTO.
Larger than the current life of the WTO ‘institution’, the Appellate Body, as this move

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suggests, may well have come of age as a true court of world trade.