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Dictum on Dicta: Obiter Dicta in WTO Disputes
Published online by Cambridge University Press: 08 May 2018
Abstract
This paper discusses an important legal issue raised by the United States in its recent attempt to block the reappointment of an Appellate Body member. According to the US, in some of his decisions, the member has made overreaching findings that amount to obiter dicta. As obiter dictum is a unique concept in the Common Law system, the US argument may only stand if the concept may be found in the WTO legal system as well. With a careful analysis of the concept of dicta in Common Law and a close examination of the effects of past panel and Appellate Body decisions in WTO dispute settlement, the paper rejects the US argument by refuting each of the three premises of the US argument, i.e., the WTO legal system based on Common Law; WTO follows stare decisis; and the WTO has rules against dicta. In addition to original contributions on the nature of the WTO dispute settlement system in theory, the article also provides some practical advice on how the controversy may be resolved.
- Type
- Review Article
- Information
- Copyright
- Copyright © Henry Gao 2018
Footnotes
The author wishes to thank Professors William Davey, Ernst-Ulrich Petersmann, Giorgio Sacerdoti, Mitsuo Matsushita, Peter Van den Bossche, Seung Wha Chang, Yasuhei Taniguchi, Debra Steger, Raj Bhala, Alan Winters, and the two anonymous reviewers for their most helpful comments. All errors remain the author's own. All websites cited are current as of 5 March 2018.
References
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73 This article uses ‘Common Law’, in its traditional sense, i.e., as a domestic legal system. This should not be confused with the emerging usage of Common Law in the context of international law, with two major schools of thoughts. The first, ‘International Common Law’ as coined by Bhala, Guzman, and Meyer, refers to the case law built on the decisions of international tribunals. In my view, as such ‘common laws’ are not binding, they are better referred to as the ‘common jurisprudence’ of international courts. See Bhala, R., ‘The Precedent Setters: De Facto Stare decisis in WTO Adjudication (Part Two of a Trilogy)’, 9 Journal of Transnational Law and Policy 1 (1999)Google Scholar; Guzman, A. T. and Meyer, T. L., ‘International Common Law: The Soft Law of International Tribunals’, 9 Chicago Journal of International Law 2 (2009), at 515–536Google Scholar. The second is the ‘Common Law of International Trade’ as suggested by Weiler and Cottier, which refers to the common traits and overall coherence between the WTO and other regional and bilateral agreements. As they focus on the common rules of different trade agreements, I think they are better named as ‘common rules’. See Weiler, J. H. H., The EU, the WTO and the NAFTA: Towards a Common Law of International Trade, Oxford: Oxford University Press (2000)Google Scholar; Cottier, Thomas, ‘The Common Law of International Trade and the Future of the World Trade Organization’, 18 Journal of International Economic Law 1 (2015), at 3–20CrossRefGoogle Scholar.
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75 See Art. 1.1 and Appendix 1 of the DSU.
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88 See e.g., Art. 11 of the DSU, which states that ‘[t]he function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements’.
89 WTO Agreement, Art. IV. 2 & 3.
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106 Statute of the International Court of Justice, Art. 59, www.icj-cij.org/en/statute (last visited 21 October 2017).
107 Sacerdoti, supra note 74, at 7–10.
108 Rome Statute of the International Criminal Court, www.icc-cpi.int/nr/rdonlyres/ea9aeff7-5752-4f84-be94-0a655eb30e16/0/rome_statute_english.pdf (last visited 21 October 2017).
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110 Ibid.
111 GATT Panel Report, EEC Restrictions on Imports of Apples from Chile, L/5047, adopted 10 November 1980, BISD 27S/98.
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113 WTO Agreement, Art. IX.2.
114 Chua, supra note 109, at 174.
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118 Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97, at 13.
119 Ibid.
120 Ibid., at 14.
121 Ibid., at 15.
122 Ibid., at 14.
123 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, p. 6481, at para. 107.
124 Ibid., at para. 109.
125 Ibid., at para. 107. The report referred to here is Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755.
126 Ibid.
127 Panel Report, United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, WT/DS344/R, adopted 20 May 2008, as modified by Appellate Body Report WT/DS344/AB/R, DSR 2008:II, p. 599, at para. 7.106.
128 Ibid.
129 In the World Trade Organisation before the Appellate Body AB-2008-1, DS344 United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, Third participant notification and written submission by the European Communities, 25 February 2008 Geneva, at para. 56.
130 Appellate Body Report, United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, WT/DS344/AB/R, adopted 20 May 2008, DSR 2008:II, p. 513, at para. 162.
131 Ibid., at para. 161.
132 Ibid., at para. 160.
133 See e.g., David's discussion on the heated debate between WTO Members when the Appellate Body Report on US–Stainless Steel was adopted. F. David, ‘The Role of Precedent in the WTO – New Horizons?’, Maastricht Faculty of Law Working Paper No. 2009–12 (2009), SSRN: https://ssrn.com/abstract=1666169, at 8–9.
134 See Sacerdoti, supra note 74, at 14; C. Davis, ‘Deterring Disputes: WTO Dispute Settlement as a Tool for Conflict Management’, presentation to the Annual Meeting of the International Political Economy Society (2016), at 20; S. Cho, ‘Precedent as a Social Phenomenon: System, Language and Symbol’, Chicago-Kent Research Paper Series, 1 June 2016, SSRN: https://ssrn.com/abstract=2791744, at 20–21; R. Alford, ‘The Role of Precedent at the WTO’, Opinion Juris, 2 May 2008, http://opiniojuris.org/2008/05/02/the-role-of-precedent-at-the-wto/.
135 Appellate Body Report, supra note 130, at para. 158.
136 This view is shared by many Appellate Body insiders. For example, Unterhalter stated that ‘[t]he WTO dispute settlement system knows no formal system of precedent’, in Unterhalter, supra note 9, at 473. Matsushita stated that ‘in the WTO jurisprudence stare decisis is not recognized’, in Matsushita, supra note 91, at 552. Hughes stated that ‘stare decisis does not apply in the WTO dispute settlement system’, in V. Hughes, ‘Working in WTO Dispute Settlement: Pride without Prejudice’, in G. Marceau (ed.), supra note 2, at 421.
137 Jackson, J. H., Sovereignty, the WTO, and Changing Fundamentals of International Law, Cambridge: Cambridge University Press (2006), at 177CrossRefGoogle Scholar.
138 Ibid., at 173.
139 Ibid., at 175.
140 Beshkar, M. and Chilton, A., ‘Revisiting Procedure and Precedent in the WTO: An Analysis of US – Countervailing and Anti-Dumping Measures (China)’, 15 World Trade Review (2016), at 386–388CrossRefGoogle Scholar.
141 Ibid., at 386–387.
142 Ibid., at 387–388.
143 Ibid., at 387.
144 Hudec, R. E., ‘Dispute Settlement’, in Schott, J. (ed.), Completing the Uruguay Round: A Results-oriented Approach to the GATT Trade Negotiations, Washington, DC: Peterson Institute for International Economics (1990)Google Scholar, at 191.
145 Hughes, supra note 1, at 121–122.
146 Steger, supra note 5, at 447. See also Bossche, P. V. D., ‘From Afterthought to Centrepiece: The WTO Appellate Body and Its Rise to Prominence in the World Trading System’, in Sacerdoti, G., Yanovich, A. and Bohannes, J. (eds.), The WTO at Ten: The Contribution of the Dispute Settlement System, Cambridge: Cambridge University Press (2006), at 292–294Google Scholar.
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149 GATT Panel Report, European Economic Community – Payments and Subsidies Paid to Processors and Producers of Oilseeds and Related Animal Feed Proteins, L/6627, adopted 25 January 1990, BISD 37S/86.
150 Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449, at 33.
151 Appellate Body Report, supra note 123, at para. 107.
152 Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475), at paras. 129–130.
153 Ibid., at para. 131.
154 Ibid., at para. 132.
155 Mission of the United States, supra note 12, at 13.
156 G. Sacerdoti, ‘The Dispute Settlement System of the WTO in Action: A Perspective on the First Ten Years’, in G. Sacerdoti, A. Yanovich and J. Bohannes (eds.), supra note 146, at 49.
157 DSU, Art. 7.2.
158 Lauterpacht, H., The Development of International Law by the International Court, London: Stevens & Sons (2nd edn, 1958)Google Scholar, at 61.
159 Jennings, R. Y., ‘The Judiciary, International and National, and the Development of International Law’, 45 International and Comparative Law Quarterly (1996) 1 at 10CrossRefGoogle Scholar.
160 Ibid., at 12.
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