The 1996 report of the Appellate Body of the World Trade Organization (WTO) concerning Japan – Taxes on Alcoholic Beverages constitutes a landmark decision on the matter of precedent in world trade dispute settlement. The Appellate Body operates within the framework of the world trade dispute settlement system, originally consisting of the customary practices pursuant to Articles XXII and XXIII of the General Agreement on Tariffs and Trade (GATT) in the field of dispute settlement and presently set forth in the Understanding on Rules and Procedures Governing the Settlements of Disputes (DSU) administered by the Dispute Settlement Body (DSB) of the WTO. This system has evolved since the entry into force of the Protocol of Provisional Application of the GATT on 1 January 1948. It is probable that the prospect of this system building up its own case law and the practical implication of that case law for the development of world trade law was not initially foreseen, yet it is not surprising that, just as the effects of the jurisprudence of the World Court on international law, the panel reports became part and parcel of the legal sense of the multilateral trade community. Even though previous panel reports do not legally bind subsequent panels, panel reports are replete of references to precedent, just as in the case of the standing international courts and tribunals. Panels rely on such precedents as authoritative expressions of their views on decided points of international trade law. Similarly, parties in world trade dispute cases are themselves guided by previous panel reports in framing and presenting their cases. In short, as Jackson has indicated, certain international law effects emanate from panel reports.