Thursday, June 28, 2012

A Dispute Tribunal for the WTO - Feasible?

The Dispute Settlement Mechanism in the WTO is often referred to as the crown jewel due too its effective mechanisms of dispute resolution and compliance. A judicial rule based system in an institution which has a history of political negotiation is indeed viewed as one of the positives of the WTO. While the failure of the Doha round of negotiations is viewed as a serious blow to the "negotiating" and "rule making" power of the WTO, the DSM has stood strong in contrast over the past decade. Some argue that the failure of the negotiation causes a serious strain on the judicial branch since disputes that are essentially political and require new rules are tried to be settled within existing legal frameworks leading to tensions.

A brief paper titled "Establishment of a Dispute Tribunal in the WTO" by Debra P Steger highlights another challenge to the DSM - the inadequacy of the Dispute Panels to address the increasing complexity and quantity of disputes at the WTO. Advocating for setting up a Dispute Tribunal which would be a permanent body consisting of international trade law experts to replace the ad hoc Panel system, the author seeks an overhaul of the DSM for ensuring that the legitimacy and credibility of the system is maintained. Highlighting the inadequacy of the Panel system as it exists today, the author states that the increasing complexity of the cases involving interpretation of many agreements as well as the inability to complete the cases within the stipulated time frame has aggravated the need for reform within the system. Increased competence and expertise in international trade law matters is the need of the hour.

Favouring the permanent Tribunal system with a set of part-time members, many advantages are seen in terms of timeliness and efficiency of disposal of cases, experience and expertise, independence and impartiality, collegiality and consistency in decision making, greater geographic diversity in members as well as a strong two-tier system along with the Appellate Body.
"There are compelling reasons to create a dispute tribunal at this point in the history of the WTO. As the WTO adjusts to the rapidly changing global economy, disputes are becoming more complex and challenging, both on their facts and in the novelty of the legal issues presented. Moreover, higher quality decisions would be produced by a tribunal whose members are available at all times and on short notice to serve on cases. This would allow the two-tier system in the WTO to function as it was designed, and enable the Appellate Body to focus on its mandate which is to review issues of law and legal interpretation in panel reports.
Finally, a dispute tribunal would result in significant time savings and efficiencies as compared with the present ad hoc panel system. Time would be saved in panel composition, and other procedural and organizational efficiencies would ensue from having members available at all times and on short notice to serve on cases and from the experience, knowledge and collegiality that would develop over time in the dispute tribunal as an institution.
There is currently a gap between the goals of the DSU and actual experience with respect to the timeliness of the dispute resolution system. While the number of disputes has been declining in recent years, panels have not generally completed their cases within the DSU timeframes and the Appellate Body has also recently begun to request the DSB to extend its timeframes. These delays could ultimately be problematic for the reputation of the WTO both with Members and stakeholders. If these delays continue and become accepted practice, they could undermine respect for the DSU as well as the credibility and legitimacy of the WTO."
The legitimacy of the multilateral system is under serious stress due to the failure of the Doha round. The judicial wing of the WTO has continued to perform an important role to implement a rule based system of mutlilateral trade devoid of "power-based" influences. Will the WTO members be ready for this reform? Though the Panel members are mandated to act independently without any affiliation, doubts have often been raised about the effectiveness of this mandate.   Is the present Panel system more favourable to members? Would the creation of the Tribunal be viewed as "over-judicialisation" of the WTO? Will the Tribunal system be an answer to this? Will the Tribunal be able to overcome the lack of progress in rule making with its judicial interpretation? Is there a danger of "judicial activism" wherein unintended interpretations may go beyond the original mandate? This possibility is true of the present panel system too but the likelihood of it happening more in a body of trade law experts seems more likely. While strengthening the DSM is pivotal to the continued credibility of the WTO, is the creation of the Tribunal system the answer?

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