Governance, Coherence, and WTO Dispute Settlement

1
Governance, Coherence, and WTO Dispute Settlement

• Joel P. Trachtman
• The Fletcher School of Law and Diplomacy

2
Agenda

• Role of Dispute Settlement in International Law
  GenerallyDispute Settlement as Governance
• Role of Dispute Settlement at the WTO
• Diagnose Incoherence
• Diagnose Imbalance
• Achieving Coherence and Balance
• A Tale of Heroism

3
The Role of Dispute Settlement in International
Law

• Role of international law
• Allow states to cooperateto overcome bargaining
  problems and transaction costs problems in market
  for authority in international relations
• Role of dispute settlement in enhancing utility
  of international law
• Incomplete Contracts
• Enforcement

4
Incomplete Contracts

• All treaties are incomplete
• Under regime of auto-interpretation, they fail to
  resolve all disputes
• Under regime of dispute settlement, all disputes
  are resolved by definitive interpretation
• Optimal completeness and rules versus standards
• Costs of specification, including political costs
• Constructive ambiguity? Governance gap and
  heroic response

5
Enforcement

• Informal third party declaration of who is
  right
• Law merchant (Milgrom, North, and Weingast)
• Solving information problem in multilateral
  setting
• Facilitating multilateral punishment of violation
• Formal
• No police force
• Authorizes self-help
• Restrains self-help

6
The Role of Dispute Settlement in WTO Law

• Mandate in terms of incomplete contracts
• To clarify (interpret)
• Preserve rights and obligations
• Provide security and predictability
• Mandate in terms of enforcement
• Gatekeeper to authorized self-help
• Penalties?
• Remedies are insufficientadd on continuing
  informal sanctions

7
Incoherence, Incompleteness, Imbalance, and
Enforcement

• Where does incoherence come from?
• Normative incompleteness
• Procedural incompleteness or imbalance in terms
  of the institutional backing for different norms
  variable institutionalization
• Institutional imbalance within the WTO

8
Normative Incompleteness

• Failure of treaty negotiators to specify how
  different international law norms relate to one
  another
• National bureaucratic incoherence
• Unwillingness to bear political costs of
  determining hierarchy of values
• Superiority of case-based determination?
• Failure of Vienna Convention on Law of Treaties
  to provide a normatively satisfactory or
  predictable response to treaty conflict

9
Procedural Incompleteness

• Only selected norms have mandatory dispute
  settlement
• Only selected norms have potential remedies
• Dispute settlement bodies have specialized
  mandates
• Result variable enforcement and variable
  compliance

10
Imbalance

• Strengthened dispute settlement in 1994
• Increasingly difficult treaty-making
• Leaves excessive responsibility to dispute
  settlement

11
Are Normative Incompleteness and Procedural
Incompleteness Bad?

• WTO Dispute Settlement has limited mandate to
  resolve normative incompleteness (reducing
  concerns regarding procedural incompleteness)
• WTO Dispute Settlement makes tough decisions that
  treaty negotiators failed to make
• WTO Dispute Settlement bears the criticism that
  treaty negotiators avoid

12
Resolving Incoherence, Incompleteness and
Imbalance

• Protect WTO Dispute Settlement from criticism by
  avoiding excessive responsibility
• Where WTO Dispute Settlement mandate is
  inadequate to resolve normative incompleteness,
  then diplomats must complete the contract ex post
• Diplomats can also resolve normative conflicts ex
  ante, but this is not always possible or desirable

13
Conclusion

• Muddling through and constitutional moments in
  international governance
• Normative incompleteness
• Procedural incompleteness
• Imbalance
• The heroism of the Appellate Body