Judicial Lawmaking at the WTO: Discursive, Constitutional, and Political Constraints

Abstract

Since the establishment of the World Trade Organization (WTO), commentators have debated the wisdom of replacing the model of political-diplomatic dispute settlement under the General Agreement on Tariffs and Trade (GATT) with a model of legalized dispute settlement. Under the GATT model, a dispute settlement panel report could be given full legal force only if adopted by a consensus of GATT Contracting Parties, including the party that lost the case. Under the WTO model, a report of the panel or the Appellate Body is adopted automatically unless WTO members, including the prevailing member, decide by consensus to block it, which is sometimes referred to as “negative consensus.” Many analysts whose work has focused on the politics of dispute settlement have emphasized the success, political flexibility, and apparent sustainability of the older model and cautioned that the legalized approach might be too cumbersome in various political contexts. Those favoring the legalized approach have emphasized its legitimizing capacity and potential to constrain more powerful WTO members from engaging in unilateral or rule-breaking behavior.