Living Without the Appellate Body: Hegemonic, Fragmented and Network Authority in International Trade

Abstract

The Appellate Body has asserted extensive authority over the rules governing global trade relations, proclaiming its ultimate authority to determine the prevailing interpretation of the rules of the World Trade Organization (WTO) as well as to control the extent to which extra-WTO norms can validate deviations from WTO rules. Its dominance over the trade regime is now threatened by two developments: the multiplication, sophistication and increased significance of regional trade agreements and the crisis over Appellate Body appointments. Examining these developments, this paper argues that the Appellate Body’s ‘hegemonic authority’ over the trade regime could be replaced by ‘fragmented authority’, with various adjudicators making decisions independently without possibility to refer divergences to a centralizing authority. The continued coherence of the trade regime may depend on the ability of trade adjudicators to establish ‘network authority’, providing the interpretive community that operates the trade regime with security and predictability as regards the application of norms. Three elements may be key for this: references in regional trade agreements to WTO rules and jurisprudence, the predisposition of adjudicators to pursue coherence and follow past decisions, and the existence of repeat players in trade adjudication who are themselves Members of this interpretive community.

JEL Classification: K33