Applicable Law in the Disputes of the World Trade Organization
Economic and Political Weekly, Vol. 44, No. 15, pp. 23-27, 2009
9 Pages Posted: 6 Aug 2010
Date Written: January 10, 2009
One of the unique outcomes of the Uruguay Round (UR) of negotiations that led to the establishment of the World Trade Organization (WTO) was the formation of the Dispute Settlement Body (DSB) with compulsory jurisdiction to settle trade disputes between WTO member countries. This marked a shift from the diplomatic, power-oriented approach to a rule-based regime to settle trade disputes. An interesting question in the context of settling trade disputes in the WTO is - ‘what is the applicable law for the DSB?’. Is it limited to WTO law enshrined in the covered agreements or can the entire body of public international law be used in settling disputes between WTO member countries? This paper endeavours to answer this question by providing a critique of certain issues raised by Professor Joost Pauwelyn in his paper, which argues that the entire body of public international law is applicable law for the DSB. Professor Pauwelyn has argued that the substantive jurisdiction of WTO panels is limited to claims under the WTO covered agreements, but the applicable law is the entire gamut of public international law. Professor Pauwelyn distinguishes between claims based on non WTO law from defence made on non WTO law. In other words, according to Professor Pauwelyn, a WTO member country cannot bring a case in the DSB against another member country for not honouring a non WTO public international law obligation, but can use public international law as a defence to deviate from its WTO obligations. The paper offers the critique by analysing the DSU provisions and the WTO jurisprudence that do not support Professor Pauwelyn’s argument.
Keywords: WTO, Applicable Law
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