A Tragedy in the Making? The Decline of Law and the Return of Power in International Trade Relations
18 Pages Posted: 4 Dec 2018 Last revised: 14 Dec 2018
Date Written: November 28, 2018
It is the end of an era—potentially the close of a semblance of the rule of law in international trade relations. This article assesses the U.S. challenge to the Appellate Body and binding dispute settlement system of the World Trade Organization. Part I examines the decline of law and return of power in international trade relations. Part II explains the rationales behind the U.S. challenge to the WTO judiciary in terms of domestic politics, the rise of China, and concerns over a fundamental imbalance between WTO political and judicial processes. Part III analyzes the potential and most likely future of WTO dispute settlement—either (1) the replacement of the Appellate Body with member agreement to binding dispute settlement, potentially with ad hoc appeals, on only a reciprocity basis, thus potentially excluding the United States; or (2) reversion to the former GATT system where parties can effectively veto the adoption of a panel report. For over two decades, the Appellate Body operated as an authoritative, quasi-constitutional, international court to resolve conflicts and develop jurisprudence. In retrospect, it was a remarkable experiment in international relations. The United States and the world may soon regret its demise.
Keywords: WTO Appellate Body, balance of international judicial and political process, law and power
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