| As pointed out by Yasuhei Taniguchi,one of the former WTO Appellate Body members,the WTO dispute settlement process starts with a consultation between the disputing members,then proceeds to an adversarial procedure before the Panel,and may end up with appellate proceedings before the Appellate Body.The WTO legal system consists of substantive law rules and procedural rules.Substantive law rules for international trade conduct are contained in various multilateral treaties such as the General Agreement on Trade in Services,the Agreement on Rules of Origin,and the Agreement on Subsidies and Countervailing measures,etc.The procedural and organizational rules are embodied in a treaty called the Understanding on Rules and Procedures Governing the Settlement of Disputes(DSU).All are collectively referred to as the WTO agreements,or the "covered agreements".Though it is difficult to define and draw a clear demarcation between substantive and procedural questions,this paper focuses on the procedural rules governing WTO dispute settlement.DSU,on one hand,has detailed provisions governing the many different dispute settlement proceedings including consultations,good offices,conciliation and mediation,arbitration,and panel and appellate review.On the other hand,it has no explicit provisions for many procedural issues,which have frequently arisen in the individual dispute settlement practice since the establishment of the WTO in 1995.After having a systemic observation and analysis of the cases settled so far,it can be concluded that there are several main types of procedural issues which,though not explicitly provided in DSU,are driven and then solved by the disputing parties through joint request before the WTO panel and appellate body members on a case-by-case basis.The panel and the Appellate Body have formed rather consistent case laws with regard to those procedural issues.This paper aims to collect,classify and analyze the main procedural issue types on the basis of the WTO dispute settlement cases and then explore the historical,organizational and institutional reasons behind these procedural practices.The practices can be divided into two big categories.One is that DSU does not provide the procedures in question,including the open hearing of WTO panel and appellate review proceedings,the sequencing issue,as well as the preliminary objections and preliminary rulings.However the disputing parties put forward joint request or one of the disputing parties makes such request to the WTO Dispute Settlement Body(DSB)or before the WTO panels and the Appellate Body,thus driving the DSB grant the request and/or the panels and the appellate body members make procedural rulings thereupon.The other procedural practice category is that DSU has contained explicit rules governing the 60-day time period for disputing parties to file appellate notice(in Article 16.4 of DSU)and that the third party rights in WTO panel and appellate body proceedings(Article 10 of DSU).But the parties in dispute make joint request or one disputing party requests to "circumvent" or "break" the rules in order to settle the dispute in question in an effective and fast manner.The requests are handled,granted or dismissed,therefore related panel and appellate body rulings and jurisprudence are made.For almost each of the procedural issues,the WTO members have made proposals to add,amend or modify the rules in the multilateral DSU review negotiations,but it has proven to be fruitless so far due to the large amount of WTO members(160 currently)and their diverse backgrounds,plus due to the practice of decision-making by "consensus" followed under GATT 1947.That is to say,the GATT historical influence on these WTO practices,the organizational "member-driven" culture,as well as the consensus decision-making institutional root-causes are concluded to explain the abovementioned practices.The WTO has inherited and has been shaped by the GATT procedural rules,traditions and culture.This is the historical root-cause for the WTO procedural issues and their resolution.The WTO is a "member-driven" organization with 160 members now,including some developed and many developing members,who have very different economic,political and legal backgrounds.It is very challenging for them to reach agreement in the multilateral DSU review negotiations.This offers an organizational root-cause for the way how the procedural issues in question are settled.The imbalance between the weakness in political institutions and the effectiveness in dispute settlement institutions,that is to say,the nearly impossibility of consensus decision-making versus the independence and effectiveness of dispute settlement panels and appellate body members can count as the institutional root-cause for the disputing parties driving the procedural issues in question to be solved in the individual dispute settlement proceedings.The WTO dispute settlement mechanism is evolving in the direction of rule-based,gradually departing from its diplomatic power-based origin.Under the "quasi-judicial" legal framework,WTO panels and appellate body members strictly follow the DSU procedural rules.It means that they have "substantial procedural leeway" with regard to procedures not stipulated in DSU,but that they do not have enough flexibility regarding those procedural issues explicitly laid down in DSU.That results in that :(1)when there is a procedural rule gap in DSU(for example,regarding preliminary ruling system to be discussed in Chapter 4)or;(2)when there is contradictory provisions in DSU(like the sequencing issue arising out of Article 21.5 and Article 22 of DSU)or;(3)when certain rules may appear to affect the reputation and image of WTO as a global organization and WTO members under pressure imposed on them by non-governmental organizations(NGOs)and domestic industries expects to deviate from the existing procedural rules in order to cater for the NGOs transparency expectations(Article 12 and 17 regarding confidentiality and open hearing of panel and appellate body proceedings),the procedural issues are driven to be managed and resolved under joint request by the disputing parties or request by at least one of the disputing parties.The research question of this paper defined above is different from the practices and case laws in which WTO panels and appellate exercise discretion in the course of applying DSU rules to individual dispute settlement other than this "member-driven" type.This paper endeavors to make a comprehensive and even an exhaustive observation of all of the main types of procedural issues driven to be solved by the disputing members on a case by case basis,collecting all relevant panel and appellate body reports adopted by the DSB up till 2014 September,tracing back to the first GATT/WTO procedural practice falling into each of the 4 categories(each of which will be covered in Chapter Two to Chapter Five),and drawing a conclusion based on the case law documents and data available.So empirical approach and case study method is one of main research methods applied in this paper.Besides,historical research approach and comparison method are adopted.Historical research method is applied,that is to make comparison and contrast between the procedural rules and practices in GATT era and those of its successor WTO.Comparison research method is adopted,placing WTO procedural rules and practices in the context of international adjudication and comparing them against those of the International Court of Justice(ICJ),which is well-recognized as an international judicial body,and those of the International Center for the Settlement of Investment Disputes(ICSID),which is considered to be "the leading international arbitration institution devoted to investor-State dispute settlement".These methods serve to make a comprehensive study at both horizontal and vertical dimensions of the historical origin,evolutions and potential trend of the WTO "member-driven" procedural case laws and serve to fulfill the aim of exploring the historical,organizational and institutional root-causes for the procedural case laws in question.This study can contribute to offer academic support for China to better understand and utilize WTO dispute settlement procedures and rules,so that to participate more effectively and efficiently in the multilateral DSU review negotiations and in the WTO dispute settlement mechanism.This paper consists of five chapters: the first chapter provides the theoretic framework for the following chapters,namely,the historical,organizational and institutional root-causes for the main types of procedural issues to be discussed in Chapter 2 to Chapter 5.WTO's predecessor GATT 1947 had only "meager" dispute settlement clauses in its inception,which were improved in the GATT 1947's almost half a century's dispute settlement practices.Its dispute settlement practices evolved from the initial "power-based" feature and pragmatism to be in the direction of being "rule-oriented" and to have "quasi-judicial" characteristics.Based on the empirical data of the GATT 1947 dispute settlement practices,it has been concluded by relevant researchers before this author that GATT 1947 has offered satisfactory solutions in most cases to the GATT 1947 contracting parties in dispute,despite the fact that GATT 1947 was not an organization but a provisional multilateral agreement,without professional dispute settlement bodies and without complete dispute settlement procedures and rules.GATT 1947 dispute settlement was characteristic of gradual evolution in practices,by identifying issues and problems,and thereupon laying down supplementary or amendatory documents.Put in another way,GATT 1947 has evolved from pragmatism to legalism.The possibility and necessity of WTO members in dispute to drive procedural issues and have them resolved can be explained from the WTO's inheritance of GATT 1947 procedures,rules and practices.Historically speaking,the negotiation background of Uruguay Round displays that the WTO original members including the United States of America and the European Community(EEC)initially did not agree on whether to have a judicial and rigid dispute settlement,as proposed by US or to have a flexible dispute settlement mechanism,as proposed by the EEC.Pushed by US,and due to EEC's compromise to US proposal,DSU was reached.As a result,the WTO dispute settlement procedures and rules are now both characteristic of outstanding judicial rigidity,reflected including in the WTO's compulsory jurisdiction,automaticity in the establishment of WTO panel,and the automatic adoption of WTO panel and appellate body reports,as well as of showing an accommodation of diplomatic means,reflected in DSU's stipulating the preceding consultation procedures before panel proceedings and displaying a preference for mutually acceptable resolutions under the DSU framework.Furthermore,Chapter 1 continues to explore the organizational and institutional root-causes.The WTO developed from GATT 1947,"a technicians' club of customs and trade experts",into an international organization with 160 heterogeneous members,which functions depending on the cooperation of its members,large in numbers and heterogeneous in backgrounds.The WTO's success depends upon its utility to the membership.In terms of its decision-making practice and adoption of new rules,it is done by consensus.The international organization WTO bound by its institutional restraint prevents it from making decisions,adopting or amending rules effectively.So far,it has proven to be almost impossible to interpret or amend rules between two rounds of multilateral negotiating rounds.It has made a profound influence in the way the WTO implements its rules.However,the effectiveness of its dispute settlement mechanism may spur the law-makers,namely,the WTO members to handle the hard issues in the course of dispute settlement.Now the overwhelming majority WTO members are developing countries,including new emerging economies like China,India,Brazil and Mexico,which form as the counter-balance against developed members such as US and EU,the former developing group preventing the latter developed group from steering the WTO into the latter's desired course only,as how the latter used to do with the old GATT 1947.Because of the WTO's organizational feature and its institutional restraint,in addition to its inheritance of the GATT 1947 pragmatism,member-driven and parties-in-dispute autonomy,it proves to be possible and necessary for the WTO members in dispute to drive some procedural issues which are not explicitly provided to be resolved in dispute settlement mechanism on a case by case basis by means of joint request or at least one party's request.Even,those procedures and rules explicitly provided may be circumvented or changed through procedural agreement by disputing parties in order to resolve their disputes more efficiently and effectively.Chapter 2 to Chapter 5 elaborates the practices,cases and jurisprudences regarding the different types of procedural issues.Specifically,Chapter 2 is about disputing members who drive the WTO panels to resolve the "sequencing" issue arising from Article 21.5 and Article 22 of DSU."Sequencing" issue refers to whether the compliance panel proceedings under Article 21.5,or the retaliation proceedings Article 22.6 will prevail.Article 21.5 is applied to decide whether the respondent member in the original panel proceedings has brought its charged measures consistent with the WTO agreements.Article 22.6 is applied under which "the DSB,under request,shall grant authorization to suspend concessions or other obligations within 30 days of the expiry of the reasonable period time unless the DSB decides by consensus to reject the request" when the situation described in Article 22.2 occurs."Article 22 does not refer to Article 21.5,nor does it require that a finding of non-compliance must be made before a party can seek authorization to retaliate.This raises the question of sequencing,that is,whether there must be a determination of non-compliance to be made before a party's seeking authorization to retaliate." The sequencing issue first occurred in the "EC-Banana III"(WT/DS27)dispute,in which "a compromise resolution" was put forward,consolidating the Article 21.5 proceeding into the Article 22.5 proceeding.Although the "EC-Banana III" resolution to the sequencing issue defused the nearly crisis of the WTO dispute settlement mechanism in the individual dispute,but it met with disagreement and challenge from WTO members.The question of the sequencing of Article 21.5 in relation to Article 22 has not been resolved multilaterally.In the over 50 cases thereafter,bilateral procedural agreements between disputing members have been reached,which stipulate that a compliance panel proceedings precedes a request for authorization to retaliate for's the other party failure to comply.A compliance panel must make a finding of non-compliance before a party can seek authorization to retaliate for failure to comply.These practices could be a significant step towards a possible multilateral solution to the problem of sequencing.Chapter 3 discussed the open hearings of WTO panel and appellate body proceedings under joint request by disputing members.Julio Lacarte-Muró,"a career diplomat who has been involved with the GATT/WTO trading system since its creation more than 50 years ago and has participated in all eight rounds of multilateral trade negotiations under the GATT",has witnessed the over sixty years of change and development of the GATT/WTO trading system.He commented that confidentiality is the basic rule of GATT 1947,which has been inherited by the WTO from the GATT 1947.The deepness and profoundness of this confidentiality culture still cannot be underestimated in the WTO.The procedures and practices developed in nearly half a century will not disappear shortly,which will permeate themselves in the daily WTO practices,especially when reform needs the consensus of the whole WTO membership.Confidentiality is an inherent part of WTO dispute settlement mechanism.The DSU contains at least 6 articles on confidentiality and the appendix 3 to DSU contains two paragraphs on confidentiality.But the WTO's external environment has changes to be different from that of the old GATT,and the NGOs are appealing for more transparency.According to Pascal Lamy,the WTO Director-General from 2005 to 2013 for 2 four-year rounds,the WTO has stepped into the era of cosmopolitics since the Seattle WTO Ministerial Conference of 1999.In 2005,the panel of "European Communities---Continues Suspension"(WT/DS320,DS321)at the joint request of parties in dispute(US,EC and Canada)agreed to open their proceedings with the parties and scientific experts for observation by WTO Members and the general public.Before this case,the WTO membership were divided in opinion and it was held that without amendment to the WTO rules,opening hearings would be impossible.Three years after this practice,and at the request of the participants(Canada,the United States and the European Communities)in the same "European Communities---Continues Suspension" dispute,the appellate body decided to open its oral hearing to public observation by WTO Members and the general public via simultaneous closed-circuit broadcast.Thus far(by August of 2014),the WTO panels have agreed to open hearings at the request of disputing parties in 12 cases and the appellate body have opened its oral hearings in 11 cases.The panels and appellate body have applied DSU and the appendix to support their reasoning and may have established case laws with regard to open hearings of WTO panel and appellate body proceedings.After a comparison and contrast between WTO and GATT 1947 has been made,the historical root-cause can be explored to explain the current DSU provisions regarding confidentiality in dispute settlement proceedings and the actual practices.The arbitration-diplomacy origin of the old GATT is the fundamental reason why the GATT/WTO dispute settlement panel and appellate review proceedings are generally kept closed to the public and even the WTO members other than the disputing members.The heterogeneous WTO membership,the pragmatism and member-driven culture inherited by WTO from the old GATT can offer the organizational and institutional root-causes to explain why the disputing members can and have to drive the open hearing practices in individual cases.The comparison and contrast made between WTO,ICJ,and ICSID,in terms of their practices and characteristics of rules,can contribute to better understand the current status and the potential development in open hearings of dispute settlement proceedings.Chapter 4 discusses the procedural issue,the cases and jurisprudence regarding the disputing members' request the WTO panel and on few occasions the Appellate Body to make preliminary rulings on their preliminary objections or other issues of preliminary feature.Preliminary objections play an important role in international adjudication,but it may be abused by the parties in dispute.Some preliminary objections are made with enough legal grounds,while others are intended to delay the dispute settlement proceedings to advance further.Judge Thomas Buergentha has criticized severely the abuse of trivial procedural tactics by the disputing parties,delaying or disrupting the court to make a judgment on substantive issues in a timely manner.Shabtai Rosenne identified and classified four types of objections put forward in dispute settlement proceedings:(1)impeding objections,which aims to prevent any further advance in proceedings;(2)defensive objections,which aims to prevent a ruling or judgment on substantive issues so that to have the other party's claim dismissed;(3)interpretive objections,which requests the suspension of the proceedings until a ruling is made regarding the jurisdiction issue;(4)pending objections,which delays the proceedings until the occurrence of extraneous event.Among these four types of objections,the first type is of complete preliminary nature.In WTO dispute settlement the most frequent preliminary objection targets at the adequacy of the request for establishment of panel.It has been a common feature of WTO dispute settlement proceedings.Filing preliminary objections has been regarded as the first defense war in WTO dispute settlement.In contrast to the explicit procedures and rules regarding preliminary objections and preliminary rulings in ICJ,ICSID framework,the DSU or its appendix has contained no such rules.But in practice,the WTO disputing members have filed preliminary ruling requests and driven the panels to make such rulings.In the recent years,there have been common practices for the panels after consulting the disputing members to request the DSB to circulate the preliminary rulings in separate document from the WTO panel report to the whole WTO membership.Chapter 5 touches upon other types of member-driven procedural practices,including that:(1)disputing parties agree that the 60 day time-period in Article 16.4 of DSU will be extended(to a certain date),and that a decision of the Dispute Settlement Body(DSB)on this extension is sought at a meeting of the DSB.This extension is agreed on the understanding that the rights of the parties with respect to adoption or appeal of the panel report are preserved,as if such adoption or appeal had been requested within 60 days specified in Article 16.4 of the DSU.There have been at least 10 cases,the disputing parties of which have reached such procedural agreements,including the first case available to this paper writer "EC — Export Subsidies on Sugar"(WT/DS265,WT/DS266,WT/DS283).Among them,there are two cases(WT/DS397,WT/DS405)involving China both as the complaint so far.(2)At least one disputing party agrees or rejects the request of the third parties to be granted enhanced third party rights,thus the panel is driven to agree or dismiss such request.There have also been cases involving request for enhanced third party rights in the WTO dispute settlement.Actually,there were also a couple of these practices in the old GATT,namely,in "Tariff Treatment on Imports of Citrus Products from Certain Countries in the Mediterranean Region" in 1985,"EC-Bananas I" in 1993 and "EC-Bananas II" in 1994.The reason for DSB agreeing to grant the disputing parties' request for extension of the 60-day appeal time period is mainly that "the workload of the Appellate Body is unpredictable",and that "there are periods when there are more appeals to decide than what capacity permits",according to former Appellate Body member David Unterhalter.The DSU rule-makers,when designing the rigidity of the mechanism,did not predict the scale,quantity and complexity of WTO dispute settlement,nor did they predict that there would be such high rate of appeal.Though WTO members have proposed to amend some appeal procedures and rules in the multilateral negotiations,as mentioned above,due to the organizational and institutional constraint,it did not bear any fruit in this regard,either.As for the enhanced third party right issue,there is only limited procedural rights granted to third parties under the DSU.The historical root-cause is that third party interest and furthermore,third party right did not exist until the 1970 s.Before 1979,there were not any procedural rules stipulating third party interest even,not to mention third party right.GATT third party interest was required to be taken into account in 1972 "United Kingdom Dollar Area Quotas " and third party intervention or participation right did not occur until in "Tariff Treatment on Imports of Citrus Products from Certain Countries in the Mediterranean Region" in 1985.It displayed that as early as in the GATTT 1947,procedural practices related to third party rights occurred before relevant rules,and that procedural rights practices went beyond in individual cases those laid down in the procedural rules.Third party intervention procedures and rules exist in ICJ and ICSID.Taking ICJ as an example,there are detailed explicit rules governing third party rights in ICJ framework(Article 62.1 of the ICJ Statute,and Article 85 and 86 of the ICJ Rules),and the third party intervention practices are few due to the ICJ judges' careful and strict following of the procedural laws and rules contained in ICJ Statute and Rules.Based on the at least 10 cases involving enhanced third party right request,it can be concluded that in five cases the panels agreed to grant such requests(WT/DS27;WT/DS26 and DS48;WT/DS265,DS266 and DS283;WT/DS384 and DS386;WT/DS412 and DS426)and that in the rest 5 cases,the panels rejected such requests.The ratio of "agree to grant" to "reject to grant" is almost 1:1.And as predicted by Professor Zhu Lanye in her paper on WTO third party participation published in 2002,"With more dispute settlement practices,a general understanding can be reached regarding the WTO enhanced third party participation.There will be a general rule to be followed in these practices".Based on the case laws,one common jurisprudence regarding this type of procedural practices is that the panel may grant enhanced third party rights when at least one disputing party agrees to do so.So far,in cases when both disputing parties reject such request,the panel also refuse to grant(WT/DS392;WT/DS415,DS416,DS417 and DS418).In conclusion,based on the large amount of,and even to say,on the possibly exhaustive cases documents and reports adopted,there are several main types of member-driven procedural practices,going either beyond the DSU's explicit rules or amending these rules by means of joint procedural agreements or request by at least one disputing parties.In light of the close linkage between the GATT 1947 and the WTO,a historical inheritance and root-cause can be explored to explain these member-driven practices.The WTO as an international organization,with large membership of heterogeneous backgrounds,with the member-driven culture and disputing member party autonomy,offers an organizational root-cause for these procedural practices.The institutional constraint of consensus decision-making,and the efficiency and effectiveness of its dispute settlement organs versus the weakness of its political organs,make an institutionally possible and necessary root-cause for the procedural practices elaborated in Chapter 2 to Chapter 5. |
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