The WTO and the Environment

Development of competence beyond trade

James Watson

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781136214318
• Edition: 1
• Topic: Law
• Subtopic: Environmental Law
• Index: Law

This book is a review of the development of the WTO dispute resolution procedure and the power and influence it has gained over the practises of the member countries as well as in other international treaties. The book addresses the development of environmental competency in the WTO and examines the arguments of those who oppose WTO rule making with impacts on the environment. The WTO's interactions with multilateral environmental agreements are considered and recent WTO cases including the 2011 US/Mexico tuna dispute and the US sea turtles decision are analysed in detail. In examining how an international organisation which was established with a specific purpose in mind has come to interact in fields beyond its original remit, James Watson demonstrates how the dispute resolution system at the WTO has come to work in a judicialised manner, operating with an informal system of precedent. This has led to the contracting parties placing more reliance on the decisions of the dispute panels and appeal body when considering policy options, with WTO rulings increasingly influencing the behaviour of national legislatures in regard to the environment.

The book goes on to make concrete recommendations, based on existing practise in the WTO dispute resolution procedure, which could enhance decision making in environmental cases heard by the WTO. The book argues that this could be achieved with straightforward amendments to the WTO, based on existing practices endorsed under the WTO for other policy considerations. The WTO and the Environment will be of particular interest to academics and students of International and Environmental law.

1	The development of a judicialised international trade dispute resolution system at the World Trade Organisation

1.1 Introduction

In the context of this book the starting point for determination of the competence of the World Trade Organisation (WTO) in dealing with environmental matters will be an overview of the nature of the dispute resolution system that the WTO operates. The central tenet of this book depends upon the notion that the legalised nature of the WTO drives contracting parties’ policy choices. Therefore, it is first important to determine how legalistic the WTO dispute settlement regime is and the power it has to enforce its decisions. Thus this chapter explores the role of the Dispute Settlement Body (DSB). It also discusses the historical development of dispute resolution within the General Agreement on Tariffs and Trade (GATT) and the WTO, and examines the issues concerning the judicialisation of the WTO dispute resolution process.

The examination of the judicialisation of the WTO’s dispute resolution mechanisms is reviewed in relation to the consideration of trade–environment issues in the WTO (this will be reviewed in detail in Chapter 4). The key aspect of this study is to determine how the development of a judicialised dispute resolution system in the WTO impacts on environmental policy at a global level, and to determine whether the WTO has the competence to deal with broad environmental policy issues. This chapter sets the scene for the body of this book, outlining the background against which the development of environmental rulings at the WTO can be examined.

Once the theoretical workings of the DSB processes have been reviewed, this chapter considers the practical implementation of the Dispute Settlement Understanding (DSU) since 1995. This provides an opportunity to look at the likely consequences of the changing workings of the DSB on the judicialisation or otherwise of the WTO dispute resolution process.

This chapter further examines whether the development of the dispute resolution process through the DSU represents a judicialisation of that process. In this sense it has been well argued that judicialisation is implied when certain conditions are met within a process – ostensibly judicialisation can be deemed to be present if GATT/WTO dispute settlement has become a triadic dispute resolution mechanism that has authority over the member states, and if the decisions of that body come to influence the way that members interact with each other.¹ Other conditions should also be seen to be met: there needs to be a judicial power with the authority and power of a triadic dispute resolver within the WTO context;² parties to the WTO use the litigation process to settle disputes; dispute resolution is de-politicised; dispute resolution bodies treat their rules as legally enforceable; the dispute resolution body treats its own decisions as precedents; and there is an emergence of a system of compulsory adjudication.³

1.2 Definition of judicialisation

As stated above, the term judicialisation can be applied to a dispute resolution procedure that has as its main tenet the presence of binding third party enforcement.⁴ Historically, prior to the GATT, this principle had not been present in international trade law. In the international trade regime, judicial power had been initially, and by design, excluded.⁵ Judicial power in this context refers to the capacity of the dispute resolver to authoritatively determine the content of the treaty’s rules-based structure. In the GATT the use of the dispute settlement procedures led to the development of a new regime, based around panel interpretations.⁶

The term judicialisation can be applied to the development of a dispute system from a basis of there being no judicial process to a rules-based system.⁷ As states gained experience of the GATT dispute settlement procedures, and as panels performed their dispute resolution functions, the member states found that a stable case law enhanced legal certainty. The GATT members could therefore afford to view the panels’ rule making as a useful, cost-effective guarantor of regime effectiveness. This process has been evidenced in other international arenas.⁸ There are now ‘islands’ of international institutions structured by rules and a well developed dispute resolution system that include among others the EU, the WTO and the International Court of Justice.⁹ Nevertheless there remain differing contentions over the extent to which the GATT/WTO dispute resolution system is truly judicialised. In this context judicialised refers to the conversion use of decision making into a more legalistic style.

In the context of the creation of the WTO DSU, the negotiators did not necessarily regard the new WTO system as a court or court-like institution.¹⁰ This is in spite of the fact that the Leutwiler Report prior to the Uruguay Round recommended structural improvements in the GATT, mainly to achieve improved dispute settlement in terms of obligatory adjudication.¹¹ The arguments for not describing the system as judicial alleviated the fears that may have existed in supporters of a more diplomatic and less rules-based dispute resolution system. In fact, by not overtly stating that the process was judicialised, this approach facilitated the adoption of the Uruguay Round agreement.¹² It is only through the adoption of the Uruguay Round and the DSU that it is possible to argue in favour of judicialisation. Renato Ruggiero, a former Director General of the WTO, commented on the creation of the DSU: ‘I suspect that neither governments nor industries have yet appreciated the full scope of the guarantees (creation of the DSU).’ ¹³ This hints at the awareness of the impact the DSU could have. This is in line with the view that a judicialised system has been developed without formal introduction.

1.2.1 Quasi-judicial?

There are many commentators who still see the system as quasi-judicial.¹⁴ Is it not the case that referring to the system as quasi-judicial simply acted as a veil to the fact that the system had the qualities of a judicial body – an international court? Ragosta puts an interesting slant on the debate, stating that quasi-judicial means as much as quasi-pregnant!¹⁵ Perhaps a useful point of view to explore is that of the people who actually work in the WTO dispute resolution system. Mike Moore, a former Director General at the WTO, described the WTO DSU as part of the growing development of International Courts and tribunals, such as the International Tribunal for the Law of the Sea, various war crime tribunals, and the International Criminal Court.¹⁶ This places the WTO DSU on the same footing as judicial international systems.

Alternatively, Ehlermann concludes that there are pieces of the system that are judicial, but not the system as a whole.¹⁷ This is based on the fact that Appell...