WTO and its Global Administration in International Dispute Resolution

By Ritesh Singh, New Law College Pune

Editor’s Note : The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. The WTO provides a forum for negotiating agreements aimed at reducing obstacles to international trade and ensuring a level playing field for all, thus contributing to economic growth and development. The WTO also provides a legal and institutional framework for the implementation and monitoring of these agreements, as well as for settling disputes arising from their interpretation and application. The current body of trade agreements comprising the WTO consists of 16 different multilateral agreements (to which all WTO members are parties) and two different plurilateral agreements (to which only some WTO members are parties).

Over the past 60 years, the WTO, which was established in 1995, and its predecessor organization the GATT have helped to create a strong and prosperous international trading system, thereby contributing to unprecedented global economic growth. The WTO currently has 160 members, of which 117 are developing countries or separate customs territories. Decisions in the WTO are generally taken by consensus of the entire membership. The highest institutional body is the Ministerial Conference, which meets roughly every two years. A General Council conducts the organization’s business in the intervals between Ministerial Conferences. Both of these bodies comprise all members. Specialized subsidiary bodies (Councils, Committees, Sub-committees), also comprising all members, administer and monitor the implementation by members of the various WTO agreements.

Introduction:

The World Trade Organization came into being in 1995. One of the youngest of the international organizations, the WTO is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War. So while the WTO is still young, the multilateral trading system that was originally set up under GATT is well over 50 years old. The past 50 years have seen an exceptional growth in world trade. Merchandise exports grew on average by 6% annually. Total trade in 2000 was 22-times the level of 1950. GATT and the WTO have helped to create a strong and prosperous trading system contributing to unprecedented growth. The system was developed through a series of trade negotiations, or rounds, held under GATT.

In 2000, new talks started on agriculture and services. These have now been incorporated into a broader work programme, the Doha Development Agenda (DDA), launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001. The agenda adds negotiations and other work on non-agricultural tariffs, trade and environment, WTO rules such as anti-dumping and subsidies, investment, competition policy, trade facilitation, transparency in government procurement, intellectual property, and a range of issues raised by developing countries as difficulties they face in implementing the present WTO agreements. The WTO’s rules – the agreements – are the result of negotiations between the members. The current set were the outcome of the 1986-94 Uruguay Round negotiations which included a major revision of the original General Agreement on Tariffs and Trade (GATT). GATT is now the WTO’s principal rule-book for trade in goods. Through these agreements, WTO members operate a non-discriminatory trading system that spells out their rights and their obligations. Each country receives guarantees that its exports will be treated fairly and consistently in other countries’ markets. Each promises to do the same for imports into its own market. The system also gives developing countries some flexibility in implementing their commitments.

International Dispute settlement:

The WTO’s procedure for resolving trade quarrels under the Dispute Settlement Understanding is vital for enforcing the rules and therefore for ensuring that trade flows Smoothly. Countries bring disputes to the WTO if they think their rights under the Agreements are being infringed. Judgments by specially-appointed independent experts Are based on interpretations of the agreements and individual countries’ commitments. The system encourages countries to settle their differences through consultation. Failing that, they can follow a carefully mapped out, stage-by-stage procedure that includes the possibility of a ruling by a panel of experts, and the chance to appeal the ruling on legal grounds. Confidence in the system is borne out by the number of cases brought to the WTO – more than 300 cases in ten years compared to the 300 disputes dealt with during the entire life of GATT (1947-94).

Following are the main stages in settling disputes under W.T.O

  • Consultation
  • Establishment of a panel
  • Report of the panel
  • Adoption of panel report
  • Appellate review before standing appellate body
  • Implementation

The WTO Secretariat, based in Geneva, has around 625 staff and is headed by a directorgeneral. It does not have branch offices outside Geneva. Since decisions are taken by the Members themselves, the Secretariat does not have the decision-making role that other international bureaucracies are given.

The Secretariat’s main duties are to supply technical support for the various councils and committees and the ministerial conferences, to provide technical assistance for developing countries, to analyze world trade, and to explain WTO affairs to the public and media. The Secretariat also provides some forms of legal assistance in the dispute settlement process and advises governments wishing to become members of the WTO.

HISTORY

The history of settlement of disputes through arbitration may be traced from very ancient times. But in modern times its history dates back from Jay treaty of 1794 between England and America. The next important event in the development of settlement of international disputes through arbitration was Alabama Claims Arbitration, 1872. In this case, America had claimed compensation from Britain on the ground that it had violated the laws of neutrality. The arbitrators gave their award in favour of America and held that Britain was liable to pay compensation. As remarked by Judge Hudson, “the success of Alabama Claims Arbitration stimulated a remarkable activity in the field of international law decisions.” The next important event was the adoption of Hague Convention of 1899, wherein the international law relating to arbitration was codified. Yet another important result of the Hague Conference of 1899 was the establishment of the Permanent Court of Arbitration. This work was completed by the Hague Conference of 1907.

About Permanent Court of Arbitration- It comprises of three institutions: (i) Panel of experts, (ii) Administrative Council; (iii) International Bureau. Each signatory power selects four persons competent in questions of international law and of highest moral reputation. They are inscribed in a list called panel of experts and the aggrieved States select five experts from this panel to constitute temporary arbitration court, situated in Hague, the Administrative Council comprises of the diplomatic representatives of the parties to the convention. The International Bureau Comprising of a General Secretary and certain other employees is also situated in Hague. Some of the most important decisions or awards by the court are North Atlantic Fisheries case (1910), Muscat Dhows case (1912), Savarkar’s case (1911), the Island of Palmas case[i], Canberro’s case (1912), Russian Indemnity case (1912), and Pious Fund case (1920).

North Atlantic Fisheries Case (1910):

In North Atlantic Fisheries case, under the peace treaty of 1783 between the USA and UK the American citizens had been given some fisheries rights in some part of Labrador, New Foundland and North Atlantic Court. Formerly these rights were used in collaboration with the British citizens. According to Britain the said treaty came to an end in consequence of Treaty of 1812. on the other hand, America contended that the treaty was only suspended. A treaty relating to American Fisheries was also entered into 1818. In 1905, Britain captured certain American Fisheries ships. In this connection there arose a dispute regarding the interpretation of treaty of 1818.

In 1909, America and Britain had entered into an agreement to refer this dispute to Permanent Court of Arbitration.The PCA decided that “the right of Great Britain to make without the consent of the US as to exercise of liberty to take fish, in Art 1 of the Treaty, is inherent to the sovereign of Great Britain.”

Savarkar’s Case (1911):

Savarkar was an Indian revolutionary who was being brought to India to be prosecuted when the ship was in Marcelese, Savarkar escaped. He was later caught by the French naval Police. But, the captain of the French ship returned Savarkar for the Captain of British ship under the wrong impression that it was his duty to do so. Later on, the French Government requested the British Government to return Savarkar on the ground that the rules relating to his extradiction were not strictly observed.

The PCA in its award made it clear that IL does not impose any obligation to return the criminals after getting them successfully extradicted.

Russian Indemnity Case (1912):

This case was between Russia and Turkey. Russia had claimed money along with interest and damages as indemnity for Russian citizens and institutions under the Treaty of 1879. Russia and Turkey referred the matter to PCA.

The Court OF Arbitration decided the case in favour of Russia. However, the court in its decision made it clear that turkey was not bound to pay the interest and damages because Russia had waived this right by its conduct.

Island of Palamas Arbitration (1929):

In this case, the dispute was between America and Netherlands over the island of Palamas. America had claimed to have acquired it under a treaty of 1898 with Spain. This Island was discovered by the Spaniards. On the other hand, Netherlands claimed to have occupied it since 1700.

According to the PCA, Island of Palamas was a part of Netherlands although it was discovered by Spaniards, they never occupied it and established contracts with the inhabitants of the island. Thus, for the occupation of a territory it was not sufficient to have an intention to establish Sovereignity over the territory concerned. It is also necessary to make some actual exercise of such authority.

It has been pointed out by aome critice that the awards given by the Court of arbitration cannot be said to be legal decision because they are generally the miture of law and politics.

They tended to confuse law with a diplomatic solution aiming at both parties.

SETTLEMENT OF INTERNATIONAL DISPUTES UNDER THE AUSPICES OF UNITED NATIONS.

Provisions in the UN charter regarding the settlement of International Disputes.

Chapter VI of the United Nations Charter, on the pacific settlement of disputes, stands at the heart of the Organization’s system of collective security. While the framers of the Charter understood clearly the need for an enforcement mechanism, and provided for the use of force against threats to international peace and security, their hopes for a better world lay in the peaceful resolution of armed conflicts. In recent years, the Council has used Chapter VI in various ways. It has entered into direct dialogue with the parties to a conflict, for example through its discussions with the Political Committee of the Lusaka Agreement. It has tried to work more closely with the Economic and Social Council, and with other regional and subregional organizations, to prevent and resolve conflicts in Africa. While the primary responsibility for the pacific settlement of disputes rests with governments and the parties to the dispute, the Council has many tools at its disposal and can play a key role while pressing those directly involved to make peace.

It is one of the purpose of UN, that the state members should settle their disputes through peaceful means. Under Article 2 of the charter that the member states have undertaken to resolve their disputes through peaceful means and not to resort to force or threat of force to resolve international disputes.

Article 14 of the charter states about that the General Assembly of the UN may make recommendations for the peaceful settlement of International disputes.

Article 33 to 38 of the chapter VI of the charter made the provisions for the peaceful settlement of the international disputes. In accordance with these provisions, if there is a likelihood of danger to international peace and security, then the states should resolve their disputes through judicial settlement, negotiations, good offices, mediation, conciliation, enquiry, or any other peaceful means of their choice.

Article 33

  1. The parties to any dispute, the continuance of which is likely to endanger the maintenance of international peace and security, shall, first of all, seek a solution by negotiation, enquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional agencies or arrangements, or other peaceful means of their own choice.
  2. The Security Council shall, when it deems necessary, call upon the parties to settle their dispute by such means.

Article 34

The Security Council may investigate any dispute, or any situation which might lead to international friction or give rise to a dispute, in order to determine whether the continuance of the dispute or situation is likely to endanger the maintenance of international peace and security.

Article 35

  1. Any Member of the United Nations may bring any dispute, or any situation of the nature referred to in Article 34, to the attention of the Security Council or of the General Assembly.
  2. A state which is not a Member of the United Nations may bring to the attention of the Security Council or of the General Assembly any dispute to which it is a party if it accepts in advance, for the purposes of the dispute, the obligations of pacific settlement provided in the present Charter.
  3. The proceedings of the General Assembly in respect of matters brought to its attention under this Article will be subject to the provisions of Articles 11 and 12.

Article 36

  1. The Security Council may, at any stage of a dispute of the nature referred to in Article 33 or of a situation of like nature, recommend appropriate procedures or methods of adjustment.
  2. The Security Council should take into consideration any procedures for the settlement of the dispute which have already been adopted by the parties.
  3. In making recommendations under this Article the Security Council should also take into consideration that legal disputes should as a general rule be referred by the parties to the International Court of Justice in accordance with the provisions of the statute of the court.

Article 37

  1. Should the parties to a dispute of the nature referred to in Article 33 fail to settle it by the means indicated in that Article, they shall refer it to the Security Council.
  2. If the Security Council deems that the continuance of the dispute is in fact likely to endanger the maintenance of international peace and security, it shall decide whether to take action under Article 36 or to recommend such terms of settlement as it may consider appropriate.

Article 38

Without prejudice to the provisions of Articles 33 to 37, the Security Council may, if all the parties to any dispute so request, make recommendations to the parties with a view to a pacific settlement of the dispute.

Under Article 37 it says that, in this matter the Security Council may also make recommendations in regard to the settlement of disputes through peaceful means. The Security Council has been given wide powers in respect of pacific settlement of disputes. Under article 34, It may investigate any dispute, or any situation which might lead to international disputes fiction or give rise to a dispute. In order to determine whether the continuance of the dispute or situation is likely to endanger the maintenance of international peace and security, Article 36 states that the Security Council may, at any stage of the dispute of the nature referred above or of a situation of the like nature, recommended procedures or methods of adjustments. The legal disputes should as a general rule is referred to the International Court of Justice.

The parties to the dispute have the duty to continue to seek settlement by other peaceful means agreed by them in the event of the failure of one particular method, should the means elaborated fail to resolve a dispute, the continuance of which is likely to endanger the maintenance of peace and security, the parties under article 37(1) of the UN charter, shall refer it to the security council.

Besides these provisions in the charter, the general Assembly on the 24th October 1970, adopted “The Declaration of Principles of International Law concerning Friendly relations and Co operation among States” provides that “the state shall accordingly seek early and just settlement of their international disputes by negotiations, inquiry, mediation, conciliation, arbitration, judicial settlement, resort to regional arrangements or other peaceful means of their choice.”

 The 1970 declaration which is not limited, asserts that in seeking an early and just settlement the parties have to agree upon such peaceful means as they see appropriate to such circumstance and nature of the dispute. It emphasizes the obligation of the state to refrain from the use of threat or use of force and a duty to settle their disputes by amicable means or any peaceful means of their choice. The declaration added that the principle of the charter embodied in the declaration contributed basic principle of the International law and appealed to all states that “To be guided by these principles in their international conduct and to develop their mutual relations on the basis of their strict observance of those principles”.

The declaration was reaffirmed by the manila declaration on the peaceful settlement of international disputes in 1982. It was declared that the states shall seek in a good faith and in a spirit of co operation on early and equitable settlement of their international disputes by any of the peaceful means. It further stated that neither the existence of a dispute nor the failure of the procedure of a peaceful settlement of disputes shall permit in the use of force or threat of force by any of the state parties to the dispute. It states that member state should make full use of the UN including the procedures and means provided for there in particularly chapter VI concerning the peaceful settlement of dispute. Member state should strengthen the primary role of the Security Council, so that it may fully and effectively discharge the responsibilities in accordance with charter of the UN, in the area of settlement of the disputes.

The special committee on the charter of the UN and on the strengthing of the role of the organization at its 1988 session a draft “Declaration on the prevention and removal of disputes and situations which may threaten international peace and security and the role of the UN in this field, it made recommendations as to how the UN and its organ should work to settle the disputes between the states. International Court of Justice as the principle organ of the un also performs important functions in regard to the settlement of the international disputes through peaceful means. The Secretary General of the UN may also become instrumental in the settlement of the certain disputes either through mediation or by offering his good offices.

Unique features of WTO with regards to Dispute Settlement:

Disputes in the WTO are essentially about broken promises. WTO members have agreed that if they believe fellow-members are violating trade rules, they will use the multilateral system of settling disputes instead of taking action unilaterally. That means abiding by the agreed procedures, and respecting judgements.[ii]

Principles while settling off the disputes

The WTO dispute settlement mechanism follows the principle of quick and equitable principle. Here the mechanism would be dealt on the basis of appeal and non-appeal.

A dispute arises when one country adopts a trade policy measure or takes some action that one or more fellow-WTO members considers to be breaking the WTO agreements, or to be a failure to live up to obligations. A third group of countries can declare that they have an interest in the case and enjoy some rights.

A procedure for settling disputes existed under the old GATT, but it had no fixed timetables, rulings were easier to block, and many cases dragged on for a long time inconclusively. The Uruguay Round agreement introduced a more structured process with more clearly defined stages in the procedure. It introduced greater discipline for the length of time a case should take to be settled, with flexible deadlines set in various stages of the procedure. The agreement emphasizes that prompt settlement is essential if the WTO is to function effectively. It sets out in considerable detail the procedures and the timetable to be followed in resolving disputes. If a case runs its full course to a first ruling, it should not normally take more than about one year — 15 months if the case is appealed. The agreed time limits are flexible, and if the case is considered urgent (e.g. if perishable goods are involved), it is accelerated as much as possible.

The Uruguay Round agreement also made it impossible for the country losing a case to block the adoption of the ruling. Under the previous GATT procedure, rulings could only be adopted by consensus, meaning that a single objection could block the ruling. Now, rulings are automatically adopted unless there is a consensus to reject a ruling — any country wanting to block a ruling has to persuade all other WTO members (including its adversary in the case) to share its view.

Although much of the procedure does resemble a court or tribunal, the preferred solution is for the countries concerned to discuss their problems and settle the dispute by themselves. The first stage is therefore consultations between the governments concerned, and even when the case has progressed to other stages, consultation and mediation are still always possible.

Without appeal Time period
Consultations, mediation, etc 60 days
Panel set up and panellists appointed, final report to parties 45 days, 6 months
Final panel report to WTO members 3 weeks
Dispute Settlement Body adopts report (if no appeal) 60 days

 

With appeal(including 1 year of without appeal it would take additional time period Time period(previous one year.
Appeals report 60-90 days
Dispute Settlement Body adopts appeals report 30 days

 

Panels adjudicating the disputes:

Panels are like tribunals. But unlike in a normal tribunal, the panellists are usually chosen in consultation with the countries in dispute. Only if the two sides cannot agree does the WTO director-general appoint them.

Panels consist of three (possibly five) experts from different countries who examine the evidence and decide who is right and who is wrong. The panel’s report is passed to the Dispute Settlement Body, which can only reject the report by consensus.

Panelists for each case may be chosen from an indicative list of well-qualified candidates nominated by WTO Members, although others may be considered as well, including those who have formerly served as panelist.  Panelists serve in their individual capacities. They cannot receive instructions from any government. The indicative list is maintained by the Secretariat and periodically revised according to any modifications or additions submitted by Members.

Method of adjudication:

Settling disputes is the responsibility of the Dispute Settlement Body (the General Council in another guise), which consists of all WTO members. The Dispute Settlement Body has the sole authority to establish “panels” of experts to consider the case, and to accept or reject the panels’ findings or the results of an appeal. It monitors the implementation of the rulings and recommendations, and has the power to authorize retaliation when a country does not comply with a ruling.

 First stage: consultation (up to 60 days). Before taking any other actions the countries in dispute have to talk to each other to see if they can settle their differences by themselves. If that fails, they can also ask the WTO director-general to mediate or try to help in any other way.

 Second stage: the panel (up to 45 days for a panel to be appointed, plus 6 months for the panel to conclude). If consultations fail, the complaining country can ask for a panel to be appointed. The country “in the dock” can block the creation of a panel once, but when the Dispute Settlement Body meets for a second time, the appointment can no longer be blocked (unless there is a consensus against appointing the panel).

Officially, the panel is helping the Dispute Settlement Body make rulings or recommendations. But because the panel’s report can only be rejected by consensus in the Dispute Settlement Body, its conclusions are difficult to overturn. The panel’s findings have to be based on the agreements cited.

The panel’s final report should normally be given to the parties to the dispute within six months. In cases of urgency, including those concerning perishable goods, the deadline is shortened to three months.

The agreement describes in some detail how the panels are to work. The main stages are:

 Before the first hearing: each side in the dispute presents its case in writing to the panel.

 First hearing: the case for the complaining country and defence: the complaining country (or countries), the responding country, and those that have announced they have an interest in the dispute, make their case at the panel’s first hearing.

 Rebuttals: the countries involved submit written rebuttals and present oral arguments at the panel’s second meeting.

 Experts: if one side raises scientific or other technical matters, the panel may consult experts or appoint an expert review group to prepare an advisory report.

 First draft: the panel submits the descriptive (factual and argument) sections of its report to the two sides, giving them two weeks to comment. This report does not include findings and conclusions.

 Interim report: The panel then submits an interim report, including its findings and conclusions, to the two sides, giving them one week to ask for a review.

 Review: The period of review must not exceed two weeks. During that time, the panel may hold additional meetings with the two sides.

 Final report: A final report is submitted to the two sides and three weeks later, it is circulated to all WTO members. If the panel decides that the disputed trade measure does break a WTO agreement or an obligation, it recommends that the measure be made to conform with WTO rules. The panel may suggest how this could be done.

 The report becomes a ruling: The report becomes the Dispute Settlement Body’s ruling or recommendation within 60 days unless a consensus rejects it. Both sides can appeal the report (and in some cases both sides do).

In case of an appeal:

Either side can appeal a panel’s ruling. Sometimes both sides do so. Appeals have to be based on points of law such as legal interpretation — they cannot reexamine existing evidence or examine new issues.

Each appeal is heard by three members of a permanent seven-member Appellate Body set up by the Dispute Settlement Body and broadly representing the range of WTO membership. Members of the Appellate Body have four-year terms. They have to be individuals with recognized standing in the field of law and international trade, not affiliated with any government.

The appeal can uphold, modify or reverse the panel’s legal findings and conclusions. Normally appeals should not last more than 60 days, with an absolute maximum of 90 days.

The Dispute Settlement Body has to accept or reject the appeals report within 30 days — and rejection is only possible by consensus.

WTO and global Administration:

In response to demands for greater accountability and responsiveness in global regulatory governance, global administrative law (GAL) decision-making mechanisms of transparency, participation, reason giving, and review have emerged in many global regimes, the WTO system. This paper shows how three aspects of the WTO regime can fruitfully be understood and evaluated in terms of administration and administrative law. With respect to the WTO’s internal governance, the paper argues that simultaneously strengthening the WTO administrative bodies and subjecting them to GAL procedural disciplines would establish better internal institutional balance and enhance the organization’s effectiveness and legitimacy. With respect to the vertical relation between the WTO and its members, it shows how the WTO has secured far reaching adoption of GAL disciplines by domestic regulatory administrations, to the benefit of foreign but also of domestic interests. With respect to the horizontal dimension of the WTO’s relation with other global standard-setting bodies, it argues that the WTO should make compliance with GAL procedures a condition for according WTO recognition to such bodies’ regulatory standards.

WTO and Global Administrative law:

The World Trade Organization (WTO) is one of the most acclaimed and condemned of international organizations. It has enjoyed considerable success in implementing the Marrakesh accords, extending trade liberalization beyond goods, dealing with non-tariff regulatory barriers to trade, and securing intellectual property rights. Yet the WTO has also been subject to stringent criticism by civil society organizations and some members for closed decision making, an unduly narrow trade focus, domination by powerful members and economic and financial interests, and disregard of social and environmental values and the interests of many developing countries and their citizens. These divergent reactions reflect the largely successful expansion of the WTO’s trade liberalization agenda, the consequent increase in the social and economic issues encompassed by its trade disciplines, the deepening penetration of those disciplines into administration, and the character of the WTO’s governance institutions and its interactions with other international regimes. Administering more than 2,000 rules on international trade, the WTO has a relatively unusual tripartite governance structure, with distinct legislative, administrative and adjudicatory branches. The relatively highly legalized dispute settlement branch enjoys considerable  independence, but the other two branches operate through relative closed consultation and  negotiation among the member states, reflecting a “member-driven” ethos. The organization and its components are deeply challenged by twin imperatives: 1) continually adapting international trade regulatory disciplines in order to expand and secure liberalized trade 2) bolstering it institutional legitimacy against attacks by critics faulting it for secretive decision making and disregard of non-trade interests and values. This chapter examines these challenges in the context  of Global Administrative Law (GAL) for multilevel regulatory governance[iii].2 It argues that the  challenges faced by the WTO can be addressed by greater application of GAL decision- making mechanisms of transparency, participation, reason giving, review, and accountability to the WTO’s administrative bodies including its councils and committees and the Trade Policy Review Body. This chapter also examines how the WTO has instilled GAL disciplines in member state administration, and the potential for extending them to other global regulatory bodies as a condition of WTO recognition of their standards The WTO exemplifies the pervasive shift of authority from domestic governments to global regulatory bodies in response to deepening economic integration and other forms of interdependency. The growing density of regulation beyond the state enables us to identify a multifaceted global regulatory and administrative space populated by many distinct types of specialized global regulatory bodies, including not only formal international organizations like the WTO but also transnational networks of domestic regulatory officials, private standard setting bodies, and hybrid public-private entities. The ultimate aim of many of these regimes is to regulate the conduct of private actors rather than states; private actors including NGOs and business firms and associations as well as domestic government agencies and officials also play a major role in shaping the decisions of these regimes. The various bodies and actors are fragmented yet linked by manifold interactions in a complex pattern of multilevel governance.

Traditional domestic and international law legal and political mechanisms are inadequate to ensure that these diverse global regulatory decision makers are accountable and responsive to all of those who are affected by their decisions. The current reality requires a reframing of the interstate paradigm of traditional international law to a more pluralistic and cosmopolitan framework. At the same time, we believe that the divisions and differences in regimes, interests and values are too wide and deep to support, at this point a constitutionalist paradigm for global governance. Current conditions however, are compatible with and indeed call for development of a global administrative law, which can be applied to particular global regulatory bodies, and their relations with domestic administrations to enhance regulatory governance without positing an encompassing global legal order. Much global regulatory governance – especially in fields as trade and investment, financial and economic regulation – can now be understood as administration, by which term we include all forms of law making other than treaties or other international agreements on the one hand and episodic dispute settlement on the other. Decision making authority in global bodies is increasingly exercised by bureaucracies, committees, expert groups, and networks of domestic officials and private specialists. In response to the need to ensure greater accountability and responsiveness in the exercise of regulatory authority, these bodies are increasingly being held to norms of an administrative law character, including requirements of transparency, participation, reasoned decision and decisional review. We are accordingly witnessing the rise of a Global Administrative Law (GAL).[iv]

The WTO offers a prime example of the most important axes of GAL: the development of mechanisms for transparency, participation, and reason-giving in the internal administrative decision-making processes of global regulatory bodies; the absorption of global administrative law norms in states’ domestic administrative structures and procedures; and the legal issues presented by increasingly close linkages among different global regulatory institutions. The following three sections of this chapter analyze the current and potential future development of GAL mechanisms with respect to each of these three dimensions:

 _the internal dimension of the governance of the WTO, most particularly its administrative branch;

 _ the vertical dimension of the relations between the WTO and its members’ domestic administrations, which it regulates; and

_ The horizontal dimension presented by the recognition by the WTO of regulatory standards issued by other global regulatory bodies.

This analysis is in part descriptive, examining the extent to which GAL principles and practices have been adopted in each area, and in part prescriptive, outlining the potential for GAL’s further development and application in global trade regulation. A concluding section summarizes the analysis and briefly assesses its significance for legal theory in relation to the rise of global administrative law patterns, contrasting it with the alternative possibility of a constitutionalist paradigm of law for global governance.

The WTO Administrative Bodies and Global Administrative Law:  

While episodic Ministerial Conferences and associated processes are responsible for high level rule-making, the daily life of the organization is carried out by the Director General and Secretariat, a few councils, and a large number of committees, which together compose the WTO’s administrative component. The General Council holds an overall supervisory authority over Councils for Trade in Goods, Trade in Services and TRIPS. It deals with the internal budget and administration of the organization, defines the distribution of competencies among the other councils and the committees, and coordinates cross-cutting issues. The three specialized councils, in turn, oversee various committees relating to their own particular parts of the various multilateral and plurilateral agreements. In addition, the important Trade Policy Review Body (TPRB) monitors members’ performance in implementing agreements, addresses questions of application that arise, and facilitates improved implementation of the agreements. The most important functions of the specialized councils, committees and the TPRB, pursuant to Article III of the WTO Agreement, are to review, supervise and promote transparency and accountability in members’ domestic trade and trade-related regulatory policies and administration. The Secretariat is responsible for supporting these bodies’ activities, gathering information on members’ trade policies and measures. In addition, many WTO agreements require members to notify specified WTO administrative bodies of relevant changes in domestic measures that may affect other members. For example, the Anti-Dumping Committee receives notifications about all new investigation processes and measures adopted by members notifications are compiled and publicly available at WTO’s website[v]. The TPRB is even more proactive in exercising its reviewing function. The Secretariat not only gathers information for the TPRB regarding member practices but prepares a draft of a report on each member under evaluation (after consultation with that member); the draft is available to all other members. The value of the TPRB process in providing evaluation and guidance is reflected by the fact that many members affirmatively requested that the TPRB review measures which they adopted in response to the 2008 financial crisis, rather than simply notifying the measures to the respective committees and councils[vi].The Director-General and Secretariat have also launched initiatives on the international trade regulatory implications of the financial crisis and domestic measures reflecting the increasingly proactive of WTO administrative bodies. The administrative functions carried out by the councils, committees and TPRB include significant normative components. For example, the General Council and the Councils on Trade in Goods, Trade in Services, and TRIPS are authorized to grant, under certain conditions, timelimited waivers from otherwise applicable WTO disciplines[vii] administrative bodies lack power to make decisions with authoritative legal effect. Nonetheless, their review and supervision of members’ implementation of the agreements will necessarily involve discussions of the meaning and application of provisions in the WTO agreements, efforts at clarification, and development of working mutual understandings of the most appropriate way of implementing members’ commitments in particular contexts, including issues of domestic institutional structure and procedure as well as substantive norms. The administrative bodies also provide technical assistance to developing country members in implementing their WTO commitments and in participating in international standard setting bodies. This assistance will inevitably involve exemplars of good practice, blending in some cases into interpretation and application of governing legal norms. Taken together, these activities involve a range of normative practices that have appreciable practical significance and influence. All WTO members have a seat on these administrative bodies. Many smaller and less developed country members with small delegations in Geneva complain that they have serious difficulties in keeping abreast of the increasing number of administrative activities, much less actively participating in all of them. [viii]Decisions are taken by consensus through a process of information-sharing, discussion, and negotiation. Each body has its own internal rules of organization and procedure regulating such matters as meetings, meeting agendas, who may attend (including in some cases observers), decisional rules, and other matters.[ix] The activities of the committees are subject to review by their respective councils, and in turn by the General Council, which issues an annual report compiling the activities and main decisions reached by all of its subordinate bodies. These processes of internal administrative review has implications beyond simple compilation of the activities undertaken by the subordinate bodies, As acknowledged in recent annual reports by the General Council, through the General Council review process statements made by members in informal meeting, such as TNC meetings[x], became public, increasing transparency, both internally and externally. In addition, during the review process the supervising council acts as a second level of decision when it evaluates the discussions and decisions in the body being reviewed, which it can approve or disapprove. This process has occurred, for example, with respect to the implementation of sensitive matters to be accomplished within certain deadlines; when the deadline was not met, the General Council was called upon to decide on extensions and in doing so reviewed the work of the subordinate body. Examples can be found in discussions on the Transparency Mechanism for Regional Trade Agreements and the Protocol amending the TRIPS Agreement.[xi]

Conclusion:

GAL, by contrast to constitionalism, proceeds at “retail” rather than “wholesale”. As this WTO case study indicates, administrative law concepts and tools derived from domestic or supranational practices can be tailored and suitably adapted to the circumstances of different global regulatory bodies and complexes in order to make incremental but nonetheless significant progress in improving governance. Understanding much global governance as administration allows us to develop a more rigorous conceptual schema of the various institutional structures and relations involved in the notoriously slippery notion of global governance. It does so by focusing the question of accountability in the more precise terms of administrative law, providing us with a set of basic tools for transparency, participation, reason-giving application of these tools can be suitably adapted for application in a wide variety of global institutional settings without insisting on any single design or order. GAL, by contrast to constitionalism, proceeds at “retail” rather than “wholesale”. As this WTO case study indicates, administrative law concepts and tools derived from domestic or supranational practices can be tailored and suitably adapted to the circumstances of different global regulatory bodies and complexes in order to make incremental but nonetheless significant progress in improving governance. Understanding much global governance as administration allows us to develop a more rigorous conceptual schema of the various institutional structures and relations involved in the notoriously slippery notion of global governance. It does so by focusing the question of accountability in the more precise terms of administrative law, providing us with a set of basic tools for transparency, participation, reason-giving application of these tools can be suitably adapted for application in a wide variety of global institutional settings without insisting on any single design or order[xii]. By taking institutions largely as it finds them and relying on procedural disciplines to improve their governance, GAL risks providing a patina of legitimacy without effecting any basic change, and may divert attention from the need for more fundamental reform.108 Further, too much reliance on legal mechanisms to achieve governance goals may end up sapping political accountability rather than compensating for its deficits[xiii]

BIBLIOGRAPHY

  • International law :- Rebecca M.M Wallace
  • Public International Law :- S. K Kapoor
  • Cases and materials on International law :- D. J Harris
  •  Cases and materials on International law :- Malcamshaw
  • International Dispute Resolution :- Leila Anglade & John Tackaberry
  • International law :- N.K Jayakumar
  • Some reflections on the operation of the dispute settlement system of the UN convention on the law of the sea during its first decade :- Robin Churchill
  • www.itlos.org

Edited by Kanchi Kaushik

[i] 2 R.I.A.A. 829 (1928)

[ii] http://www.wto.org/english/thewto_e/whatis_e/tif_e/disp1_e.htm,  visited on 20.1.2014

[iii] See B. Kingsbury, N. Krisch and R.B. Stewart, “The Emergence of Global Administrative Law”, 68 Law and

Contemporary Problems 15 (2005).

[iv] See ibid; D.C. Esty, “Good Governance at the Supranational Scale: Globalizing Administrative Law”, 115 Yale

Law Journal 1490 (2006). The website of NYU Law School Institute for International Law and Justice’s research

project on global administrative law collects a wide range of research papers and other materials on the subject

(www.iilj.org/gal). See also Global Administrative Law: Cases, Materials, Issues, edited by S. Cassese et al.

(second edition 2008) (www.iilj.org/GAL/GALCasebook.asp); Symposium, The Emergence of Global

Administrative Law, Law and Contemporary Problems, Vol. 68:3-4 (Summer-Autumn 2005), pp. 1-385;

Symposium, Global Governance and Global Administrative Law in the International Legal Order, European

Journal of International Law vol. 17 (2006), pp. 1-278; Global Administrative Law Symposium, NYU Journal of

International Law and Politics, Vol. 37:4 (2005). The GAL Project, jointly with leading law schools and research

[v] See <http://www.wto.org/english/tratop_e/adp_e/adp_e.htm> (June 2009).

[vi] Missão do Brasil em Genebra (Brazilian Mission in Geneva), Carta de Genebra, ano VIII, n. 1, maio de 2009, p.

  1. References are made to formal and informal meetings in which the issue was discussed, and members’ positions

about it. See also Joost Pauwelyn and Ayelet Berman, Administrative action in the WTO: the WTO’s Initial

Reaction to the Financial Crisis (forthcoming). The authors named the informal initiative embraced by the Director

General as an “administrative action” undertaken by the managerial arm of the WTO (the Secretariat and the DG).

[vii] See Isabel Feichtner, The Waiver Power of the WTO: Opening the WTO for Political Deliberation on the

Reconciliation of Public Interests, Jean Monnet Working Paper 11 (2008) (contending that decisions on waivers

should be a forum to confront and resolve conflicting interests and norms). One example among many is the

authority of the Council of Goods to waive the most-favored nation clause (Article I:1 of GATT-1994) so as to

enable developed country members to grant under certain conditions duty-free or preferential treatment to goods

from least developed regions and countries.

[viii] See Constantine Michalopoulos, “Developing countries’ participation in the World Trade Organization, World

Bank Policy Research Working Paper No. 1906, march 1998; Håkan Nordström, Participation of developing

countries in the WTO, mimeo, 2006 (available at < www.noits.org/noits06/Final_Pap/Hakan_Nordstrom.pdf>

[ix] Most councils and committees follow the provisions of the General Council Rules of Procedure (WT/L/28),

sometimes with amendments on matters such as attendance at meetings or decision-making processes.

[x] See, e.g., WTO-WT/GC/117- General Council Annual Report (2008), 19 January 2009; WTO-WT/GC/114-

General Council Annual Report (2007)

[xi] See WTO-WT/GC/114- General Council Annual Report (2007), 21 January 2008; WTO-WT/GC/M/112- General

Council – Minutes of the meeting held on 18 December 2007

[xii] The history of the Basel II capital adequacy standards tends to support this conclusion

[xiii] C. Harlow, “Global Administrative Law: The Quest for Principles and Values’ (2006) 17 European Journal of

International law 187.

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