I wanted to follow-up on my postabout a NAFTA Chapter 19 panel's consideration of zeroing under U.S. law. I realize that I put a lot of emphasis on DSU Article 3.2 as the basis for arguing that WTO panel and Appellate Body clarifications of WTO provisions constitute "international obligations." (I've made this same argument before.) The basic point is that if the DSU is an international obligation, which everyone seems to accept, then the provision in the DSU which gives panels and the Appellate Body the authority to "clarify" WTO provisions means that such clarifications are also international obligations. It occurred to me that if I'm going to rely on DSU Article 3.2 in this way, I should make sure it means what I think it does. So, in this post, I talk a little about what the provision means and where it comes from. (Unfortunately, there is more on the former than the latter. I looked various places for answers as to where it came from, but did not come up with much. Those of you who may know something, feel free to add it in the comments.)
Let's start with the text. DSU Article 3.2 provides:
The dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. The Members recognize that it serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law. Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.
The key part is in the second sentence, where it is stated that the WTO dispute settlement system "serves ... to clarify the existing provisions of [the covered] agreements in accordance with customary rules of interpretation of public international law." That's not exactly the same as saying that panels and the Appellate Body have the function of clarifying WTO provisions, but it's close, I think. Panels and the Appellate Body are the main part of the dispute settlement system, and they are the ones doing the actual clarifying. Yes, there is the DSB, but practically speaking the DSB is not actively providing guidance on the meaning of the legal texts in individual cases. So, looking at the second sentence alone, I'm comfortable with a view that Article 3.2 envisions panels and the Appellate Body providing a formal clarification of the provisions of the WTO agreements (subject to the WTO Members overruling them with an "interpretation" under WTO Agreement Article IX:2).
Making things more difficult, there's the third sentence, which perhaps undermines, to some extent, the conclusion about the second sentence. This sentence says that DSB recommendations and rulings "cannot add to or diminish the rights and obligations provided in the covered agreements." Note that it does not refer directly to panel or Appellate Body rulings, but rather talks about the "DSB recommendations and rulings." Of course, it's panel and Appellate Body reports that provide the basis for the DSB recommendations and rulings, so I think we can safely overlook this distinction and conclude that, in effect, it's the panel and Appellate Body rulings that must not "add to or diminish the rights and obligations" in the agreements.
So how do we reconcile the second and third sentences? One sentence requires that panels and the Appellate Body clarify WTO provisions, while the next sentence says that clarifications cannot "add to or diminish the rights and obligations" as written in those provisions. Is it really possible to fulfill both tasks? It seems to me that by its nature, clarification means that a judicial body takes the underlying text further than its existing language, providing some additional meaning. Inevitably, I would argue, this additional meaning will, in some instances, be something that was not anticipated by at least some of the drafters (or, arguably, on occasion, not even readily discernible from the text). It's difficult to imagine how such additional meaning can be provided without ever "adding to or diminishing" the rights and obligations, at least from the perspective of one or more Members or others with an interest in the system. That is to say, clarifications will almost certainly diverge from someone's view of the rights and obligations as they appear in the text. The result is that there is an inherent tension in these two sentences.
Now, the Appellate Body has implied that as long as you are engaging in a proper interpretation, you are not adding to or diminishing the rights and obligations:
we have difficulty in envisaging circumstances in which a panel could add to the rights and obligations of a Member of the WTO if its conclusions reflected a correct interpretation and application of provisions of the covered agreements.
Chile - Alcohol, para. 79. Thus, in the Appellate Body's view, the clarifications will provide additional meaning, but as long as they are done properly, they will almost never "add to or diminish" rights and obligations. It seems to me, though, that under this approach, the "add to or diminish" requirement has almost no impact.
Summing up, this provision could be thought of as recognizing the role of GATT/WTO "courts" in providing clarifications of the provisions, but at the same time trying to keep excesses by these courts in check by indicating that the clarifications cannot take things too far. It's a provision that recognizes the inevitability of the powerful role of the judiciary in "making law," and tries to rein it in. The job of courts is to explain what legal provisions mean, but they should not stray too far from what the drafters intended or the text itself objectively means. In essence, the provision is an attempt to establish a particular role for courts. It's just hard to figure out what, precisely, that role was intended to be. (That's how it all reads to me anyway, although I'm not sure that's what the drafters meant.)
Speaking of the drafters' intent, what did the drafters of this provision have in mind? My attempts at researching this have come up mostly empty. I don't see much negotiating history to explain things. Clearly, some of the language is drawn from the 1989 Decision on Improvements to GATT Dispute Settlement Rules and Procedures, which states the following in para. 1:
Contracting parties recognize that the dispute settlement system of GATT serves to preserve the rights and obligations of contracting parties under the General Agreement and to clarify the existing provisions of the General Agreement. It is a central element in providing security and predictability to the multilateral trading system.
It's mostly the same as DSU Article 3.2, but without the "add to or diminish" qualification. (Arguably, the addition of this qualification in the DSU is intended to make sure the role of panels and the Appellate Body is properly bounded.) Aside from the 1989 Decision, though, I can't find any negotiating history on this issue in the GATT/WTO context. If anyone knows of any discussion of this, feel free to post it in the comments.
For what it's worth, with regard to non-WTO trade agreements, while I didn't do comprehensive research on this, a quick look at a few agreements shows a variety of approaches. Some use "interpret":
EC - Chile Interim Agreement, Art. 187, para. 3
Arbitration panels shall interpret the provisions of this Agreement in accordance with customary rules of interpretation of public international law, due account being taken of the fact that the Parties must perform this Agreement in good faith and avoid circumvention of their obligations.
Some use "clarify":
Australia-Singapore, Chapter 16, Article 1.5
Arbitral tribunals shall clarify the provisions of this Agreement in accordance with customary rules of interpretation of public international law.
Some have instructions that are more general:
Australia - U.S., Article 21.9, para. 2
The panel shall consider this Agreement in accordance with applicable rules of interpretation under international law as reflected in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (1969). It shall base its report on the relevant provisions of the Agreement and the submissions and arguments of the Parties. ...
A few of these agreements have the "add to or diminish" language.
Finally, I'm not sure whether non-trade agreements, or even domestic law, have similar provisions. I've never heard of anything like this in other contexts, but there may be something.
ADDED: Tomer points me to BISD 29S/13 as the source for "add to or diminish." Here's that document: http://www.wto.org/gatt_docs/English/SULPDF/91000208.pdf And here's a reference to it from the second Tuna/Dolphin case:
The 1982 Ministerial Declaration on dispute settlement explicitly provides that panel decisions "cannot add to or diminish the rights and obligations provided for under the General Agreement." (BISD 29S/13).
(Para. 3.11)
Having thought to look at GATT cases, I also see this from Canned Fruit (from 1985):
The Panel was also of the view that its conclusions could not add to or diminish existing rights and obligations of contracting parties under Article XXIV:6 of the General Agreement.
(Para. 46)
It's interesting that the language did not show up in the 1989 Improvements, but did make it into the DSU.
