One of the issues raised by the United States in its critique of the Appellate Body is the role of precedent. How much weight should be given to past cases? Is the Appellate Body being too deferential to its prior rulings? Is there a difference between the "cogent reasons" language used by the Appellate Body and a standard that says past cases have only "persuasive value"? In a short Cato paper (a longer version will be coming out in the Journal of World Trade next year), Jim Bacchus and I are skeptical that there is much difference between the current Appellate Body approach and what the United States seems to be advocating:
In our view, the concerns voiced by the United States about the Appellate Body’s cogent reasons standard and its alleged illegitimate adherence to precedent are vastly overstated. Although the cogent reasons language is new, it is not clear to us that an interpretative approach stating that a panel should have cogent reasons for departing from previous appellate reasoning and rulings differs from a reliance on persuasiveness. It could be argued that there are subtle differences in the two approaches, based on who has the burden to show that a previous ruling should not be followed. It seems likely, though, that the Appellate Body would have been explicit if it had intended to announce such a distinction. ...
Furthermore, it is not at all clear how the use of one interpretative approach instead of the other would lead, in practice, to different outcomes. Rather, it seems most likely that the use of the two different interpretative approaches will each reach the same result. In fact, a recent WTO panel applied the absent cogent reasons approach in a way that allowed it to depart from past Appellate Body reasoning. The difference between the absent cogent reasons approach and the standard of persuasiveness endorsed by the United States seems to us to be one mainly of semantics. This perceived legal distinction by the United States does not warrant the emphasis the United States has given it.
As the same time, we would not object to a clarification that "persuasive value" is the proper standard, along the lines of the following addition to DSU Article 3.2:
“Clarifications provided by panels and the Appellate Body can have persuasive value, but are of less authority than the interpretations adopted under Article IX:2 of the WTO Agreement.”
