Here's more from the Trade Talks podcast with Stephen Vaughn:
Chad P. Bown 33:26
But can I ask you, then, where is our constructive proposal to have this conversation? So we haven't gotten it from the Europeans or the Chinese or anything yet, but where is the American proposal for how to fix the WTO?
Stephen Vaughn 33:38
Well, one of the problems that we have is, I mean, when I look at the text of the DSU as it reads now,
Soumaya Keynes 33:44
that's the Dispute Settlement Understanding
Stephen Vaughn 33:47
I think that the Americans who negotiated that text did a pretty good job. I mean, when I read it, and I think when most American lawyers read it, it looks as though you have created a process whereby there will be a panel, and then there will be an Appellate Body but that Appellate Body is really constrained. It says that they have to make a decision within 90 days, it says that they can't change the rules and obligations of the parties you have provisions like Article 17.6 that are supposed to give deference to members in sensitive areas like the anti-dumping laws. So on paper, it appears to look
like a reasonable set of rules. In reality, none of those paper protections did the United States very much good at all. That's why I think you see the Americans keep coming back to this question. Until we understand why we are so far apart in terms of how to read the text, simply trying to come up with new text is really a waste of time.Chad P. Bown 34:47
So there is no paperable solution to this problem.
Stephen Vaughn 34:52
I don't want to say there's no paperable solution to it. I mean, but I think there has, to me, I would think you would have to see some sort of a willingness for other countries to take more seriously the concerns that the Americans have expressed. And I think if people are thinking, well, this is just about the trade bar or well, it's just because the Americans want to win all the time. Well, that's not going to be very conducive and those conversations aren't going to be very productive.
Chad P. Bown 35:18
But we could have just written down what exactly it is that we wanted to see changed and see what the reaction would have been from an approach like that.
Stephen Vaughn 35:29
So for example, let's say that we said that we wanted to make sure that that they weren't going to add to the rights and obligations of the members. Well, it already says that. So I don't really, you know, it's not that simple to kind of just come in and say we're going to have these different pieces of text. I mean, when I read Article 17.6, for example, it's really, really clear. But when they read it, it has a completely different outcome. So there's an old school of law that goes back to the 20s at Yale called Legal Realism, and the Legal Realists were people who believed that what matters is not what's on the piece of paper, what matters is who the decision makers are, and the law is whatever they tell you it is. And to some extent, this is part of what we're wrestling with here. It's not just a question of what gets written down, it's a question of what's going to actually happen at the other end of that process. And so I think what the Americans have been trying to do is to have a more profound conversation here. And let's see, are we really capable of having a shared judicial process? Or are our understandings about law and policy so far apart, that we're just going to have to find other ways to work together?
I want to talk briefly about three points here: (1) What does it mean to add to or diminish the right and obligations under the WTO agreements? (2) How do you apply the special legal standard of review under AD Agreement Article 17.6(ii)? And (3) who should the decision-makers be in all of this?
On the point about adding to or diminishing the rights and obligations, I've never been sure how to apply that principle. DSU Article 3.2 says, "Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements." But it also says the system "serves ... to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law." If panels and the Appellate Body perform that clarification in a good faith manner, how could they add to or diminish the right and obligations? With every clarification, there is the risk that one side or the other feels like the rights and obligations were added to or diminished somehow. All you can do as the adjudicator is make your best effort to reach a reasonable interpretation.
As to AD Agreement Article 17.6(ii), this provision states in relevant part: "Where the panel finds that a relevant provision of the Agreement admits of more than one permissible interpretation, the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations." My sense is that there is genuine confusion among some people on how this provision can work. If the Vienna Convention is applied properly, they say, there will be just one interpretation, rather than multiple permissible ones. In my view, however, there has to be a way to get to multiple interpretations, or else Article 17.6(ii) will have no meaning. So how do we get to multiple meanings? I suggested some possibilities here, which included this: "As an illustration of a situation where more than one permissible interpretation exists, if the panel concludes that the interpretive approach set out in Article 31 of the Vienna Convention on the Law of Treaties leaves the meaning of a provision ambiguous or obscure, there shall be a presumption that the provision admits of more than one permissible interpretation, and the panel shall find the authorities' measure to be in conformity with the Agreement if it rests upon one of those permissible interpretations." But regardless of how you do it, you have to get there. Nonetheless, I don't think the answer to this problem is clear right now, and some additional textual guidance would be helpful to alleviate the confusion.
And finally, with regard to the statement that "the Legal Realists were people who believed that what matters is not what's on the piece of paper, what matters is who the decision makers are, and the law is whatever they tell you it is," I think this is a pretty important point. As things stand now, all of these interpretive decisions are made by some combination of Appellate Body Members and the Appellate Body Secretariat, or panelists and the Legal Affairs division (with assistance from other divisions in some cases), or panelists and the Rules division (perhaps with help from other divisions; I'm not sure how the Rules division cases work in this regard). The choice of decision-makers matters, and after the current crisis is over, we may end up with a different configuration of these decision-makers.
