At the always excellent Georgetown Law International Trade Update last week, there was a "Fireside Chat" between Demetrios Marantis (former Deputy U.S. Trade Rep. and acting U.S. Trade Rep.) and Biden administration Ambassador to the WTO Maria Pagan. They covered a lot of ground, and on WTO dispute settlement, after an initial question and answer, there was this exchange about "certainty" in dispute settlement:
Demetrios Marantis: Maria, ... [d]oes that mean that WTO dispute settlement is essentially dead?
Maria Pagan: Well, no, I mean, there are disputes that are going on. And one of the things that we have said is, you can have one tier dispute settlement that gives you, that should be able to give members what they need. I hear "you really want certainty." Well, you can have certainty with one tier. Why do you need an appellate body? What's so magical about this?
Certainty can mean a number of different things in this context. One thing it might mean is that you get a final ruling in your dispute as to whether the measure at issue is consistent with the obligations, and it's true that you can get that with a one tier panel system or with a two tier system involving an appellate body (or even a three tier system with something like a Supreme Court of World Trade). That ruling tells you which side wins and which side loses the case.
But another thing certainty could mean is that the clarifications of WTO provisions called for by DSU Article 3.2 provide a clear understanding of the meaning of WTO rules, so that governments understand the obligations/exceptions and how they apply to any measures or actions they might take going forward. Like most things, certainty is a matter of degree, and I think two tiers gives you a lot more of this type of certainty than one tier does.
To illustrate this, let's look at the core principle of non-discrimination. In very general terms with regard to determining the existence of discrimination, some people want to look at effect, some at intent, some at both, and some at other things that can be hard to characterize. Because of this diversity of views, when you have multiple first tier panels looking at this issue, you are inevitably going to end up with conflicting rulings. When that happens, there is a great deal of uncertainty. If one panel says "aim and effect" while another panel says "no aim and effect," what exactly is the obligation and how do you comply with it?
A second tier appeal mechanism can help address this problem, especially if it has institutional elements rather than being an ad hoc mechanism. A single interpretation from one appellate body, rather than multiple competing interpretations from individual panels, provides more certainty.
An appeals mechanism is not going to be perfect in this regard, of course, and the Appellate Body shifted back and forth a bit on its interpretations of non-discrimination over time. But it is better than a situation where you are trying to argue a case, and there are three prior panels saying three different things, and as a result everyone has trouble articulating what the obligation is.
