The DSU & National Interests.

1. : A case for reform The DSU & National Interests. Submitted by: Joe Pickerill ITRN 603 George Mason University

2. : A case for reform The Issue at hand: Most member nations of the WTO honor international agreements and treaties, such as the one that created the WTO. CAVEAT: as long as they do not conflict with national laws and regulations

3. : A case for reform Why a problem? For eg., In the US, int’l agreements have no effect as law if they conflict with the Constitution. Unlike other organizations such as the UN, the WTO’s binding system of arbitration can have enormous impacts on domestic regulations and laws….thus directly effecting the individual rights and freedoms of national members’ citizenry.

4. : A case for reform The case to date: Is the honeymoon over??? A country will seriously jeopardize its int’l credibility if it does not ‘play by the rules’. As rulings become more intrusive, demanding the reform of domestic laws which directly effect the public, perhaps the success of the DSU will soon be challenged.

5. : A case for reform Example of problem scenario: In democratic nations the assignment of power to a supranational entity effectively removes the accountability of representative government, arguably the key tenet of democracy. The public might be at a loss to determine whether new regulations are the result of their own gov’t or the WTO’s ruling on int’l trade rules.

6. : A case for reform US Beginning to see a problem: “Congress could not predict in 1994 what disputes could possibly arise in the future,…the range of US legal functions effectively at the disposal of the DSU is tremendous and includes the powers to regulate foreign commerce, to spend and even to tax.” (McBride) THESE ALL BEING FUNCTIONS OF FEDERAL GOV’T, UNDER THE CONSTITUTION

7. : A case for reform What can be done? 1st, the DSU is worth saving 2nd, It cannot survive without the cooperation of member countries 3rd, The blurring between int’l agreements and trade rules and the impacts of such agreements on domestic law, regulations and inevitably the public need to be remedied.

8. : A case for reform 2-pronged approach: 1. Integrate greater transparency into the DSU process. 2. The Use of more diplomatic methods to Dispute settlement when rulings will pass beyond border issues to domestic ones.

9. : A case for reform CURRENT STATE OF WTO’s ‘TRANSPARENCY’: A CRITIQUE The WTO was made recently exempt from an int’l freedom of information the lack of transparency of the dispute settlement process Consistent fears of the power of the major trading nations in setting the agenda and dominating negotiations The weakness or even impotence of small countries in being able to, if necessary, implement trade sanctions subsequent to a dispute The perceived power held by the Appellate Body, made up of a small group of trade experts

10. PROS Allows member nations to provide either their own substantive expertise or allow other supranational org. expertise to be consulted = greater input All documents of proceeding and finding be made available to all interested parties = more democratic in nature. CONS Opens up the floodgates and could stall the currently efficient process Could lead to greater criticism from the public as they are allowed to become more aware of the process thus stunting its effectiveness. : A case for reform Transparency

11. : A case for reform CRITIQUE OF LEGALISTIC APPROACH Gov’ts may too easily think that progress can be made in the WTO through enforcement and litigation versus an open exchange at the negotiating table, thus appearing less open and democratic.

12. PROS Allows for treaties and agreements to be reached that will not overtly demand the changing of domestic law and the infringement of national citizens’ rights Removes the reliance on ambiguities in int’l law, levels the playing field and recognizes the influence politics has on all int’l decisions CONS Could stall the process Could lead to the effective impotence of the WTO Could lead to further criticism of the process, eg. The greater use of backroom deals Favors the EU approach to dispute settlement and runs afoul of the US mandate = future problems. : A case for reform Diplomatic vs Legalistic

13. : A case for reform The WTO is intended to level the playing field of int’l trade for all member nations. It’s ability to do so has been made largely possible by an effective and timely Dispute Settlement System agreed to by treaty of all member nations. Increasingly such powers go beyond the borders of int’l trade and pass within national contexts, thus giving the WTO the effective ability to regulate national economies. The argument is that rulings can force domestic citizens to fall under the rules of the int’l law contrary to the laws and rules of which they have voted for and proscribed in their collective constitutions.

14. : A case for reform Cont. “The WTO also reserves the power to reject citizens’ expressions of their values” (Shirzad) If the WTO intends to survive this it must introduce greater transparency into its methods and process and a diplomatic approach versus a legalistic one could avoid the perceived trampling of domestic sovereignty.

15. : A case for reform Works Cited: GIF image: www.wto.org Barfield, Claude. WTO dispute settlement system in need of change. Intereconomics. May/Jun 2002, Hamburg. McBride, Scott. Dispute settlement in the WTO: Backbone of the global trading system or delegation of awesome power?Law and Policy in International Business. Spring 2001, Washington. Shirzad, Faryar. The WTO dispute settlement system: Prospects for reform. Law and Policy in International Business. Spring 2000, Washington. Stephan, Paul B. Sheriff or prisoner? The United States and the World Trade Organization. Chicago Journal of International Law. Spring 2000, Chicago. Wallach, Lori. Transparency in WTO dispute resolution. Law and Policy in International Law. Spring 2000, Washington.