Enhancing the legitimacy of the World Trade Organization: why the United States and the European Union should support the Advisory Centre on WTO Law.

• Author: Greisberger, Andrea

ABSTRACT

The World Trade Organization (WTO) has faced harsh criticism from developing nations in recent years. Many developing nations feel that the promises they received when they joined the WTO have not been fulfilled. These nations feel that wealthy, industrialized nations like the United States and the members of the European Union are the only ones that have benefited from the organization. Moreover, they feel that these developed nations have benefited at their expense through the WTO's dispute settlement process. Many improvements to the WTO have been proposed. However, the one that seems the most able to help developing nations, the Advisory Centre on WTO Law (ACWL), has not received support from either the United States or the European Union.

The Advisory Centre was established in 2001 and is the first center for legal aid in the international system. The goal of the Advisory Centre is to provide developing nations with training and legal assistance in WTO matters. The WTO is an intricate system of rights and obligations, supported by a binding dispute settlement mechanism to ensure compliance. Meaningful participation in the WTO requires a good understanding of these rights and obligations and the ability to participate in its dispute settlement mechanism. The ACWL has the potential to benefit every nation that participates in the WTO, not just developing nations. The ACWL legitimizes the WTO as a whole. When parties are equally represented, the entire system is legitimated. Therefore, both the United States and the European Union would ultimately benefit from supporting this organization.

TABLE OF CONTENTS I. INTRODUCTION A. The Structure of the WTO B. The WTO Dispute Settlement Process II. THE NEED FOR WTO REFORM: ENSURING THAT DEVELOPING COUNTRIES HAVE EQUALITY OF ACCESS TO THE DISPUTE SETTLEMENT PROCESS III. THE SOLUTION: THE ADVISORY CENTRE ON WTO LAW A. The Logistics of the ACWL B. The Work of the ACWL in its First Year of Operation C. A Case Study in Depth: European Communities-Trade Description of Sardines IV. THE REACTION OF THE EUROPEAN UNION AND THE UNITED STATES TO THE ACWL V. CONCLUSION I. INTRODUCTION

A new non-governmental international organization has been established to provide developing and least-developed countries with high-quality legal advice for disputes involving the World Trade Organization (WTO). (1) This organization, the Advisory Centre for World Trade Law (ACWL), was first conceived by a trade delegate from Colombia. (2) Many developed and developing countries have contributed both financial and moral support to the organization, (3) which has been quite successful in its first years of operation. (4) Surprisingly, however, neither the United States nor the European Union has shown interest in supporting the organization. (5)

This lack of support does not make sense for several reasons. First, the lack of support from the United States and the European Union contravenes their national and supranational policies regarding fair representation. (6) The justice systems in both the United States and the European Union are seen by many nations as models of equal justice because of their commitment to ensuring that defendants are adequately represented. (7) Second, the WTO has faced substantial criticism in recent years primarily because many developing countries feel that they are not getting what they were promised when they joined the WTO. (8) By ensuring that developing countries are on equal footing with developed nations in the dispute settlement process, the ACWL has helped stem this criticism and given developing countries hope for their future in the WTO. (9) For example, Peru, represented by the ACWL, has received a favorable Appellate Body decision in a dispute with the European Union, something that may not have been possible without the help of the Centre. (10) Finally, providing developing countries with equal access to the WTO dispute settlement process provides the legitimacy to the WTO. (11) However, before it is possible adequately to explain the many advantages of the ACWL, it is first necessary to provide a preliminary explanation of the WTO and its dispute settlement process.

1. The Structure of the WTO

   The WTO Agreements provide the legal basis for the multilateral trading system that was established on January 1, 1995. (12) It is also the preliminary text of the Uruguay Round agreements signed on April 15, 1994 in Marrakesh. (13) The process and substance envisioned under these agreements extends far beyond that included in the General Agreement on Tariffs and Trade (GATT), the predecessor of the WTO. (14) While the GATT dealt only with trade in goods, the new WTO expanded the scope to trade in services and trade-related intellectual property. (15)

   At the initiation of the Uruguay Round of negotiations, the need to establish a new international organization was not anticipated. (16) However, as the Round drew to a close, the results of the debates and discussions were increasingly seen as a coherent agreement to which all countries that had participated in the Round should adhere. (17) Of special interest to the participants was the creation of a dispute settlement system that would govern issues arising under the many agreements. (18) Most participants "saw great advantage in giving a clear, logical, and strong institutional structure to the post-Uruguay Round trading system." (19) The end result is the WTO, composed of sixteen short articles and four annexes. (20) The annexes include other Uruguay Round agreements and GATT provisions that have been carried over into the WTO. (21)

   Article III of the WTO agreement defines its five primary functions. The first function is "to facilitate the implementation, administration and operation, and further the objectives, of this Agreement and of the Multilateral Trade Agreements, and also to provide the framework for the implementation, administration and operation of the Plurilateral Trade Agreements." (22) The second is to be a "negotiating forum." (23) The administration of the "arrangements in Annexes 2 and 3 for the settlement of disputes that may arise between members and for the review of trade policies" are respectively the third and fourth functions. (24) Finally, the WTO is to cooperate with the International Monetary Fund and the World Bank in order to attain greater policy-making coherence. (25)

   A country becomes a member of the WTO in two ways. (26) The first way, "Original Membership," applied solely to nations that were members of the GATT, and was open to these nations for a limited time. (27) Original Members were required to accept the WTO agreement without reservations and to make "concessions and commitments for goods and services, embodied in schedules that had been duly accepted and annexed." (28) Least-developed countries (LDCs) that became original members were essentially subject to the same conditions, but were "only required to take commitments and concessions to the extent consistent with their individual development, financial or trade needs, or their administrative and institutional capabilities." (29) The second means by which a country may become a member of the WTO is through the process of "accession." (30) Accession is open to any nation indefinitely, and essentially means that terms of membership are negotiated between the nation wishing to join and the nations that are already members. (31) These terms are unspecified but are intended to put the joining country on equal footing with that of other members. (32) Once membership is realized, all states have the same rights and privileges, and the manner by which a nation joined is irrelevant. (33) All countries must pay their share of expenses, and all must conform their government's laws and regulations to the WTO rules. (34)

   The backbone of the WTO is the Ministerial Conference, which is composed of all WTO members and meets at least biannually. (35) When the Ministerial Conference is not in session, the WTO is led by the General Council, which is also composed of all members. (36) The Council is responsible for the continuous management of the WTO, meeting regularly to supervise all its work. (37) It is also responsible for convening as the Dispute Settlement Body (DSB) and as the Trade Policy Review Body. (38) Meetings of these bodies take place quite frequently; the DSB meets, on average, once a month and the Trade Policy Review Body meets even more often. (39) In the main, decision making in the WTO is done on the basis of consensus. (40) When there is formal voting, each member of the WTO has one vote, and the general rule is that the decisions of the Ministerial Council or the General Council are made by the majority of votes cast. (41)

2. The WTO Dispute Settlement Process

   Article 3.2 of the WTO Agreement states, "The dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system." (42) The Dispute Settlement System outlined by the WTO is a "single set of rules to cover disputes that may arise under any element of the Uruguay Round package," including the WTO itself and annexes including the GATT. (43) The detailed rules are designed to ensure a speedy settlement process that cannot be blocked by individual countries. (44)

   The function of the dispute settlement system is to preserve and clarify the rights and obligations of WTO member states. (45) Moreover, dispute settlement procedures are calculated to "secure a positive, and if possible, mutually acceptable, solution to a dispute." (46) Preferably, the solution is to withdraw the measures that are inconsistent with obligations under the WTO Agreement. (47) If the withdrawal is not accomplished, compensation is a possible, although less satisfactory result. (48) Retaliation, wherein the injured nation, with authorization, suspends trade concessions or obligations to the offending...