Extending Trade Law Precedent.

AuthorKucik, Jeffrey

Table of Contents I. Introduction 541 II. International Law and Precedent 544 A. Precedent 545 1. Judicial Technique 545 2. The International Judicial Technique of Precedent 547 B. The Tension between International Precedent and States 549 C. International Precedent and State Responses 553 III. Trade Law and Precedent 555 A. Stare Decisis at the WTO 556 B. An Empirical Assessment of Trade Law Precedent 558 1. Coding 558 2. Following and Distinguishing Precedent 559 3. Extending and Narrowing Precedent 562 IV. Trade Law Precedent and US Compliance 567 A. The United States and Precedent 568 1. General 568 2. Zeroing Methodology and Other Extension s B. The United States and Compliance 574 V. International Precedent and Legalization 579 A. Extension and Institutional Design 580 B. Extension and International Law 583 VI. Conclusion 586 I. INTRODUCTION

The World Trade Organization's (WTO) Appellate Body (AB) recently went from the trade regime's "Crown Jewel" to its "Crown of Thorns." (1) After years of mounting political controversy, the AB lost its quorum in December of 2019--the result of the United States blocking the (re)appointment of AB members. (2) Now, the United States has stated that since a decision was completed without the issuance by a properly constituted AB, the decision cannot be considered for adoption--effectively signaling that it will not comply with WTO decisions. (3) Why has the United States undermined the AB? And what do their actions illustrate about the issues facing international adjudication more generally?

This Article argues that despite a formal rule against the application of precedent, the AB leaned heavily on prior decisions. In applying precedent, the AB often gave an expansive treatment to its prior rulings, eventually leading to a backlash. While recent commentary about the demise of the AB has looked at the role of precedent, this Article's analysis is the first to systematically describe that unwritten norm and its effect on compliance. (4) The AB is important as it is the sole international, multilateral, and appellate court or tribunal (IC) with general jurisdiction over an entire area of United States policy, routinely interpreting a discrete number of treaties. (5)

Specifically, this Article uses data to explore the relationship between the extension of precedent or decisions that expand the meaning in the application of a previous decision and the determination to comply with decisions. This analysis shows a relationship between extension and compliance and notes that extensions can add cost for states because it makes politically unworkable interpretations of the law hard to reverse by the traditional mechanisms of control. As put simply by a commentator, "[W]hen you make the rules unrealistically tight, you also provoke a backlash." (6)

This Article's analysis is anchored in public choice theory. (7) As will be explained, very often in ICs there can be precedent without a formal stare decisis rule. This may lead to a troubling path--creating a dilemma--for ICs because of the domestic political consequences of their decisions. While ICs increase their authority by using precedent to build up a record of legal coherence, efforts to bolster authority backfire because states may respond adversely to decisions. From the standpoint of political officials, international trade agreements need to result in net political gains relative to their costs. (8) Given the uncertainty about the future, strategic ambiguity in treaties can help tailor the degree of commitments as new information comes to light. (9)

As shown in Part II, the AB, through a strong norm of precedent, may have contributed to the strengthening of legal commitments and with that a marked decrease in compliance by its once main supporter.

This analysis focuses on the WTO. However, the findings have implications beyond the peculiar confines of trade law. First, for institutional design, it is unlikely that efforts to better define the value of precedent can resolve the general problem without impacting ICs, as some have suggested in the context of the WTO crisis. (10) Instead, this Article notes that the use of sunset clauses in treaties could be one way to maintain strong delegation (including systems with appeal processes) without the risk of dramatic challenges to the authority of ICs, which inevitably need consistency and predictability in decisions. These controversial clauses, which require parties to a treaty to affirmatively confirm a desire to continue the agreement, are recent developments in United States practice (11) as evidenced by the United States-Mexico-Canada Agreement (USMCA). (12) More broadly, this analysis suggests the WTO, which was once an example of strong functional delegation, will remain as a cautionary tale of relying on ICs without an effective and functional mechanisms for clarifying treaty terms by political means when real economic and political power is at stake. (13)

Second, this Article poses that scholars theorizing compliance should account for the intertemporal dimension of legal commitments in explaining state behavior. Recent scholarship on international relations has begun to emphasize different aspects of the design of international agreements for cooperation. (14) Among other elements, the literature highlights the problem of "time inconsistency" in states' preferences for international cooperation. (15) However, compliance theory needs a fuller account of how agreements evolve over time from the inside, including the role played by ICs and other interpretative mechanisms. This process can affect the nature of the legal commitment, potentially widening the distance between the rules in practice and the original design over time. This Article shows that the slow erosion of rules that results from ICs' rulings must be accounted for by compliance theory no matter what competing vision (international law as "contract" or international law as "governance") one embraces. (16)

This Article proceeds as follows. Part II first examines how precedent is treated under international law. Part III discusses how precedent is used at the WTO and how it became a source of political contention. Part IV focuses on the United States and antidumping, which is by far the most widely used trade remedy. Before concluding, Part V develops the argument and explains the implications of these findings for the WTO and beyond.


    Many of the institutions that adjudicate international legal disputes are designed so that there is no formal stare decisis (i.e., obligatory application of precedent). Yet, in practice, ICs frequently rely on past interpretations when making their decisions. This is because ICs, like any other court, or state, who invoke precedent have a systemic interest in predictability and coherence across decisions. However, there is a fundamental tension between the role of precedent in international law and state behavior. Among others, states may push back against the application of precedent through various mechanisms of control, including noncompliance.

    1. Precedent

      (1.) Judicial Technique

      Judicial precedent is associated mainly with common law. However, globalization and the convergence of diverse legal traditions have made precedent relevant across different levels of systems, including international law. (17)

      In its simplest terms, binding precedent requires that adjudicators follow past rulings. (18) Courts may not necessarily explain or evaluate the authority of past decisions. Following precedent generally involves applying the best reading of a prior decision as it is, strengthening its binding authority. In practice, legal bodies try to follow their own precedents, and they rarely abandon the force of prior decisions. This is because courts wish to maintain coherence in their readings for reasons of practicality and, importantly, increased authority of the decision and the court. (19) Precedent can also act as a constraint for future judges. For example, in a recent controversial case before the US Supreme Court, Chief Justice John Roberts atypically joined the Court's four liberal justices, citing the adherence to precedent, to invalidate a law that would have curtailed access to abortions in the state of Louisiana. (20)

      While precedent typically means following prior readings, it may also take on other forms. For example, judges can utilize the plasticity often encountered in legal discourse to distinguish prior readings. (21) Barry Friedman argues that "distinctions drawn by a subsequent court must be germane to the purpose or justification for the rule itself." (22) Where that is not the case, courts may clarify precisely why a prior ruling does not apply.

      Both following and distinguishing precedent can increase the authority of the court, as they bolster the importance of previous readings and generate greater coherence in legal interpretations over time. Importantly, scholars also recognize at least two ways judges adapt prior decisions. (23) The first is narrowing precedent, which occurs in instances where the best prior reading applies but where the court decides to shrink the scope of that reading to have a more limited bearing on the decision at hand. Narrowing precedent can be done slowly over time (24) or by abruptly interpreting a precedent less broadly than it might have been construed otherwise. (25) According to Stephen Sachs, "Courts often amend past doctrines by distinguishing prior cases on narrow, sometimes formal, grounds. That's how doctrine usually changes over time; not by wholesale overruling, but by slow evolution and reassessment of the law." (26) In this sense, narrowing precedent means that the court effectively shrinks the ratio decidendi of the precedent, trimming back its reach.

      Courts may also adapt precedent where the best prior reading does not apply clearly to the case at hand. In these...

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