Article: Epistemic Contests and Legitimacy of the World Trade Organization: The Brazil – USA Cotton Dispute and Incremental Balancing of Global Interests, 4(1) Trade, L. & Dev. 200 (2012) [available here]
Author: Arthur Daemmrich
Comment by Joost Pauwelyn
This paper is ultimately about legitimacy. The core argument is that the WTO’s legitimacy base has shifted from “political” (expanding membership, success at major trade round negotiations) to “judicial” (WTO dispute settlement) and, more particularly, “expertise” (a “technical turn”). Prof. Daemmrich uses the US – Cotton dispute and the debates there around econometric models and data as an example on point.
A couple of comments.
First, I do not think that legitimacy is a matter of “either, or” (e.g. judicial legitimacy has replaced political legitimacy). It is more a matter of degrees, relative balance, dispute settlement possibly compensating for some legitimacy loss elsewhere rather than fully replacing it. In any event, I do not believe that an international organization like the WTO can survive on “juridical legitimacy” alone. As I have written elsewhere, the GATT/WTO’s story is not one from politics to law, but a bi-directional interaction between politics and law (more law being enabled by and requiring more politics).
So when the author writes that WTO dispute settlement and its “technical turn” made “claims for democratic legitimacy more difficult to sustain” (p. 219), I have my doubts. If anything, we have seen an Appellate Body going to great pains to open itself up to outside interests (third parties and amicus curiae), holding public hearings, considering norms developed outside the WTO and embracing new disciplines and inputs (e.g. scientific and economic evidence). Here in particular, dispute settlement has enhanced, not replaced, democratic legitimacy. Rather than holding an inward-looking debate between self-minded trade diplomats or WTO insiders, the AB operates on a broader platform of contestation between an increasing variety of interests. The alternative to what the author calls a “technical turn” is not democratic nirvana. It is gunboat diplomacy or, at best, one epistemic community in charge (rather than several “fighting it out”).
To give just one concrete, recent example: To keep a link to business and economic reality, the panel on China – Electronic Payment Services interpreted the words “all payment and money transmission services” not only with reference to the Shorter Oxford English Dictionary but also to “certain glossaries and specialized dictionaries” and considered descriptions of the services sector at issue drawn from private “industry sources” such as company brochures, annual reports or company websites.
The WTO may, in the future, be mainly a clearinghouse, stabilizer and dispute settler (possibly even to enforce FTAs and plurilaterals), but even then its “political” arm can fulfill the role of oversight, monitoring and implementation through committee work, trade policy review and discussion. This work, in turn, may filter back into dispute settlement and keep the dialogue going outside formal rounds of negotiations (as happened in the Tuna – II report where reference was made to a non-binding decision by the TBT Committee on international standards, and the Clove dispute where the AB referred to a Ministerial Declaration).
Second, when the author writes that “Panel reports extract arguments from both sides, cite individual scientific, technical, and economic experts, define technical terms and common phrases … and then announce precedent-setting rules” (p. 238), he may be over-stating the authority or required precedential value of DSB rulings.
To keep the debate between law and politics open, the AB, acting as it does in such a contested and contestable environment, would be ill advised to write its rulings in stone. The AB may have the last word on a particular case, but it is not infallible nor does it have an inherent claim to superior knowledge especially knowing that it has to decide each case in less than 90 days. A tension may, moreover, arise between legal doctrines of precedent and the inherently evolving nature of science including the social science of economics. However, if a legal term is flexible enough to host economics input at one point in time, it should be flexible enough to update that input at a later stage. The question is then not so much one of stare decisis or precedent but one of static versus evolutionary interpretation.
Third, the author may also be over-stating the subjective nature of science and economics (“consensus on underlying methods for determining scientific or economic truth is proving impossible to achieve”, p. 202). True, the holy grail of complete objectivity is unattainable, but that does not mean we should not even try. Like law (and e.g. the VCLT rules of treaty interpretation), also economics has its methodological discipline. If this discipline is followed, assumptions are disclosed and data limitations acknowledged, economics can be of great value and be a crucial ingredient for more accurate and robust dispute settlement. This, in turn, should help, not hurt, legitimacy. I have recently described the use, non-use and abuse of economics in WTO and investor-state dispute settlement, as part of a four-year project entitled DISSETTLE. Important caveats are that (1) economic (and other) expertise must be run through legal criteria, adding to, not replacing judicial adjudication, (2) methodological discipline must be respected, (3) communication must be kept simple, (4) due process must be respected and (5) experts must avoid or disclose value judgments.
One core issue is who provides the advice. In the WTO, for example, panels have never appointed independent economic experts but relied instead on in-house staff economists. Where the latter add evidence or facts to the record, their input should be disclosed (if not rules against ex parte communications may be violated). So far, in the WTO, party-appointed experts have not been subject to rules of independence or impartiality, nor to cross-examination. This should change. They should also be obliged to disclose their assumptions and data limits as well as enable the opposing party and panel to verify the data.
Finally, one important problem with the turn to a variety of interests, sources and disciplines, as positive as it may be, is the question of access and resources. Will this make it more difficult for, for example, poor developing countries to actively and successfully engage in dispute settlement? Econometric and scientific studies as well as raw data can be expensive to collect, make and understand. So whereas contestation can check power and balance it out, it may also enhance power asymmetries. Also, countries like the US are transparent. Finding reliable data in, for example, China or Russia may be different.
The worst thing to do for an adjudicator confronted with contradictory studies is to assume that they cancel each other out (“ask three economists and you will get five answers”; but is this any different from asking three lawyers?). Their underlying assumptions, limits and merits must instead be examined and the studies can then be weighed, like other factual evidence, in a burden of proof exercise. Equally bad would be for an adjudicator to blindly accept or slavishly swallow any expert advice simply because it comes from an “expert”. While judges may not (and should not) be able to construct and run regression models, they can be trained so as to be able to check the parameters, validity and weight of such models.
In sum, this is a stimulating article, questioning the sources of legitimacy, in particular expertise, in the WTO.