For years now, I've been fascinated by Canada's Agreement on Internal Trade (AIT), which has a domestic trade dispute system that looks a lot like the dispute systems in international trade agreements. I've never been able to generate much excitement from others about the AIT, though (even most Canadians seem uninterested!).
But now I have something new to add to the discussion: They've created an appeals mechanism, and it's kind of intriguing!
The first appellate decision is here. Here are a few highlights:
-- The scope of appellate review is not what we are used to at the WTO: Article 1706.1(1) provides that an appeal may be based “on the grounds that the panel erred in law, failed to observe a principle of natural justice or acted beyond or refused to exercise its jurisdiction.” I wish there were a way we could replace the DSU appeal provisions with this one, just for one appeal, so we could watch the Appellate Body decide if a panel "failed to observe a principle of natural justice"!
-- They have remand! Article 1706.1(4) sets out the Appellate Panel's mandate in the following terms: "The Appellate Panel shall, on the completion of the hearing, issue a report with reasons which: (a) may confirm, vary, rescind, or substitute the Report of the Panel in whole or in part, or refer the matter back to the Panel for rehearing; ... "
-- The case was an interesting de facto discrimination-type one related to a Quebec measure on the labelling of certain dairy products and their substitutes:
7. In recent years, dairy product substitutes have proliferated on the Canadian market and are generally sold freely in all provinces of Canada except Quebec.
8. Dairy product substitutes sold in Canada are made primarily from edible oils derived from grain produced in the western provinces. Quebec is the pre-eminent producer of dairy products in Canada.
9. Saskatchewan says that real objective of the impugned Quebec legislation is protection of the Quebec dairy industry against competition from dairy product substitutes. Quebec says that the legislation is intended to protect the consumer.
The Quebec measure at issue said, in relevant part:
no person shall (1) use the words « milk », « cream », « butter », « cheese » or a derivative of any of those words to designate a dairy product substitute;
I had trouble figuring out what the case was all about until I read this:
131. For example, the margarine sold under the name “I Can’t Believe It’s Not Butter” would contravene section 4.1(1) of the FPA because its label uses the word “butter” in labeling a dairy product substitute, even though the name of the product on the label explicitly says that it is not butter.
-- The appellate panel decided to show lots of deference to the lower panel on issues of interpretation, partly on the basis that the lower panel knew more about trade issues:
91. This brings us to the fundamental question to be resolved with respect to standard of review. When an Appellant alleges that a Panel erred in interpretation of the AIT, does the Appellate Panel review the Panel on a standard of correctness or a standard of reasonableness?
92. In our view, the appropriate standard is reasonableness.
93. As we have explained above, many of the considerations that induce a court to exercise deference towards an administrative tribunal on judicial review do not apply in the relationship between the Appellate Panel and a Panel under the AIT. Likewise, many of the considerations that govern an appeal court’s oversight of lower courts do not apply in the relationship between the Appellate Panel and a Panel under the AIT.
94. One consideration however that does apply in both the judicial review context and in the present context is the relative expertise of the generalized reviewing body as compared to the specialized decision maker. Unlike the Panel, we do not have “expertise or experience in matters covered by this Agreement”. Such experience provides a basis for a practical interpretation of the Agreement in a manner that best achieves its objectives.
I don't know if the appeal of this case is going to start a trend or be an aberration, and I'm not sure law journals will be flooded with commentary on these issues, but it was certainly worth a blog post. It's not clear to me why Canada doesn't address these issues through their constitution, in their regular court system, but it's kind of interesting that they do it the way they do.