From a new House bill introduced by Congressmen Rangel and Levin (full text here):
SEC. 205. ROLE OF WTO APPELLATE BODY RULINGS IN THE WTO DISPUTE SETTLEMENT SYSTEM.
(a) Findings- Congress finds the following:
(1) The United States and other members of the World Trade Organization made clear when they established the World Trade Organization that the text of the WTO agreements, and not interpretations of those agreements by the Appellate Body or any other international tribunal, establishes the rights and obligations of WTO members. The WTO members determined that `in their findings and recommendations, the panel and Appellate Body cannot add to or diminish the rights and obligations' in the text of an agreement. Instead, a dispute settlement panel is to make an `objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements'. The WTO members themselves, by a three-fourths majority, have the `exclusive authority' to adopt binding interpretations of the WTO agreements.
(2) Accordingly, in 1996, the WTO Appellate Body stated that past dispute settlement decisions `create legitimate expectations among WTO Members, and, therefore, should be taken into account where they are relevant to any dispute. However, they are not binding, except with respect to resolving the particular dispute between the parties to that dispute.'.
(3) In 2008, however, the Appellate Body criticized a dispute settlement panel for conducting its own objective assessment of a legal issue and refusing to follow the Appellate Body's past interpretations of provisions of WTO agreements. The Appellate Body stated that it was `deeply concerned about the Panel's decision to depart from well-established Appellate Body jurisprudence clarifying the interpretation of the same legal issues'.
(4) The notion that a dispute settlement panel is obligated to follow Appellate Body precedent, rather than its own objective assessment of the relevant WTO agreements, is inconsistent with the text of those agreements and ultimately may have a chilling effect on future negotiations to further open markets and strengthen the global trading system.
(b) Sense of Congress- It is the sense of the Congress that the United States should state unequivocally that--
(1) it in inconsistent with the express mandate of limited authority to the WTO Appellate Body under the Understanding on Rules and Procedures Governing the Settlement of Disputes for the Appellate Body to establish a new legal standard that dispute settlement panels must apply in deciding cases; and
(2) a dispute settlement panel is obligated to follow the text of an agreement negotiated by the WTO members themselves, and not the `jurisprudence' of the WTO Appellate Body.
I have two questions about this.
First, what would the practical impact be of panels being explicitly authorized to follow their own views rather than those of the Appellate Body? Won't the Appellate Body just reverse any panel decisions that are contrary to its jurisprudence?
Second, DSU Article 3.2 says that the dispute settlement system "serves ... to clarify the existing provisions of [the covered] agreements in accordance with customary rules of interpretation of public international law." Don't these "clarifications" establish at least some degree of de facto precedent?
