The Precedential Effect of WTO Panel and Appellate Body Reports

Abstract

The Dispute Settlement Understanding in the WTO Agreement represents a significant shift from a diplomatic model of dispute settlement to a rule-based model. The substitution of legal legitimacy for political legitimacy in the dispute settlement process makes the success or failure of the system largely dependent on the credibility of the jurisprudence produced by the panels and Appellate Body. One way which international tribunals have established credible jurisprudence, is by following their previous decisions unless there is good reason for deciding otherwise. This paper examines the precedential effect of previously adopted panel and Appellate Body reports, and policy reasons for and against a stronger form of precedent in WTO jurisprudence.