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Dictum on Dicta: Obiter Dicta in WTO Disputes

Published online by Cambridge University Press:  08 May 2018

HENRY GAO
HENRY GAO*
Affiliation:
School of Law, Singapore Management University, Singapore
*
*Email: gaohenry@gmail.com.
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Abstract

This paper discusses an important legal issue raised by the United States in its recent attempt to block the reappointment of an Appellate Body member. According to the US, in some of his decisions, the member has made overreaching findings that amount to obiter dicta. As obiter dictum is a unique concept in the Common Law system, the US argument may only stand if the concept may be found in the WTO legal system as well. With a careful analysis of the concept of dicta in Common Law and a close examination of the effects of past panel and Appellate Body decisions in WTO dispute settlement, the paper rejects the US argument by refuting each of the three premises of the US argument, i.e., the WTO legal system based on Common Law; WTO follows stare decisis; and the WTO has rules against dicta. In addition to original contributions on the nature of the WTO dispute settlement system in theory, the article also provides some practical advice on how the controversy may be resolved.

Type
Review Article
Information
World Trade Review , Volume 17 , Issue 3 , July 2018 , pp. 509 - 533
Copyright
Copyright © Henry Gao 2018 

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Footnotes

The author wishes to thank Professors William Davey, Ernst-Ulrich Petersmann, Giorgio Sacerdoti, Mitsuo Matsushita, Peter Van den Bossche, Seung Wha Chang, Yasuhei Taniguchi, Debra Steger, Raj Bhala, Alan Winters, and the two anonymous reviewers for their most helpful comments. All errors remain the author's own. All websites cited are current as of 5 March 2018.

References

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13 Ibid., at 12–13. These four reports are Appellate Body Report, Argentina – Measures Relating to Trade in Goods and Services, WT/DS453/AB/R and Add.1, adopted 9 May 2016; Appellate Body Report, India – Measures Concerning the Importation of Certain Agricultural Products, WT/DS430/AB/R, adopted 19 June 2015; Appellate Body Report, United States – Countervailing Duty Measures on Certain Products from China, WT/DS437/AB/R, adopted 16 January 2015; and Appellate Body Report, United States – Countervailing and Anti-Dumping Measures on Certain Products from China, WT/DS449/AB/R and Corr.1, adopted 22 July 2014, DSR 2014:VIII, p. 3027.

14 Ibid., at 13–15.

15 Ibid., at 15.

16 Ibid.

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19 Sarvarian & Fontanelli, supra note 10.

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22 K. Raja, ‘DSB Holds Second Dedicated Session on AB Reappointment Process’, South North Development Monitor, No. 8343, 28 October 2016; WTO Dispute Settlement Body, ‘Minutes of Meeting held in the Centre William Rappard on 26 October 2016’, WT/DSB/M/387, 5 December 2016. See also J. Caporal, ‘DSB Kicks Off Discussions of Appellate Body Reappointment Process’, Inside US Trade, 30 September 2016.

23 Raja, supra note 22.

24 Thomas R. Graham, Ujal Singh Bhatia, Ricardo Ramírez-Hernández, Shree Baboo Chekitan Servansing, Peter Van den Bossche, and Yuejiao Zhang, Letter to H.E. Mr Xavier Carim, Chair, Dispute Settlement Body, World Trade Organization, Geneva, 18 May 2016, at 1.

25 Ibid.

26 Georges Abi-Saab, James Bacchus, Luiz Olavo Baptista, Lilia R. Bautista, Claus-Dieter Ehlermann, A.V. Ganesan, Jennifer Hillman, Merit E. Janow, Mitsuo Matsushita, Shotaro Oshima, Giorgio Sacerdoti, Yasuhei Taniguchi, and David Unterhalter, letter to Ambassador Xavier Carim of South Africa, Chairman, Dispute Settlement Body, World Trade Organization, Geneva, Switzerland, 31 May 2016, at 2.

27 Ibid.

28 Ibid.

29 Ibid., at 3.

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31 Black, H. C., Handbook on the Law of Judicial Precedents, or, the Science of Case Law (1912), at 166Google Scholar.

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33 Black's Law Dictionary, entry on Dictum.

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35 McAllister, ibid., at 167.

36 Ibid.

37 Black's Law Dictionary, entry on Dictum.

38 McAllister, supra note 34, at 168.

39 Scofield, Robert G., ‘The Distinction Between Judicial Dicta and Obiter Dicta’, 25 Los Angeles Lawyer 17 (Oct. 2002), at 33Google Scholar, as cited in McAllister, ibid.

40 Black, supra note 31, at 176.

41 Ibid.

42 Ibid, at p. 179.

43 Ibid.

44 ‘Dictum Revisited’, supra note 32, at 513.

45 Ibid.

46 Ibid., at p. 515.

47 Black, supra note 31, at 179.

48 McAllister, supra note 34, at 162.

49 Ibid., at 163.

50 Ibid., at 164.

51 Ibid., at 164–165.

52 Posner, R., How Judges Think, Cambridge, MA: Harvard University Press (2008), at 192–193Google Scholar.

53 According to Black's Law Dictionary, stare decisis means ‘to stand by things decided’. However, there has been considerable confusion in determining what ‘things’ have in fact been ‘decided’. See e.g., Steinman, A. N., ‘To Say What the Law Is: Rules, Results, and the Dangers of Inferential Stare decisis’, 99 Virginia Law Review (2013)Google Scholar, at 1810; Abramowicz, M. and Stearns, M., ‘Defining Dicta’, 57 Stanford Law Review (2005)Google Scholar, at 1094.

54 McAllister, supra note 34, at 161; ‘Dictum Revisited’, supra note 32, at 513; Greenawalt, K., ‘Reflections on Holding and Dictum’, 39 Journal of Legal Education (1989)Google Scholar, at 431.

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57 McAllister, supra note 34, at 177.

58 Greenawalt, supra note 54, at 434.

59 McAllister, supra note 34, at 172.

60 Posner, supra note 52, at 81.

61 Greenawalt, supra note 54, at 434.

62 Dawson, J. P., Oracles of the Law, Ann Arbor, MI: University of Michigan Press (1968), at 415Google Scholar.

63 Ibid., at 392.

64 Dawson, supra note 62, at 263; Merryman, J. H., The Civil Law Tradition, Stanford, CA: Stanford California Press (1969)Google Scholar, at 37; Cummins, R. J., ‘The General Principles of Law, Separation of Powers and Theories of Judicial Decision in France’, 35 International & Comparative Law Quarterly (1986)CrossRefGoogle Scholar, at 599; Lasser, M. de S.-O.-I'E., ‘Judicial (Self-Portraits: Judicial Discourse in the French Legal System’, 104 Yale Law Journal (1995)Google Scholar, at 1330.

65 Code de l'organisation Judiciare, tit. II, art. 10. Aug. 16–24. 1790, as cited in Lasser, ibid., at 1335.

66 Ibid.

67 J. Komárek, ‘Judicial Lawmaking and Precedent in Supreme Courts’, LSE Legal Studies Working Paper No. 4/2011, at 21–27, SSRN: https://ssrn.com/abstract=1793219.

68 Lasser, supra note 64, at 1338–1339.

69 Dawson, supra note 62, at 440. See also C. Allen, Law in the Making (1966), as cited in Tete, W. T., ‘Code, Custom and the Courts: Notes Toward a Louisiana Theory of Precedent’, 48 Tulane Law Review 1, 24 (1973–1974)Google Scholar, at footnote 30.

70 Dawson, supra note 62, at 432–502.

71 Ibid., at 499.

72 13 Entscheidungen des Bundesgerichtshofs in Zivilsachen, 265, 279–282, as cited in Dawson, supra note 62, at 491.

73 This article uses ‘Common Law’, in its traditional sense, i.e., as a domestic legal system. This should not be confused with the emerging usage of Common Law in the context of international law, with two major schools of thoughts. The first, ‘International Common Law’ as coined by Bhala, Guzman, and Meyer, refers to the case law built on the decisions of international tribunals. In my view, as such ‘common laws’ are not binding, they are better referred to as the ‘common jurisprudence’ of international courts. See Bhala, R., ‘The Precedent Setters: De Facto Stare decisis in WTO Adjudication (Part Two of a Trilogy)’, 9 Journal of Transnational Law and Policy 1 (1999)Google Scholar; Guzman, A. T. and Meyer, T. L., ‘International Common Law: The Soft Law of International Tribunals’, 9 Chicago Journal of International Law 2 (2009), at 515–536Google Scholar. The second is the ‘Common Law of International Trade’ as suggested by Weiler and Cottier, which refers to the common traits and overall coherence between the WTO and other regional and bilateral agreements. As they focus on the common rules of different trade agreements, I think they are better named as ‘common rules’. See Weiler, J. H. H., The EU, the WTO and the NAFTA: Towards a Common Law of International Trade, Oxford: Oxford University Press (2000)Google Scholar; Cottier, Thomas, ‘The Common Law of International Trade and the Future of the World Trade Organization’, 18 Journal of International Economic Law 1 (2015), at 3–20CrossRefGoogle Scholar.

74 See Dainow, J., ‘The Civil Law and the Common Law: Some Points of Comparison’, 15 American Journal of Comparative Law (1967), at 423–424Google Scholar. See also G. Sacerdoti, ‘Precedent in the Settlement of International Economic Disputes: The WTO and Investment Arbitration Models’, Bocconi Legal Studies Research Paper No. 1931560 (2011), SSRN: https://ssrn.com/abstract=1931560, at 4.

75 See Art. 1.1 and Appendix 1 of the DSU.

76 Dainow, supra note 74, at 421.

77 Lasser, supra note 64, at 1327.

78 Sacerdoti, supra note 74, at 4.

79 Benayas, C. de la V., ‘Judicial Method of Interpretation of Codes’, 42 Louisiana Law Review (1982)Google Scholar, at 1645.

80 Posner, supra note 52, at 144.

81 Sacerdoti, supra note 74, at footnote 11.

82 Dainow, supra note 74, at 432. Terris, D., Romano, C. P. R., and Swigart, L., ‘International Judges and International Law’, in Terris, D., Romano, C. P. R., and Swigart, L. (eds.), The International Judge: An Introduction to the Men and Women Who Decide the World's Cases, Oxford: Oxford University Press (2007), at 123Google Scholar.

83 Lasser, supra note 64, at 1342.

84 Sacerdoti, supra note 74, at 4.

85 Ibid., 4

86 Dainow, supra note 74, at 432.

87 Terris et al (eds.), supra note 82, at 123.

88 See e.g., Art. 11 of the DSU, which states that ‘[t]he function of panels is to assist the DSB in discharging its responsibilities under this Understanding and the covered agreements’.

89 WTO Agreement, Art. IV. 2 & 3.

90 Steger, supra note 5, at 448.

91 Matsushita, M., ‘Reflections on the Functioning of the Appellate Body’, in Marceau, G. (ed.), supra note 2, at 548Google Scholar.

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93 WTO Appellate Body, Working Procedures for Appellate Review, WT/AB/WP/6, 16 August 2010, Rule 3(2).

94 Ibid., at Rule 4(1).

95 Hughes, supra note 1, at 127–128.

96 Working Procedures, supra note 93, at Rule 4(3).

97 Hughes, supra note 1, at 127–128; Ehlermann, C.D., ‘Six Years on the Bench of the “World Trade Court” Some Personal Experiences as Member of the Appellate Body of the World Trade Organization’, 36 Journal of World Trade (2002), at 612–613CrossRefGoogle Scholar.

98 Steger, supra note 5, at 453.

99 Terris et al. (eds.), supra note 82, at 123.

100 Working Procedures, supra note 93, Rule 3(2).

101 Matsushita, supra note 91, at 556–557. See also Lewis, M. K., ‘The Lack of Dissent in WTO Dispute Settlement’, 9 Journal of International Economic Law (2006), at 895–931CrossRefGoogle Scholar.

102 This does not mean that there are no disagreements among Appellate Body members, but the Appellate Body worked very hard to reach consensus. See e.g., Lacarte-Muró, supra note 2, at 478–479.

103 Bacchus, J., ‘Table Talk: Around the Table of the Appellate Body of the World Trade Organization’, 35 Vanderbilt Journal of Transnational Law (2002), at 1021–1040Google Scholar.

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105 For example, in his comprehensive review on the treatment of precedents by international adjudicators, former ICJ President Gilbert Guillaume notes that, while international courts ‘construct an entire jurisprudence based on their own precedent’, they all ‘distance themselves in principle from the rule of stare decisis’. Similarly, while ‘[t]he arbitration tribunals are … inclined to rely on precedent … with rather excessive zeal’, ‘stare decisis rule is no more applied in ICSID than it is in other international jurisdictional instances’. See Guillaume, G., ‘The Use of Precedent by International Judges and Arbitrators’, 2 Journal of International Dispute Settlement (2011) 1, at 7–16CrossRefGoogle Scholar. See also Pauwelyn, J., ‘Minority Rules: Precedent and Participation before the WTO Appellate Body’, in Jemielniak, J., Nielsen, L., and Olsen, H. (eds.), Establishing Judicial Authority in International Economic Law (2016)Google Scholar, at footnote 1, which notes that ‘[t]he only international tribunal to date that was set up with a binding rule of precedent (stare decisis) is the Caribbean Court of Justice’.

106 Statute of the International Court of Justice, Art. 59, www.icj-cij.org/en/statute (last visited 21 October 2017).

107 Sacerdoti, supra note 74, at 7–10.

108 Rome Statute of the International Criminal Court, www.icc-cpi.int/nr/rdonlyres/ea9aeff7-5752-4f84-be94-0a655eb30e16/0/rome_statute_english.pdf (last visited 21 October 2017).

109 Chua, A. T. L., ‘Precedent and Principles of WTO Panel Jurisprudence’, 16 Berkeley Journal of International Law (1998)Google Scholar, at 177.

110 Ibid.

111 GATT Panel Report, EEC Restrictions on Imports of Apples from Chile, L/5047, adopted 10 November 1980, BISD 27S/98.

112 GATT Panel Report, European Economic Community  – Restrictions on Imports of Apples – Complaint by the United States, L/6513, adopted 22 June 1989, BISD 36S/135, at para. 12.1. See also Chua, supra note 109, at 178.

113 WTO Agreement, Art. IX.2.

114 Chua, supra note 109, at 174.

115 See e.g., Bhala, R., ‘Myth about Stare decisis and International Trade Law (Part One of a Trilogy)’, 14 American University International Law Review (1998), at 845Google Scholar; Pelc, K. J., ‘The Welfare Implications of Precedent in International Law’, in Jemielniak, et al. (eds.), supra note 105Google Scholar, at 177.

116 Chua, supra note 109, at 195.

117 Panel Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/R, WT/DS10/R, WT/DS11/R, adopted 1 November 1996, as modified by Appellate Body Report WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, DSR 1996:I, p. 125, para. 6.10.

118 Appellate Body Report, Japan – Taxes on Alcoholic Beverages, WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, DSR 1996:I, p. 97, at 13.

119 Ibid.

120 Ibid., at 14.

121 Ibid., at 15.

122 Ibid., at 14.

123 Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products – Recourse to Article 21.5 of the DSU by Malaysia, WT/DS58/AB/RW, adopted 21 November 2001, DSR 2001:XIII, p. 6481, at para. 107.

124 Ibid., at para. 109.

125 Ibid., at para. 107. The report referred to here is Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998, DSR 1998:VII, p. 2755.

126 Ibid.

127 Panel Report, United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, WT/DS344/R, adopted 20 May 2008, as modified by Appellate Body Report WT/DS344/AB/R, DSR 2008:II, p. 599, at para. 7.106.

128 Ibid.

129 In the World Trade Organisation before the Appellate Body AB-2008-1, DS344 United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, Third participant notification and written submission by the European Communities, 25 February 2008 Geneva, at para. 56.

130 Appellate Body Report, United States – Final Anti-Dumping Measures on Stainless Steel from Mexico, WT/DS344/AB/R, adopted 20 May 2008, DSR 2008:II, p. 513, at para. 162.

131 Ibid., at para. 161.

132 Ibid., at para. 160.

133 See e.g., David's discussion on the heated debate between WTO Members when the Appellate Body Report on US–Stainless Steel was adopted. F. David, ‘The Role of Precedent in the WTO – New Horizons?’, Maastricht Faculty of Law Working Paper No. 2009–12 (2009), SSRN: https://ssrn.com/abstract=1666169, at 8–9.

134 See Sacerdoti, supra note 74, at 14; C. Davis, ‘Deterring Disputes: WTO Dispute Settlement as a Tool for Conflict Management’, presentation to the Annual Meeting of the International Political Economy Society (2016), at 20; S. Cho, ‘Precedent as a Social Phenomenon: System, Language and Symbol’, Chicago-Kent Research Paper Series, 1 June 2016, SSRN: https://ssrn.com/abstract=2791744, at 20–21; R. Alford, ‘The Role of Precedent at the WTO’, Opinion Juris, 2 May 2008, http://opiniojuris.org/2008/05/02/the-role-of-precedent-at-the-wto/.

135 Appellate Body Report, supra note 130, at para. 158.

136 This view is shared by many Appellate Body insiders. For example, Unterhalter stated that ‘[t]he WTO dispute settlement system knows no formal system of precedent’, in Unterhalter, supra note 9, at 473. Matsushita stated that ‘in the WTO jurisprudence stare decisis is not recognized’, in Matsushita, supra note 91, at 552. Hughes stated that ‘stare decisis does not apply in the WTO dispute settlement system’, in V. Hughes, ‘Working in WTO Dispute Settlement: Pride without Prejudice’, in G. Marceau (ed.), supra note 2, at 421.

137 Jackson, J. H., Sovereignty, the WTO, and Changing Fundamentals of International Law, Cambridge: Cambridge University Press (2006), at 177CrossRefGoogle Scholar.

138 Ibid., at 173.

139 Ibid., at 175.

140 Beshkar, M. and Chilton, A., ‘Revisiting Procedure and Precedent in the WTO: An Analysis of US – Countervailing and Anti-Dumping Measures (China)’, 15 World Trade Review (2016), at 386–388CrossRefGoogle Scholar.

141 Ibid., at 386–387.

142 Ibid., at 387–388.

143 Ibid., at 387.

144 Hudec, R. E., ‘Dispute Settlement’, in Schott, J. (ed.), Completing the Uruguay Round: A Results-oriented Approach to the GATT Trade Negotiations, Washington, DC: Peterson Institute for International Economics (1990)Google Scholar, at 191.

145 Hughes, supra note 1, at 121–122.

146 Steger, supra note 5, at 447. See also Bossche, P. V. D., ‘From Afterthought to Centrepiece: The WTO Appellate Body and Its Rise to Prominence in the World Trading System’, in Sacerdoti, G., Yanovich, A. and Bohannes, J. (eds.), The WTO at Ten: The Contribution of the Dispute Settlement System, Cambridge: Cambridge University Press (2006), at 292–294Google Scholar.

147 For discussions on WTO as a ‘Member-driven’ organization, see Elsig, M., ‘The World Trade Organization at Work: Performance in a Member-driven Milieu’, 5 Review of International Organizations (2016) 345–363CrossRefGoogle Scholar.

148 For an analysis on the issue, see Yanovich, A. & Voon, T., ‘Completing the Analysis in WTO Appeals: The Practice and its Limitations’, 9 Journal of International Economic Law (2006), 933–950CrossRefGoogle Scholar.

149 GATT Panel Report, European Economic Community – Payments and Subsidies Paid to Processors and Producers of Oilseeds and Related Animal Feed Proteins, L/6627, adopted 25 January 1990, BISD 37S/86.

150 Appellate Body Report, Canada – Certain Measures Concerning Periodicals, WT/DS31/AB/R, adopted 30 July 1997, DSR 1997:I, p. 449, at 33.

151 Appellate Body Report, supra note 123, at para. 107.

152 Appellate Body Report, United States – Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 April 2005, DSR 2005:XII, p. 5663 (and Corr.1, DSR 2006:XII, p. 5475), at paras. 129–130.

153 Ibid., at para. 131.

154 Ibid., at para. 132.

155 Mission of the United States, supra note 12, at 13.

156 G. Sacerdoti, ‘The Dispute Settlement System of the WTO in Action: A Perspective on the First Ten Years’, in G. Sacerdoti, A. Yanovich and J. Bohannes (eds.), supra note 146, at 49.

157 DSU, Art. 7.2.

158 Lauterpacht, H., The Development of International Law by the International Court, London: Stevens & Sons (2nd edn, 1958)Google Scholar, at 61.

159 Jennings, R. Y., ‘The Judiciary, International and National, and the Development of International Law’, 45 International and Comparative Law Quarterly (1996) 1 at 10CrossRefGoogle Scholar.

160 Ibid., at 12.