Interpretation of the WTO Agreements, Democratic Legitimacy and Developing Nations

Abstract

The authority to interpret WTO covered agreements has made the panels and the Appellate Body the most influential organs in the WTO institutional framework. They enjoy considerable discretionary power to decide on the consistency of Members’ domestic measures, and also can attribute meaning to specific provisions, influencing the course of WTO jurisprudential development. While the functioning and contributions of the panels and Appellate Body are widely admired, an increasing number of scholars perceive that these bodies are improperly creating new WTO rules and procedures through the technique of ‘filling legal gaps’, ‘completing the analysis’ or ‘clarifying ambiguity’. Specifically, the discretionary power has been used to read into the WTO rules new obligations which were not foreseen or negotiated during the Uruguay Round of negotiations. Many see this attempt at norm expansion through judicial process as inherently dangerous, usurping the functions of the WTO political bodies in a manner contrary to democratic legitimacy. This paper is an attempt to highlight the extreme pattern of decisions of the panels/Appellate Body, highlight the adverse consequences of such decisions and the need for greater attention and debate on this issue in the policy space. The paper highlights some of the decisions by the panels and Appellate Body where, through innovative interpretation, the Members’ obligations were expanded, without deference to the democratic and political process. The paper argues that the panels and the Appellate Body have consistently made improper use of the techniques of interpretation, and often made policy choices to the resentment and detriment of a large majority of the WTO membership.

Keywords: WTO law, Internretation, Dispute settlement, Developing countries, democratic legitimacy