The Sutherland Report and Dispute Settlement

Authors

Mark L. Movsesian, St. John's University School of LawFollow

Document Type

Article

Publication Date

2005

Abstract

Ten years after the organization's founding, an air of disappointment surrounds the WTO. The great promise of a global trade regime, dedicated to the principle of comparative advantage, seems to have stalled. The Doha Development Round, launched in 2001 in an attempt to redeem the disastrous Seattle Ministerial Conference of 1999, has been stymied by familiar disputes between North and South, mostly with respect to agricultural issues, but with respect to nonagricultural market access and services as well. Frustrated by impasses at the WTO, members have increasingly bypassed the organization in favor of discrete "preferential trade agreements", or PTAs, that address trade issues in regional and sub-regional units. According to critics, these PTAs are creating a "spaghetti bowl" of trade regimes that threatens to make the global organization irrelevant.

The dissatisfaction extends even to dispute settlement, long seen as the WTO's major contribution to international law. Although the DSU has had some notable successes, particularly in comparison to the often desultory GATT dispute settlement mechanism, commentators have voiced concerns. For example, one hears complaints that the retaliation remedy is too lenient, particularly in the context of asymmetric disputes between large and small economies;' there are proposals to cure this problem by allowing for monetary compensation as a remedy. Commentators denounce the idea that members can violate their treaty obligations indefinitely—that members have the option to "breach" or to "buy out" their victims by accepting retaliation. Still others argue that the Appellate Body should be more willing to supplement WTO treaty text with other substantive international law, including customary international law.

The Sutherland Report—more properly, the Report by the Consultative Board on The Future of the WTO—reflects this sense of unease about the organization's apparent drift. While affirming that the WTO represents "the most dramatic advance in multilateralism" since the 1940s, the Report worries that the organization "is not by any means fully equipped" for the tasks ahead. To remedy this situation, the Report makes numerous recommendations in a wide variety of areas. The language is moderate in tone and the proposals mostly moderate in scope; the authors clearly understood the dangers of a radical transformation of the organization. And, as one would expect in a work done by committee, there are some tensions in the Report; its endorsement of plurilateral negotiations, for example, seems a bit at odds with its condemnation of PTAs. But one can fairly say that several important elements of the Report tend in the direction of strengthening the WTO as an institution, of making it a more independent and less "Member-driven" body.

Reaction within the WTO membership has been tepid. There is little chance that the General Council will consider the Report before the end of the Doha Round, which could mean indefinite postponement. This lack of enthusiasm is not all that surprising. Enhancing the rigor of the WTO as an institution seems unlikely to solidify members' commitment to the organization. On the contrary, increasing the demands of WTO membership—for example, by enlarging the organization's scope and making its rulings more binding—seems more likely, at this point, to result in greater suspicion and resistance. Empowering the WTO in some of the ways that the Report suggests could actually retard, rather than advance, the cause of freer global trade.