Academic journal article Texas International Law Journal

The Effect of the WTO in European Court Litigation

Academic journal article Texas International Law Journal

The Effect of the WTO in European Court Litigation

Article excerpt

I would first like to summarize what WTO (World Trade Organization) dispute settlement looks like for those of you who may not follow the WTO on a day-to-day basis. The WTO dispute settlement system has, I would say, at least four characteristics that are of interest for our purposes today. First of all, it has compulsory jurisdiction.1 This means that if you are one of the 148 members of the WTO and have a dispute or a disagreement with another country, that other country must go through the dispute settlement process. Second, litigation can proceed through two instances: before ad hoc panels and, on appeal on questions of law only, before the standing Appellate Body. Rulings of these tribunals acquire binding legal force within the WTO, unless there is a consensus amongst the WTO members (including the member having prevailed in litigation) against that, which is very unlikely and has never happened so far. Third, WTO dispute settlement proceeds quickly, at least in comparison to many domestic jurisdictions: panel proceedings should normally only last for about nine months; if the panel's decision is appealed to the WTO Appellate Body, that appeal proceeding should then last no longer than ninety days. Taking some procedural back and forth into account, you should normally have a decision in both instances within two years. Fourth, and finally, if a country does not implement a ruling of a panel or of the WTO Appellate Body, the winning party may then exercise pressure to induce compliance by the losing party by taking countermeasures, notably by introducing retaliatory trade restrictions on imports from the other country.2 That's WTO dispute settlement for you in a nutshell.

What about implementation of these WTO dispute settlement rulings-notably, what about implementation or respect for these decisions by the European courts (the Court of First Instance or our highest court, the European Court of Justice)? That very question is one of the most hotly debated issues in European Union (EU) law, and it goes to the relationship between EU law and international law generally.

The EU, contrary to the United States, does not have a supremacy clause in its founding treaty. Nor do we have a law or a provision that says that we are a monistic legal order. The choice for a monist system in the EU is essentially judge-made law. It was developed by the European Court of Justice in a case some thirty years ago,3 and explained in more detail some twenty years ago.4 It is interesting to see how the European Court of Justice rejected the concerns of the opposition-of those who said, "look Court, this is not something for you to enter into, and if a choice has to be made it should be for a dualist system. International responsibility is one thing, it's another thing what these international rules and rulings should mean in our own legal order."

The Court dealt with at least three of their objections. One objection was that whenever international treaties contain dispute settlement provisions, the Court should really leave the interpretation of those international treaties to their own dispute settlement mechanisms. The Court did not think that this was a very relevant consideration to reject monism. It said that it was its responsibility to decide what these international rules meant in the EU domestic legal order.5 Another objection was that, by giving direct effect to an international treaty, the Court would upset the balance between the European institutions. The Commission and the Council of Ministers were actually out there in the international arena negotiating and enforcing treaty law, so the Court should allow them to decide when to give domestic law effect to an international rule or not. Otherwise, the Court would influence the European Commission (EC)'s negotiating position. Again, the Court rejected this objection. The Court essentially said that if (and only if) a treaty does not specify what its domestic law effect is supposed to be, then it is for the judiciary to decide. …

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