Published: The Hindu, June 08, 2004,

By Prabhash Ranjan

ONE DIMENSION of the World Trade Organisation (WTO) that has, perhaps, gone unnoticed is the contribution it has made to the domain of public international law. The character of international law has always been a moot issue. Right from the days of John Austin, who reduced international law to positive morality, to this day, notwithstanding the strides made by public international law, people have often vacillated in calling international law “law” in the true sense of the term.

This hesitation stems from the fact that international law has been found wanting in all three processes that characterise any process of law making. These three processes are: the process of making the law itself, the process of settling disputes on the basis of the law made and the enforcement of decision relating to the disputes. All these three processes have been overwhelmingly dominated by international diplomacy and politics. This has often made the critics question the legitimacy of “international law.”

If one contrasts this with the rule-based system established under the aegis of the WTO, which is a part of public international law, one finds considerable difference. As far as the first process in law making is considered, there is not much difference. Rule making in the WTO is also dominated by international diplomacy and politics.

But, there is a perceptible difference in the other two processes of law making. This difference is attributable to the formation of the Dispute Settlement Body (DSB) under the WTO. The purpose behind establishing the DSB was to have a body that would administer the rules and procedures and provide security and predictability to the multilateral trading regime.

According to James Bacchus, former Chairman of the Appellate Body (AB), a body under the DSB to hear the appeals from the panel cases, there are two characteristics that make the DSB a unique judicial settlement body. In fact, it is these characteristics that divorce the second and the third elements in the law making process from international diplomacy and politics.

The two characteristics are: the compulsory jurisdiction of the DSB and the ability to enforce the judgment. The DSB has compulsory jurisdiction because all member nations under the WTO have agreed that any dispute with another member over any treaty matter annexed in the WTO agreements will be settled by the DSB. The DSB has the ability to enforce the judgments by authorising one member to the dispute to impose economic sanctions on the other, if the other party fails to comply with the rulings given by the DSB.

Unparalleled and unprecedented

The presence of these two characteristics in the DSB makes it an unparalleled and unprecedented judicial settlement body in international law. It is unparalleled because it is miles ahead of the only other judicial settlement body that exists at the multilateral level i.e. the International Court of Justice (ICJ) at The Hague. The ICJ has limited compulsory jurisdiction and a very weak enforcement mechanism. It is unprecedented because international law has not witnessed such a comprehensive dispute settlement body before.

These two distinguishing characteristics of the DSB have given the belief to the member countries that the international trading system established under the WTO will not suffer at least on account of the second and third processes in law making. It is this belief that is exhibited in the fact that both developed and developing countries take recourse to the DSB on a regular basis.

There is enough statistical evidence to prove this assertion. According to the AB’s Annual Report for 2003, issued by the WTO in May this year; from 1996 to 2003, different member countries appeared before the AB on 386 occasions either as an appellant, appellee or third participant. In this period India appeared before the AB on 18 occasions in different capacities. Since its inception, the DSB has settled hundreds of trade disputes between various WTO members.

My purpose is not to glorify the DSB or the WTO. My intention is just to demonstrate the unique contribution that public international trade law as envisioned in the WTO has made to the larger domain of public international law. The functioning of the DSB has shown for the first time that disputes can not only be settled according to law but also be enforced according to law.

Today, in the form of the WTO we have a model that imparts a relatively stronger legal character in the literal sense of the term to the body of “international law.”