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This chapter examines how the facts of a case are established, particularly how the record of the proceedings is formed and what the role of the panel and the parties is in that process. The chapter is divided into two main parts. Section I discusses the role of the panel as a reviewer; it explains the limitations that are associated with this role in the context of challenges to domestic trade remedy investigations. It argues that, notwithstanding the views of some commentators, the same restrictions do not apply in cases brought before a panel under the sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) agreements, where the panel acts as the original-trier-of-facts. Section II focuses on the role of the panel as the original-trier-of-facts. It examines how the factual record on which the panel bases its rulings is developed.

This chapter presents some basic ideas to be used in the enterprise of understanding, assessing, and designing suggestions for improving the process of fact-finding (or process of proof) in WTO dispute settlement. In short, the goal is to establish a framework for the analysis which is undertaken in the following chapters. The chapter is divided into two main sections. Section I provides an overview of how the process of fact-finding fits into the overall context of legal adjudication. Section II focuses on the WTO dispute settlement system. It is argued that an optimal process of fact-finding must (i) maximize the goals of the system of adjudication of which it is part; (ii) manage uncertainty and the risk of error efficiently; and (iii) be in harmony with the basic structure of the system of adjudication of which it is part.

The previous chapter introduced some basic concepts related to the process of fact-finding and briefly outlined how those concepts are applied in international dispute settlement proceedings, including WTO dispute settlement. This chapter examines in more detail how panels and the Appellate Body manage the concept of the burden of proof and determine when the burden of proof has been discharged. In other words, the main issue discussed regards the functioning of the burden of proof in WTO dispute settlement. The chapter also discusses the related question of the degree of persuasion that panels must reach in order to determine that the burden of proof has been discharged: that is, it addresses the question of the standard of proof.

This chapter looks at the seventeen international courts (ICs) with the formal jurisdiction to adjudicate disputes pertaining to a broad range of issues. Fourteen of these ICs have jurisdiction to adjudicate disputes between state parties; thirteen have jurisdiction regarding disputes involving nonstate actors (international institutional actors or private litigants). Quite often the dispute settlement role primarily binds others to follow the terms of the legal agreement, and quite often the IC has also been delegated other roles. Indeed, all but three of the ICs with a formal dispute settlement jurisdiction also have been delegated either enforcement, administrative, or constitutional review roles. These facts help explain why more often than not ICs have compulsory jurisdiction for their dispute settlement role.

This introductory chapter begins with a brief discussion of how the evolution and increased sophistication of the WTO legal system has resulted in more complex disputes requiring the resolution of complex factual questions. It then considers how panels and the Appellate Body have failed to provide clear guidance on how the process of fact-finding in WTO dispute settlement functions, including with respect to issues such as the allocation of the burden of proof — which can be determinative of the outcome of a case. An overview of the subsequent chapters is presented.

Taking into account the fact that the question of the allocation of the burden of proof has not been addressed in the Understanding on Rules and Procedures Governing the Settlement of Disputes (DSU), this chapter is a critical analysis of the rules that panels and the Appellate Body have developed to allocate the burden of proof between the parties. Section I reviews the case law and sets out the questions which will be further discussed in the following sections. Section II argues that panels and the Appellate Body have not adopted a coherent approach and that this has resulted in arbitrary allocations of the burden of proof. Section III then searches for solutions outside the realm of WTO jurisprudence. It explains that domestic law and general principles of law can provide only limited guidance. An alternative analytical framework is then developed on the basis of the law and economics literature on the burden of proof. The last part of the chapter addresses the question of whether the burden of proof should be allocated differently in compliance proceedings under Article 21.5 of the DSU.

The current dispute settlement system of the WTO creates a particular challenge for WTO Members with limited exports because litigation costs are more or less independent of the commercial stakes involved in a dispute. Small Members with small trade stakes may therefore find it too costly to pursue legitimate claims. Reviewing the aims and practices of small-claims procedures at the national and supranational level, this chapter analyzes whether a similar institution could be introduced at the WTO. It makes a prima facie case that the current dispute settlement system effectively discriminates against small claims and hence owners of small claims, and thus, in particular, against least-developed countries, small-island economies, and low-income developing countries. It explains what small-claims procedures are at the national level, what purpose they serve, how they are organized in different jurisdictions involving alternative design features, and what challenges they have faced. The chapter also explores the issues raised by adding a small-claims procedure in the WTO context and indicates specific design features that could address them.

This chapter discusses the meaning of basic concepts such as the burden of proof, standard of proof, and presumptions. It explains how those concepts are defined in the common law system, the civil law system, and in international law. It argues that because those concepts do not have exactly the same meaning in all legal systems, WTO panels and the Appellate Body should clearly define those concepts in the context of WTO law, taking into consideration the basic structure of the WTO dispute settlement system.

This chapter gives an overview of the diverse ‘constitutional approaches’ of the European Court of Justice (ECJ), the European Free Trade Area (EFTA) Court, the ECtHR, and national courts throughout Europe, for example in their judicial review of governmental interferences into economic freedoms and other fundamental rights on the basis of judicial interpretation and application of ‘constitutional principles’ with due regard to the human rights obligations of the governments concerned. The principles of ‘commutative justice’, ‘contractual justice’, and ‘conventional justice’ underlying private commercial arbitration differ fundamentally from the principles of ‘constitutional justice’ limiting governments and public national and international courts. The judicial task of settling disputes with due regard to the constitutional rights of citizens and constitutional restraints of governance powers is essential for maintaining an ‘overlapping consensus’ on ‘principles of justice’ among states and citizens with competing self-interests and conflicting conceptions for a good life, social justice, and an efficient regulation of the economy.

Chapter 5 analyses the implementation of WTO farm rules within the WTO dispute settlement system in order to determine the extent to which the Dispute Settlement Body's rulings have brought about further farm trade liberalization. First, the chapter explains how the system works; and then it highlights the important change from a consensual to a quasi-judicial system, and assesses cases in which the CAP has been directly or indirectly challenged. Sugar, beef hormones, and bananas were important EU cases; and the US cotton case also established important precedents.

This chapter sketches relevant features of the subject of analysis: the WTO dispute settlement system. This book on treaty interpretation by the WTO Appellate Body is essentially concerned with how the Appellate Body has used interpretation to simultaneously assert and justify its exercise of the judicial function in the WTO. This presupposes an awareness of the characteristics of this dispute settlement system, its jurisdiction, and the law that applies in adjudicating disputes between WTO Members. For that purpose, the chapter introduces the WTO dispute settlement system, its jurisdiction, the applicable law, and the applicable principles of treaty interpretation. It also contrasts the effect of authentic interpretations of the WTO treaty language with that of judicial interpretations, mostly from a practical perspective.

This chapter discusses the nature of international adjudication. It also explains the features of a legitimate court, and the instances when courts ‘make law’ and defined more broadly the domain of international institutionalized dispute settlement. That part considers the underlying dynamics of distinct dispute settlement modes and whether it is accurate to describe their primary function as engaging in ‘dispute settlement’ at all. The chapter also considers the characteristics and limitations of law-making in the political, quasi-judicial, and judicial settings discussed, and concludes with an attempt to situate these issues within broader theoretical frameworks. Institutionalized dispute settlers may be regarded as both triadic conflict resolvers and guardians of public values. All else being equal, a dispute settler that shares the characteristics of one who looks like and quacks like a domestic court is more likely to attempt adjudicative law-creation.

This chapter focuses on the inherent powers of the Appellate Body, and how the availability and exercise of such powers influences the interpretation and application of procedural rules in WTO dispute settlement. The analysis in this chapter builds on the distinction, made in Chapter 4, between procedural and substantive silences in WTO treaty language and the Appellate Body's interpretation of those silences. The chapter helps to explain how and why the appreciation of the judicial function of the WTO Appellate Body is commonly too narrowly construed on the basis of the DSU.

Toye focuses on issues relating to substantive justice as mediated through the international trade regime. He argues that the transition from the GATT to the WTO is leading to the continuation, possibly even the worsening, of inequality amongst countries. Toye concludes that formal justice is at odds with substantive justice since the inequalities of political and economic power between developed and developing countries have not been compensated for in the enactment of supposedly improved trade procedural rules.

This introductory chapter explains the European University Institute (EUI) dispute prevention and dispute settlement project and its main policy conclusions. The overview of alternative methods of dispute prevention and dispute settlement in transatlantic relations (section I) showed not only the diversity of intergovernmental dispute prevention and dispute-settlement mechanisms, but also an obvious lack of effective legal and judicial remedies of EU and US citizens against violations of WTO obligations by their own governments. The 14 case-studies of recent transatlantic disputes were classified into four different categories depending on the policy measures concerned and on their underlying conflicts of interests (section II). The survey of different legal, economic, and political theories of dispute prevention and dispute settlement (section III) explained their different value premises and the need for constitutional rules that (1) limit discriminatory abuses of foreign policy discretion; (2) protect domestic policy autonomy for non-discriminatory market regulations; (3) promote ‘negative comity’, ‘positive comity’, and ‘mutual recognition’ as conflict prevention strategies; and (4) ‘decentralize’ and ‘de-politicize’ intergovernmental disputes by empowering EU and US citizens to invoke and enforce precise and unconditional WTO guarantees of freedom and non-discrimination in domestic courts so as to promote rule of law, non-discriminatory conditions of competition, and ‘participatory democracy’ in transatlantic relations.

This chapter considers some of the controversial issues addressed by different arbitral tribunals concerning the application of most favoured nation (MFN) clauses to dispute settlement. It begins with a brief discussion on the concept, origin, and purpose of MFN clauses. It then discusses the application of MFN clauses to dispute settlement.

This chapter explains why and discusses what might be done to minimize the negative impact of third parties on effective use of dispute settlement by developing countries. The chapter proceeds as follows. First, it discusses what the DSU (Understanding on Rules and Procedures Governing the Settlement of Disputes) allows by way of third-party participation. Second, it elaborates a hypothesis on how third parties shape rulings, conditional on the fact that they first undermine early settlement, and then turn to our findings. Third, it looks at the evidence concerning third-party participation in cases filed by poor complainants. The chapter concludes by examining the various proposals for reforming third-party rights under the DSU and how these might bear on developing countries, in particular.

This chapter discusses WTO (World Trade Organization) dispute settlement and enforcement provisions. The mechanism used by the WTO is unique to that institution, and the procedures are formal and binding rather than by diplomatic means. The sections of the chapter are as follows: The WTO dispute settlement procedures; Operation of the system; Systemic issues; The domestic dimensions of enforcement; and Conclusion.

This chapter explores whether EC Free Trade and Investment Agreements (FTAs) present a new, alternative model for addressing human rights in foreign investment regulation and dispute settlement. It provides an overview of the scope of foreign investment regulation in EC FTAs, highlighting their limited, but innovative approach to foreign investment. It then describes the dispute settlement mechanisms in the EC's FTAs and doubts their suitability for investment disputes in view of their failure to fully address the demands of investors, home and host countries. It considers the effectiveness and suitability of EC FTAs for addressing the human rights implications of foreign investment regulation, and emphasizes the importance given to human rights as an objective of EC FTAs and as an ‘essential element’ of the agreements. The chapter concludes with the future challenges and perspectives for FTAs, notably in view of the EC's willingness to deal with the challenges posed by the interaction between foreign investment and human rights.