WTO NEWS: SPEECHES — DG PASCAL LAMY
> Pascal Lamy’s speeches
Good morning and thank you all for joining us in this reunion to commemorate the 30th anniversary of the Legal Affairs Division.
I will resist the temptation to start my intervention today with a joke about lawyers. Instead, I would like to tell you a little bit about how the GATT came to have a Legal Affairs Division.
Some thirty years ago, Arthur Dunkel appointed Hielke Van Tuinen as the first GATT Director of Legal Affairs. Van Tuinen’s appointment opened the way for the creation, a few months later, of the Office of Legal Affairs and eventually of the GATT Legal Affairs Division.
Mr Dunkel’s decision to create a legal office in the GATT Secretariat would not have been taken lightly, as the GATT community generally was resistant to introducing all forms of legalism. Fortunately, none followed the advice of Dick the Butcher in Shakespeare’s Henry the Sixth to ‘kill all the lawyers’. But it must be said that old-school trade diplomats were quite sceptical about having lawyers meddle in the interpretation of rules that had been so carefully negotiated. So Mr Dunkel was a brave man.
In a house no stranger to irony, the office of legal affairs was created on the condition that the head of the office not be a lawyer.
During the first years of the GATT, trade diplomats saw themselves as ministers of an exclusive, esoteric code. To a large extent, they were. The original GATT rules applied to a small group of countries and those rules were not always easy to understand by the uninitiated. As famously quoted by John Jackson, Senator Millikin — then Chairman of the US Senate Finance Committee — said in 1951 that ‘Anyone who reads GATT is likely to have his sanity impaired’.
Many of the GATT diplomats at the time had been personally involved in drafting the rules, so they had strong convictions about how they should be understood. When trade disputes arose, the emphasis was not on passing legal judgement on whether a measure violated GATT rules, but rather on finding politically-acceptable solutions. To ensure that outcome, disputes were referred to working parties comprising the countries directly involved. A working party report could be approved only by consensus, including with the acceptance of all parties to the dispute.
The approach was expedient and may have served well the GATT contracting parties for the initial years. But it soon became insufficient. New contracting parties joined the GATT and new diplomats replaced the original negotiators. It was not always possible to rely on the personal experience of trade diplomats to explain the sometimes rather obscure legal passages that their predecessors had crafted. More importantly, for the GATT to serve its fullest potential as a framework to promote trade and investment, it was important that the rules were applied in a transparent and predictable manner. This did not necessarily coincide perfectly with endeavouring to find a solution that was diplomatically acceptable to all parties.
And so came about Eric Wyndham White’s initiative in the mid-1950s to refer trade disputes to panels of experts, instead of the traditional working parties. From then on, panels would not include the parties involved in the dispute and panelists would be tasked with issuing objective and neutral rulings. The transition from working parties to panels may have seemed an insignificant technical step for the system, but it represented one giant leap in legal and political terms.
The evolution did not stop there, of course. Over the following decades, GATT contracting parties continued to introduce changes in procedures, moving to a dispute settlement system increasingly based on rules.
As trade law experts, you will be aware of the codifications, decisions and amendments adopted in 1966, at the end of the Tokyo Round in 1979, in the Ministerial Declaration of 1982, in the decision on dispute settlement in 1984, and in the decision on improvements to GATT dispute settlement adopted in 1989.
Most significant, however, were the bold changes that Members introduced at the end of the Uruguay Round, when they adopted the Dispute Settlement Understanding. As a result, WTO Members enjoy one of the most successful systems for dispute settlement on the international plane, one that has proved to be extremely robust and efficient.
In the 17 years since 1995, Members have brought 439 trade disputes to the WTO. Many of these disputes have been solved by direct consultations between the parties. Indeed, dispute settlement panels have only been composed in 206 cases, less than half of the disputes. This is despite the virtually automatic right to have a panel established whenever a WTO Member considers that consultations have failed to bring about a resolution to a dispute.
Of those disputes that move forward beyond consultations, many are resolved by the parties, either during the panel stage or the appellate review. In fact, panel reports have been adopted for only some 177 disputes so far, corresponding to around 40 per cent of all cases brought to the WTO.
Disputes about compliance have occurred in less than 30 cases, or less than 7 per cent of disputes overall. And trade sanctions in cases of non-compliance –or suspension of concessions, as we call them under WTO rules– have occurred in only 17 cases, which is less than 4 per cent of the total number of disputes. Again, this is particularly noteworthy as the suspension of trade concessions is an almost automatic right of Members in cases of non-compliance.
There is very broad confidence in the WTO dispute settlement mechanism. Ninety-eight Members have participated in one capacity or another, which is 63 per cent of the membership. Importantly, developing Members are just as active as developed ones. Six of the most frequent complainants are developing country Members.1
In a speech last year, Nigeria’s Ambassador Agah, former chairman of the DSB, noted that the WTO dispute settlement system is also ‘remarkably efficient.’ Indeed, the average timeframe for WTO panel proceedings is 11 months, excluding the time parties take to compose their panels and translation time. This compares quite favourably to the 4 years average length for proceedings at the International Court of Justice, 2 years on average at the European Court of Justice, 3 and a half years to complete an investment dispute before the International Centre for the Settlement of Investment Disputes at the World Bank, and 3 and 5 years on average for NAFTA proceedings under Chapters 20 and 11, respectively.
Of course, there are areas where the dispute settlement rules can be clarified and perfected. These are being addressed in the current negotiations for the improvement and clarifications of the DSU. But Members are justifiably proud of our system, even in its current form. It serves a key role in assisting Members to find mutually acceptable solutions to their disputes; solutions that are in conformity with their obligations under the treaties they have so painstakingly negotiated.
In seeking to resolve trade disputes, GATT contracting parties and WTO Members have benefitted from the hard work and dedication of the Secretariat. Members regularly express appreciation during DSB meetings of the work of WTO staff members who ably and professionally serve panels and the Appellate Body. Indeed, we all owe a debt of gratitude to them and to the Directors that have guided them, most of whom are with us today. Chapeau to Hielke, Åke, Frieder, Bill, Pieter Jan, and Bruce. We also have in this room many past members of the staff of the Legal Affairs Division, some who have travelled long distances to be present at this reunion. May I say to them, welcome home. Finally, let me salute the current members of the Legal Affairs Division, who, under the able leadership of Valerie, have always shown remarkable dedication and professionalism. Without them, “the unsung heroes of the disputes”, the WTO dispute settlement mechanism would not continue to enjoy the outstanding reputation that it does.
During the last 65 years, we have witnessed a remarkable journey, from an obscure, minimalistic and at times hermetic trade agreement between a limited number of parties, to an ambitious, complex multilateral trade system that binds 155 members — so far! — through diverse and sometimes complex rules.
In this long and gradual journey, we have been fortunate to be guided by many eminent thinkers. One of them has done us the honour of joining us today. Professor John Jackson visited the GATT Secretariat in the mid-1960s as a researcher. The result of that early visit is contained in his seminal book, ‘World Trade and the Law of GATT’ first published in 1969. This was the first major, comprehensive effort to systematize the rules of the GATT and to translate them from the obscure language that, to quote Senator Millikin again, risked impairing the mental sanity of readers, into a coherent set of principles that could usefully guide government officials, international civil servants, private business, and students of GATT law.
More than 40 years later, we continue to be indebted to the work of Professor Jackson. Indeed, countless trade law practitioners, including Appellate Body Members, staff members of the WTO secretariat and delegates, many of whom are present in this room, had the privilege to study under John.
And we are lucky that John continues to stimulate our thinking on trade issues. After retiring from a distinguished career at the University of Michigan, Professor Jackson joined the faculty of Georgetown University, where he created the Institute of International Economic Law and founded the Journal of International Economic Law. He has also been a strong advocate of the multilateral system. He was part of the group of eight eminent persons appointed by my predecessor and chaired by Peter Sutherland to reflect on the Future of the WTO. In the final report of that group, the section on dispute settlement, coordinated by Professor Jackson, notes: ‘By most accounts and most measures, the operation of the [WTO] dispute settlement system… has been a remarkable success.’
It goes without saying that the success is owed in no small measure to scholars like John Jackson.
One of John’s many talents is the ability to translate complex rules into clear ideas: transforming these mind-boggling provisions, in fact, almost into children’s games. Indeed, the opening section of John’s ground-breaking book on trade law, ‘The World Trading System’, identifies some “puzzles” illustrating the complexities of international trade relations. So we thought we would return the favour. As a token of appreciation for his lifetime of work in support of the multilateral trading system and his invaluable contribution to international trade law, and for joining us today, I would like to present Professor Jackson with a special puzzle of his own as a souvenir of this reunion.
[Hands puzzle to Professor Jackson.]
I welcome you all to this reunion to commemorate the 30th anniversary of the Legal Affairs Division and wish you a productive and enjoyable day of discussions.
Thank you for your attention.
Notes:1. Argentina, Brazil, India, Korea, Mexico, Thailand. Back to text