Jean Monnet Center at NYU School of Law


II. The Heritage and Ethos of Diplomacy

There is, of course, some measure of hyperbole in talking of a "paradigm shift" in the WTO dispute resolution. The "old" dispute resolution process, all too quickly dismissed as "non juridical", did, despite the need for the consent of both parties, result in more than a trickle of Panel decisions, all of which were written in "legalese", and which did at least to some degree what legal third party dispute resolution is about: ascertaining facts, interpreting a treaty (the GATT) and applying the law as interpreted to a dispute. All very much in the manner it is done today under the new procedures.17 Even more strikingly, notwithstanding the need for positive consensus of even the losing party, most Panel Reports were in fact adopted. Finally, thanks to the seminal and always fresh work of Bob Hudec, we know that, despite the absence of an orderly regime of sanctions, most adopted reports were in fact complied with.18

And yet, it is not inappropriate to think of that "old" dispute settlement process as diplomacy through other means.19 The following features of the old dispute settlement process justify in my view this characterization.

1. The "internal" nature of disputes

A very dominant feature of the GATT was its self-referential and even communitarian ethos explicable in constructivist terms.20 The GATT successfully managed a relative insulation from the "outside" world of international relations and established among its practitioners a closely knit environment revolving round a certain set of shared normative values (of free trade) and shared institutional (and personal) ambitions situated in a matrix of long-term first-name contacts and friendly personal relationships. GATT operatives became a classical "network". This phenomenon was a result of several factors, such as the relatively restricted and homogeneous State membership of GATT which eliminated much of the Cold War tensions, the marginalization of trade diplomats within national administrations (considered a second-rate diplomatic career, often disdained by Ministries of Foreign Affairs and left to the "lowlier" trade ministries), the supposed "technical", and "professional", nature of the subject matter (considered "low politics" as compared to "high politics" which dealt with security and "real" foreign policy) and the consequent media indifference.21 Within this ethos, there was an institutional goal to prevent trade disputes from spilling over or, indeed, spilling out into the wider circles of international relations: a trade dispute was an "internal" affair which had, as far as possible, to be resolved ("settled") as quickly and smoothly as possible within the organization.22

2. The discrete nature of disputes

Although disputes might have raised broad systemic issues of relevance and consequence far beyond the immediate parties, the process tended to treat them as discrete eruptions between members requiring "settlement". This would be attempted in the pre-Panel stage23 but even if the overt diplomacy failed, empanelment was, indeed, a continuation of diplomacy by other means. In the selection of Panellists, a prime objective would be to find those who would be acceptable to the parties and most suitable to resolving the specific dispute. Very often they were diplomats or ex-diplomats, belonging to the same internal WTO network. It should be noted that some Panels, like Italian Tractors,24 were potentially of huge systemic significance. But, arguably, these might be considered more the exception than the rule.

3. The intergovernmental nature of disputes

Disputes, and their resolution, were discrete in another sense too: They were perceived as being between-"belonging to"-and pertaining to governments. The implications of GATT rules generally and the outcome of dispute resolution specifically to non-governmental constituencies were only dimly perceived.

There are, I think, two principal explanations for this: first is the classical Government-is-the-State fallacy. International law and international organizations condition a belief in the equation of the State with its Government. It would be hard to conduct international relations and engage in international legal obligations without such an equation.25 So, to regard GATT disputes in this way would be almost natural. Second, until very late in the day, perhaps until the Tuna-Dolphin disputes, my impression is that GATT practitioners genuinely failed to understand the deep social and political domestic consequences of the regime and disciplines of which they were custodians and their implications for constituencies beyond governments in general and trade ministries in particular. They should, perhaps be forgiven, since these constituencies often lived in the same blissful ignorance.

4. The confidential nature of disputes

This happy state of mutual ignorance was in part the result of the diplomatic ethos of confidentiality. Confidentiality is the hallmark of diplomacy. It is, often, a critical ingredient in "Getting to Yes"26 in delicate negotiations. It is, too, in the way illegible handwriting decipherable only by pharmacists is the hall mark of doctors and superfluous Latinisms the sine-qua-non hallmark of lawyers, a means for self-empowerment and self-aggrandizement. In GATT dispute resolution there was a double level of confidentiality: once a Panel was established, only a narrow range of actors, even within the GATT, were privy to the proceedings. At its conclusion, the outside world was treated to a perfunctory account. Even if not officially shielded and eventually finding their way into the BISD, Panel Reports were for many years hard to come by in timely fashion except for a few privileged cognoscenti. The secrecy surrounding the dispute resolution process is one of the clearest indications of its perception as diplomacy through other means.

5. Jurisprudence and Jurists' prudence27

The compliance pull of old "GATT" was, indeed, impressive given its voluntaristic nature. In talking to Panellists of that era one gets, however, the impression, difficult to prove empirically, of an ethos which favoured 5:4 outcomes rather than 9:0. Crafting outcomes which would command the consent of both parties and thus be adoptable was the principal task of the Panellists. Custodianship over the Law of the GATT was far from both the minds, and let us be frank, the ability of many Panellists. Both the drafting of Reports and the legal "mumbo-jumbo" were left in the hands of the secretariat. This is not to argue that the law did not play an important constraining role. It did. But it was construed in a context which put a premium on settlement and acceptability, and in a finely tuned process which often combined the diplomatic skill and reflex of the panel with the legal expertise of the Secretariat. There is an unintended honesty in the style of most Panel Reports: They are written in Third Party Reporting style: "the Panel considered, the Panel deliberated et cetera". It is honest since the writer is typically the legal secretary to the Panel, himself or herself a member of the Secretariat reporting to his or her supervisor. It often shades the truth in that the legal deliberation will often have taken place between legal secretary and other members of the Secretariat and not, in any meaningful sense within the Panel.

17 See e.g., DSU, as note 3, above, arts 11, 12. Indeed, according to one particularly authoritative assessment, in the mid 1950s, the GATT dispute settlement system underwent its first dramatic shift to juridification. Rather than a "working party" composed of governmental representatives, a dispute would be referred to a "panel" of trade experts who would act in their own capacities, not as representatives of certain governments. This development heralded a shift from a "negotiating" atmosphere to a more "judicial" procedure in addressing trade disputes. John H. Jackson, The World Trading System (2nd edn, 1997), pp. 115-116.

18 See Hudec et al.,as note 13, above, at pp. 7-8.

19 See generally Robert E. Hudec, The GATT Legal System: A Diplomat's Jurisprudence, 4-J.W.T.615 (1970), pp. 615-616. Reich, From Diplomacy to Law: The Juridicization of International Trade Relations, 17 Nw. J. Int'l L. & Bus. 775 (1996-1997).

20 For a general understanding of constructivism and its application in different contexts, see, e.g. Friedrich Kratochwil, Rules, Norms, and Decisions: On the Conditions of Pratical and Legal Reasonong in International Relations and Domestic Affairs (1989); Alexander Wendt, Collective Identity Formation and the International State, 88 Am. Pol. Sci. Rev. (1994), p. 384; Peter J. Katzenstein, The Culture of National Security: Norms and Identity in World Politics (1995); Martha Finnemore, National Interest in International Society (1996).

21 Part of the political problems now facing the WTO is the result of a change in all these factors. Membership is far larger and heterogeneous; there are much deeper divisions and tensions between North and South, East and West, Europe and the USA; there are many new faces and greater difficulty maintaining the previous clubiness.

22 There were exceptions to this and some disputes became visible beyond the GATT horizon e.g. the 1962 Uruguayan claim against all developed countries, the so called "Chicken War" of the 60s and the US-EC DISC cases. See Uruguayan Recourse to Article XXIII, Panel Reports, adopted on 16 November 1962, GATT B.I.S.D. (11th Supp.) at 95 (1962), on 3 March 1965 GATT B.I.S.D. (13th Supp.) at 35 (1965), and on March 3 1965 GATT B.I.S.D. (13th Supp.) at 45 (1965); United States/European Economic Community Negotiation on Poultry, 21 November 1963, GATT B.I.S.D. (12th Supp.) at 65 (1964), L/2088; United States-Income Tax Legislation (DISC), 2 November 1976, GATT B.I.S.D. (23rd Supp.) at 98 (1976), L/4422.

23 See note 17, above.

24 Italian Discrimination against Imported Agricultural Machinery, Panel Report adopted on 23 October 1958, GATT B.I.S.D. (7th Supp.) (1958), p. 60.

25 That diplomats believe in this may be excusable. That whole chunks of the discipline of international relations operate on this premise is a bit less so.

26 Getting to Yes: Negotiating Agreement Without Giving In (Roger Fisher et al. eds., 1983), p. 134. ("Good faith negotiation does not require total disclosure. Perhaps the best answer to question such as `What is the most you would pay if you had to' would be along the following lines: `Let's not put ourselves under such a strong temptation to mislead. If you think no agreement is possible, and that we may be wasting our time, perhaps we could disclose our thinking to some trustworthy third party, who can then tell us whether there is a zone of potential agreement.' In this way it is possible to behave with full candor about information that is not being disclosed."). See also, A. Eban, Diplomacy for the Next Century (New Haven, Yale University Press, 1998), p. 78.

27 Cf. Ted L. Stein, Jurisprudence and Jurists' Prudence: The Iranian-Forum Clause Decisions of the Iran-U.S. Claims Tribunal, 78 Am. J. Int'l L. (1984), p. 1.



This site is part of the Academy of European Law online, a joint partnership of the Jean Monnet Center at NYU School of Law and
of the Academy of European Law at the European University Institute.
Questions or comments about this site?