11 Apr VJIL Symposium: Introducing “Interpretation and Institutional Choice at the WTO”
[Gregory Shaffer is the Melvin C. Steen Professor of Law at the University of Minnesota Law School. Joel P. Trachtman is the Professor of International Law at the Fletcher School of Law and Diplomacy at Tufts University.]
This post is part of the Virginia Journal of International Law Symposium, Volume 52, Issues 1 and 2. Other posts in this series can be found in the related posts below.
First, we would like to thank the Virginia Journal of International Law for inviting us to participate in this online discussion and Opinio Juris for hosting this discussion on our recent Article, “Interpretation and Institutional Choice at the WTO.”
Our article develops a new framework for understanding the drafting and interpretation of the agreements of the WTO, based on comparative institutional analysis. Our aim is to provide a better means for describing and assessing the consequences of choices in treaty drafting and interpretation. Both treaty drafting and judicial interpretation implicate a range of interacting social decision-making processes, including domestic, regional, and international political, administrative, judicial, and market processes — which we collectively refer to as institutions. Our framework focuses attention on the way that choices among alternative institutions implicate different social decision-making processes, thereby affecting participation and welfare. We draw on specific examples from WTO case law to illustrate our framework. While our article focuses on the WTO, the framework that we develop has general relevance for understanding the interpretation of international and domestic legal texts from “law and economics” and “law and society” perspectives. It builds on work by Grief, Komesar, North and Williamson. We develop further the comparative institutional analysis suggested by these and other authors.
Like any dispute settlement body confronting a legal text, WTO panels and the Appellate Body have choices in applying the text to particular factual scenarios that are not specifically addressed by the text. More than one WTO provision or WTO agreement may apply to the factual situation, whether the provisions are drafted as fairly precise rules, more open-ended standards, or exceptions. The resolution of these interpretive arguments has important consequences, not only regarding who wins or loses a particular case, but also regarding broader systemic issues of domestic and international policy.
These consequences of treaty interpretation can be viewed in welfare terms (regarding the efficiency and distributive consequences of a particular interpretation) and in participatory terms (regarding the quality and extent of participation in the decision-making processes at issue). In terms of participation, we describe the effect of a WTO interpretive choice on the allocation of authority over a particular issue to different social decision-making processes, such as domestic political and administrative processes, international political and administrative processes, markets, and judicial bodies. These choices affect the degree of transparency, accountability, and legitimacy of social decision-making. In addition, by deciding among such institutional alternatives as incorporation of international standards, judicial balancing, delegation to markets, national deference, and process-based review, these choices implicate which social decision-making process decides a particular policy issue, thereby affecting in particular ways the institutional mediation of individual preferences. The quality and extent of participation can serve as a proxy for both efficiency and distributive consequences. The different dynamics of participation characterizing different institutional fora will determine the pursuit of a particular social goal, whether it be resource allocation efficiency, justice as fairness, human rights, sustainable development, or some other goal. All of these goals are susceptible to inclusion in a welfarist analysis and all are captured within our framework.
By comparatively analyzing the institutional dynamics associated with different choices, we may begin to understand, and make explicit, how choices in treaty drafting and interpretation affect the articulation and institutional mediation of preferences. In this way, they affect domestic and global economic welfare.