April 2012

VJIL Symposium: Sungjoon Cho Answers to Kelly, Shaffer, and Trachtman

[Sungjoon Cho is currently a Visiting Professor of Law at Northwestern University School of Law. He is also Professor of Law and Norman and Edna Freehling Scholar, Chicago-Kent College of Law.] 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 of all, I would like to thank Profs. Shaffer, Trachtman and Kelly for their valuable comments my Article, "Beyond Rationality: A Sociological Construction of the World Trade Organization." I feel fortunate to have these rich and provocative exchanges on this important issue. Let me start my response to their comments by reiterating that I do not intend to question the merits of Profs. Shaffer and Trachtman’s substantive arguments. The authors’ institutional scrutiny is analytically clear, rhetorically powerful, and offers a simple yet powerful heuristic on the WTO and its affairs. My critique centers on their methodological framework, which many International Relations (IR) scholars, such as Robert Keohane and Alex Wendt, would categorize as “rationalism.” Profs. Shaffer and Trachtman basically draw on the “comparative institutional analysis” developed by Neil Komesar, which focuses on the availability of alternative choices in understanding the development of a particular institution. In general, this approach belongs to the school of “new institutional economics” espoused by Douglas North and Oliver Williamson. According to this theory, all institutions are invariably accompanied by transaction costs and therefore can be replaced by alternatives. In the same vein, the WTO is a welfare-maximizing contract within this theoretical framework (Shaffer & Trachtman, p. 111). As the authors might agree, no framework is perfect and rationalism is no exception. Rationalism inevitably leaves some paradigmatic blind spots, which tend to obscure a more complete understanding of the WTO. I maintain that we need to identify those blind spots, and that an alternative framework, such as the one I propose here, could brighten our picture of the WTO. I do not argue for “taking sides.” In fact, I also employed a law and economics methodology in another paper addressing a different issue. Granted, Profs. Shaffer and Trachtman do acknowledge the value of ideational (non-rationalist) parameters, such as “ideas” and “community.” In fact, their mission statement explicitly aims for the exploration of a “law and society” perspective. Nonetheless, their work gives only passing attention to social dynamics. It does not appear that their analysis seriously engages the social, or sociological, aspects of the decision-making process. For example, when they mentioned the “interpretive community” they could have engaged in substantive discussions that involve judicial internalization or the role of interlocutors and norm sponsors. In contrast, those “choices” correspond to consequentialist considerations informed by efficiency concerns. Therefore, it is hard to accept that they view WTO norms as a discursive device powered by the WTO members’ shared understandings or behavioral expectations.

VJIL Symposium: Gregory Shaffer and Joel Trachtman Comment on Sungjoon Cho’s “Beyond Rationality”

[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. We are grateful to Professor Cho for writing this Article (Beyond Rationality: A Sociological Construction of the World Trade Organization) as a critique of our earlier Article (Interpretation and Institutional Choice at the WTO). Our article examined the choices in WTO interpretation in terms of their institutional implications, which in turn affect social welfare and participation in social decision-making. Cho’s main point is that our approach is “blindsided” by failing to understand WTO rules and interpretations from the standpoint of a discourse-based constructivist or sociological approach. He contends that norms at the WTO arise from discourse, and that actors judge the behavior of others and formulate their own behavior on the basis of these constantly evolving norms. Cho’s article, in our view, does not engage with our central focus — which is to increase understanding of what is at stake in WTO drafting and interpretation in terms of the implications for not only social welfare, but also (and relatedly) for participation in social decision-making processes. We did not aim with this article to take sides in the rationalist-constructivist debate. We rather believe that our framework is open to addressing the role of both ideas and interests, and is by no means “textualist determinist” (p. 325) and “rationally predetermined” as Cho contends (pp. 325, 334, 347, 353). Readers of our article and users of our analytic framework can decide for themselves. To turn to Cho’s sociological approach, it seems to imagine a closed discursive community endogenously or autopoetically generating norms. Our approach highlights instead the exogenous consequences of interpretive choices, however those interpretive choices are informed, including by norms developed interactively, or by interests and perspectives that are not endogeneous to the “WTO community.” We question what it could possibly mean for welfare (however one views it) for the world to be structured as Cho conceives of it, as a place where international organizations such as the WTO have an internal discourse that determines norms which in turn determine behavior. How would these norms be judged? Cho argues for some independent “values”-based metric, but seems to fail to recognize that different individuals have different values, perspectives, and priorities; that different states represent different constituencies; and that what people value and prioritize affects welfare. Our framework, in contrast, makes clear how interpretive choices allocate authority to different institutional decision-making processes, which mediate expressions of diverse values and priorities in different ways (each of them imperfect, but some better than others in different contexts).

VJIL Symposium: Doctor, Heal Thyself – A Commentary on Professor Sungjoon Cho’s Critique of Shaffer and Trachtman

[Claire Kelly is a Professor of Law at Brooklyn Law School.] 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. Thank you very much to Opinio Juris for this opportunity to comment on this set of Articles recently published in the Virginia Journal of International Law. To address rationalism’s failings, Professor Cho prescribes a constructivist or sociological lens in his Article, "Beyond Rationality: A Sociological Construction of the World Trade Organization." While I wholeheartedly agree with Professor Cho's desire to supplement the rationalist account with a sociological perspective, I would challenge him to address the same normative biases of powerful countries in that sociological framework. Indeed, concerns regarding “participation, transparency, accountability, and legitimacy” are perhaps more pronounced in the sociological account. It is not clear to me that the sociological account adequately addresses them either. In response to Gregory Shaffer and Joel Trachtman’s "Interpretation and Institutional Choice at the WTO," Professor Sungjoon Cho aptly reminds us to consider the sociological framework in international law as it sheds light on “institutional evolution and development concerns” largely overlooked by the rationalist framework. Professor Cho makes several important points. First, rationalism like any theory is not perfect. It cannot explain everything. Although it attempts to predict what rational actors might do, it can overlook what real actors “whose rationality is in fact bounded” do. Second, rationalism’s preference for textualist interpretation undervalues the possibility of endogenous change. Third, the rationalist lens fails to account for the normative biases inherent in a system where powerful countries bargain with less powerful ones. This normative blind spot along with normative concerns of "participation, transparency, accountability, and legitimacy" are given little attention by the rationalist framework. Sociological communities can indeed "change what WTO members think of themselves and the nature of their perceived interests through "frames of reference." But those frames of reference are dominated by the powerful and developed states. So while the constructivist framework is useful; it too has blind spots. The same questions of transparency, accountability, participation and legitimacy arise when one looks through a constructivist lens as when one looks through a rationalist one. Those questions are all the more important in this framing because the discursive dimensions of the WTO or any other institutional setting are often hidden from sight. Admittedly, the constructivist account acknowledges that the social discourse is symbiotic. No actor is immune from the influence of others. But one must suspect that some actors are more influential than others in constructing social norms.

VJIL Symposium: Introducing Sungjoon Cho’s “Beyond Rationality: A Sociological Construction of the World Trade Organization” – A Critique of “Interpretation and Institutional Choice at the WTO” by Professors Shaffer and Trachtman

[Sungjoon Cho is currently a Visiting Professor of Law at Northwestern University School of Law. He is also Professor of Law and Norman and Edna Freehling Scholar, Chicago-Kent College of Law.] 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...

VJIL Symposium: Gregory Shaffer and Joel Trachtman Answer to Brewster, Howse, and Pauwelyn

[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. We were delighted to learn that Profs. Brewster, Howse, and Pauwelyn had agreed to comment on our article, Interpretation and Institutional Choice at the WTO, on Opinio Juris. Their comments add to our understanding of the important question of how drafting and interpretive choices made by treaty-writers and judges can be understood in terms of allocation of authority. Rachel Brewster adds some important dimensions to this study, asking whether we can identify pro-liberalization or majoritarian impulses in Appellate Body decision-making. Rob Howse illuminates these questions by noting that the Appellate Body seems determined to resist pressure from other branches of the WTO. Howse also highlights the delicate and evolving line that the Appellate Body seems to tread between referring to non-WTO international law in circumstances where it may be jurisprudentially questionable to do so, and avoiding the challenge to the legitimacy of the WTO legal system that might arise if the Appellate Body were to ignore non-WTO international law in its decision-making. The commentators capture our aim to provide an analytic framework for helping lawyers, judges, scholars, students, and policy makers understand and evaluate institutional choices in the drafting and interpretation of the WTO agreements. These choices have welfare and distributive consequences, which are mediated by how the choices delegate and allocate authority to different social decision-making processes. In the article, we apply the framework both to choices in the drafting of the WTO agreements and their interpretation in case law. Our goal in writing the article was to provide an analytical template in order to highlight the ways in which different drafting and interpretive choices may be understood in terms of their allocation of decision-making to different institutions, including the market, ultimately affecting social welfare and participation. Some lawyers and legal scholars may feel uncomfortable with the social science convention that positive assessment is not to be influenced by normative analysis, but is rather to inform it. In our article, we follow this convention and avoid providing our own normative assessment of the interpretive choices made by treaty-writers and judges. Our comparative institutional analysis is rather intended to illuminate the consequences of choice by providing a template for analysis. For example, interpretive choices include the decision to limit the role of non-WTO law in WTO dispute settlement, or to defer to certain standard-setting bodies in WTO dispute settlement. We do not engage in empirical analysis of the impact of these choices in particular cases. Rather, we draw suggestive links between these choices and dependent variables that can be understood as normative desiderata: principally, welfare enhancement and participation in social decision-making. We explicitly note that there are tradeoffs in these institutional choices, and that the tradeoffs must be evaluated both generally and on a case-by-case, contextually-situated, basis.

VJIL Symposium: Joost Pauwelyn Comments on “Interpretation and Institutional Choice at the WTO”

[Joost Pauwelyn is Professor of International Law at the Graduate Institute of International and Development Studies in Geneva, Switzerland.] 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. Thank you to Opinio Juris and the Virginia Journal of International Law for inviting me to participate. This Article, by Greg Shaffer and Joel Trachtman, makes the important point that choices in treaty drafting and judicial interpretation allocate authority. For example, a choice for rules (instead of standards) or reference to non-WTO norms and expert advice (instead of WTO law only) allocates authority, respectively, to negotiators (instead of the judiciary) and to other bodies or experts (instead of the WTO). This is clear and convincing. From there, however, the authors make an extra and less convincing step: after (descriptively) linking choice to authority they then (normatively) link type of authority to welfare and participation levels arguing, for example, that treaty drafters (setting rules) can be presumed to “maximize welfare” and offer more “transparency, accountability, and legitimacy” than the judiciary (applying standards) (p. 111). A similar hierarchy is presumed putting the WTO above standard-setting bodies such as Codex or the ISO, on the view that the latter “evade the need for consensus within the WTO” (p. 113) and are “subject to capture by certain interests” (p. 114). I find it extremely difficult to make such generalizations about which type of authority is “better” in welfare and participation terms (Instead of gauging the consequences of interpretative choices it may be more productive to think about the underlying reasons for such choices, as I tried to do here with my co-author Manfred Elsig). Today’s reality is that authority flows from an increasing diversity of sources (national & international; public & private; political, judicial & expertise etc.). Unless one makes the broadest of assumptions (e.g., “if we ignore strategic problems and asymmetric allocation of power”, at p. 111; elsewhere, equating all of WTO law to trade liberalization and on that basis implying that the WTO is more “efficient”, p. 132), it no longer makes sense to presume that one source is, by definition, “better” than another (e.g. that negotiators or the WTO do a “better job” than judges, experts or other institutions). It all depends on the task at hand (for some things politicians are better; for others, judges, experts or the market) and the detailed set up of the authority in question (how does it operate; who is included; what is its reputation and support?), rather than its type. Nor do we have to make a binary choice between this or that authority: the WTO can refer to outside standards yet at the same time exercise judicial control over those standards (as the recent Panel on US – Tuna Label did, checking the inclusiveness and transparency of the standard); it can refer to scientific or economic experts for factual matters, defer to national authorities for appropriate levels of protection but leave decisions on legal criteria in the hands of WTO panels.

VJIL Symposium: Robert Howse Comments on “Interpretation and Institutional Choice at the WTO”

[Robert Howse is the Lloyd C. Nelson Professor of International Law at the New York University School of Law.] 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. The Article by Shaffer and Trachtman is a tour de force: it identifies and explains many of the most important interpretative choices that panels and the Appellate Body have made in adjudicating disputes under WTO law, and speculates on the implications for the WTO as an institution, its economic and political economy functions, and for the relation between international law and politics, both domestic and transnational. I assigned this article in one of the introductory classes for my advanced course in WTO law at NYU, because it canvassed so many of the issues that students need to think about when they are consider the WTO case law as a jurisprudence. One of the issues that the authors discuss, which intersects with my own scholarship about the WTO and about fragmentation in international law more generally, is the role of non-WTO international law in WTO dispute settlement. Here the authors place considerable emphasis on the EC-Biotech case, where the panel made a highly dubious interpretative choice to exclude non-WTO international law relevant to to the regulation of GMOs from its consideration of the meaning of the WTO norms at issue. The authors thus tend to the conclusion that non-WTO has been marginalized in WTO dispute settlement, with possibly serious consequences for the legitimacy of the system; as they note, on such a scenario, there is an effective assertion of the supremacy of WTO rules or other international law norms that may be applicable to the matter at hand. Can such a supremacy be sustained legitimately from the perspective of the international legal system as a whole? My sense is that the Appellate Body is cautiously distancing itself from the narrow approach in EC-Biotech. In EC-Aircraft, the Appellate Body, seemingly influenced by the ILC Working Group on Fragmentation Report, suggested that considerations of systemic integration in international law might suggest a fuller embrace of non-WTO international law in appropriate cases, even where not all WTO Members are parties to the non-WTO international agreement. In the China-AD/CVD case, the AB based its interpretation of an important concept in the WTO Subsides and Countervailing Measures Agreement (that of a "public body") almost entirely upon the ILC Articles on State Responsibility. I sense that the AB has returned the orientation of the jurisprudence to the greater openness to non-WTO international law that had been displayed much earlier in the case of Shrimp/Turtle, where the AB brought a number of non-WTO international legal instruments into its adjudication of that dispute, particular those concerned with biodiversity. A very shrewd observation of the authors is that, in a number of doctrinal areas, the AB has chosen approaches that entail judicial balancing, or case-by-case weighing of multiple factors or considerations, to "bright lines." They are right that such an interpretative choice tends to be very (self-) empowering of the judicial branch. It is also a way of managing political conflict or disagreement in a fashion that may help preserve the legitimacy of the judiciary, since "bright lines" can often appear to favor systematically one value or one constituency over another in an area of normative contestation (the authors discuss the now clearly rejected (Shrimp/Turtle) "bright line" that the unadopted Tuna/Dolphin panels invented on PPMs, which systematically excluded a whole range of activist environmental strategies from consistency with WTO law): here we should consider Cass Sunstein's thinking about "one case at a time."