Does the WTO need a New Agreement to Save its Dispute Settlement System?
The WTO’s new Director-General Roberto Azevedo is celebrating a rare event: The WTO’s entire 159-country membership has finally reached a new multilateral agreement. This is the first time that the WTO’s membership as a whole (as opposed to smaller groups of its member states) has reached an agreement since it was formed in 1994 and the first set of agreements under the so-called “Doha” round of negotiations that has been going on since 2001. Most commentary in the United States and elsewhere describe this as a pretty small-bore agreement on trade facilitation and agriculture (especially given the scope of the original agenda under Doha).
I am intrigued by some commentary coming out of Bali to the effect that a new agreement is needed to keep the WTO relevant and legitimate in the eyes of its members. The WSJ has this unattributed comment:
Some negotiators said the limited pact gives the WTO credibility to continue its other main role: as an arbiter of trade disputes.
The WTO works by consensus and the breakdown of the talks could also have hurt the organization’s dispute-settling mechanism, they said.
I guess I am skeptical that the lack of progress on new agreements will have any serious impact on the ability of the WTO’s famous dispute settlement body to stay relevant. With or without the new agreement, the WTO is already an immensely deep and complex web of legal obligations for a larger and larger set of members. Interpreting these obligations, and managing disputes, is probably significant enough to most members that they don’t feel like they need a new agreement to stay engaged.
Anyway, the Bali agreement is only a “draft ministerial declaration” which needs to be formalized next year. Then, the U.S. Congress will have a chance to vote on it (and probably the Asian and European regional trade deals). This ought to be loads of fun in a congressional election year. At least they don’t have to get two-thirds of the U.S. Senate on board.