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How to Treat the WTO's Problem with Precedent

Updated: Oct 16, 2021

By: Timothy Meyer

This Article argues that the World Trade Organization’s Appellate Body (AB), or a successor body, must become more transparent in justifying its decision to rely (or not) on prior decisions. The AB’s practice of precedent—which the United States cited as a cause of its decision to paralyze the AB by blocking new appointments—is similar to how it has approached “likeness” in nondiscrimination cases. It placed a lot of weight on whether two cases (or products) are sufficiently similar to be compared, and it spent relatively less time substantively justifying its treatment of prior cases. Because the WTO does not have a system of stare decisis, the AB and WTO panels generally must explain why they find prior decisions persuasive, rather than simply relying on similarity to justify carrying prior interpretations forward.

The Article begins by examining and evaluating the results of a new study from Jeffrey Kucik and Sergio Puig, the first study to use a large dataset to study the AB’s use of precedent. The Article then advances a framework for how WTO dispute panels should evaluate the relevance of prior cases in future disputes. The proposed approach would treat the comparison of cases as merely a threshold inquiry. If two cases are sufficiently alike and one party contests the applicability of the prior decision, then a tribunal must substantively justify its treatment of the prior decision in light of a variety of factors. In some instances, the result may be that the AB or a panel acknowledges that a prior interpretation was wrong and should not be followed. Openly analyzing the persuasive value of prior cases, and acknowledging when those cases should not be followed, would better promote the goals of relying on prior decisions—promoting predictability, transparency, and coherence in the law’s application—as compared to deference to prior decisions based only on the similarity of two disputes.


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