PRIVATE PARTY STANDING IN THE WTO: TOWARDS JUDICIALIZATION OF WTO DECISIONS IN U.S. COURTS

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1 PRIVATE PARTY STANDING IN THE WTO: TOWARDS JUDICIALIZATION OF WTO DECISIONS IN U.S. COURTS KOHSHI ARNOLD ITAGAKI* ABSTRACT Only member states of the World Trade Organization (WTO) are authorized to initiate disputes under the WTO s dispute settlement procedures to remedy violations of WTO Agreements by other member states. There has been debate as to whether the WTO dispute settlement procedures should be expanded to allow private parties, such as corporations and non-governmental organizations, the opportunity to initiate disputes. The overwhelming use of the dispute settlement procedures by developed countries and significant underuse by developing countries suggest an imbalance in the system of WTO dispute settlement. It has been argued that this incongruity may be alleviated if private parties could initiate disputes that developing countries cannot afford or lack the expertise to initiate themselves. The United States legislature has made clear that decisions by the WTO are not self-enforcing. Instead, they merely represent recommendations for how the United States should respond, rather than signifying international obligations. Similarly, U.S. courts tend to treat decisions by the WTO as non-binding, choosing instead to defer to the legislature regarding appropriate action (or non-action) to adverse decisions by the WTO against the U.S. government. Nevertheless, U.S. courts have judicially created doctrines at their disposal to assess legislative actions invoking issues of international law and may strike down a statute as unreasonable if it is in violation of the United States international obligations. This Note examines the potential impact that private party standing will have on the treatment and weight of WTO decisions in U.S. courts. It presents the proposition that WTO decisions may have binding authority in U.S. courts ( judicialization ) as international obligations. Such an effect, however, may only be invoked in specific circumstances where (1) a private party files a suit in U.S. court against the U.S. government (2) relying on a WTO decision in favor of that same private party (3) for the government s failure to comply (including * J.D. Georgetown University Law Center, expected May 2015; B.A., magna cum laude, Rutgers University, The author would like to thank Professor John J. Jackson for his thoughtful and critical feedback on an earlier version of this Note. The author also thanks the editors and staff of the Georgetown Journal of International Law for their time and assistance, and his family and friends for their continuous support. 2014, Kohshi Arnold Itagaki. 1265

2 GEORGETOWN JOURNAL OF INTERNATIONAL LAW non-action) with the WTO decision in favor of the private party. Public policy constraints to the potential judicialization of WTO decisions, however, may force U.S. courts to defer to Congress on how to treat WTO decisions in light of private party standing. I. INTRODUCTION II. IN SUPPORT OF PRIVATE PARTY STANDING IN WTO DISPUTE SETTLEMENT PROCEDURES A. Policy Rationale to Support Private Party Standing in the WTO B. Arguments Against Private Party Standing in the WTO III. U.S. STATUTES ON TREATMENT OF WTO DECISIONS IN U.S. COURTS IV. JUDICIAL DOCTRINES ASSESSING WTO DECISIONS AND MEASURES TAKEN BY CONGRESS V. HOW U.S. COURTS REVIEW WTO DECISIONS AND CONGRESS S WTO-INCONSISTENT ACTIONS A. U.S. Courts Expressing Relevance of WTO Decisions in Their Analysis B. Corus Staal and the Cases Thereafter: Near-Absolute Deference to the Legislature C. Judicial Review of Reasonableness of Commerce s Responses to WTO Decisions VI. POTENTIAL JUDICIALIZATION OF WTO DECISIONS BY U.S. COURTS A. U.S. Courts Leaving Open the Possibility of Judicializing WTO Decisions B. Applying Judicially-Created Doctrines to Recognize WTO Decisions as Binding C. The Weight of WTO Decisions as Evidence for Causes of Action Before U.S. Courts VII. LIMITS ON THE JUDICIALIZATION OF WTO DECISIONS IN U.S. COURTS A. Overcoming the Existing Deference to the Legislature B. The Non-Binding Nature of WTO Decisions VIII. CONCLUSION I. INTRODUCTION Since its inception, the WTO Dispute Settlement Body (DSB) has been praised by both supporters and critics of the WTO for its effi [Vol. 45

3 PRIVATE PARTY STANDING IN THE WTO ciency and for changing the face of modern international trade. 1 The WTO Agreements, which establish the DSB, are some of the most comprehensive international agreements on trade in modern history. 2 The Agreements have changed the mechanism for dispute settlements between member states. 3 When there is a trade dispute involving a WTO agreement, WTO members may invoke the WTO dispute settlement procedures to remedy alleged violations. 4 This system was initially viewed as a significant improvement over previous General Agreement on Tariffs and Trade (GATT) dispute settlement provisions 5 under which there was no enforcement mechanism to counteract member states having to comply with GATT provisions only when it was in their individual best interests to do so. 6 While representatives of all WTO members administer the dispute settlement proceedings and are permitted to utilize the dispute mechanisms, developed countries have been the most frequent utilizers of the dispute system. 7 One of the key characteristics of the WTO dispute settlement system is that only member states (i.e., countries signed 1. Keisuke Iida, Is WTO Dispute Settlement Effective?, 10 GLOBAL GOVERNANCE 207, 207 (2004); see also Robert A. Rogowsky, WTO Disputes: Building International Law on Safeguards, 50 VA. LAW. 1 (2001), available at 2. H.R. REP. NO , at 16 (1994); see generally Filicia Davenport, The Uruguay Round Agreements Act Supremacy Clause: Congressional Preclusion of the Charming Betsy Standard with Respect to WTO Agreements, 15 FED. CIRCUIT B.J. 279 (2005). 3. Sean P. Feeney, The Dispute Settlement Understanding of the WTO Agreement: An Inadequate Mechanism for the Resolution of International Trade Disputes, 2 PEPP. DISP. RESOL. L.J. 99, 99 (2002); see also Susan Tiefenbrun, Free Trade and Protectionism: The Semiotics of Seattle, 7 ARIZ. J. INT L.& COMP. L. 257, (2000). 4. JEANNE J. GRIMMETT, CONG. RESEARCH SERV., RS20088, DISPUTE SETTLEMENT IN THE WORLD TRADE ORGANIZATION (WTO): AN OVERVIEW 1-2 (2009) [hereinafter WTO Dispute Settlement Overview]. Before the current WTO DSB, the GATT lacked an enforcement mechanism to counteract states complying with GATT provisions only when it was in their best interests to do so; thus, the GATT dispute resolution was non-binding to parties involved, which was viewed as a fundamental failure in its dispute resolution system. Correcting this fundamental flaw was one of the key considerations for member states signing onto the WTO Agreement. Feeney, supra note 3, at 101; see generally JOHN H. JACKSON ET AL., LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC RELATIONS: CASES, MATERIALS AND TEXT 289 (West Group, 3d ed. 1995). 5. Carolyn B. Gleason & Pamela D. Walther, The WTO Dispute Settlement Implementation Procedures: A System in Need of Reform, 31 LAW & POL Y INT L BUS. 709, 709 (2000). 6. Michael Laidhold, Private Party Access to the WTO: Do Recent Developments in International Trade Dispute Resolution Really Give Private Organizations a Voice in the WTO?, 12TRANSNAT L LAW. 427, 430 (1999). 7. WTO Dispute Settlement Overview, supra note 4, at 2. The U.S. has represented either the complainant or defendant in about half of all complaints filed with the WTO DSB. Id. 2014] 1267

4 GEORGETOWN JOURNAL OF INTERNATIONAL LAW onto the WTO) are permitted to initiate disputes. 8 Thus, private nonstate actors, including non-governmental organizations (NGOs) and corporations, lack the standing and opportunity to initiate trade disputes under the WTO. 9 The proposition for allowing non-state actors the opportunity to initiate a dispute (private party standing) under the WTO DSB has garnered significant debate, which the WTO has yet to formally address. 10 In the United States, Congress and the judicial system have clearly stated that the measures to respond to decisions regarding WTO decisions by the DSB should be vested solely with Congress. 11 This Note seeks to intertwine two seemingly distinct areas of international trade to consider and predict their combined effect on WTO jurisprudence in the future: (1) the policy arguments in support of private party standing in the WTO dispute settlement procedures, and (2) the potential treatment of WTO jurisprudence by the U.S. judicial system if such a change were to be implemented. The purpose for the merger of these topics is to propose the potential changes in the treatment of WTO jurisprudence in domestic court systems if private party standing were permitted in the WTO. Although WTO decisions have been treated as non-binding recommendations to member states, U.S. courts may be willing to rely on WTO decisions with more binding authority in specific circumstances discussed in this Note. The parts discussed in this Note are as fragmented as they are interrelated, with the purpose being to provide as well-rounded a scope of information as possible in assessing the two abovementioned key areas of interest. As previously discussed, arguments for private party standing and the impact of such changes on U.S. jurisprudence have been kept isolated from one another, so a broad overview of several subtopics is necessary to create the appropriate context for analysis. The idea is to propose a potential course of action that U.S. courts may 8. CTR. FOR INT L ENVTL. LAW, TRANSPARENCY AND PUBLIC PARTICIPATION IN WTO DISPUTE SETTLEMENT 5 (2009), available at Dec09.pdf. 9. Id. Individuals participating in international trades under the WTO is another example of a non-state actors. 10. Compare Joel P. Trachtman & Philip M. Moremen, Costs and Benefits of Private Participation in WTO Dispute Settlement: Whose Right Is It Anyway?, 44HARV. INT L L.J. 221 (2003) (arguing in support of private party standing), with John H. Jackson, International Law Status of WTO Dispute Settlement Reports: Obligation to Comply or Option to Buy Out?, 98AM. J. INT L L. 109 (2004) (arguing that the WTO dispute settlement should remain as is) U.S.C. 3533; see also SNR Roulements v. United States, 521 F. Supp. 2d 1395 (Ct. Int l Trade 2007) [Vol. 45

5 PRIVATE PARTY STANDING IN THE WTO take in response to private party standing in the WTO decision based on a diverse context of judicial, legislative, and public policy subtopics relevant to the two main topics of this Note. Part II of this Note presents an overview of the policy arguments in support and against the possibility of private party standing in the WTO, concluding that private party standing should be allowed in the WTO dispute settlement procedures. Part III provides the relevant statutory law enacted by Congress regarding the treatment of WTO jurisprudence. Part IV defines judicially created doctrines that U.S. courts utilize in addressing issues of international trade law and international law more generally. Part V reviews the past and present treatment of WTO jurisprudence and legislative actions in response to WTO decisions. Part VI proposes the potential path that U.S. courts may take in response to private party standing in WTO dispute settlement procedures. Based on policy interests, statutes, case law, and judicial doctrines discussed in the previous sections, this Note addresses the possibility for WTO jurisprudence to create binding international obligations in the U.S. judicial system. This proposition will, however, be limited to specific circumstances where (1) a private party files a suit in a U.S. court against the U.S. government (2) relying on a WTO decision in favor of that same private party (3) for the government s failure to comply (including non-action) with the WTO decision in favor of the private party. Finally, Part VII briefly presents key limitations to the raised hypothesis in light of the statutory law addressed in Part III and the body of case law presented in Part V, which establishes the non-binding nature of WTO decisions. This section also examines the more likely outcome that U.S. courts will, as a matter of public policy, defer to Congress on how to treat WTO decisions in light of private party standing in the WTO. Nevertheless, the judicially created doctrines are available for U.S. courts to recognize WTO decisions as binding international obligations under U.S. law. II. IN SUPPORT OF PRIVATE PARTY STANDING IN WTO DISPUTE SETTLEMENT PROCEDURES Concerns have emerged regarding the current WTO dispute settlement system and whether it should be revised to better accommodate the role of non-state actors in the changing global landscape. 12 Interna- 12. Faisal A.S.A. Albashar & A.F.M. Maniruzzaman, Reforming the WTO Dispute Settlement System: A Rethink of the Third Party Right of Access to Panel and Appeal Processes from Developing Countries Perspectives, 11 J. WORLD INV. & TRADE 313 (2010). At the same time, there are procedural and 2014] 1269

6 GEORGETOWN JOURNAL OF INTERNATIONAL LAW tional trade issues overseen by the WTO have become more globally interconnected, 13 with both new countries joining the WTO 14 and countries formerly having very little impact on international trade increasing in economic strength. 15 As discussed in the subsequent paragraph, developing countries in particular have been the most vocal critics of the current WTO dispute settlement system, viewing the current regime as enforcing a system inherently biased against them. 16 Due to the dramatic rise of developing countries becoming WTO member states 17 in the past several years, one major revision to the WTO dispute settlement procedures that may be warranted is the expansion of private party involvement and standing in particular. 18 Some have argued that it is inconsistent for a dispute settlement system to allow alleged violations of WTO rules on the basis of an individual s injury, yet not permit such decisions by the WTO DSB to be enforced by individuals affected by non-implementation of applicable WTO decisions. 19 Allowing private party standing in the WTO DSB provides a practical way to ensure that developing countries can utilize the system by having their WTO disputes represented and addressed by private parties of those countries. 20 The primary revision to the WTO that may resolve some major issues policy hurdles to allow even the possibility of private party standing in WTO decisions, such as how to implement such procedures and whether amendments would be capable of garnering sufficient support by member states to be enacted. See generally Feeney, supra note Feeney, supra note Glen T. Schleyer, Power to the People: Allowing Private Parties to Raise Claims Before the WTO Dispute Resolution System, 65FORDHAM L. REV. 2275, 2276 (1997). 15. GREGORY SHAFFER, INT L CTR. FOR TRADE & SUSTAINABLE DEV., HOW TO MAKE THE WTO DISPUTE SETTLEMENT SYSTEM WORK FOR DEVELOPING COUNTRIES: SOME PROACTIVE DEVELOPING COUNTRY STRATEGIES 52, 9-13 (2003), available at Publications/Detail/?ots591 0c54e3b3-1e9c-be1e-2c24-a6a8c &lng en&id Kim Van Der Borght, Justice for All in the Dispute Settlement System of the World Trade Organization?, 39GA. J. INT L & COMP. L. 787, 789 (2011). 17. Schleyer, supra note 14, at ALBERTO ALEMANNO, PRIVATE PARTIES AND WTO DISPUTE SETTLEMENT SYSTEM 31 (2004), available at &context lps_clacp. But see GBOYEGA ALAWODE, RIGHT OF PARTICIPATION IN WTO DISPUTE SETTLEMENT PROCEEDINGS: A STUDY OF CASES INVOLVING AMICUS CURIAE BRIEFS 2 (2011) (explaining that amicus briefs have been used by private parties like NGOs during WTO dispute settlements with some frequency). 19. ALEMANNO, supra note 18, at Aaron Catbagan, Rights of Action for Private Non-State Actors in the WTO Dispute Settlement System, 37DENV. J. INT L L.& POL Y 279, 302 (2009) [Vol. 45

7 PRIVATE PARTY STANDING IN THE WTO with the DSB is to eliminate the limitation that only WTO member states can initiate trade disputes under the WTO agreement and allow private parties to initiate disputes in the WTO dispute settlement procedures as well. 21 Other methods for effectively responding to the criticisms of the WTO dispute procedures have been considered, such as allowing the private sector to offer legal services to counteract the financial hurdles to participating in the WTO dispute system 22 and increasing the rights of third parties (i.e., WTO members not parties named in a WTO dispute) to participate in the panel stage of the dispute proceedings and submit documents to the Dispute Panel. 23 While such methods are easier to implement, they fail to resolve the most inherent challenge for developing countries: the ability for developing countries to initiate WTO disputes particular to their interests without need or reliance on other countries selection of such claims. By allowing private party standing, these countries can rely on and utilize private parties to initiate disputes on their behalf regarding interests unique to them. Due to the economic and structural hurdles for developing countries, private party standing is viewed as one of the key options for ensuring participation of all WTO member states in the WTO DSB. 24 The possibility for disputes to be initiated by private persons (e.g., corporations and individual trade participants) gives disadvantaged countries the ability to have their trade concerns addressed in the WTO, despite lacking the resources necessary to initiate such claims themselves. 25 Statistical data reflects a WTO dispute system overwhelmingly utilized by developed countries; 26 the lack of expertise and necessary resources of developing countries 27 prevents them from initiating, let alone arguing, a dispute under the WTO dispute system for violations of trade rules. Thus, private party standing in the WTO has been argued as the solution to ensuring that developing countries 21. Id. 22. Chad P. Bown & Bernard M. Hoekman, WTO Dispute Settlement and the Missing Developing Country Cases: Engaging the Private Sector, 8 J. INT L ECON. L. 861, (2005). 23. Albashar & Maniruzzaman, supra note 12, at SHAFFER, supra note Marc L. Busch & Eric Reinhardt, Developing Countries and General Agreement on Tariffs and Trade/World Trade Organization Dispute Settlement,37 J.WORLD TRADE 719 (2003). 26. Matthew C. Turk, Why Does the Complainant Always Win at the Wto?: A Reputation-Based Theory of Litigation at the World Trade Organization, 31 NW. J. INT L L.& BUS. 385 (2011). 27. Joost Pauwelyn, Enforcement and Countermeasures in the WTO: Rules are Rules Toward a More Collective Approach, 94 AM. J. INT L. L. 335, (2000). 2014] 1271

8 GEORGETOWN JOURNAL OF INTERNATIONAL LAW trade rights can be protected and asserted regardless of economic power. 28 It is important to mention that the concept of private party standing in an international trade treaty s dispute procedures is not a novel proposition. Most notably, under Chapter Eleven of the North American Free Trade Agreement of 1994 (NAFTA), private investors may initiate a dispute for compensation from a NAFTA member state for enacting certain measures that adversely affect their investments in the host country. 29 While this ability for private parties has faced mixed reactions, 30 it serves as an important example of a treaty-based international trade regime that does allow private parties to initiate disputes against member states. Additionally, certain member states, including the United States, have adopted their own legislation for private parties to petition to their government to file a WTO dispute. 31 Subpart A introduces a broader discussion on private party standing to ultimately conclude that private party standing will most effectively tackle the current drawbacks of the WTO dispute system. Subpart B highlights major arguments against private party standing, along with counter-arguments to support private party standing. A. Policy Rationales to Support of Private Party Standing in the WTO It has been argued that non-state actors, such as firms, industrial associations, and organizations should play a larger role in ensuring greater equality in the WTO dispute settlement system. The role of non-state actors under the current WTO dispute settlement procedures have failed to live up to [an] actual important role in the system because they are not complainants or defendants in the WTO proceedings; their participation is generally informal; and they have typically only been involved in a limited number of cases through amicus briefs. 32 Enabling non-state actors to assert complaints and settle trade disputes would allow private parties in developing countries the ability 28. Schleyer, supra note 14, at Chris Tollefson, Games Without Frontiers: Investor Claims and Citizen Submissions Under the NAFTA Regime, 27 YALE J. INT L L. 141, (2002). 30. See generally David R. Haigh, Q.C., Chapter 11 Private Party vs. Governments, Investor-State Dispute Settlement: Frankenstein or Safety Valve?, 26 CAN.-U.U. L.J. 115 (2000) U.S.C (2012). 32. Christian Tietje & Karsten Nowrot, Forming the Centre of a Transnational Economic Legal Order? Thoughts on the Current and Future Position of Non-State Actors in WTO Law, 5EUR. BUS. ORG. L. REV. 321, (2004) [Vol. 45

9 PRIVATE PARTY STANDING IN THE WTO to initiate disputes that their governments lack the resources to bring, 33 particularly for new member states of the WTO. 34 The underutilization by developing countries of the WTO DSB is in complete opposition to the lopsided reliance of WTO dispute procedures by developed countries, which is viewed as a reflection of a flawed dispute resolution system. 35 Developed countries such as the United States and those that compose the European Union gain more out of the system because they have use of full-time staff to investigate potential issues, safeguard their rights, and enforce judgments. 36 Statistics confirm that an overwhelming number of cases are initiated by developed countries (over a two-to-one ratio). While over 100 WTO members (largely consisting of developing countries) have never raised a complaint, the top eleven users of the WTO dispute procedures account for nearly seventy percent of complaints filed. 37 Inherent institutional bias is also reflected in empirical data, suggesting poorer countries have less capacity to absorb legal costs and are thus less likely to participate in WTO litigation even when it is in their interests to initiate a dispute. 38 Therefore, having the ability to file a claim as a 33. Catbagan, supra note 20, at Id. at (providing a case study of Vietnam and citing World Trade Organization, Dispute Settlement Gateway Disputes by Country, available at tratop_e/dispu_e/dispu_by_country_e.htm (last visited Nov. 2, 2013)). 35. Feeney, supra note 3, at 108; see generally G. Richard Shell, The Trade Stakeholders Model and Participation by Nonstate Parties in the World Trade Organization, 17 U. PA. J. INT L ECON. L. 359 (1996). Several additional arguments have been made in support of private party standing. One of those is the need for greater transparency as an international dispute resolution mechanism, especially in light of an increasingly interconnected global trade economy. Timothy Stostad, Trappings of Legality: Judicialization of Dispute Settlement in the WTO, and its Impact on Developing Countries, 39 CORNELL INT L L.J. 811 (2006) (noting the ongoing efforts and arguments for increased non-state participation in the WTO processes but not so far as supporting private standing). Another argument is that non-state actors are an integral part of the WTO legal framework yet lack the ability to directly participate in the decision-making processes directly. Tietje & Nowrot, supra note 32, at But see James Durling, Rights of Access to WTO Dispute Settlement, in DUE PROCESS IN WTO DISPUTE SETTLEMENT (P. Ruttley et al. eds., 2001) (discussing the various informal avenues which non-state actors currently have in the WTO dispute settlement procedures, such as filing amicus briefs or making legal opinions available to the Dispute Panel). 36. Van Der Borght, supra note 16, at RODERICK ABBOTT, EUR. CTR. FOR INT L POLITICAL ECON., ARE DEVELOPING COUNTRIES DETERRED FROM USING THE WTO DISPUTE SETTLEMENT SYSTEM? 9 (2007), available at ecipe.org/media/publication_pdfs/are-developing-countries-deterred-from-using-the-wto-disputesettlement-system.pdf. 38. Chad P. Bown, Participation in WTO Dispute Settlement: Complainants, Interested Parties, and Free Riders, 2 WORLD BANK ECON. REV. 287, 304 (2005). It has been suggested that the passive 2014] 1273

10 GEORGETOWN JOURNAL OF INTERNATIONAL LAW WTO member state does not mean that opportunity can actually be utilized. Developing countries are also unwilling to participate in WTO proceedings because of a lack of capacity to exert pressure on export groups of developed countries through enforcement and retaliation. 39 A country s ability to enforce a ruling by the DSB in its favor against another state depends largely on the economic resources of the enforcing party. 40 Whether or not to devote resources to WTO decisions depends on competing factors: the importance of a trade decision affecting the members exports versus the cost (i.e., monetary, human resources) of conducting a case to begin with. For poorer countries, administrative problems rather than the WTO dispute settlement system itself is the determining factor in whether to initiate a dispute. 41 Thus, the cost of litigation severely discourages poor countries from initiating claims under the WTO dispute settlement procedures. 42 Not only are developing countries limited monetarily, they are also limited in terms of expertise in trade law and ability to analyze the landscape of international trade. Developed countries have teams of lawyers and trade analysts devoted to assessing their country s trade obligations, strategies, and risks. 43 Developing countries, on the other hand, lack the scientific knowledge, financial resources, and technological capabilities to adequately assess risks that may be necessary to consider even before adopting the precautionary measures needed to comply with the WTO Agreements. Thus, the lack of necessary resources and capabilities inhibit developing countries opportunities to attitude of developing countries leads to little dispute participation at reflecting internal governance and organization issues of developing countries. ABBOTT, supra note 37, at Jide Nzelibe, The Case Against Reforming the WTO Enforcement Mechanism, 2008 U. ILL. L. REV. 319, 336 (2008). 40. Stostad, supra note 35, at Van Der Borght, supra note 16, at However, the rise of developing countries with substantial financial power (e.g., Argentina, Brazil, and China) are well placed to use the system but are only a minority of developing countries that actually do benefit from the system (largely because they are emerging economics, not just developing countries). See generally Bown and Hoekman, supra note Shawkat Alam, The United Nations Approach to Trade, the Environment and Sustainable Development, 12 ILSA J. INT L & COMP. L. 607, 623 (2006); see, e.g., Agreement on the Application of Sanitary and Phytosanitary Measures, GATT Doc. MTN/FA Ii-A1A-4 (Dec. 15, 1993) in Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, GATT Doc. MTN/FA (Dec. 15, 1993), 33 I.L.M. 9 (1994) (noting difficulties of developing countries) [Vol. 45

11 PRIVATE PARTY STANDING IN THE WTO utilize the WTO DSB and initiate claims based on their particular interests. 44 In an increasingly interdependent global trade economy, non-state actors have become the primary participants in international trade. 45 Private party access to international trade organizations such as the WTO is conducive to ensuring state accountability by individuals involved in international trade disputes. 46 By allowing private parties the ability to initiate disputes that developing countries lack the resources and expertise to bring themselves, private party standing in the WTO represents an opportunity for a more leveled playing field in a system which thus far has been overwhelmingly utilized by developed nations and vastly underutilized by poorer, developing countries. B. Arguments Against Private Party Standing in the WTO Several commentators and courts have expressed disapproval of the possibility of private party standing (or increased involvement of non-state actors) in the WTO dispute settlement process. 47 One of the most frequent arguments against private party standing is that international trade is a field that requires specialized expertise and policy judgments that should be left to the experts (i.e., political branches of the governments of the member states). 48 Whether to initiate claims 44. See generally Van Der Borght, supra note Susan Strange, States, Firms, and Diplomacy, 68 INT L AFFAIRS 1, 2 (1992). 46. Michael Laidhold, Private Party Access to the WTO: Do Recent Developments in International Trade Dispute Resolution Really Give Private Organizations a Voice in the WTO?, 12 TRANSNAT L L. 427, (1999). 47. Several other arguments against private party standing have also been raised. (1) It has been argued that all WTO members have similar litigation interests in mind in WTO disputes and, as a result, there will be an overlap of export interests among member states creating spillover benefits for developing countries. Tietje & Nowrot, supra note 32, at (2) Another argument similar to this is that the most populous developing countries (e.g., India and Brazil, and soon China) will expand WTO litigation involvement, which is instrumental because these countries represent a significant proportion of the world s poor and will improve WTO benefits as a result. Id. (3) Lastly, many have argued private parties already have a significant influence under the current system and there is no need to change procedures which are efficient as is. A number of existing provisions put in place reflect the protection of private actor interests as the core consideration in deciding which disputes to advance under the WTO Agreement, including Articles III and XI of GATT. Informal avenues also exist by which non-state actors, and NGOs in particular, may exercise influence on individual WTO members such as in the form of amicus briefs, making related documents and legal opinions available to them. Furthermore, the assistance from outside lawyers in preparing cases and drawing up legal arguments has become the norm, and the financial resources available via commercial interests involved. Id. 48. See, e.g., Tembec v. United States, 441 F. Supp. 2d 1302, 1318 (Ct. Int l Trade 2006). 2014] 1275

12 GEORGETOWN JOURNAL OF INTERNATIONAL LAW under the WTO dispute settlement procedures is often a reflection of a country s interest groups exerting pressure on the legislature. 49 The argument against private party standing rests on the need for separation between domestic trade law and international treaty law. It is the legislature that responds to interest group pressures (which represent various public opinions) on whether to lobby for a particular dispute under the WTO on behalf of select public interests. 50 Because international trade involves delicate policy issues of political significance, it is argued that the legislatures are the only actors able to balance various competing interests and decide which issues are worth bringing before the WTO. 51 Despite this particularly significant argument against private party standing in the WTO, the Investor-State Dispute Settlement provision under Chapter Eleven of NAFTA and its allowance of private investors to initiate disputes 52 signifies the ability for international treaty law and domestic law to integrate with one another 53 despite a dichotomy between the two forms of law. NAFTA provisions are explicitly designed to ensure NAFTA dispute settlements do not create a stare decisis effect on domestic courts and instead may be rel[ied] upon the decisions of other tribunals state practice. 54 The WTO Agreement uses similar language in its treaty, 55 which reflects the potential to incorporate private party standing under the WTO, just as private party standing in NAFTA has already been implemented successfully despite being treaty law. III. U.S. STATUTES ON TREATMENT OF WTO DECISIONS IN U.S. COURTS The discussion in support of private party standing in the WTO sets the stage for a potentially major revision of the dispute settlement 49. Nzelibe, supra note 39, at Id. 51. John D. Greenwald, After Corus Staal Is There Any Role, and Should There Be For WTO Jurisprudence in the Review of U.S. Trade Measures by U.S. Courts?, 39GEO. J. INT L L. 199, (2007); see also Corus Staal BV v. Dep t of Commerce, 395 F.3d 1343, 1349 (Fed. Cir. 2005) ( We give Commerce substantial deference...because of the foreign policy implications...we will not attempt to perform duties that fall within the exclusive province of the political branches. ). 52. North American Free Trade Agreement, U.S.-Can.-Mex., art. 1101, Dec. 17, 1992, 32 I.L.M. 289 (1993). 53. Susan D. Franck, Integrating Investment Treaty Conflict and Dispute Systems Design, 92 MINN. L. REV. 161, 163 (2007). 54. Haigh, supra note 30, at Marrakesh Agreement Establishing the World Trade Organization, Annex 2 art. 3.2, Apr. 15, 1994, 1867 U.N.T.S [Vol. 45

13 PRIVATE PARTY STANDING IN THE WTO procedures in the WTO. Equally crucial is an understanding of the current landscape of WTO decisions in U.S. courts in order to assess what impact such changes in WTO procedures may have. This must first start with reviewing the statutory laws that are currently in place. Statutory law and related legislative history establish that as a matter of domestic law, (1) WTO obligations do not trump inconsistent federal law; (2) adverse dispute reports do not automatically take precedent over existing domestic law or practice; and (3) private parties cannot use WTO dispute reports in domestic litigation to challenge the government s trade actions. In the United States, any decision by the WTO DSB finding a U.S. law or practice in violation of a WTO agreement is not given unilateral legal effect. 56 Instead, one of the political branches must expressly enact either a statute revising the particular federal law or an administrative measure explaining the government s disagreement with a WTO decision. 57 U.S. courts (i.e., the Court of International Trade and Court of Appeals for the Federal Circuit) have taken varying stances on suits that invoke WTO DSB decisions. 58 The legal effect of WTO decisions under the Uruguay Round Agreements Act (URAA) 59 is non-binding under U.S. domestic law. 60 The statute addresses the relationship between WTO agreements and federal law and prohibits private remedies on relying on alleged violations of WTO agreements. 61 URAA section 102 requires that congressional action implement adverse decisions by the WTO DSB. 62 Thus, WTO decisions do not unilaterally bind any person or situation involving the United States. Further, the URAA states that nothing in the statute shall be construed...to amend or modify any law of the United States...or...to limit any authority conferred under any law of the United States...unless specifically provided for in this act. 63 Legislative history also indicates that WTO decisions are treated as non-self-executing until Congress, not the courts, has explicitly 56. WTO Dispute Settlement Overview, supra note 4, at Id. 58. See supra Part V U.S.C JEANNE J. GRIMMETT ET AL., CONG. RESEARCH SERV., RS22154, WTO DECISIONS AND THEIR EFFECT IN U.S. LAW 3 (2008), available at Uruguay Round Agreements Act, 19 U.S.C. 3533(d)-(f)) [hereinafter URAA]. 62. JOHN J. BARCELÓ III, THE STATUS OF WTO RULES IN U.S. LAW 5 (2006), available at &context lsrp_papers U.S.C. 3512(a)(2). 2014] 1277

14 GEORGETOWN JOURNAL OF INTERNATIONAL LAW implemented such agreements as permissible under the terms of the statute. 64 The Statement of Administrative Action (SAA) 65 further explains that [i]f there is a conflict between U.S. law and any of the Uruguay Round agreements, section 102(a) of the implementing bill makes clear that U.S. law will take precedence. 66 Because the domestic effect of an adverse WTO dispute report has no unilateral binding effect on relevant U.S. law, 67 neither does a WTO decision that conflicts with a U.S. law. Instead, Congress is the only authority empowered to determine how to appropriately respond to WTO decisions where federal law violates the WTO Agreements. 68 One U.S. court further noted that Congress consults with various congressional and executive bodies and agencies, to determine whether or not to implement WTO reports and determinations and, if so implemented, the extent of implementation. 69 The SAA also confirms the intent to limit the domestic effect of WTO dispute reports. 70 Both the explicit statutory text of and the legislative history to the URAA indicate the U.S. government s intent to treat WTO decisions as non-binding until and unless the political branches enact formal measures complying with such decisions. IV. JUDICIAL DOCTRINES ASSESSING WTO DECISIONS AND MEASURES TAKEN BY CONGRESS As previously discussed, private rights of action relying on WTO decisions are expressly precluded under the URAA and its legislative history. At the same time, however, there is no explicit statutory bar preventing a U.S. court from at least taking into consideration WTO jurisprudence. 71 A variety of judicially created doctrines have been constructed and utilized in reviewing legislative actions concerning violations of WTO decisions. U.S. courts may be willing to find an 64. Uruguay Round Agreements Act, Statement of Administrative Action, H.R. REP. NO (1994), reprinted in 1994 U.S.C.C.A.N [hereinafter SAA]; see also GRIMMETT ET AL., supra note 60, at SAA, supra note U.S.C. 3512(d) U.S.C. 3512(b)(1). 68. Id. 69. Mary Jane Alves, Reflections on the Current State of Play: Have U.S. Courts Finally Decided to Stop Using International Agreements and Reports of International Trade Panels in Adjudicating International Trade Cases?, 17TUL. J.INT L &COMP. L. 299, 347 (2009) (citing Corus Staal BV, 395 F.3d at 1349). 70. SAA, supra note Greenwald, supra note 51, at [Vol. 45

15 PRIVATE PARTY STANDING IN THE WTO agency determination unlawful if unsupported by substantial evidence on the record, or otherwise not in accordance with law. 72 To make this determination, the court relies on a two-step analysis first set out by the U.S. Supreme Court in Chevron, U.S.A., Inc. v. Natural Resources Defense Council (Chevron). 73 In the first step of analysis, the court will utilize its methods of statutory interpretation to determine whether Congress has clearly spoken on a particular legal issue. 74 If the underlying statute is silent or ambiguous, the court will then determine whether the agency s construction of the statute is permissible, while deferring to the agency s interpretation of a statute if reasonable (step two analysis). 75 The Court in Chevron explained that this deference is justified because of the agency s intimate familiarity with the facts and circumstances regarding a particular area, stating that the responsibilities for assessing the wisdom of such policy choices and resolving the struggle between competing views of the public interest are not judicial ones. 76 Another doctrine of statutory interpretation, first articulated in Murray v. Schooner Charming Betsy (Charming Betsy), 77 has been used to determine whether an agency s determination is reasonable for purposes of step two of the Chevron test. The Court in Charming Betsy held that where a statute does not require a specific interpretation (i.e., more than one interpretation exists), the statute should be interpreted consistently with the United States international obligations (the Charming Betsy canon). 78 For relevant purposes, that international obligation would be that invoked through a WTO agreement (including DSB decisions). Plaintiffs typically argue, on the basis of the Charming Betsy canon, that an agency interpretation violating a WTO obligation is unreasonable under Chevron step two by citing factual evidence to support such a claim. 79 As Part V of this Note will indicate, such claims have been overwhelmingly unsuccessful U.S.C. 1516a. See, e.g., Thai I-Mei Frozen Foods Co. v. United States, 616 F.3d 1300 (Fed. Cir. 2010) (finding the Department of Commerce s determination that a Thailand company was illegally dumping shrimp into United States commerce as unsupported). 73. Chevron, U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 837, (1984). 74. Id. 75. Id. at Id. at Murray v. Schooner Charming Betsy, 6 U.S. 64, 118 (1804). 78. Id. 79. See, e.g., SKF USA Inc. v. United States, 659 F. Supp. 2d 1338, (Ct. Int l Trade 2009). 2014] 1279

16 GEORGETOWN JOURNAL OF INTERNATIONAL LAW V. HOW U.S. COURTS REVIEW WTO DECISIONS AND CONGRESS S WTO-INCONSISTENT ACTIONS The last Part discussed judicially created doctrines for U.S. courts to utilize in assessing matters of international law and legislative actions. In reality, however, U.S. courts have substantially deferred to Congress in their response to WTO decisions without assessing the reasonableness of the measures taken. An overview of relevant past cases addressing WTO decisions and agreements provides an essential backdrop to predict the potential impact that private party standing in the WTO may have on U.S. courts. While judicially created doctrines such as the Chevron analysis are essential tools the courts use to assess the legality of legislative actions involving international rules (including the WTO agreements), statutory language from the legislature seems to indicate a clear intent on curbing domestic legal effect of WTO law altogether. Nonetheless, private parties have relied on citing WTO dispute reports in U.S. courts with varying levels of success. 80 The reality is that most cases relying on adverse WTO decisions get summarily rejected due to deference to the legislature in responding to WTO decisions, yet several cases have cited WTO decisions to either support the court s final decision or show that their decision is consistent with a relevant WTO decision. 81 Subpart A of this section indicates that some courts were much more willing to recognize the relevance of WTO decisions, while Subpart B highlights increasing deference to Congress in how to respond to a WTO decision. Subpart C presents cases assessing the reasonableness of agency responses to adverse WTO decisions, with the level of scrutiny depending on the availability of judicial precedents and the existence of a statutory basis for a particular agency action in light of a WTO decision. A. U.S. Courts Expressing Relevance of WTO Decisions in Their Analysis Throughout the first several years following the passage of the URAA in 1994, U.S. courts gave considerable weight to WTO agreements and decisions in aiding the courts reasoning. 82 Early cases suggested treating WTO agreements (including DSB decisions) as secondary legislative history, applying step two of the Chevron analysis to find an 80. Jeffrey L. Dunoff, Less Than Zero: the Effects of Giving Domestic Effect to WTO Law, 6 LOY. U. CHI.INT L L. REV. 279, (2008); see, e.g., SNR Roulements v. United States, 521 F. Supp. 2d 1395, 1398 (Ct. Int l Trade 2007). 81. See, e.g., Usinor v. United States, 342 F. Supp. 2d 1267, (Ct. Int l Trade 2004). 82. See Alves, supra note 69, at [Vol. 45

17 PRIVATE PARTY STANDING IN THE WTO agency s interpretation as contrary to an international agreement (i.e., the WTO). 83 In one case, the Court of International Trade (CIT) upheld the Environmental Protection Agency s interpretation of a U.S. environmental law as not inconsistent with the WTO agreement, noting, congressional statutes must be construed wherever possible in a manner that will not require the United States to violate the law of nations. 84 Although in Hyundai Electronics v. United States, the CIT ultimately held a WTO panel report had no binding effect under U.S. law, the court rejected the view that a panel report serves no purpose in litigation before the court...[a] panel s reasoning, if sound, may be used to inform the court s decision. 85 In another case, the court reviewed an International Trade Commission (ITC) determination that was also the subject of an adverse report by a WTO dispute resolution panel. 86 The CIT found the ITC s interpretation of U.S. law as...not inconsistent with the WTO [Antidumping] Agreement. 87 The court also found persuasive the reasoning of later WTO panel and Appellate Body reports and emphasized that [n]othing in the law foreclose[d] it from looking to such reports in its analysis of the agency s determinations. 88 Most recent cases continue to deny any binding legal effect of WTO dispute reports on domestic law, 89 but still acknowledge their usefulness where consistent with the U.S. courts holdings. In Timken v. United States, the CIT determined that WTO reports are not binding but asserted they might help inform the court s decision. 90 The petitioner argued that a statute permitting zeroing was unreasonable because the United States violated its international obligations, citing evidence 83. Id. 84. George E. Warren Corp. v. EPA, 159 F.3d 616, 624 (D.C. Cir. 1998) (citing S. African Airways v. Dole, 817 F.2d 119, 125 (D.C. Cir. 1987) (citing Charming Betsy, 6 U.S. at 118)) Ct. Int l Trade 302, 312 (1999). 86. Usinor, 342 F. Supp. 2d at Id. at Id. at 1279; see generally Alves, supra note 69, at It is important to note that during this period of time was the passage of the Trade Act of Congress was concerned that WTO dispute resolution panels and the WTO AB did not apply an appropriately deferential standard of review and directed not to apply any of the United States implementing legislation with respect to any agreement negotiated under WTO until the Secretary of Commerce issued a report to Congress addressing congressional concerns as to whether or not the DSB had added or diminished the rights and obligations of the U.S. under GATT/WTO Agreements. Bill Thomas, Trade Act of 2002, H.R. REP. NO , at 61 (2002). Subsequent opinions by U.S. courts echoed these concerns about reports by WTO panels Ct. Int l Trade 1072, 1082 (2002), aff d, 354 F.3d 1334 (Fed. Cir. 2004). 2014] 1281

18 GEORGETOWN JOURNAL OF INTERNATIONAL LAW that (i) a WTO Appellate Body (AB) decision determined the zeroing methodology violated the WTO agreements, and (ii) under the Charming Betsy canon, courts should interpret U.S. law in a manner consistent with U.S. international obligations. 91 The court rejected this challenge without explicitly stating whether or not the Charming Betsy canon was applicable. Nevertheless, because the United States was not party to the WTO AB decision, the CIT noted that the WTO decision binds neither the court nor the U.S. government and thus cannot be used to find the Department of Commerce s (Commerce) practice unreasonable. 92 B. Corus Staal and the Cases Thereafter: Near-Absolute Deference to the Legislature In Corus Staal BV v. United States, Corus, a Dutch manufacturer, challenged portions of a second administrative review of the antidumping order on a selection of Corus export prices as a violation of law. 93 Rather than directly challenging the use of zeroing or the court s previous rulings by citing WTO decisions, Corus instead argued that the United States had later adopted a new policy on zeroing which should be applied to the second administrative review. In response to the condemnation of zeroing by an adverse WTO AB report, Corus presented evidence that the United States announced it would abandon the use of zeroing in certain dumping investigations. 94 Corus also noted that Commerce had subsequently recalculated Corus dumping margin without zeroing and concluded that no dumping existed. 95 In light of such developments, Corus argued that the United States impliedly adopted WTO reports condemning zeroing, 96 and thus 91. Id. 92. Id. Mary Alves notes the CIT in Timken and Usinor might have considered staying its own proceedings pending the outcome of the other related proceedings, remanding the determination, or allowing the agency first opportunity to give consideration to own international obligations. Unlike the courts, Congress did not preclude agencies from hearing and considering arguments regarding the consistency of their actions with U.S. international trade obligations. Alves, supra note 69, at Corus Staal BV v. United States, 502 F.3d 1370, 1371 (Fed. Cir. 2007). 94. Id. at Id. at (citing Implementation of the Findings of the WTO Panel in US-Zeroing (EC): Notice of Determinations under Section 129 of the Uruguay Round Agreements Act and Revocations and Partial Revocations of Certain Antidumping Duty Orders, 72 Fed. Reg. 25,261 (Dep t Implementation of the Findings of the WTO Panel in US-Zeroing (EC): Notice of Determinations under Section 129 of the Uruguay of Commerce (May 4, 2007)). 96. Appellate Body Report, United States Measures Relating to Zeroing and Sunset Reviews, WT/ DS322/AB/R (Jan. 9, 2007) [Vol. 45