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APPELLATE BODY ASSERTS RIGHT TO RECEIVE AMICUS CURIAE BRIEFS

by Chakravarthi Raghavan


Geneva, 11 May 2000 -- The Appellate Body (AB) of the World Trade Organization has asserted its procedural right to accept and consider amicus curiae briefs from individuals and organizations, not members of the WTO, thus ignoring the harsh criticism it got from most of the members in 1998 for taking account of amicus curiae briefs in the shrimp-turtle dispute.

The views of the Appellate Body has come in a report issued Wednesday rejecting a US appeal that the continued levy, after an administrative review, of countervailing duties against imports of certain varieties of steel, leaded bars, from the United Kingdom, was legal.

The ruling is likely to add to the serious concerns among members, particularly the developing countries, about the way the dispute settlement system is being used to expand the powers of the WTO, increase their obligations and reduce their rights. While it may please some environmental NGOs of the North, it is unlikely to impress or win over the Southern NGOs who are increasingly seeing the WTO as an unjust and iniquitous system, and within countries are forming broad alliances to prevent any further new rules and obligations, in existing or new areas and subjects.

Two other rulings over the past few days that have accentuated this perception of the inequities of the WTO are:

* The ruling by a panel in a dispute brought by the US against South Korea under the plurilateral government procurement agreement, whereby the panel has in effect asserted that the non-violation complaint route of the dispute settlement could be used, not only against trade measures involving lack of good faith implementation of commitments, but against "treaty errors" arising out of lack of good faith in negotiations.

The panel in this case seems to imply that while under the principles of international law codified in the Vienna Law of Treaties, and interpretations by the International Court of Justice, an 'error' in treaty-making because of lack of good faith of one of the parties, could be used by the other party to get out of the treaty obligations wholly or, where severable, that particular portion of the treaty, in the WTO, the DSU could be used to correct such errors in agreements. The panel held against the US on the ground that it had not exercised due diligence and thus could not invoke treaty error, but has opened the 'non-violation' route for future disputes.

* The rulings of two (separate) panels and the Appellate Body in two related cases -- that of Canada against Brazil, and Brazil against Canada -- over export subsidies for exports of competing aircraft, has proved a bias in the system. In the case against Canada, the latter by just not disclosing information has been able to escape scrutiny and judgement whether its export credit financing facilities to its aerospace industries constituted an export subsidy. But another panel against Brazil has hit Brazil, and the reconvened compliance panels have made the situation worse.

The substantial effect of the rulings in the aircraft subsidy cases are to confirm that under the WTO rules, developing countries, in terms of the subsidies agreement, would always be at a disadvantage - since the international financial system makes cost of money and borrowing for the South much, much higher than for the North, and providing export credits at the same rate that a Northern government does to a competitor, would make it a prohibited subsidy. In footnote No 55, the panel has said the WTO's subsidies and countervailing duty agreement "cannot remove competitive disadvantages arising from structural differences between WTO members" but that a wider interpretation (to remove such disadvantage as sought by Brazil) might place developing countries at a greater disadvantage.

The three-member bench in the steel import subsidy dispute consisted of Messrs. Mitsuo Matsushita (Japan), Said El-Naggar (Egypt) and Julio Lacarte Muro (Uruguay).

Lacarte Muro replaced Christopher Beeby (New Zealand), who died on 19 March, on the Appellate Division bench that heard the case.

On the procedural issue of amicus curiae briefs, having asserted its right under the DSU procedures to receive and take into account views of individuals or organizations, not members of the WTO, the Appellate Body decided that it did not need to take into account the views in two amicus curiae briefs filed by American Iron and Steel Institute and the Speciality Steel Industry of North America.

In the shrimp-turtle dispute, at the time of the adoption on 8 November 1998, by negative consensus, of the Appellate Body ruling, a number of WTO members had used some harsh language to rebuke the Appellate Body for taking into account the NGO views (in an amicus curiae petition), and thus giving the NGOs "rights exceeding those possessed by WTO members who are not participants in the dispute."

[Under the DSU, only those WTO members who notify to the DSB, within a fortnight of the panel reference, their third party interest, and not the generality of members, are allowed to make submissions to panels. And in appeal, which is confined to issues of law, besides the parties, only those who had intervened before the panel, could present their views to the Appellate Body.]

[In the shrimp-turtle case, the Appellate Body bench (of Florentino Feliciano of the Philippines, James Bachus of the USA and Lacarte Muro of Uruguay) in deciding to accept three amicus curiae briefs that were appended to its own presentation by the United States, and one that had also come directly to the Appellate Body. In the preliminary ruling taking the amicus curiae into account, the AB had then said that it would give its reasons for accepting the brief in its final ruling, but never did so. The Appellate Body had also interpreted Art. 13 of the DSU rules, enabling a panel "to seek" (an active verb) information from experts and others, to mean power "to receive" such information via amicus curiae briefs.]

All the developing country WTO members who spoke in the DSB in November 1998, had said it was for the membership to decide who could or could not participate, and the extent to which NGOs could participate in the WTO, and accused the Appellate Body of usurping the powers of the membership.

Since then, in the DSU review, the US (and the EU to some extent) have been strongly pushing for change in DSU rules to provide an opening for NGOs into the panel process. Developing countries have refused. As a result even the small procedural changes on which everyone had more or less agreed have been blocked before since before Seattle, and in latest round of informal consultations in May.

The AB claim to its rights to receive and take account of amicus curiae has to be seen in this background, and appears to be a case of its attempt to legislate on the subject by favouring the US demand on NGOs.

[Over and above these, the DSU review has also been held up by the EC which has said it could not accept any review changes without provisions to outlaw the 'carousel' approach to retaliation (the US administration rotating the import products subject to penal levies as retaliation), which has now been mandated by the Congress in the Africa Trade bill.]

In the present case, the AB received two amicus curiae petitions from the US industry lobbies. The EC said these were inadmissible in appellate proceedings. The EC agreed that such amicus briefs from NGOs could be received by panels in terms of Article 13 of the DSU, as set out by the Appellate Body in the shrimp-turtle case. But this provision of Art.13 of the DSU only enabled receiving factual information and technical advice, and not legal arguments or interpretations from non-members. Mexico and Brazil (who intervened before the Appellate Body) agreed that neither the DSU nor the working procedures allowed the Appellate Body to receive factual information of the type contemplated by Art.13, much less briefs from private entities. In its ruling on this issue, the AB says there is nothing in the DSU or the working procedures that specifically provide the AB may accept or consider submissions or briefs from sources other than participants and third participants in an appeal. On the other hand, "neither the DSU nor the Working Procedures explicitly prohibit acceptance or consideration of such briefs."

The AB then cites Art 17.9 of the DSU - "working procedures shall be drawn up by the Appellate Body in consultation with the Chairman of the DSB and the Director-General, and communicated to the Members for their information." And, in a footnote, the AB bench adds, "In addition, Rule 16 (1) of the Working Procedures allows a division hearing an appeal to develop an appropriate procedure in certain specified circumstances where a procedural question arises that is not covered by the Working Procedure."

Without clarifying whether any working procedure that it has drawn up (under Rule 16.1), in consultation with the DSB Chair and the WTO DG, or the procedure it drew up in the specified circumstances of this case, the AB adds: "This provision makes clear that the Appellate Body has broad authority to adopt procedural rules which do not conflict with any rules and procedures in the DSU or the covered agreements. Therefore, we are of the opinion that as long as we act consistently with the provisions of the DSU and the covered agreements, we have the legal authority to decide whether or not to accept and consider any information that we believe is pertinent and useful in an appeal."

The AB ruling then goes on "to emphasize" that in the WTO dispute settlement system, the DSU envisages participation in panel or Appellate Body proceedings, as a matter of legal right, only by parties and third parties to the dispute. And, under the DSU, only Members of the WTO have a legal right to participate as parties or third parties.

Individuals and organizations, which are not Members of the WTO have no "legal right" to make submissions to or to be heard by the AB. The AB has no "legal duty" to accept or consider unsolicited amicus curiae briefs submitted by individuals or organizations, not members of the WTO. The AB has a legal duty to accept and consider only submissions from WTO Members which are parties or third parties in a particular dispute.

Having made these 'interpretations' and assertions (from the ordinary dictionary meanings of the words used in the DSU rules), the AB adds: "We are of the opinion that we have the legal authority under the DSU to accept and consider amicus curiae briefs in an appeal in which we find it pertinent and useful to do so. In this appeal, we have not found it necessary to take the two amicus curiae briefs filed into account in rendering our decision."

The WTO Director-General recently described the dispute settlement system as the 'jewel in the crown' of the WTO. In the rules-based system of international trade, governed by public international law which recognizes that states cede authority/sovereignty only explicitly, the AB and the dispute panels, seem to be claiming a prerogative of the crown in medieval times. (SUNS4666)

The above article first appeared in the South-North Development Monitor (SUNS) of which Chakravarthi Raghavan is the Chief Editor.

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