Thu, Jun 02, 2005
World Trade Court Has Real Power
It's the biggest case ever to go before the World Trade
Organization's court. Worth billions of dollars to both Airbus and
Boeing, the subsidy dispute between the US and the EU will likely
take several years and several million dollars to resolve. And the
people who will decide the case probably won't even be judges -- at
least, not full-time judges.
That's the way it is at the intersection of law and trade. The
WTO court is staffed by freelance judges -- often diplomats -- who
have very little knowledge of legal practices but are strong in
their negotiating skills. For most who have sat on the WTO bench in
the past, it's their first time ever settling a trade dispute.
The WTO court is chaired by a three-person panel of judges. It
has real power. Just ask President George W. Bush. Two years ago,
the WTO court forced him to abandon tarrifs aimed at protecting the
struggling US steel industry from foreign competition. The lever in
that ruling was the threat of $2 billion in trade sanctions.
Both US and EU eaders are leery of the court. "WTO panels are
making up new rules," Montana Democratic Sen. Max Baucus wrote in
response to questions from The Wall Street Journal. He said they
"have invented rules that do not appear in any negotiated agreement
-- then used those rules to strike down US laws and policies."
An EU study found the WTO panel system should be altered, saying
"panelists do not have time to develop expertise in the procedural
and technical aspects of the dispute settlement system."
Even the judges themselves complain, saying they can't hear
cases and keep their day jobs at the same time. But that's just
what they're expected to do. And if they have a hard time
understanding the trade laws upon which they rule, you can imagine
how difficult it is for the countries involved to interpret and
implement those rulings.
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