This essay takes up both the direct and the indirect effect of WTO law within the U.S. legal system. It also attempts to explain the relative absence of such effects—that is, the weak status of WTO law within the U.S. legal system–from a political economic perspective. Finally it considers the prospects for including direct or indirect effect for WTO law in a future multilateral agreement.
The force of WTO rules within any country’s domestic law depends on several concepts, the most basic of which are direct effect and supremacy. The question of supremacy arises only if the rules at issue first have direct effect. For convenience and simplicity I will discuss direct effect as a single concept—meaning that for WTO rules to have direct effect a private person must have standing in a domestic court to base a legal claim directly on a WTO provision as a rule of decision.
In the United States even when an international agreement has direct effect it never has supremacy. A subsequent federal statute always overrides a prior self-executing (having direct effect) international agreement. The only way a form of supremacy could be given to an international agreement in the United States would be through a statute similar to the 1972 European Communities Act or the 1998 Human Rights Act, both in the United Kingdom. These acts rely essentially on an instruction to courts to interpret subsequent statutes as subordinate to European Community law and the European Human Rights Convention, respectively, unless the subsequent statute is explicit about its intent to contravene the relevant treaty. In today’s world it is unimaginable that any such act concerning WTO law could be enacted in the United States. Thus for all practical purposes, WTO supremacy is excluded as an option for the U.S. legal system.
Several further distinctions will arise in the body of this essay. Direct effect could attach either to the WTO agreements themselves or to WTO Panel and Appellate Body rulings, or to both. As we will see, it attaches to neither, but the analytical distinction is important. Finally, even when an agreement does not have direct effect in U.S. law, it may be given indirect effect, by which I mean that it can be used as a controlling source for interpreting ambiguous domestic statutes. Once again the possibility arises of indirect effect attaching either to the WTO agreements themselves or to Panel and Appellate Body rulings, or to both. As we will see, it seems to attach to neither in the United States—or at least it does not do so in more than a highly qualified or muted sense concerning the WTO agreements and not at all, concerning dispute settlement rulings.
The essay is divided into three fundamental parts. First it describes the current status of WTO law within the U.S. legal system, a status of almost fire-wall-like separation between the international and domestic spheres. Second it asks why this state of affairs exists, and seeks answers in political economy and public-choice theory. Finally it asks whether in the future WTO law is likely to be given more recognition within the domestic legal systems of the United States and other member states.
One further introductory comment is in order. Merely asking these kinds of questions suggests a predisposition in favor of direct effect for the WTO. I have tried to resist that orientation by taking a positive analytical, rather than normative approach. It is certainly true, however, that all the essays in this symposium collection presuppose the value of the WTO and ask how it can more effectively propel its members into a more open, integrated, and harmonious world trading system, the vision that inspired Cordell Hull decades ago to support reciprocal trade agreements and the ITO/GATT system.
It is also true that many writers have argued for WTO direct effect in pursuit of that goal. Writing in the mid-1980’s, for example, Jan Tumlir argued that leading countries should agree to entrench in domestic law the principle of non-discrimination in trade policy, raising it to a level parallel to the civil rights notion of equality before the law. He understood that that idea “conflicts with political instincts and habits of thought formed over very long periods of time.” Still he seemed to hope for a breakthrough that would deputize private legal action to advance the cause of liberal trade.
Experience in European Community law with the transformative consequences of direct effect ushered in by the pathbreaking Van Gend & Loos decision also encourages the thought that similar effects should be possible within the WTO system. But the allure of the parallels can be misleading, as deeper study of the two systems suggests. I will return to this point later in the essay.
The Status of WTO Rules in U.S. LawTo read original paper, click here