enforcement, particularly in the sphere of environmental protection. We prefer to herald the amazingly broad reach that the 1947 drafters gave to these powerful provisions.
In particular, consider the Public Morals Clause of Article XX(a). Members have imposed frequent trade restrictions based on the “immorality” of activities in other countries. These restrictions have ranged from prohibitions on trade with countries practicing or condoning slavery to bans on importation of child pornography. The exception is broad enough to justify trade restrictions to encourage countries to abandon denial of freedom of the press, to allow their citizens to emigrate, to forbid work by indentured children, and to provide a remedy for other human rights violations, especially when a consistent pattern of such violations by the country are evident. In Antigua’s challenge to U.S. prohibition of Internet gambling, the WTO’s Appellate Body—the World Trade Court7 (WTC)—interpreted the equivalent Public Morals Clause in the General Agreement on Trade in Services (GATS), which sets rules for trade in services as opposed to the trade in goods regulated by the GATT and the other WTO Agreements. The WTC left undisturbed the broad definition of public morals advanced by the panel below: ‘“Public morals’ denotes standards of right and wrong conduct maintained by or on behalf of a community or nation”8 If the restrictive border measure unmistakably implements a human rights objective, our opinion is that few aspects of human rights law could not qualify as enforcing a Member’s “standards of right and wrong,” and thus fall, under this interpretation, within the policy addressed by the Public Morals Clause. We should think this result especially likely in view of the explicit charge by the UN Charter that Members promote human rights.
The Appellate Body explicitly noted the relevance of its analysis to the similar Public Morals Clause of GATT Article XX.9 We detail in section 6.4 the additional conditions that a Member must meet for full exemption, but we are confident that the U.S.-Gambling case takes an important step toward integrating human rights policies into the economic ends of the WTO Agreements. Importantly, the WTC has situated the General Exceptions on an equal plane with the Four Pillars, requiring that panels strike a balance in interpretation so that neither cancels out the other.10 The Court thus has effortlessly brought customary and other non-WTO international law into the room with WTO dispute panels and reminded panels that they must interpret “evolutionary” language in the 1947 treaty in light of contemporary concerns of the community of nations, taking advantage of other precepts of international law, including the opinions of the ICJ.11
We take considerable comfort in these interpretations of the General Exceptions, which verify the wide berth that WTO Members have given themselves to implement human rights policies and the direction that the WTC has extended to panels to find guidance in the broader precepts of international law in their analysis of claims that Members have violated the WTO Agreements.
Article VI contains another important exception that permits Members to restrict trade in unfair imports, as defined by the WTO Anti-dumping and Subsidies Agreements. These Agreements treat imports as unfair if exporters “dump” them (i.e., sell the goods at a lower price for export than they sell them in the home market, or for a price that is below their cost of production). The Agreements also identify as unfair products that benefit from targeted government subsidies, because the subsidy gives them an artificial comparative advantage in trade.
The WTO TBT Agreement and the Sanitary and Phytosanitary Measures (SPS) Agreement (treated in detail in sections 7.4 and 6.6) provide increasingly important road maps to Members that desire to restrict trade in pursuit of the protection of human life or health and the environment at the level that the Member considers appropriate. Through these and other exceptions, the apparently straightforward Pillars of the GATT become more complex than at first they seemed: (a) Article XI proscribes restrictions on imports or exports; (b) successive rounds of multilateral negotiations have substantially reduced tariffs, which Members then “bind” at the lower rate under Article II; and (c) articles I and III ensure through nondiscrimination that the benefits and privileges of local trading accords will be spread to all WTO Members, thus accelerating trading wealth across all Members. GATT’s Four Pillars have spawned many exceptions, some quite logical and consistent with the Pillars themselves, others needed to carve out a place within global trading rules for a precious package of continuously developing human rights policies.
2.5 WTO Dispute Settlement
As we would expect with twenty-seven thousand pages of trade rules, Members frequently have disputes over their interpretation and compliance. The centerpiece of the WTO is its powerful dispute settlement system, with its singular international law triumph of automatic adoption of dispute panel reports. Unlike the situation during the GATT’s first fifty years, the losing Member no longer may block implementation of a panel’s decision. Members of course still are sovereign states and may choose not to implement a panel’s “recommendations.” Noncompliant Members, however, now will suffer substantial financial pain in the form of trade retaliation by the winning Member for trade lost through the violative border measure. In almost every instance during the first ten years of the WTO’s operation, permission by a dispute panel to retaliate has been sufficient to convince the losing Member to bring its measure into compliance with a panel recommendation.
By contrast, during the first fifty years of trade dispute settlement, GATT parties authorized retaliation in only one instance (as it happens, against the United States for its dairy quotas), which illustrates the diplomacy-driven nature of the early years of trade dispute settlement. Virtually automatic adoption of panel reports operates by “reverse consensus.” Unless a consensus exists to reject the report, WTO Members acting jointly as the Dispute Settlement Body must accept every panel report (or the Appellate Body’s report after appeal, which is also an automatic right). A consensus rejection of the report must include the winning Member, because reverse consensus is defined to mean that no Member present formally objects. We are confident that Members will refuse only an egregiously ill-reasoned “outlaw” report—that is, one whose adverse impact on other programs would more than offset its favorable effects in the actions under dispute. In fact, Members have yet to reject a report, although in an instance in which both the winning and losing Members equally feared the future effects of a panel’s broad opinion, disputants agreed not to appeal the decision so that future panels could more easily ignore the ruling.12 As with all international dispute resolution, neither panel nor Appellate Body reports create binding precedent, although future panels or later Appellate Body decisions rarely disagree with Appellate Body reports.
A useful holdover from GATT dispute settlement, in which only positive consensus satisfactorily could end a formal disagreement among Members, is that the purpose of dispute settlement remains “a positive solution” While the adjudicatory systems after which its creators patterned WTO dispute settlement emphasize winners and losers, the WTO’s Dispute Settlement Understanding (DSU) repeatedly facilitates crafting of a mutually agreed solution that is consistent with WTO law. This central theme explains as well the four complex stages of WTO dispute settlement (good offices, conciliation, and mediation also are available, but are not used): consultations (sixty days), panel consideration (six to nine months, longer in technical cases), appeal (if desired) of the panel’s decision (sixty to ninety days), and, finally, implementation of the decision’s “recommendations” through the losing Member’s legislative or regulatory rescission of the offending border measure (up to fifteen months, sometimes extended). The DSU provides precious little guidance to panels beyond charging them to make “an objective assessment of the matter,” which is perhaps the minimalist approach required in melding the civil and common law systems of WTO Members. In these circumstances, we should marvel that panels have achieved the high level of legal discourse that we may find in their more than two hundred opinions. This achievement is even more notable in light of the almost certainly conflicting requirement on one hand “to clarify” provisions of the WTO Agreements while adhering to the dictate, on the other, that they “cannot add to or diminish the rights and obligations provided” in those Agreements.13
The WTC has begun not only to create a substantial body of international trade law, but also
