New Challenges for a World in Flux
Edited by Linda Yueh
Chapter 2: The Legitimacy of WTO
2. The legitimacy of WTO law Thomas Cottier INTRODUCTION The eighth General Agreement on Tariffs and Trade (GATT) cycle of Multilateral Trade Negotiations (Uruguay Round 1986–1993) brought about a substantial increase and expansion of multilateral rules and disciplines in international trade regulation. Beyond refining existing agreements, new regulatory areas were added, in particular the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). A new framework agreement, establishing the World Trade Organization (WTO), created new legal foundations under which Members, the Secretariat and dispute settlement have been operating since 1995 (WTO 1999). Most importantly, the GATT dispute settlement mechanism was strongly reinforced. For the first time in international law, a two-tier system with the possibility of appealing the decision was introduced, removing the requirement for a positive consensus of Members. Incentives to comply were reinforced. Failing the implementation of rulings, complainant Members are not only entitled to obtain compensation in terms of market access rights; they are also entitled, subject to additional proceedings, to suspend market access rights and thus exercise economic sanctions within the multilateral framework of the WTO (Cottier and Oesch 2005: 143–194). These mechanisms both contain unilateral actions, but also reinforce multilateralism as they enjoy the blessing of Members. These achievements of the Uruguay Round have contributed greatly to the overall and impressive growth of world trade in the past decade. Millions of daily transactions are based upon the rules which have emerged over the past...
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