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As discussed earlier, the non-violation provision is a relic of the diplomatic system.[50] It is likely that the architects of the GATT 1947 intended to protect the burgeoning world trading system, which was based on the compilation of tariff negotiations, from being diluted by the various circumvention measures which would be subsequently invented by the governments. Such a concern probably appeared quite plausible, at least initially.
However, considering that the world trading order was in an inchoate stage during the late 1940's, the GATT architects should have been more circumspect. They should have given the GATT system enough time to further evolve and to accommodate those circumvention measures within the scope of legal obligations. In other words, instead of inserting a murky provision like "non-violation" in the early GATT 1947, complicated "non-tariff" measures should have been discussed, intensively and extensively, in the later rounds of negotiations under the auspices of the GATT. The results of those negotiations would have been reflected and incorporated in the GATT system through amendments or creation of side agreements. [51] At the very least, the trade diplomats should have dealt with the non-violation cases outside of the GATT, through traditional diplomacy.[52]
Nevertheless, the GATT architects ambitiously inserted a non-violation provision in the middle of a legal structure. They may not have fully recognized that legalism was not simply one diplomatic tool among many, but could enhance predictability and impartial dispute-settlement. Or perhaps they did not want such a transparent system. Rather, they might have desired a dispute settlement system in which diplomacy would play an important role in the course of a closed-door, yet flexible, process.[53]
The inherent ambiguity surrounding the non-violation provision remains unresolved, confusing complainants about its proper use. In many non-violation cases, there has been no prominent distinction between violation and non-violation complaints[54]. Moreover, at the initial complaint-filing stage, the non-violation provision does not provide an independent and definite cause of action. It has played only an auxiliary role as a precaution against the failure to win the first violation argument. It is noteworthy that non-violation complaints are, in many cases, preceded by the phrase, "even if no violation exists." Moreover, the complaining party often makes little effort to distinguish between a violation claim and a non-violation claim.[55] For instance, in Citrus (1982) the United States claimed that the EC's preferential tariffs on citrus imports from certain Mediterranean countries generally caused nullification or impairment, with no distinction between violation and non-violation.[56] In the future, that murkiness may lead a future complaining party to misuse or rely too heavily on the non-violation provision.
More importantly, the GATT panel rulings on the non-violation cases up to now have not always been consistent, clear and reasonable. Among the 24 non-violation cases from 1947 to 1990,[57] while seven resulted in affirmative panel rulings, only three panel reports, all of which involved "supplementary-mode" complaints, were adopted.[58] Of course, GATT panels have attempted to limit the scope of non-violation cases by establishing some criteria for the "supplementary-mode" cases, emphasizing the link between tariff concessions and reasonable expectations.[59] However, it is unclear to what extent the reasonable "expectation" that the value of tariff concessions would not be affected should be legitimized in a particular case. It seems unreasonable that a previously determined balance of tariff concessions and resulting expectations should be thought to last for an indeterminate period of time.[60] In addition, it is questionable whether those expectations, based upon reciprocity or the balance of bilateral tariff concessions, should be applicable to a third country that did not actually negotiate tariff concessions with a complaining party.[61]
The more serious problem with regard to uncertainty arises in the "independent-mode" cases, which are not linked to tariff concessions. There are no fallback provisions or explanatory notes detailing the meaning of Article XXIII:1(b), nor are there any sufficient precedents in the GATT panel decisions to establish uniform criteria for independent-mode non-violation cases. In such cases, ambiguity seems to culminate in "non-discipline." For instance, it would be highly speculative to judge whether the attainment of an objective of the Agreement is impaired as a result of a certain non-violation measure. [62]
Although there is no adopted panel decision for this mode of non-violation case, the panel in Citrus (1982) strongly implied the possibility of the above position. The Citrus panel ruled that the non-violation nullification or impairment remedy also protects the broader balance of benefits which governments legitimately expect, due to reciprocal commitments to observe the obligations in the General Agreement itself.[63] One could imagine a future case similar to Citrus(1982) coming before the WTO panel. Despite the absence of stare-decisis in the GATT panel reports, a panel could nevertheless look to the reasoning of an unadopted panel report that it considered persuasive and relevant. [64] In that context, these independent-mode non-violation cases could potentially be misused. Any Member country could nonetheless rely on the independent-mode non-violation complaint method to present an invalid complaint if it was unable to identify a violation under the WTO system against a specific measure by another Member state. For such a country, the non-violation provision would be a panacea.[65 ]
The liberal application of the provision may further weaken efforts by the Member countries to determine the precise meaning of legal obligations within the WTO system. Whenever a Member is faced with a sophisticated and challenging legal question as to the validity of a specific measure under the WTO, it may be tempted to file a non-violation complaint. A panel facing this type of complaint could be highly embarrassed and any affirmative ruling based on this vague proposition would be neither welcomed nor followed by the losing party and other Members. Such a situation could potentially harm both the stability and credibility of the WTO.
One of the eventual goals of the newly launched WTO system is to integrate service arrangements into its regime through the creation of the GATS. The GATS is now in its initial developmental stages and accordingly full of uncertainties. The huge differences in the nature of goods and services will generally make it difficult for the GATS to rely entirely on the GATT for guidance. [67] The GATS, nonetheless, has directly imported the GATT dispute settlement system, including non-violation complaints.[68]
The GATS's reliance on the GATT dispute settlement system would aggravate ambiguities in the non-violation regime from which the GATT already suffers. First, there is no concept of "tariff binding" in service negotiations. Instead, each Member submits, on a sector by sector basis, a Schedule of Specific Commitments that includes market access commitments as well as national treatment conditions and qualifications according to the varying degrees of development under the "progressive liberalization" principle.[69] Against this backdrop, the notion of "reasonable expectation", which at the time of tariff negotiations rested on the principle of reciprocity, would be diluted or even absent.[70] Without a reasonable expectation requirement, supplementary-mode non-violation cases would be irrelevant because the minimum requirement of a connection between tariff concessions and reasonable expectation therefrom cannot be demonstrated.[71] Therefore, with respect to non-violation cases, the GATS regime would produce only "independent-mode" cases for which there are no specified precedents or discipline.[72]
Furthermore, several aspects of the GATS make it more difficult to determine whether a specific measure, especially a regulatory policy, violates the GATS.[73] For example, under the GATS, Members have "the right to regulate and to introduce new regulations on the supply of services within their territories in order to meet national policy objectives."[74] Moreover, any "inherent competitive disadvantages which result from the foreign character of the relevant services or service suppliers" are beyond the scope of national treatment obligations. [75] These nebulous aspects of the GATS require Member countries to depend more on non-violation claims than on claims of violation. Such reliance then causes difficulties for the panel that must decide whether there has been nullification or impairment of benefits.
An example is illustrative. Let us assume that country X, which is a Member of the GATS, has made a specific commitment to permit the establishment of a foreign bank branch within its territory, and that country Y, which is also a GATS Member, has several bank branches in country X. Then, without warning, X enacts a statute purported to reinforce supervision over foreign bank branches by requiring them to comply with more complex and burdensome procedures than those required of domestic banks. Since introducing a new regulation is at least facially consistent with GATS, if Y wants to challenge X's statute under the WTO regime, Y will be compelled to file a non-violation complaint, arguing that the statute nullifies or impairs the benefits accruing to Y under X's commitments in its schedule.[76] On the other hand, X may counter-argue that Y's competitive disadvantage, if any, derives from the inherent character of Y's foreignness and thus no nullification or impairment of benefits exists.[77] Given this situation, it would be very difficult for a panel to decide whether a non-violation nullification or impairment has occurred. In this context, it is noteworthy that the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) explicitly prohibits the non-violation provision in the GATT 1994 from being applied to dispute settlements under TRIPs for a period of five years from the date of entry into force of the WTO Agreement.[78]
One key area that could generate independent-mode non-violation complaints en masse is the area of competition policies. [79] Generally speaking, competition policies are infrequently mentioned in the former GATT and the WTO context. Concern over the frequent occurrence of competition policy cases led the 1960 Report to strongly recommended direct consultations between contracting parties with a view toward eliminating the harmful effects of p articular restrictive practices.[80] However, only a small number of cases actually concerned with competition policies or restrictive business practices were brought before the panel in the half decade history of the GATT. Moreover, the focus of these cases was simply to determine whether a specific measure involved "governmental intervention" which suggested a violation of the GATT 1947.[81] Accordingly, it would be fair to say that the GATT 1947 did not delve into competition policies.[82] The GATS does have an independent provision on "Business Practices", but the content is abstract and hortatory, merely encouraging consultations and cooperation.[83]
Potential competition policy conflicts are more serious now than ever before.[84] As the world economy becomes more interdependent and international trade has a more direct impact on individual economies, competition policies can no longer be viewed as purely domestic. For instance, competition policies have recently drawn public criticism in some specific cases regarding market access to Japan (particularly for the United States).[85] Furthermore, future conflicts over competition policies are likely to occur in the context of North-South tension.[86] With respect to industrial countries, the relatively weak or even nonexistent competition policies of developing countries could be viewed as "trade barriers," even though developing countries would argue that they are entitled to such industrial development policies.[87] In addition, loose enforcement of domestic anti-competition policies, including the toleration of restrictive business practices by private companies, could be viewed as an unfair comparative advantage for domestic industries vis-à-vis foreign exporters.[88] Given that it is debatable whether the above policies or practices would constitute "social dumping"[89] or a "subsidy,"[90] even in the new WTO regime, [91] obviously they do not seem to constitute violation cases.[92] Hence, industrial countries may feel compelled to argue "non-violation nullification or impairment" as a second-best option.[93]
A second source of conflict may arise from developing countries, whose main concerns over anti-competition practices seem to derive from the possible abuse of market-controlling power by multinational enterprises.[94] For example, in the middle of the Uruguay Round investment negotiation (Agreement on Trade-Related Investment Measures[95]), many developing countries expressed concerns about the negative impact of competition-stifling practices of multinational enterprises. These include the requirement that subsidiaries purchase imports from their parent company rather than source their needs locally and the prevention of exports by subsidiaries in order to segment world markets.[96] Since no rules effectively govern that kind of practice within the GATT, developing countries may rely on the pliable concepts of non-violation nullification or impairment to protect their competitive position.
In summary, as the interdependence of the world economy grows, competition policies once regarded as pure domestic policies will have greater international meaning and implications. This situation may cause industrial and developing countries to raise new kinds of claims against each other. Under the WTO regime those claims would probably fit within the category of non-violation nullification or impairment. It is obvious that a flood of anti-competition claims into the dispute settlement system will increase and exacerbate the ambiguity embedded in so-called "independent-mode" non-violation nullification or impairment cases. It would be difficult, in many cases, to accept that the complicated impact of current competition policies must be assessed in terms of reasonable expectations derived directly from tariff concessions made two or three decades ago.[97] It would be enormously burdensome for a panel to handle this situation without any substantive rules, practices, or precedents on which to base its ruling.
The ambiguity surrounding the concept of non-violation nullification or impairment may serve to over-extend the jurisdiction of the WTO dispute settlement mechanism.[98] This is because "ambiguity" in some cases produces "versatility." Any complaining party would naturally invoke the non-violation nullification or impairment provision when the party faces a situation in which another party does not "technically" breach any obligation under the WTO regime, but still should be considered "responsible" for the situation. Thus, to a complainant in this situation, the non-violation provision is a source of hope.[99]
It should be noted, however, that very expansive jurisdiction may jeopardize the dispute settlement system to the extent that an inundation of non-violation complaints would overwhelm a panel.[100] First, the question will arise as to whether the panel can deal with all cases it will receive. For example, as mentioned above, without any substantive rules, practices, or guidelines, the panel is not likely to make an appropriate and justifiable decision on non-violation nullification or impairment with regard to "anti-competition" issues in the WTO dimension.[101] Likewise, the panel will not be free to determine whether a chronically low labor standard in a developing country has resulted from under-enforcement of its domestic labor law since no specific obligation concerning this area exists in the WTO regime. Second, it is not clear whether a panel should decide all cases coming before its consideration. It would be problematic if a panel were to examine sensitive issues, such as policies related to "sovereign determination," simply because they appear idiosyncratic or unacceptable and thus result in nullification or impairment of another party's benefits. Similarly, in many cases, a panel should not be forced to second-guess the underlying logic of the domestic regulatory regime of a country. [102]
According to Professor Hudec, under the current dispute settlement mechanism there is a possibility that undesirable and inappropriate cases could damage the WTO trading system. [103] These are the so-called "wrong cases." Wrong cases seem to be particularly problematic when they are initiated with respect to an issue on which the WTO community has either not yet reached a consensus or on which past consensus has broken down.[104] It seems quite probable that wrong cases would proliferate if a panel tried to rule on issues that it should not handle. These cases include issues where current Members have not yet established relevant substantive norms on which panel decisions can be based or cases in which sovereign questions arise as to whether a panel should second-guess the policy determination of a Member country.[105] Such cases pose a "risk of over-adjudication"[106] or a "risk of politicization," resulting in a loss of legitimacy of the dispute settlement mechanism and harm the legitimacy of the WTO system as a whole. [107]
When improvements in the WTO dispute settlement mechanism that emerged from the Uruguay Round are considered, these concerns become more serious. In the former GATT dispute settlement system, any contracting party, including the losing party itself, could block the adoption of a panel report regardless of the ruling. This screening mechanism in some sense functioned to expel irrelevant cases,[108] even though it was generally criticized for weakening the rule of law in the dispute settlement system. In contrast, most procedures in the new WTO dispute settlement system are designed to be more expeditious, more automated, and more enforceable,[109] giving a panel and the Appellate Body more power as well as making it extremely difficult to block the adoption of any panel or Appellate Body reports.[110] Therefore, once a non-violation complaint is accepted by a panel (Appellate Body), however unreasonable and unjustifiable it may be, the ruling is almost automatically adopted.
Moreover, if the two parties concerned in a dispute still fail to reach a "mutually satisfactory adjustment" after a determination that a measure nullifies or impairs benefits without violation,[111] the winning party will rely on enforceable remedies, namely "compensation and suspension of concessions."[112] Why the losing party (or other Members for that matter) will choose to tolerate the ensuing sanctions is unclear, since it would then be forced to compensate the prevailing party or have its tariff concessions suspended by that party. Although a panel or Appellate Body report has no formal stare-decisis effect, when considered in light of the practical role of panel reports in guiding and steering subsequent cases, the above situation would severely undermine not only the credibility and stability of the dispute settlement system, but the entire WTO system.
One might argue that a panel would simply have to refuse to judge sensitive issues that might develop into wrong cases, thus keeping them out of the dispute settlement system. However, abandonment cannot be the end of the story. Although the WTO is a "trade" organization which effectively governs the world "trade" system, if it fails to deal with emerging trade-related issues, such as competition policies, conflicting interests of various power groups, including domestic constituencies, will help destabilize the WTO regime. The system would be criticized for its mediocre problem-solving capacity.[113]
Concomitantly, Member countries pressured by interest groups would be compelled to exercise unilateral measures of their own. Such a unilateral response would take two forms. First, the Member countries might attempt to expand extraterritorial jurisdiction of their domestic anti-competition laws. [114] Recently, for instance, the United States Supreme Court appears to have broadened the extraterritorial jurisdiction of the United States antitrust law (the Sherman Act) in a 5 to 4 decision in Hartford Fire Insurance Co. v. California in 1993.[115] Second, the Member countries might seek to mobilize a certain unilateral trade sanction pursuant to their own trade laws in order to fulfill their own policy goals. In the Fuji-Kodak (1998) case, for example, the United States asserted that the use of unilateral sanctions in Section 301 was not inconsistent with the WTO, because the WTO did not cover competition policy issues.[116] The United States has traditionally maintained this approach in the international trade area and recently reaffirmed its stance in the process of implementing the Uruguay Round.[117] This approach is legitimized by the so-called "self-help" theory advocated by Professor Hudec, who maintains that if the GATT (WTO) fails to govern a specific area, the complaining party may freely rely on "self-help" in some circumstances.[118] Although this approach has received harsh criticism,[119] it is unlikely that the United States will change its stance in the near future. Moreover, it is argued that the United States can effectively shape the agenda at the negotiating table by threatening to use Section 301.[120]
In summary, if a panel accepts broad jurisdiction over non-violation complaints, it will soon face problems as to whether it can or should make a decision. These problems may undermine the predictability and transparency of the dispute settlement system. If, in turn, a panel simply sidesteps the aforementioned issues, it may provoke a preemptive reaction by some countries and imperil the future credibility and stability of the WTO. Future panels face such a dilemma.
[50] See supra Part I.A.
[51] Belatedly, after three decades had passed from the launch of the GATT, non-tariff measures (NTBs) were beginning to be discussed in the Tokyo Round, and some side agreements such as the Standard Code were created. However, the legal nature of these side agreements was controversial in some situations since the hierarchy of legal obligations both in the GATT and in these side agreements was not clear-cut. Moreover, these side agreements entered into force only among the states which accepted them and this optional situation led to the criticism of "GATT a la carte." Finally, there was no unified dispute settlement system across the GATT and these side agreements provided the possibility of "forum shopping". JACKSON ET AL., supra note 5, at 296 - 97. See also JOHN H. JACKSON, THE WORLD TRADING SYSTEM: LAW AND POLICY OF INTERNATIONAL ECONOMIC RELATIONS (1995).
[52] Vermulst & Driessen, supra note 10, at 136.
[53] JACKSON, supra note 51, at 83 - 88.
[54] Hudec, supra note 10, at 618; GENERAL AGREEMENT ON TARIFFS AND TRADE, ANALYTICAL INDEX- GUIDE TO GATT LAW AND PRACTICE 610 n.64 (1994) [hereinafter ANALYTICAL INDEX].
[55] See supra note 34. In 14 out of 24 non-violation complaints (1947 - 1990), complaining parties filed a non-violation claim as an alternative to a violation claim. See also infra Part III.A.
[56] See Citrus, supra note 39.
[57] See Annex, supra note 34.
[58] According to Professor Petersmann, the blockage of adoption by the GATT Council of these reports reflected an attempt to avoid legally wrong interpretations or to keep open interpretative issues which the defendants continued to challenge, rather than a breakdown of the GATT dispute settlement process. Petersmann, supra note 10, at 1192 - 93.
[59] See supra Part I.A.2.
[60] See JACKSON ET AL., supra note 5, at 364.
[61] Since actual tariff negotiations are performed "bilaterally", reasonable expectation derived from tariff negotiations would also be bilateral. However, multilateralization in the current international trade regime, represented by the WTO system, is geared towards the notion of "rule of law." The contract-like bilateralism embedded in the concept of "expectation" imposes its own set of limitations. See id.
[62] See, e.g., Nullification and Impairment of Benefit, supra note 38; The Cuban Liberty and Democratic Solidarity Act (request for the establishment of a Panel by the European Community), WT/DS38/2 (October 8, 1996).
[63] See Citrus, supra note 39.
[64] See Appellate Body Report, Japan--Taxes on Alcoholic Beverages, October 1, 1996, WT/DS8/AB/R; WT/DS10/AB/R; WT/DS11/AB/R [hereinafter Alcoholic Beverages].
[65] See supra note 62.
[66] See WILL MARTIN & L. ALAN WINTERS, THE URUGUAY ROUND: WIDENING AND DEEPENING THE WORLD TRADE SYSTEM (1995) (an overview of the GATS framework).
[67] See Lisa Sue Klaiman, Applying GATT Dispute Settlement Procedures to a Trade in Services Agreement: Proceed with Caution, 11 U. PA. J. INT'L BUS. L. 657, 659 (1990).
[68] See GATS, supra note 6 art. XXIII; DSU, supra note 31, art. 22. In fact, the unification of dispute settlement procedures is regarded as one of the merits of the new dispute settlement system. See JACKSON ET AL., supra note 5, at 340.
[69] See, e.g., GATS, supra note 6, art. XVI (Market Access), XVII (National Treatment), XVIII (Additional Commitments), XIX (Negotiation of Specific Commitments), and XX (Schedules of Specific Commitments).
[70] See Petersmann, supra note 10, at 1231.
[71] See supra Part I.C.
[72] Id.
[73] In this context, some scholars argue that the provisions of national treatment in GATS should be specified in terms of the service providers' sectoral characteristics. See, e.g., Christopher Bail, Conceptual Problems and Possible Elements of Multilateral Framework for International Trade in Services, in PROGRESS AND UNDERCURRENTS IN PUBLIC INTERNATIONAL LAW 6: LIBERALIZATION OF SERVICES AND INTELLECTUAL PROPERTY IN THE URUGUAY ROUND OF GATT (Philip Sacerdoti ed., 1990).
[74] See GATS, supra note 6, pmbl. While trade in goods is mainly governed by border measures, trade in services is regulated by domestic laws and regulations. See Taylor, supra note 4, at 304.
[75] See GATS, supra note 6, art. XVII n.10.
[76] See id., art. XXIII, ¶ 3.
[77] See supra note 75. See GATS, supra note 6, art. XVII n.10.
[78] See TRIPs, supra note 48.
[79] Competition policies are usually defined to include laws and regulations that govern private producer behavior and the market structure within which interactions between producers take place; first, practices of individual firms (e.g., pricing and advertising); second, horizontal arrangements which refer to those between firms selling the same product or group of products (e.g., price-fixing, output restriction, and cartelization) and vertical arrangements which refer to those between manufacturers and their suppliers and distributors. See NAHEED KIRMANI, THE INTERNATIONAL MONETARY FUND, INTERNATIONAL TRADE POLICIES: 2 THE URUGUAY ROUND AND BEYOND, BACKGROUND PAPERS 68 (1994) [hereinafter IMF].
[80] 1960 Report of the Group of Experts on Restrictive Business Practices--Arrangements for Consultations, June 2, 1960, GATT B.I.S.D. (9th Supp.) at 170 - 71 (1960) [hereinafter 1960 Report].
[81] See, e.g., Semi-Conductors, supra note 32; Measures Affecting the World Market for Copper Ores and Concentrates, L/6456, January 31, 1989, GATT B.I.S.D. (36th Supp.) at 200 - 01 (1989).
[82] Interestingly, the Havana Charter, which contained antitrust provisions, failed to enter into force precisely due to these provisions. Bogdandy, supra note 35, at 106; JACKSON ET AL., supra note 5, at 1092 - 93.
[83] GATS, supra note 6, art. IX.
[84] Id. at 73.
[85] Many trading partners of Japan, led by the United States, have been arguing that the structural uniqueness of Japan's domestic distribution system functions as a powerful block against market access by foreign competitors. See IMF, supra note 79, at 68 - 70.
[86] Of course, future conflicts in the competition policy areas could arise in the dimension of North vs. North or South vs. South, but more salient conflicts would probably occur between the North and South since their interests in the area of competition policies seem to collide, at least for the time being.
[87] IMF, supra note 79, at 73.
[88] JACKSON ET AL., supra note 5, at 1092.
[89] "Social dumping" can occur when import prices are low because of lax enforcement of domestic anti-competition regimes. Id. at 683.
[90] It is sometimes suggested that loose enforcement of a domestic anti-competition regime could in fact function as an unfair advantage to domestic producers and thus be the object of countervailing duties. Id. at 1092.
[91] See Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Annex 1A of the WTO Agreement, supra note 2, art. 2 (Determination of Dumping); Agreement on Subsidies and Countervailing Duties, Annex 1A of the WTO Agreement, supra note 2, art. 1 (Definition of a Subsidy) [hereinafter Subsidies Agreement].
[92] See infra Part III.A.2.
[93] See, e.g., Fuji-Kodak, supra note 7; Nullification and Impairment of Benefits, supra note 38.
[94] JACKSON ET AL., supra note 5, at 1062.
[95]Agreement on Trade-Related Investment Measures, Annex 1A of the WTO Agreement, supra note 2.
[96] IMF, supra note 79, at 73.
[97] See supra Part I.B.
[98] Petersmann, supra note 16, at 192.
[99] Bogdandy, supra note 35, at 96.
[100] See supra note 42.
[101] International norm-making in the competition policy area, even in the form of soft law (guidelines or recommendations), does not seem easily achievable. Compliance with those norms is challenging. Within the OECD, discussion on how to cope with "competition policy and trade" issues has been quite active, centering around the Committee on Competition Law and Policy and the Trade Committee. The OECD did establish a consultation and conciliation mechanism in its "Revised Recommendation of the Council concerning Cooperation between Member Countries on Restrictive Business Practices Affecting International Trade," but it has been largely ignored by Member countries. See Barringer & Durling, supra note 41, at 140.
[102] See JACKSON ET AL., supra note 5, at 363; Steven P. Croley & John H. Jackson, WTO Dispute Procedures, Standard of Review, and Deference to National Governments, 90 AM. J. INT'L L. 193, 193 - 94 (1996).
[103] Robert E. Hudec, GATT Dispute Settlement after the Tokyo Round: An Unfinished Business, 13 CORNELL INT'L L.J. 145, 159 (1980); see also William J. Davey, Dispute Settlement in GATT, 11 FORDHAM INT'L L.J. 51, 67 - 78 (1987).
[104] See id.
[105] See supra Part II.C.1. Professor Hudec argued that, as seen in the DISC case, panel decisions on non-traditional areas like trade in services would be difficult for domestic government officials to accept, and this would hinder panel decisions from being implemented by the losing party. See Robert E. Hudec, Reforming GATT Adjudication Procedures: The Lessons of the DISC case, 72 MINN. L. REV. 1443, 1508 - 09 (1988).
[106] Bogdandy, supra note 35, at 110 n.88.
[107] Philip M. Nichols, Participation of Non-government Parties in the World Trade Organization: Extension of Standing in World Trade Organization Disputes to Non-government Third Parties, 17 U. PA. J. INT'L ECON. L. 295, 327 (1996).
[108] See Petersmann, supra note 10, at 1192 - 93.
[109] See, e.g., DSU, supra note 31, arts. 6.1, 8.7, 15, 16, and 17.
[110] According to the DSU, it requires a consensus of all Member countries, including the victorious party, to block a panel (Appellate Body) decision, which seems nearly impossible. It is frequently called "negative consensus". DSU, supra note 31, art. 16; JACKSON ET AL., supra note 5, at 343.
[111] DSU, supra note 31, art. 26 ¶ 1(b).
[112] GATT 1994, supra note 5, art. XXIII ¶ 2; DSU, supra note 31, arts. 22, 26, ¶ 1(d).
[113] Robert E. Hudec, International Economic Law: The Political Theater Dimension, 17 U. PA. J. INT'L ECON. L. 9, 10 (1996).
[114] See Renee Hardt, Kodak v. Fuji: A Test for the Extraterritorial Application of the Sherman Act, 15 B.U. INT'L L.J. 309, 309 - 10 (1997).
[115] Id.; 509 U.S. 764 (1993). In this case, the Supreme Court did not resort to traditional "comity analysis" as established in Timberlane Lumber Co. v. Bank of America, N.T. & S.A. when it held that the United States courts should not take into account foreign interests unless there is a "true conflict" between the United States law and the law of the foreign state. Hardt, supra note 114, at 311. However, this approach is likely to impose substantial litigation costs on a plaintiff as well as the risk of losing the suit. Even if the plaintiff wins, the court's decision may not be enforceable, id. at 312. Therefore, without confidence about its claim against a foreign company, no U.S. company would easily rely on this approach rather than a safer political process like a Section 301 petition, id. at 339.
[116] See Abels, supra note 42, at 523. Eventually, the United States made no case under Section 301 primarily because Japan refused to negotiate under Section 301 with the United States. Instead, the United States went to the WTO dispute settlement mechanism. Considering the Auto and Auto Parts case, Japan would have once again filed a complaint with the WTO panel against the United States' threat of the Section 301 sanction if the United States relied on Section 301 in this case. See Taylor, supra note 4.
[117] See, e.g., GEN. ACCT. OFF., THE GENERAL AGREEMENT ON TARIFFS AND TRADE--URUGUAY ROUND FINAL ACT SHOULD PRODUCE OVERALL U.S. ECONOMIC GAINS, July 29, 1994, GAO/GGD 94-83A, 1994 WL 836267 (F.D.C.H.); OFF. U.S. TRADE REPRESENTATIVE, EXECUTIVE OFF. PRESIDENT, THE URUGUAY ROUND AGREEMENT ACT, STATEMENT OF ADMINISTRATIVE ACTION: UNDERSTANDING ON RULES AND PROCEDURES GOVERNING THE SETTLEMENT OF DISPUTES, September 27, 1994.
[118] Taylor, supra note 4, at 227 n.86; Robert E. Hudec, Thinking About the New Section 301: Beyond good and Evil, in AGGRESSIVE UNILATERALISM 113, 130 (Jagdish Bhagwati & Hugh T. Patrick eds., 1990).
[119] See, e.g., JAGDISH BHAGWATI: WORLD TRADING SYSTEM AT RISK (1991).
[120] Taylor, supra note 4, at 291.