Negotiate or litigate? Effects of WTO judicial delegation on U.S. trade politics

Law and Contemporary Problems

Volumn 71, Issue 1, 2008, Pages 256-282

  Goldstein, Judith L ^a   Steinberg, Richard H ^b  

^a STANFORD UNIVERSITY   (United States)

^b UNIVERSITY OF CALIFORNIA   (United States)

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EID: 48949092923     PISSN: 00239186     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (137)

1. "Judicial lawmaking" is defined as action by a judicial body that establishes new legal rules. Such action is usually taken pursuant to a court's perceived authority to interpret legal text. A court may take a restrained or expansive stance on interpretation, leading to variance in the extent of judicial lawmaking. As elaborated in Part II, below, judicial lawmaking at the WTO is done by the Appellate Body. WTO judicial lawmaking is treated here as having two dimensions: Fiffing gaps in legal text and clarifying ambiguity.
2. For a more detailed explanation of increasing stalemate in WTO trade rounds, see Judith L. Goldstein & Richard H. Steinberg, Regulatory Shift: The Rise of Judicial Liberalization at the WTO, in THE POLITICS OF GLOBAL REGULATION (Walter Mattli & Ngaire Woods eds., forthcoming 2008).
3. Terry M. Moe, The New Economics of Organization, 28 Am. J. POL. SCI. 739,756 (1984).
4. Curtis A. Bradley & Judith Kelley, The Concept of International Delegation, 71 LAW & CONTEMP. PROBS. 1, 27 (Winter 2008) (quoting Kenneth W. Abbott & Duncan Snidal, Hard and Soft Law in International Governance, 54 INT'L ORG. 421, 436-37 (2000)).
5. For more on the distinction between formal or de jure sovereignty and informal or de facto sovereignty, see Richard H. Steinberg, Who Is Sovereign?, 40 STAN. J. INT'L L. 329, 340 (2004).
6. Final Act of the U.N. Conference on Trade and Employment, Havana Charter for an International Trade Organization, chs. VII-IX, U.N. Doc. E/CONF.2/ 78 (Mar. 24,.1948) [hereinafter Havana Charter].
7. Protocol of Provisional Application of the General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-2051, 55 U.N.T.S. 308 [hereinafter Protocol of Provisional Application].
8. See generally Richard Blackhurst, The Capacity of the WTO to Fulfill Its Mandate, in THE WTO AS AN INTERNATIONAL ORGANIZATION 31 (Anne O. Krueger ed., 1998). In a comparative analysis of international organizations, Blackhurst concludes that the GATT/WTO has had a small and underfinanced secretariat.
9. Id. at 41. He notes that the only agency with a smaller staff and budget among the seventeen most active international agencies is the United Nations Conference on Trade and Development.
10. Id. at 40, tbl.1.1.
11. Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, 33 I.L.M. 1125 (1994) [hereinafter WTO Agreement].
12. The secretariat remained under formal UN control until the WTO's creation. Thus, through the mid-1990s, the UN was the legal entity that could appoint the Director-General and set compensation.
13. See generally JOHN H. JACKSON, WORLD TRADE AND THE LAW OF GATT 201-48 (1969) (discussing "The Legal Framework of Tariff Concessions and Negotiations in GATT").
14. See generally World Trade Organization, Aid For Trade Global Review, http://www.wto.org/english/tratop_e/devel_e/a4t_e/ global_review_e.htm (last visited Jan. 25, 2008) (describing the WTO's goals for monitoring and evaluation of its "Global Aid-for-Trade Review" program).
15. See generally WTO Agreement, supra note 9, Annex 3 (describing the Trade Policy Review Mechanism).
16. See John H. Jackson, The WTO Dispute Settlement Understanding - Misunderstandings on the Nature of Legal Obligation, 91 AM. J. INT'L L. 60, 62 (1997).
17. See generally Improvements to the GATT Dispute Settlement Rules and Procedures, Apr. 13, 1989, GATT B.I.S.D. (36th Supp.), at 61 (1990) [hereinafter Midterm Dispute-Settlement Rulesc], available at http://www.wto.org/gatt_docs/English/SULPDF/91420188.pdf.
18. See General Agreement on Tariffs and Trade arts. XXIII(2), XXV, Oct. 30,1947, 61 Stat. A-11, 55 U.N.T.S. 194 [hereinafter GATT];
19. Richard H. Steinberg, In the Shadow of Law or Power? Consensus-Based Bargaining and Outcomes in the GATT/WTO, 56 INT'L ORG. 339, 344 (2002).
20. ROBERT E. HUDEC, ENFORCING INTERNATIONAL TRADE LAW: THE EVOLUTION OF THE MODERN GATT LEGAL SYSTEM 11 (1993).
21. Robert E. Hudec, The New WTO Dispute Settlement Procedure: An Overview of the First Three Years, 8 MINN. J. GLOBAL TRADE 1, 4-5 (1999).
22. HUDEC, supra note 16, at 12.
23. See id. at 13.
24. See Hudec, supra note 17, at 21.
25. HUDEC, supra note 16, at 13.
26. See id. at 8.
27. Id. at 14.
28. Marc L. Busch & Eric Reinhardt, Testing International Trade Law: Empirical Studies of GATT/WTO Dispute Settlement, in THE POLITICAL ECONOMY OF INTERNATIONAL TRADE LAW 457, 473 (Daniel L. M. Kennedy & James D. Southwick eds., 2002).
29. HUDEC, supra note 16, at 13.
30. U.S.C. § 2411 (2000).
31. Id. § 2411(a),(b).
32. Id. § 2411(a)(1).
33. For more details on this argument, see Judith Goldstein & Joanne Gowa, U.S. National Power and the Post-War Trading Regime, 1 WORLD TRADE REV. 153, 158-64 (2002).
34. See generally Midterm Dispute-Settlement Rules, supra note 14.
35. Thi description of the U.S. position in 1990 is documented in USTR, Dispute Settlement, in THE U.S. DELEGATION BRIEFING BOOK FOR THE BRUSSELS MINISTERIAL (Dec. 1990) (on file with authors).
36. Id.
37. "Legalization" is a particular form of institutionalization characterized by precision, obligation, and delegation. See generally Kenneth W. Abbott, Robert O. Keohane, Andrew Moravcsik, Anne-Marie Slaughter & Duncan Snidal, The Concept of Legalization, 54 INT'L. ORG. 401 (2000).
38. See Steinberg, supra note 15, at 359-60.
39. Understanding on Rules and Procedures Governing the Settlement of Disputes, Apr. 15, 1994, Marrakesh Agreement. Establishing the World Trade Organization, Annex 2, Legal Instruments-Results of the Uruguay Round, 33 I.L.M. 1125, 1226 (1994) [hereinafter DSU], available at http://www.wto.org/english/tratop_e/dispu_e/dsu_e.htm (last visited Feb. 21, 2008).
40. Busch and Reinhardt count 654 disputes filed from 1948 through June 2002. Busch & Reinhardt, supra note 24, at 462. From the date of the WTO's establishment through June 2000, 202 disputes were initiated.
41. See World Trade Organization, Chronological List Of Disputes Cases, http://www.wto.org/english/tratop_e/dispu_e/dispu§atus_e.htm (last visited Jan. 27, 2008).
42. See also Kara Leitner & Simon Lester, WTO Dispute Settlement 1995-2003: A Statistical Analysis, 7 J. INT'L ECON. L. 169 (2004).
43. Each of these 279 disputes is listed chronologically in World Trade Organization, supra note 36.
44. DSU, supra note 35, art. 6(1).
45. Id. arts. 16(4),2(4).
46. Id. art. 22(7).
47. Id. art. 17(6).
48. See Jackson, supra note 14, at 61-64.
49. See Inge Govaere, The Reception of the WTO Agreement in the European Union: The Legacy of GATT, in REGIONALISM AND MULTILATERALISM AFTER THE URUGUAY ROUND 703, 707 (Paul Demaret, Jean-Francois Bellis & Gonzalo García-Jiménez eds., 1997) (suggesting that GATT/WTO law has almost no direct effect in the law of the European Union and its Member States);
50. Richard H. Steinberg, Direct Application of Multilateral Trade Agreements in the United States, in REGIONALISM AND MULTILATERALISM AFFER THE URUGUAY ROUND 715, 723 (Paul Demaret, Jean-Francois Bellis & Gonzalo García-Jiménez eds., 1997) ("The GATT 1947 and the Uruguay Round Agreements, including the GATT 1994, have had only limited direct effects in US law.").
51. See Richard H. Steinberg, Judicial Lawmaking at the WTO: Discursive, Constitutional, and Political Constraints, 98 AM. J. INT'L L. 247, 250 (2004) (arguing that politics is the tightest constraint on judicial lawmaking at the WTO, and that political constraint is unlikely to operate unless such lawmaking changes the fundamental balance of WTO rights and responsibilities favored by powerful states).
52. See id. for a more detailed statement of the arguments in this section.
53. See, e.g., Anne-Marie Burley & Walter Mattli, Europe Before the Court: A Political Theory of Legal Integration, 47 INT'L ORG. 41, 73-76 (1993);
54. John Ferejohn & Barry Weingast, Limitation of Statutes: Strategic Statutory Interpretation, 80 GEO. L.J. 565, 581-82 (1992);
55. Erik Voeten, The Politics of International Judicial Appointments: Evidence from the European Court of Human Rights, INT'L ORG. (forthcoming 2008).
56. Interview with A. Jane Bradley, former chief U.S. dispute-settlement negotiator and Assistant USTR for Enforcement, in Washington, D.C. (Mar. 2007); Interview with Kenneth Freiberg, USTR Deputy Gen. Counsel, in Washington, D.C. (Mar. 2007). According to Bradley and Freiberg, a handful of lawyers in the USTR's General Counsel's office were concerned about judicial lawmaking, but those at the political level in both Washington and Brussels were persuaded by the clarity of the WTO agreements and by the mandate of DSU Articles 3.2 and 19.2 that neither panels nor the Appellate Body could add to nor diminish the rights and obligations provided in the covered agreements. Interviews with A. Jane Bradley & Kenneth Freiberg, supra. U.S. Senator Bob Dole was concerned enough about judicial lawmaking that he proposed establishing a commission to review the decisions and behavior of the Appellate Body, but only twelve co-sponsors joined him in support of the proposal, and it never passed the Senate.
57. See generally WTO Dispute Settlement Review Commission Act, S. 16, 104th Cong. (1995) (establishing a WTO Dispute Settlement Review Commission to review dispute-settlement reports of the WTO's Appellate Body).
58. Ultimately, the distinction between gap-filling and ambiguity clarification may be fragile, but the distinction is respected here out of convention. See generally H.L.A. HART, THE CONCEPT OF LAW (1961).
59. Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products, paras. 79-91, WT/DS58/A-B/R (Oct. 12,1998) [hereinafter U.S. - Shrimp-Turtle], available at http://docsonline.wto.org/DDFDocuments/t[WT/DS/58ABR.doc.
60. DSU, supra note 35, art. 13(1).
61. Appellate Body Report, European Communities - Regime for the Importation, Sale and Distribution of Bananas, paras. 9-10, WT/DS27/ AB/R (Sept. 9, 1997).
62. Id. at para. 10.
63. See Panel Report, Indonesia - Certain Measures Affecting the Automobile Industry, para. 14.9, WT/DS54/R, WT/DS55/R, WT/DS59/R, WT/ DS64/R (July 2, 1998), available at http://www.wto.org/English/ tratop_je/dispu_e/54rOO.pdf.
64. See U.S. - Shrimp-Turtle, supra note 49, at paras. 20-28.
65. Id. at para. 126 (quoting GATIF, supra note 15, art. XX(g)).
66. Id. at para. 129.
67. Id. at paras. 150-86.
68. Id. at para. 161.
69. See Appellate Body Report, United States - Definitive Safeguard Measures on Imports of Circular Welded Carbon, Quality Line Pipe from Korea, paras. 208-17, WT/DS202/AB/R (Feb. 15, 2002), available at http://www.wto.org/english/tratop_e/dispu_e/202abr-e.pdf;
70. Appellate Body Report, United States - Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, paras. 166-69, WT/DSl77/AB/R, WT/DS178/AB/R (May 1, 2001) [hereináfter U.S. - Lamb Meat], available at http://docsonline.wto.org/DDFDocuments/t/WT/DS/178ABR.doc;
71. Appellate Body Report, United States - Definitive Safeguard Measures on Imports of Wheat Gluten from the European Communities, paras. 76-78, WT/DS166/AB/R (Dec. 22, 2000), available at http://www.wto.org/english/tratop_e/dispu_e/166abr_e.pdf.
72. Interview with Tim Reif, Democratic Chief Trade Counsel, U.S. House Comm. on Ways and Means, in Washington, D.C (Apr. 2002). In the Uruguay Round negotiations, U.S. negotiators refused to agree to a test that would require national authorities to quantify the relative effects of imports and other factors on domestic industry. In so refusing, the U.S. negotiators intended to enable the International Trade Commission to continue using its qualitative approach to analyze the "substantial cause" question in safeguards cases.
73. U.S. - Lamb Meat, supra note 59, at paras. 105-06.
74. See, e.g., Appellate Body Report, United States - Anti-Dumping Measures on Certain Hot Rolled Steel Products from Japan, paras. 226-28, WT/DS184/AB/R (July 24, 2001), available at http://www.wto.org/englisb/tratop_e/dispu_e/184abr_e.pdf.
75. Appellate Body Report, United States - Laws, Regulations and Methodology for Calculating Dumping Margins ("Zeroing"), para. 263, WT/DS294/AB/R (Apr. 18, 2006) [hereinafter U.S. - Zeroing], available at http://www.wto.org/english/tratop_e/dispu_e/294abr_e.pdf.
76. Id. at para. 173 n.286.
77. Id. at para. 263.
78. See U.S. SECRETARY OF COMMERCE, EXECUTIVE BRANCH STRATEGY REGARDING WTO DISPUTE SETTLEMENT PANELS AND THE APPELLATE BODY: REPORT TO THE CONGRESS TRANSMITTED BY SECRETARY OF COMMERCE 7-10 (2002), available at http://www.ita.doc.gov/ReporttoCongress.pdf.
79. See generally CLAUDE E. BARFIELD, FREE TRADE, SOVEREIGNTY, DEMOCRACY: THE FUTURE OF THE WORLD TRADE ORGANIZATION (2001);
80. Daniel K. Tarullo, The Hidden Costs of International Dispute Settlement. WTO Review of Domestic Anti-Dumping Decisions, 34 LAW & POL'Y INT'L BUS. 109 (2002).
81. See generally Alan O. Sykes, Protectionism as a "Safeguard": A Positive Analysis of the GATT "Escape Clause" with Normative Speculations, 58 U. CHI. L. REV. 255 (1991).
82. U.S. - Lamb Meat, supra note 59, at para. 197.
83. See also Appellate Body Report, Argentina - Safeguard Measures on Imports of Footwear, para. 151, WT/DS121/AB/R (Dec. 14, 1999), available at http://docsonline.wto.org/DDFDocuments/t/WT/DS/ 121ABR.doc.
84. Report of the Intersessional Working Party on the Complaint of Czechoslovakia Concerning the Withdrawal by the United States of a Concession under the Terms of Article XIX, paras. 11-12, GATT/CP/106 (Mar. 27, 1951) (adopted Oct. 22, 1951), available at http://sul-derivatives. stanford.edu/derivative?CSNID= 90310003&mediaType=application/pdf.
85. Agreement on Safeguards, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1A, 1869 U.N.T.S. 154 (1994), available at http://www.wto.org/english/docs_e/legal_e/ 25-safeg.pdf.
86. Interview with Tim Reif, former USTR Associate General Counsel and member of the U.S. delegation that negotiated the Agreement on Safeguards, in D.C. (May 2005).
87. U.S. - Lamb Meat, supra note 59, at paras. 69-72 (citing Appellate Body Report, Korea - Definitive Safeguard Measure on Imports of Certain Dairy Products, para. 85, WT/DS98/AB/R (Dec. 14, 1999), available at http://docsonline.wto.org/DDFDocuments/t/WT/DS/ 98ABR.doc.
88. Judicial lawmaking was raised several times in the Uruguay Round dispute-settlement negotiations, but in all of those instances, participants were expressing a preference that prospective changes to the dispute-settlement system should not create, by constructive interpretation, obligations that were not established in the texts of GATT/WTO agreements.
89. See, e.g., GATT Secretariat, Summary and Comparative Analysis of Proposals for Negotiations, MTN. GNG/NG13/W14/Rev.2 (June 22, 1988), available at http://www.wto.org/gatt_docs/English/SULPDF/ 92050053.pdf;
90. GATT Secretariat, Meeting of 25 June 1987, MTN.GNG/NG13/2 (July 15, 1987), available at http://www.wto.org/gatt_does/English/ SULPDF/92020218.pdf.
91. See, e.g., JOHN CROOME, RESHAPING THE WORLD TRADING SYSTEM: A HISTORY OF THE URUGUAY ROUND (1995).
92. Interviews with A. Jane Bradley & Kenneth Freiberg, supra note 47 (identifying the following reports: Report of the Panel, United States - Restrictions on Imports of Tuna, WT/DS29/R (June 16, 1994), reprinted in 33 I.L.M. 839 (1994), available at http://www.wto.org/gatt_docs/English/SULPDF/9l790l55.pdf;
93. Report of the Panel, United States - Restrictions on Imports of Tuna, WT/DS21/R (Sept. 3, 1991), reprinted in GATT B.I.S.D (39th Supp.) at 155 (1993), available at http://www.wto.org/ gatt_docs/English/SULPDF/91530924.pdf
94. Report of the Panel, Canada - Measures Affecting the Sale of Gold Coins, L/5863, 1985 WL 291500 (Sept. 17, 1985) (unadopted) (Canada agreed with certain parts of the report and rescinded the tax but blocked adoption of the report because it disagreed with findings relating to the MFN principle);
95. Report of the Panel, United States Tax Legislation (DISC), Nov. 12, 1976, GATT B.I.S.D. (23rd Supp.) at 98 (1977), available at http://www.wto.org/gatt_docs/English/SULPDF/90930121.pdf (the United States permitting its adoption only in conjunction with a Contracting Parties decision, the substance of which was negotiated between the EC and the United States, interpreting various points of GATT law)).
96. See generally Negotiations on the Dispute Settlement Understanding, Proposal of the Africa Group in the WTO, para. 2 (Oct. 2002) (on file with authors);
97. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 17-18 February 2003, TN/DS/M/9 (July 1, 2003);
98. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 28-30 January 2003, TN/DS/M/8 (June 30, 2003);
99. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 16-18 December 2002, TN/DS/M/7 (June 26, 2003);
100. Dispute Settlement Body - Special Session, Special Session of the Dispute Settlement Body - Report by the Chairman, Ambassador Péter Balás, to the Trade Negotiations Committee, TN/DS/9 (June 6, 2003);
101. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 13-15 November 2002, TN/DS/M/ 6 (Mar. 31 2003);
102. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 14 October 2002, TN/DS/M/5 (Feb. 27, 2003);
103. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 10 September 2002, TN/DS/M/4 (Nov. 6, 2002);
104. Settlement Body - Special Session, Negotiations on the Dispute Settlement Understanding - Proposals on DSU by Cuba, Honduras, India, Malaysia, Pakistan, Sri Lanka, Tanzania and Zimbabwe, TN/DS/W/18 (Oct. 7, 2002);
105. Special Session of the Dispute Settlement Body, Minutes of Meeting - Held in the Centre William Rappard on 15 July 2002, TN/DS/M/3 (Sept. 9, 2002);
106. Dispute Settlement Body - Special Session, Contribution of the United States to the Improvement of the Dispute Settlement Understanding of the WTO Related to Transparency - Communication from the United States, TN/DS/W/13 (Aug. 22,2002).
107. Confidential notes on meetings of the informal DSU Reform Group from Oct. 22, 1998-Sept, 24, 1999, provided to the author by a senior trade official (Apr. 2002) (on file with authors).
108. These articles were selected by searching the Lexis-Nexis database of "US & Canadian Law Reviews, Combined" on Feb. 7, 2004, for articles that mentioned "GATT" at least ten times and "dispute settlement" at least five times.
109. Steve Charnovitz, Environmental Trade Sanctions and the GATT: An Analysis of the Pelly Amendment on Foreign Environmental Practices, 9 Am. U. J. INT'L. L. & POL'Y 751, 788 (1994);
110. Daniel A. Farber & Robert E. Hudec, Free Trade and the Regulatory States: A GATT's-Eye View of the Dormant Commerce Clause, 47 VAND. L. REV. 1401, 1408-09 (1994).
111. These figures are based on the author's review of articles selected by searching the Lexis-Nexis database of "US & Canadian Law Reviews, Combined" on Feb. 7, 2004, for articles that mentioned "WTO" at least ten times and "dispute settlement" at least five times.
112. Interview with A. Jane Bradley, supra note 47; Interview with Dorothy Dwoskin, Assistant USTR for Multilateral Affairs, in Washington, D.C. (May 2005).
113. See Tarullo, supra note 66, at 168. Complainants win almost ninety percent of all dispute-settlement cases. This win rate may be explained by a combination of asymmetric information and the cost of bringing a case, rather than by the political leanings of the tribunal. Nevertheless, this high win rate it is consistent with other evidence, presented above, suggesting a bias toward liberalization.
114. See Busch & Reinhardt, supra note 24.
115. See generally Tarullo, supra note 66.
116. For example, a liberal bias has been apparent in WTO rulings against the EC's banana regime, beef hormones directive, subsidization of sugar, and restrictions on GMOs and against U.S. trade-remedy laws (particularly those used to protect steel) and cotton subsidies. See Panel Report, European Communities-Measures Affecting the Approval and Marketing of Biotech Products, WT/DS291/R, WT/DS292/R, WT/DS293/R (Sept. 29, 2006), available at http://www.wto.org/english/news-e/ news06_e/291r_e.htm; Appellate Body Report, European Communities-Export Subsidies on Sugar, WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R (Apr. 28, 2005), available at http://docsonline.wto.org/DDFDocuments/t/WT/DS/283ABR.doc; Appellate Body Report, United States-Subsidies on Upland Cotton, WT/DS267/AB/R (Mar. 3, 2005), available at http://www.wto.org/english/tratop_e/ dispu_e/267abr_e.pdf; Appellate Body Report, European Communities-Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R, WT/DS48/AB/R (Jan. 16, 1998); Appellate Body Report, European Communities-Regime for the Importation, Sale and Distribution of Bananas, WT/DS27/AB/R (Sept. 9, 1997).
117. This figure was approximated as of Aug. 31, 2007, by dividing the total number of dispositive WTO dispute-settlement rulings holding a Member in contravention of a WTO obligation by the number of cases in which a WTO Member has been found in noncompliance with such a ruling pursuant to DSU Article 21. This calculation is an approximation because it is possible (although rare) that a Member has failed to comply but that the successful complainant was compensated by the contravening Member or otherwise decided not to pursue the matter under DSU Articles 21 and 22. For the list of information upon which this calculation rests, see World Trade Organization, supra note 36.
118. DSU, supra note 35, art. 21(3).
119. In the United States, the government publishes a proposed retaliation list in the Federal Register thirty days prior to the effective date of retaliation.
120. See generally Judith Goldstein & Lisa L. Martin, Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note, 54 INT'L ORG. 603 (2000).
121. This analysis is consistent with that presented by Epstein and O'Halloran in this volume. See David Epstein & Sharyn O'Halloran, Sovereignty and Delegation in International Organizations, 71 LAW & CONTEMP. PROBS. 77 (Winter 2008). However, we consider the interaction as only a two-party game-the United States interacting with the WTO. The interests of the WTO are assumed to be fixed and for free trade the preferences of the United States are as suggested in Figure 1, which could lead to a range of possible policy outcomes.
122. See Michael Bailey, Judith Goldstein & Barry R. Weingast, The Institutional Roots of American Trade Policy: Politics, Coalitions, and International Trade, 49 WORLD POL. 309, 328-29 (1997);
123. Michael Hiscox, The Magic Bullet? The RTAA, Institutional Reform, and Trade Liberalization, 53 INT'L ORG. 669, 687-89 (1999).
124. U.S. - Shrimp-Turtle, supra note 49.
125. U.S. - Lamb Meat, supra note 59.
126. Appellate Body Report, United States - Subsidies on Upland Cotton, WT/DS267/AB/R (Mar. 3, 2005), available at http://www.wto.org/ english/tratop_e/dispu_e/267abr_e.pdf.
127. U.S. - Shrimp-Turtle, supra note 49.
128. See, e.g., Appellate Body Report, United States - Measure Affecting Imports of Woven Wool Shirts and Blouses from India, § VI, WT/DS33/A.B/R (Apr. 25, 1997), available at http://www.worldtradelaw.net/reports/wtoab/us-woolshirts(ab).pdf.
129. See, e.g., Bailey, Goldstein & Weingast, supra note 91, at 314;
130. Judith Goldstein, International Law and Domestic Institutions: Reconciling North American "Unfair" Trade Laws, 50 INT'L ORG. 541, 559-60 (1996).
131. See Oona A. Hathaway, Positive Feedback: The Impact of Trade Liberalization on Industry Demands for Protection, 52 INT'L ORG. 575, 584-88 (1998), for a similar argument.
132. See Single European Act, 1987 O.J. (L 169) 1.
133. The Luxembourg Compromise, signed on Jan. 31, 1966, provides, In the event of decisions that can be adopted by majority on the proposal of the Commission, when very important interests of one or several partners are at stake, the members of the Council will attempt, within a reasonable period of time, to arrive at solutions that could be adopted by all members of the Council in respect of their mutual interests and those of the Community. This is considered a "political declaration" by Foreign Ministers and did not amend the Treaty of Rome. See Arrangements Made in Luxembourg Between the Foreign Affairs Ministers of the Six, Jan. 31, 1966,5 I.L.M. 316,317 [hereinafter Luxembourg Compromise].
134. Case 178/84, Comm'n v. Germany, 1987 E.C.R. 1227, available at http://eurlex. europa.eu/smartapi/cgi/ sga_doc?smartapi!celexplus!prod!CELEXnumdoc&numdoe=61984JO178&1 g=en (last visited Feb. 21, 2008)
135. Case 120/78, Rewe-Zentral AG v. Bundesmonopolverwaltung für Branntwein, 1979 E.C.R. 649, available at http://eur-lex.europa.eu/smartapi/cgi/ sga_doc?smartapi!celexplus!prod!CELEXnumdoc&lg=en&numdoc= 61978J0120 (last visited Feb. 21, 2008).
136. See Karen J. Alter, The European Union's Legal System and Domestic Policy: Spillover or Backlash?, 54 INT'L ORG. 489,493 (2000);
137. Burley & Mattli, supra note 46, at 62-65.