Research On Discretionary Laws In WTO Dispute Settlement

“As applied” challenges and “as such” challenges are thetwo main parts in WTO Dispute Settlement Body. “As such” challenges are to review the domestic laws of members.If one member found another member’s domestic laws violate its obligations under the WTO agreement, it can apply for an “as such” challenge in WTO Dispute Settlement Mechanism. Although there is no specific provision in WTO to regulate “as such” challenges, “as such” challenges gain a wide recognition after “US-Superfund”(BISD 34S/136) case. The panel and the Appellate Body developed mandatory/discretionary doctrine during the process of reviewing challenged law in “as such” challenges. Under the mandatory/discretionary doctrine, enactment of a “mandatory” law may constitute a violation of the WTO obligations, whilea “discretionary” law does not constitute a violation until a government actually commits a prohibited act.The application of mandatory/discretionary doctrine directly related to the legitimacy of a domestic law in “as such” challenge. In the period of GATT and early WTO, mandatory/discretionary doctrine was treated as a rule to apply. Under no circumstance would it be ruled as violation of WTO rules if it is deemed as a discretionary law.In the opinion of the“United States — Sections 301–310 of the Trade Act 1974”(DS152) case, the Appellate Body noted that whether or not a discretionary law constitutesa violation of WTO depends on the relevant WTO rules. Since then, the attitude of DSB towards discretionary lawshas become increasingly unpredictable.This dissertation, based upon the thorough discussion of WTO dispute settlement cases, analyzes discretionary laws in “as such” challenges from both theoretical and practical perspectives, and proposes some suggestions for our country concerning/regarding/with regard to this kind of cases in future.This dissertationincludes four parts, except the introduction and conclusion:The first section defines discretionary laws in WTO dispute settlement. This part first analyzes the ideas of the panel and the appellate body when determining whether a law is a discretionary one, and then concludes that the scope of discretionary laws in WTO is wider than in domestic law system. The discretionary law in WTO meansthat the law empowers administrative organizations discretion to act or interpreter,and even to legislate a more detailed law. With those discretion, these laws may not violate WTO obligations. And then, this part elaborates the discretionary laws that can be challenged in WTO dispute settlement system from the perspective of legal validity, legal hierarchy and legal form.The second section focuses on the theoretical basis of review of discretionary laws in WTO dispute settlement. This part is divided into two levels.Firstly, it points out the legal basis of jurisdiction of DSB ondiscretionary laws. Pursuantto article 16.4 of the Marrakesh Agreement Establishing the World Trade Organization and article 23 of GATT1994, the WTO has jurisdiction on the reviewing of domestic laws; Secondly, it analyzes the discretionary laws from the domestic perspective and purposes that a statemember shall conform to the international obligations and a domestic law shall be subject to the review by DSB.The third section analyzes the legal practice of discretionary laws in WTO dispute settlement. The attitude of panel and Appellate Body towards discretionary laws changes with the development of mandatory/discretionary doctrine. Through the research of typical cases related to review of discretionary laws and the development of mandatory/discretionary doctrine, this part try to indicate the attitude of panel and appellate body toward discretionary laws in WTO dispute settlement.The last section is to propose some suggestions for our country when encounter same “as such” challenges. In future practice of “as such” challenges, if we were on the complaint side, we should focus on the mandatory or discretionary nature of the challenged law and the burden of proof; if we were on the respondent side, we can use the mandatory/discretionary doctrine to defend ourselves. In addition, it is suggested that China’s future legislation should not be too rigid, the flexibility of laws can greatly improve the rate of success in our future “as such” challenge.