¹ See, e.g., John H. Jackson, The World Trading System: Law and Policy of International Economic Relations §1.1 (1989); see also infra note 2.

² See John H. Jackson, Alternative Approaches for Implementing Competition Rules in International Economic Relations, 2 Swiss Rev. Int'l Econ. Rel. 2, 2–25 (1994); John H.Jackson, Reflections on Problems of International Economic Relations, in Trilateral Perspectives on International Legal Issues: Relevance of Domestic Law and Policy 307 (Proceedings of Trilateral Symposium on International Law, July 25–28, 1994) (forthcoming 1996); John H. Jackson, The Uruguay Round, World Trade Organization, and the Problem of Regulating International Economic Behaviour, in Policy Debates/Débats Politiques (Ottawa, Centre for Trade Policy and Law, 1995) [hereinafter Uruguay Round].

³ See Tip O'Neill & Gary Hymel, All Politics Is Local (1994).

⁴ Peter F. Drucker, Trade Lessons from the World Economy, Foreign Aff., Jan./Feb. 1994, at 99, 99.

⁵ Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, Apr. 15, 1994, 33 ILM 1140 (1994) [hereinafter Final Act]. The Final Act embodies, inter alia, the Agreement Establishing the World Trade Organization, openedfor signature Apr. 15, 1994, 33 ILM at 1144 [hereinafter WTO Agreement], See primarily the part of that Final Act devoted to dispute settlement, Understanding on Rules and Procedures Governing the Setdement of Disputes, Annex 2 to WTO Agreement, 33 ILM at 1226 [hereinafter DSU]; see also H.R. Doc. No. 316, 103d Cong., 2d Sess. (1994); Hugo Paemen & Alexandra Bensch, From the Gatt to the WTO—The European Community in the Uruguay Round 71 (1995).

⁶ See Jackson, Uruguay Round, supra note 2.

⁷ See generally Paemen & Bensch, supra note 5; Jackson, supra note 1, ch. 4.

⁸ See, e.g., Louis Henkin, The Mythology of Sovereignty, ASIL Newsletter, Mar.-May 1993, at 1.

⁹ See infra part II.

¹⁰ Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994, Art. 17.6, in Annex 1A to WTO Agreement, supra note 5 [hereinafter Anti-Dumping Agreement].

¹¹ R. St. J. Macdonald, Margins of Appreciation, in European System for the Protection of Human Rights, ch. 6 (R. St. J. Macdonald, Franz Matscher & Herbert Petzold eds., 1993); see also Thomas A. O'Donnell, The Margin of Appreciation Doctrine: Standards in the Jurisprudence of the European Court of Human Rights, 4 Hum. Rts. Q. 474 (1982).

¹² Based on interviews by Professor Jackson.

¹³ See Jackson, Uruguay Round, supra note 2.

¹⁴ See DSU, supra note 5, Art. 17.6, 33 ILM at 1236.

¹⁵ WTO Agreement, supra note 5, Art. XVI:1.

¹⁶ We will not here analyze in detail the jurisprudence of the GATT panel reports regarding the standard of review. Rather, in this article we focus on the policy arguments and the question of applying analogous national legal system rules about such a standard.

¹⁷ GATT Dispute Settlement Panel, “Hatter's Fur Case”, Report on the Withdrawal by the United States of a Tariff Concession under Article XIX of the GATT, 1951, paras. 8–14, GATT Sales No. GATT/1951–3 (1951), portions reproduced in John H. Jackson & William J. Davey, Legal Problems of International Economic Relations: Cases, Materials and Text 556 (2d ed. 1986).

¹⁸ GATT Dispute Settlement Panel, New Zealand—Imports of Electrical Transformers from Finland, GATT, Basic Instruments and Selected Documents [BISD], 32d Supp. 55, 69, para. 4:7 (1985) [hereinafter New Zealand Transformers].

¹⁹ Id. at 67, para. 4:4.

²⁰ GATT Dispute Settlement Panel, Swedish Anti-Dumping Duties, BISD, 3d Supp. 81 (1955).

²¹ New Zealand Transformers, supra note 18, at 68, para. 4:4 (quoting Swedish Anti-Dumping Duties, supra note 20, at 85–86, para. 15).

²² GATT Dispute Settlement Panel, Korea—Anti-Dumping Duties on Imports of Polyacetal Resins from the United States, GATT Doc. ADP/92, para. 57 (1993) [hereinafter Korea Resins].

²³ Id., paras. 208–13.

²⁴ GATT Dispute Settlement Panel, United States—Restrictions on Imports of Tuna, GATT Doc. DS29/R, para. 3.73 (1994) [hereinafter Tuna II].

²⁵ GATT Dispute Settlement Panel, United States—Imposition of Anti-Dumping Duties on Imports of Fresh and Chilled Adantic Salmon from Norway, GATT Doc. ADP/8, at 232 (1992); GATT Dispute Setdement Panel, United States—Imposition of Countervailing Duties on Imports of Fresh and Chilled Adantic Salmon from Norway, GATT Doc. SCM/153, paras. 209–12 (1992). Many GATT panel cases discuss this question of “deference.” See, e.g., United States—Section 337 of the Tariff Act of 1930, BISD, 36th Supp. 345 (1990); Korea Resins, supra note 22, paras. 208–13; United States—Taxes on Automobiles, GATT Doc. DS31/R, paras. 5.11–5.15 (1994); United States—Imposition of Countervailing Duties on Imports of Fresh and Chilled Adantic Salmon from Norway, GATT Doc. ADP/8, paras. 43–67 (1992).

²⁶ Many concepts struggle widi drawing the appropriate line between overreaching intrusion by international panels and tribunals into sovereign national affairs, on the one hand, and the inevitable necessity for an effective rule-based system to accord such panels and tribunals the power to evaluate national government actions, on the other. These concepts include the question of exhaustion of national remedies as a prerequisite to an international case; questions of the leeway given to national governments under exceptions to GATT Article XX diat require “necessary” criteria; questions relating to how a national audiority should weigh different factors that could lead to an injury test in antidumping or countervailing duty cases, such as in the U.S. challenge to the latitude granted by the Korean Government to national regulations as measured against the nondiscriminatory obligations of Article III (national treatment); and various questions relating to the burden of proof in a contentious proceeding between nations. Some of these are expressed in cases cited in note 25 supra.

²⁷ Anti-Dumping Agreement, supra note 10.

²⁸ Ministerial Decisions, in Final Act, supra note 5.

²⁹ These observations are based partly on interviews by Professor Jackson of negotiators and business observers of the negotiations, and on articles during 1993 in Inside U.S. Trade. The reader should note that in reviewing this negotiating history, or “travaux préparatoires,” we are not arguing that it should necessarily be used by a panel interpreting the WTO texts, since, as we note below, that is a matter of controversy. We present it here to assist us as observers in better identifying the issues embedded in various competing approaches to interpretation.

³⁰ See text at note 28 supra.

³¹ DSU, supra note 5, 33 ILM at 1227.

³² See text at note 27 supra. We will largely ignore Article 17.6(i), which suggests that panels should not redo national government fact determinations. Of course, the troublesome question of what is “fact” and what is “law” is involved, and much national jurisprudence addresses that question (in a different context, to be sure). See, e.g., Bernard Schwartz, Administrative Law §10.5 (3d ed. 1991) (explaining judicial treatment of law-fact distinction). As a practical matter, at least for some time, the WTO panels will likely not have the capacity to do much in the way of fact determination. The 17.6 text does authorize review by the WTO panels of the fact-gathering procedures. There are still some problems in this realm, since many nations also do not have adequate fact-gathering procedures. Moreover, the private parties concerned are often the real participants in national-level administrative procedures, while at the WTO panel the government is the party and the government may not have had any realistic chance to present facts at the national level. But we put these issues aside for the future.

³³ This statement is based on interviews with negotiators and observers.

³⁴ Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, Art. 2, para. 1(a), 1155 UNTS 331, 8 ILM 679 (1969) [hereinafter Vienna Convention]. Of course, the Convention does not bind countries that have not accepted it (including, as of 1995, the United States), but it is widely accepted that almost all of the Convention codifies customary international law, or has become later customary international law. See, e.g., Louis Henkin, Richard Crawford Pugh, Oscar Schachter & Hans Smit, International Law: Cases and Materials 418 (3d ed. 1993). The position of the U.S. Executive generally recognizing the Vienna Convention as an authoritative guide to customary international law regarding treaties is explained at the beginning of part III (before §301) of 1 Restatement (Third) of the Foreign Relations Law of the United States 145 (1987) [hereinafter Restatement]. In particular, Articles 31 and 32 of the Convention, which cover the interpretation of treaties, are often considered to codify, or currendy represent, customary international law.

³⁵ Specifically, Article 31 provides that a treaty shall be interpreted in accordance with the ordinary meaning to be given its terms in their context and in light of the treaty's purposes, where context includes any “agreement relating to the treaty” and any “instrument in connection with the conclusion of the treaty”; furthermore, “any subsequent agreement … regarding the interpretation of the treaty or the application of its provisions” shall be taken into account together with the treaty's context. Vienna Convention, supra note 34, Art. 31, paras. 1–3.

³⁶ Article 32 of the Vienna Convention reads as follows:

Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:

(a) leaves the meaning ambiguous or obscure; or

(b) leads to a result which is manifestly absurd or unreasonable.

³⁷ One of the most significant, but almost hidden, issues surrounding Article 17.6 is the potential for use of negotiating history (travaux préparatoires). The habitual technique for lawyers from some jurisdictions, such as the United States, is to turn readily and immediately to such history (often called “legislative history”), although even in the United States some members of the Supreme Court in recent years have disparaged this approach. See, e.g., Gustafson v. Alloyd Co., 115A S.Ct. 1061, 1071 (1995) (Kennedy, J.); United States v. Thompson/Center Arms Co., 504 U.S. 505, 521 (1992) (Scalia, J., concurring). Some lawyer-negotiators with these legal habits may have important knowledge of the Uruguay Round negotiations, some having even been present in the midnight discussions and compromises, and thus may be eager to argue one way or another that this history should determine the meaning of Article 17.6 (and other clauses of the Anti-Dumping Agreement). Such an interpretive approach raises several problems.

First of all, the approach under the Vienna Convention, now understood to be applicable to the interpretive deliberations of WTO panels, is generally considered to relegate preparatory history (Article 32) to a subsidiary role in interpretation, to be used only when the means specified in Article 31 do not resolve an interpretive problem. See, e.g., Tuna II, supra note 24; Ian Brownlie, Principles of Public International Law 630 (4th ed. 1990). Application of this approach could mean that the first sentence of Article 17.6(h), by implicit incorporation of Articles 31 and 32, always resolves the interpretive issue in question, with no option to turn to 17.6(ii)'s second sentence. Of course, those with the “legislative history habit” might argue that 17.6's own such history clearly demonstrates a different intent. They might further argue that the Vienna Convention's approach is not favored by the structure and language of 17.6 itself.

Yet there are important reasons to apply the “supplementary” or subsidiary approach to preparatory work, some of which can be briefly mentioned. For one thing, not all national negotiators were present at some of the tiny meetings used to resolve differences in the late nights at the end of the negotiations. For another, nations that did not participate at all in the negotiations but join the WTO later will understandably not want to be bound by an uncertain and often unobtainable negotiating history. Indeed, the lack of documentation on much of this history reinforces the danger of relying on it, which leads to a third reason recommending the Vienna Convention's approach to preparatory work. In the past, negotiators who have left government to join the private practice of law have written articles or testified in various government proceedings about their own negotiating experiences as evidence of the negotiating history. In some cases, these persons have received fees for such testimony from a party in interest Such testimony cannot always be given full credibility.

³⁸ See, e.g., FTC v. Gratz, 253 U.S. 421, 427 (1920).

³⁹ 5 U.S.C. §706 (1988).

⁴⁰ 467 U.S. 837 (1984).

⁴¹ While Chevron is widely and rightly considered an important change in administrative law jurisprudence, the case is more evolution than revolution. Its tenor and logic are traceable at least to Gray v. Powell, 314 U.S. 402, 411 (1941) (directing the lower courts to respect reasonable agency decisions). See also NLRB v. Hearst Publications, Inc., 322 U.S. 111, 130–31 (1944) (suggesting that appellate court should have deferred to agency's interpretation since that interpretation had “a reasonable basis in law”). In the decades between 1941 and 1984, the Court sent widely varying signals with respect to the extent of judicial deference agency interpretations of statutes should enjoy. See generally Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise §3.1 (3d ed. 1994). Chevron aimed at settling some of the confusion born of these mixed signals.

For analysis and commentary on the doctrine and its application (still a matter of some debate), see, e.g., Stephen Breyer, Judicial Review of Questions of Law and Policy, 38 Admin. L. Rev. 363, 372–82 (1986); Thomas W. Merrill, Judicial Deference to Executive Precedent, 101 Yale LJ. 969 (1992); Abner J. Mikva, How Should the Courts Treat Administrative Agencies?, 36 Am. U. L. Rev. 1 (1986); Antonin Scalia, Judicial Deference to Administrative Interpretations of Law, 1989 Duke LJ. 511; Peter Schuck & E. Donald Elliott, To the Chevron Station: An Empirical Study of Federal Administrative Law, 1990 Duke LJ. 984; Kenneth W. Starr, Judicial Review in the Post-Chevron Era, 3 Yale J. on Reg. 283 (1986); Cass Sunstein, Law and Administration after Chevron, 90 Golum. L. Rev. 2071 (1990); Russell L. Weaver, Some Realism About Chevron, 58 Mo. L. Rev. 129 (1993).

⁴² Chevron, 467 U.S. at 842.

⁴³ Id. at 843.

⁴⁴ Id. n.9; see also KMart Corp. v. Carrier, Inc., 486 U.S. 281, 300 (1988) (Brennan, J., concurring); NLRB v. United Food & Commercial Workers Union, Local 23, 484 U.S. 112, 123 (1987); INS v. Cardoza-Fonseca, 480 U.S. 421, 446 (1987).

⁴⁵ Chevron, 467 U.S. at 842.

⁴⁶ For examples of lower courts' invocation of step one of the Chevron doctrine, see, e.g., Skandalis v. Rowe, 14 F.3d 173, 178–79 (2d Cir. 1994); Sweet Home Chapter of Communities for a Great Oregon v. Babbitt, 17 F.3d 1463, 1464 (D.C. Cir. 1994), rev'd on other grounds, 115 S.Ct. 2407 (1995); Satellite Broadcasting & Communications Ass'n of Am. v. Oman, 17 F.3d 344, 348 (11th Cir.), cert, denied, 115 S.Ct. 88 (1994).

⁴⁷ Chevron, 467 U.S. at 842–44.

⁴⁸ Id. at 843 n.11 (“The court need not conclude that the agency construction was the only one it permissibly could have adopted to uphold the construction, or even the reading the court would have reached if the question initially had arisen in ajudicial proceeding.”) (citations omitted).

⁴⁹ Chevron also left open the question whether the deferential standard articulated in the case would apply only to agency rule making, as in Chevron itself, or also to agency adjudication, the other main mode of agency decision making. Some lower courts interpreted Chevron to apply to adjudicatory decisions, too. See, e.g., National Fuel Gas Supply Corp. v. FERC, 811 F.2d 1563, 1569–71 (D.C. Cir. 1987). Eventually, the Supreme Court resolved this question. See DeBartolo Corp. v. Florida Gulf Coast Bldg. & Constr. Trades Council, 485 U.S. 568, 574 (1988) (applying Chevron to agency adjudication). Finally, Chevron was not crystal clear about whether the standard of review articulated in that case applied to “pure” questions of statutory interpretation or, rather, only to agencies' application of law to particular facts. Supreme Court jurisprudence since the Chevron case has clarified that question somewhat. In NLRB v. United Food & Commercial Workers Union, Local 23, 484 U.S. 112, 123 (1987), the Court made clear that Chevron deference does indeed apply to “pure” questions of statutory construction, as well as to applications of legal standards to facts—notwithstanding suggestions to the contrary in earlier post-Chevron cases, see INS v. Cardoza-Fonseca, 480 U.S. 421, 446–48 (1987).

⁵⁰ Part of this confusion owes to the open-endedness of the Chevron doctrine's essential concepts—“ambiguous,” “precise,” “reasonable.” Part owes to the fact that the traditional rules of statutory construction are themselves contradictory and thus easily subject to manipulation. And post-Chevron Supreme Court jurisprudence has shed little light on the matters. For a most helpful overview, see Thomas W. Merrill, Textualism and the Future of the Chevron Doctrine, 72 Wash. U. L.Q. 351 (1994).

⁵¹ See, e.g., Davis & Pierce, supra note 41, §3.3.

⁵² See 467 U.S. at 843–44; see also Cardoza-Fonseca, 480 U.S. at 454 (Scalia, J., concurring); Babbitt v. Sweet Home Chapter of Communities for a Great Oregon, 115 S.Ct. 2407, 2414–16 (1995); Reno v. Koray, 115 S.Ct. 2021, 2027 (1995); Nations Bank v. Variable Annuity Life Ins. Co., 115 S.Ct. 810, 813 (1995).

⁵³ Interestingly, as noted above, early drafts of Article 17.6 used the word “reasonable” instead of “permissible,” but that formulation was ultimately rejected by negotiators.

⁵⁴ See, e.g., Chevron, 467 U.S. at 843 n.9.

⁵⁵ See, e.g., Davis & Pierce, supra note 41, §3.6, at 129-30; Starr, supra note 41, at 298–99; Sunstein, supra note 41, at 2104–05.

⁵⁶ Indeed, as one author indicates, arguably the Supreme Court has not even followed the Chevron case in a number of its later decisions. See Merrill, supra note 41, at 980–90.

⁵⁷ Indeed, it is at least possible that “reasonable” and “permissible” are not perfectly synonymous within Chevron jurisprudence, notwithstanding that in Chevron itself the Court repeatedly used both the word “reasonable,” see Chevron, 467 U.S. at 844, 845, 865, and the word “permissible,” id. at 843 n.11, 866.

⁵⁸ NLRB v. United Food & Commercial Workers Union, Local 23, 484 U.S. 112, 123 (1987); accord Sullivan v. Everhart, 494 U.S. 83, 89 (1990); see also Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42 (1987).

⁵⁹ For a classic treatment of the point, see Karl N. Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons About How Statutes Are to Be Construed, 3 Vand. L. Rev. 395 (1950).

⁶⁰ See supra part III. Often gatt/wto panels, just like U.S. federal courts, consider interpretations supplied in the first instance by U.S. administrative agencies, since under U.S. domestic law the Commerce Department and the International Trade Commission carry out the administration of GATT implementing legislation. In an antidumping procedure under U.S. antidumping legislation, a petitioner brings a case before the Commerce Department, which determines whether there was dumping—the “margin of dumping” question. If the Commerce Department concludes there was dumping, the case moves to the ITC, which determines the extent of the injury—the “material injury” question. (A closely analogous procedure, which assigns similar roles to the Commerce Department and the ITC, governs countervailing duties cases as well.) Both Commerce Department and ITC final decisions can be appealed to the U.S. Court of International Trade. In any event, when the Commerce Department makes a ruling in an antidumping case, it does so by implicitly or explicitly interpreting the U.S. statute in light of the U.S. Uruguay Round implementing legislation and, thus, in light of the GATT/WTO Agreement itself. See infra note 67.

⁶¹ At issue in the case was the meaning of the term “stationary source” in the Clean Air Act Amendments of 1977. The amendments required states to develop permit systems to govern the construction and operation of new or modified major stationary sources of air pollution in regions of the nation that had not yet achieved national air quality standards. The permit systems were to impose stringent emissions requirements on such sources. The agency, the Environmental Protection Agency (EPA), sought to allow states to adopt a plantwide definition of “stationary source” for the purposes of the permit programs. That way, a state could issue a permit allowing a plant to construct or modify one smokestack that did not meet the strict emission requirements, so long as the emissions of that entire plant (taking all of its smokestacks together) did not increase. According to Chevron, such a decision, involving complicated and technical trade-offs, is best left to the agency specifically delegated the responsibility of regulating air quality and administering the Glean Air Act and its amendments, rather than to judges, who “are not experts in the field.” Chevron, 467 U.S. at 865.

⁶² This argument, too, finds expression in Chevron itself:

Judges … are not part of either political branch of the Government. Courts must, in some cases, reconcile competing political interests, but not on the basis of the judges' personal policy preferences. In contrast, an agency to which Congress has delegated policymaking responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration's views of wise policy to inform its judgments. While agencies are not directly accountable to the people, the Chief Executive is … .

Id.

⁶³ Rather, agencies enjoy Chevron deference with respect to their own statutes—their organic statutes and any other statutes that an agency is specifically charged with administering. See Peter L. Strauss, One Hundred Fifty Cases per Year: Some Implications of the Supreme Court's Limited Resources for Judicial Review of Agency Action, 87 Colum. L. Rev. 1093 (1987).

⁶⁴ See Ariti-Dumping Agreement, supra note 10, Art. 17.6(i), quoted in text at note 27 supra.

⁶⁵ Id. This standard of review of facts may appear similar to a long-standing “arbitrary and capricious” standard in U.S. administrative law, but arguably the language of Article 17.6(i) gives an even greater obligation to the panels to evaluate the process of fact-finding. In addition, since antidumping cases are often very fact specific, requiring a series of decisions determining whether facts are “sufficient” for findings (inter alia) of dumping, causation, material injury or retroactivity, the line between “fact” and “law” may be particularly fuzzy.

⁶⁶ Status of International Law and Agreements in United States Law, Restatement, supra note 34, ch. 2; see also John H. Jackson, Status of Treaties in Domestic Legal Systems: A Policy Analysis, 86 AJIL 310 (1992).

⁶⁷ Restatement, supra note 34, §114, which reads: “Where fairly possible, a United States statute is to be construed so as not to conflict with international law or with an international agreement of the United States.” (citing, inter alia, Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch) 64 (1804)).

⁶⁸ On U.S. law, see, e.g., id. §111 (non-self-executing treaties), and §115 (later-in-time statute supersedes a self-executing treaty). See, e.g., Suramerica de Aleaciones Laminadas, C.A. v. United States, 966 F.2d 660, 667–68 (Fed. Cir. 1992). See also John H. Jackson, William Davey & Alan O. Sykes, International Economic Relations: Cases, Materials and Texts 321 (3d ed. 1995). The law in the European Union is not completely clear on this subject. The preamble to the document recommending approval of the Uruguay Round suggests that the Uruguay Round treaties will not be “direcdy applicable” in Europe. Commission of the European Communities, COM(94) 143 final.

⁶⁹ This point has also been made by David Palmeter, United States Implementation of the Uruguay Round Anti-Dumping Code, J. World Trade, June 1995, at 39, 76.

⁷⁰ See supra note 60 (explaining roles of ITC and Commerce Department).

⁷¹ Alan Sykes, The (Limited) Role of Regulatory Harmonization in the International System, paper for Conference on the Multilateral Trade Regime in the 21st Century: Structural Issues, Columbia Law School (Nov. 3–4, 1995). See also Alan O. Sykes, Product Standards for Internationally Integrated Goods Markets (Brookings Institution 1995). For one example, the treaty word “necessary” in text like that of GATT Article 20 (which provides, inter alia, an exception from other GATT obligations for measures “necessary to protect human, animal or plant life or health”) may need to be interpreted to recognize that governments should be authorized to have some choice among several government measures (not mandated to choose, e.g., the “least restrictive” measure), as long as the choice does not unduly detract from the basic broader policy goals of the treaty.