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Proquest Dissertations DEVELOPING A MULTI-DIMENSIONAL STANDARD OF LEGITIMACY FOR THE WORLD TRADE ORGANIZATION DISPUTE SETTLEMENT SYSTEM By Navid Rahbar Sato Submitted to the Faculty of the Washington College of Law of American University in Partial Fulfillment of the Requirements for the Degree of Doctor of Juridical Science In Law Chair: Dean Claudio Grossman s /J.. /11 Date 2011 American University Washington, D .C. 20016 AMERJCAN UMVERSITY UBIWft q<oq t-J UMI Number: 3468030 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. UMI ___.,Dissertation Publishing...____ UMI 3468030 Copyright 2011 by ProQuest LLC. All rights reserved. This edition of the work is protected against unauthorized copying under Title 17, United States Code. -------Pro uesr ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 ©COPYRIGHT by Navid Rahbar Sato 2011 ALL RIGHTS RESERVED Dedicated to Ikuko and Bahram, my parents, for their love and support Special thanks to Amir Hossein, Franak, and Mahyar Amirsaleh 11 DEVELOPING A MULTI-DIMENSIONAL STANDARD OF LEGITIMACY FOR THE WORLD TRADE ORGANIZATION DISPUTE SETTLEMENT SYSTEM by Navid Rahbar Sato ABSTRACT The goal of this dissertation is to show how some of the problems of legitimacy faced by the WTO in the 21st century have been addressed through the increasing utilization, success, and legitimacy of its dispute settlement mechanism and how this process has resulted in what this dissertation calls: a multi-dimensional standard of legitimacy. Integral to this new standard of legitimacy is increased participation of developing countries. The dissertation analyzes the notion of legitimacy and its sources in contemporary international law and within the context of globalization. Specifically, it analyzes three perspectives of legitimacy that work in tandem: (1) source based legitimacy, (2) procedure based legitimacy, and (3) result based legitimacy. The findings of this complex model of legitimacy will be supplemented and expanded through interviews with public officials of nineteen WTO Members. The purpose of these interviews was to provide a comprehensive analysis of the notion of legitimacy that cannot readily be ascertainable through statistical data. lll ACKNOWLEDGMENTS I would like to sincerely thank my advisers Padideh Ala'i, Daniel Bradlow, David A. Gantz for their guidance, support, and encouragement. Padideh supported and guided me with her deep understanding of development of international law and evolution of international organizations. I owe a debt of gratitude to Maria J. Pereyra for providing me an opportunity to conduct research as a doctoral visiting researcher at the Economic Research and Statistics of the WTO as well as her valuable insights and comments on the research. To Yujin Kim, I wish to convey my deep appreciation and thanks for editing and discussing the dissertation, as well as for her friendship and support. I would also like to extend my gratitude to Robert Howse, George Abi-Saab, Werner Zdouc, Petros Mavroidis, Hakan Nordstrom, Hector Torres, Janos Volkai, Cherise M. Valles, Keith Rockwell, Joost Pauwelyn, Peter Van den Bossche, Hiromi Yano and Ambassador Ronald Sanorio Soto who provided me with helpful comments and insights to develop the research. iv TABLE OF CONTENTS ABSTRACT .......................................................................................... .ii ACKNOWLEDGEMENTS ....................................................................... .iii LIST OF FIGURES ................................................................................ xii LIST OF TABLES ..................................................................................xiv LIST OF ABBREVIATIONS .....................................................................xv 1. INTRODUCTION ....................................................................................................... 1 1.1 Role of the Dispute Settlement System ................................................................. 5 1.2 Hypothesis and Research Questions ...................................................................... 7 1.3 How Can WTO Dispute Settlement System Achieve its Goal? ............................ 8 1.4 Scope of Legitimacy in the Dissertation ................................................................ 9 1.5 Methodology ........................................................................................................ 10 2 BACKGROUND, HISTORY, AND NOTION OF LEGITIMACY .......................... 12 2.1 Emergence oflnternational Organizations in an Interconnected World ............. 12 2.1.1 Establishment of the WTO, "the Lost Pillar of the Post-World War II Economic Order," as a Response to Globalization ................................................... 16 2.2 Global Governance, WTO and Rise of Legitimacy Concerns ............................ 19 2.2.1 Global Governance in Contemporary International Law and its Impacts on Legitimacy ................................................................................................................ 22 v 2.3 Historical and Theoretical Origins of the WTO Legitimacy Crisis ..................... 29 2.3.1 "Club Model" of Negotiations ...................................................................... 29 2.3 .2 Was Liberalization of Trade as Beneficial to Developing Countries as Expected? .................................................................................................................. 32 2.3.3 Current Changes in International Law Due to Globalization and Its Impact on Legitimacy ................................................................................................................ 35 2.3 .3 .1 Proliferation of International Lawmakers and Changes in Addressees of International Law and Its Impacts on Legitimacy (Multilayer Governance) ....... 37 2.3.3.2 Rise ofNon-Trade Concerns within the WTO's Mandate ...................... 44 2.3.3.3 Asymmetrical Institutional Structure of the WTO .................................. 48 2.4 The WTO as a Global Governance Institution .................................................... 57 2.5 History and Notion of Legitimacy ....................................................................... 67 2.5.1 History of Legitimacy ................................................................................... 68 2.5.2 Characteristics and Definition oflegitimacy ................................................. 69 2.5 .2.1 Characteristics of Legitimacy .................................................................. 70 2.5.2.1.1 Multifaceted Nature of Legitimacy and its Examination within its Context ............................................................................................................ 71 2.5.2.1.2 Gradual Formation of Legitimacy and its Dynamic Nature .............. 74 2.5.2.1.3 Legitimacy as a Matter of Degree ..................................................... 75 2.5.2.2 Definition of Legitimacy in a Normative and Sociological Sense .......... 75 2.5.2.2. l Legitimacy in a Normative Sense ..................................................... 76 2.5.2.2.2 Legitimacy in a Sociological Sense .................................................. 78 3 FROM ITO TO GATT TO WTO ............................................................................... 80 3.1 History of ITO/GATT/WTO: Economic and Political Context .......................... 80 3.1.1 Bretton Woods Conference ........................................................................... 82 Vl 3 .1.2 Havana Charter .............................................................................................. 84 3 .2 Evolution of the GATT 194 7 ............................................................................... 87 3.2.1 Purpose of the GATT 1947 ........................................................................... 87 3.2.2 Interim Commission for the International Trade Organization (ICITO) ...... 89 3.2.3 GATT Rounds ............................................................................................... 90 3.2.3.1 Shift from Tariff Negotiations to Non-Tariff Negotiations ..................... 92 3 .2.3 .2 Was the Uruguay Round a "Grand Bargain" for Developing Countries, LDCs, and Developed Countries? ....................................................................... 100 3.2.4 Doha Round as Doha Development Agenda ............................................... 102 3.2.4.1 Subjects Covered by Negotiations ......................................................... 103 3.2.4.2 Failure ofNegotiations .......................................................................... 106 3.3 Evolution of Dispute Settlement ........................................................................ 108 3.3.1 Dispute Settlement in ITO and Havana Charter. ......................................... 108 3.3.2 The GATT 1947 Provisions of Dispute Settlement .................................... 113 3.3.2.1 Chairman Rulings in 1948 ..................................................................... 114 3.3.2.2 Working Parties ..................................................................................... 116 3 .3 .2.3 The Panel on Complaints ....................................................................... 117
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