Extending Trade Law Precedent

Precedent is celebrated as a fundamental feature of dense legal systems as it creates predictability, builds coherence, and enhances the authority of courts and tribunals. But, in international adjudication, precedent can also affect interstate cooperation and ultimately the legitimacy of international organizations. Wary of clashing with state interests, most international dispute settlement systems are designed so that rulings do not set obligatory precedent. This Article describes the role of precedent in the Appellate Body (AB) of the World Trade Organization (WTO) to explain how precedent can affect compliance with the decisions of international courts and tribunals (ICs).

This Article makes two main contributions. First, it shows that there can be precedent without a formal stare decisis rule. In theory the AB has a rule against binding precedent. Based on empirical evidence, however, this Article shows that the AB has in fact a strong norm of relying on prior decisions.

Second, it shows that over time, the widening of legal commitments can result from extending precedent to new situations and this has an impact on the ability or willingness of states to comply. These findings have implications for the WTO and beyond. For the WTO, efforts to better define the value of precedent are unlikely to resolve the general mistrust of the AB and, therefore, this Article proposes other solutions to control the drift resulting from precedent. Beyond the WTO, international scholars should account for the intertemporal dimension of legal commitments in analyzing and explaining compliance with international law.