The Application of WTO Law in China
(Jiangyu Wang)

Part II Application of GATT/WTO in U.S. Law - No strict Self-Executing

C. U.S. Courts - Unfriendly to GATT/WTO Agreements

In a common law jurisdiction like U.S., courts will directly shape the practice of trade law after the country entered into the WTO treaty. Power to regulating foreign trade traditionally falls within the sphere of influence of Congress and Executive, and the judiciary does not frequently address this area. However, in occasions they have chance to formulate rules in this regard, U.S. courts demonstrate little concern for harmony with international trade agreements and often neglect the GATT/WTO as law. This attitude was typically illustrated in the decision of the U.S. Court of Appeals for the Federal Circuit in Suramerica de Aleaciones Laminadas, C.A. v. United States.

The Suramerica case involved American procedures for imposing countervailing duties. A group of Venezuelan producers of aluminum redraw rods commenced an action to contest the U.S. Department of Commerce (DOC) with regard to the DOC's approval of an U.S. company's petition to investigate Venezuelan producers for foreign subsidies as well as to the Department's substantive finding of subsidies. To the extent international trade agreements were concerned, the Venezuelan producers contended that the DOC's interpretation of U.S. law (19 U.S.C. § 1671a) was inconsistent with U.S. obligations under the GATT. They argued that the legislative history of the statute demonstrates Congress's intent to comply with the GATT. Moreover, they identified a GATT panel's decision which recently rejected DOC's interpretation of the statute.

The Court of Appeals rejected this argument on two grounds. First, it pointed out that GATT panel's decisions did not set stare decisis on their own right. "The GATT panel itself acknowledged and declared that its examination and decision were limited in scope to the case before it." But most importantly, in the court's opinion, GATT-represented international agreements have no binding effects in U.S. law. The court explained its stance as follows:

"[even] if we were convinced that Commerce's interpretation conflicts with the GATT, …. the GATT is not controlling. While we acknowledge Congress's interest in complying with U.S. responsibilities under the GATT, we are bound not by what we think Congress should or perhaps wanted to do, but by what Congress in fact did. The GATT does not trump domestic legislation; if the statutory provisions at issue here are inconsistent with the GATT, it is a matter for the Congress and not this court to decide and remedy."
The Suramerica decision had profound ramifications on the practices of international trade law with the United States. On a broader level, it represented "judicial repudiation of international trade law." As characterized by one commentator, the logic of the opinion was simply this: "I don't know what the GATT said. I do not know what it means, but it does not really matter because the GATT does not count here." Although this kind of mentality of disfavoring international law seems "incredible", its rational has been affirmed by other federal courts. For example, in Mississippi Poultry Ass'n v. Madigan, the U.S. Court of Appeals transferred the decision of Suramerica into its specific holding. In Madigan, two trade associations challenged one of a regulation promulgated by the Agricultural Department pursuant to the Poultry Products Inspection Act ("PPIA") and presented a different interpretation of the PPIA. The Fifth Circuit rejected the Agricultural Department's argument that an alternative interpretation urged by the trade associations would be inconsistent with the GATT/WTO. Quoting Suramerica, the Fifth Circuit held that "even if … [the] interpretation conflicts with the GATT, … the GATT is not controlling." The court acknowledged the "strong instructive authority" of the U.S. Court of Appeals for Federal Circuit on international trade, and it recognized that the "flawless reasoning" of Suramerica requires domestic courts to apply this decision to trade matters before them, "even if virtually certain to create a violation of the GATT".

As we shall see in the following, the frivolous attitude in the U.S. Congress and Judiciary (and sometimes the Executive) towards international agreements would create tremendous opportunity for global trade dispute. Though eventually the "Prisoner's Dilemma" will works and countries have to go back to international trade law for arranging world trade order, the restrictive view of international trade law does add many unnecessary costs to trading nations of the world.

(* Footnote Omitted)