Arrested norm development: The failure of legislative-judicial dialogue in the WTO

Abstract The WTO’s 30-year history has been marked by a well-known imbalance: while WTO Members have largely failed to negotiate new legal rules, the WTO’s dispute settlement system has been extraordinarily active. This imbalance has created the perception that WTO law is mostly developed by the WTO’s judicial organs, which has in turn sparked a backlash against the WTO’s dispute settlement system. The article explores the reasons why WTO Members have failed to do their part in shaping norm development in the WTO. The article builds on the existing explanations to provide a fuller picture of what has blocked Member-driven norm development. Specifically, it highlights the ways in which divergent views about the scope of the judicial function in the WTO have shaped the approaches of key players to legislative overruling; the negotiating principles in the WTO that legitimize demands for ‘payment’ even for interpretations that would simply restore the original bargain; and WTO Members’ desire to preserve the pragmatic and legally innocuous character of the WTO’s councils and committees. The article proposes a conceptual framework for thinking about the institutional design challenges that are at the heart of the crisis of WTO dispute settlement and situates various reform proposals within that framework. As WTO Members contemplate the revival of legislative-judicial dialogue as one of the key planks of the reform of the WTO dispute settlement system, developing a fuller understanding of why that dialogue has failed in the past is more important than ever.