Parallel Proceedings at the WTO and Under NAFTA Chapter 19: Whither the Doctrine of Exhaustion of Local Remedies in DSU Reform?

I. INTRODUCTION Initially hailed as the "crown jewel" of the Uruguay Round and the "linchpin" of the World Trade Organization (WTO) multilateral trading system,1 it is now widely acknowledged that the WTO Dispute Settlement Understanding (DSU)2 needs revision. At the Doha Ministerial Conference in November 2001, trade ministers issued the following statement regarding negotiations on DSU reform: We agree to negotiations on improvements and clarifications of the Dispute Settlement Understanding. The negotiations should be based on the work done thus far as well as any additional proposals by Members, and aim to agree on improvements and clarifications not later than May 2003, at which time we will take steps to ensure that the results enter into force as soon as possible thereafter.3 Even before the 2001 Doha Ministerial Conference, a formal review of the DSU had begun in late 1997 pursuant to a 1994 Uruguay Round ministerial decision to review the DSU within four years after it entered into force.4 That review, however, ultimately "sputtered to an end on July 30, 2003, without reaching any conclusions."5 It remains unclear whether future amendments to the DSU, if any, will consist of some modest fine-tuning or an ambitious overhaul.6 There are numerous suggestions and proposals for DSU reform-most from WTO Members, others from interested observers.7 The DSU, both as drafted and as interpreted by WTO panels and the Appellate Body, has also been the subject of broad criticism when it comes to the absence of rules on judicial restraint.8 Commentators have criticized the DSU's legal void as to rules governing standing to bring a complaint (other than that the complaining party must be a WTO Member9), on mootness (with post-complaint events not rendering a dispute moot if the panel's terms of reference have been issued10), on ripeness (with panels in effect rendering advisory opinions in cases where there is no live controversy11), and on the doctrine of non liquet12 (where panels should decline to rule in cases where the law is not clear).13 Interestingly, among the various reform proposals advanced by WTO Members, there is not a single mention of making rules on judicial restraint-for example, mootness, ripeness, and standing-a part of the WTO dispute settlement process.14 Another rule of customary international law not currently a candidate for DSU reform is the doctrine of exhaustion of local remedies. Despite the potential reduction in the WTO caseload that application of the exhaustion doctrine could produce, the exhaustion doctrine has, for some inexplicable reason, been ignored in the discussions on DSU reform. To put the exhaustion doctrine in WTO context, of the ninety-five original DSU proceedings resulting in a panel report as of September 2005, forty-three have involved disputes arising under either the WTO Antidumping Agreement (AD Agreement)l5 and/or the Agreement on Subsidies and Countervailing Measures (SCM Agreement).16 As explained below, both of these Agreements mandate judicial review of administrative determinations by national investigating authorities. In addition, in a number of instances, Canada, Mexico, and the United States have initiated WTO dispute settlement proceedings to challenge purported violations of the AD Agreement and/or the SCM Agreement, while they and/or their nationals have simultaneously pursued resolution of the same disputed issues under the binational dispute settlement panel mechanism established under Chapter 19 of the North American Free Trade Agreement (NAFTA).17 Parallel proceedings have been brought under NAFTA Chapter 19 and to the WTO involving the following products: (1) Canadian exports to the United States of softwood lumber and wheat, (2) U.S. exports to Mexico of high-fructose corn syrup, and (3) Mexican exports to the United States of cement and oilcountry tubular goods.18 As Table XX in Appendix XX illustrates, all or most of the same legal issues were raised in these parallel proceedings. …