Making momma unhappy

The US lost a WTO case against its flavored cigarette ban, which made people unhappy.

Now, the US is not changing its laws, which has made Indonesia (the winner in the case) unhappy.

What does it mean to have international dispute settlement where ain’t no one happy?

I explore that question in an update (soon to be published in a book by Edward Elgar) to a paper published last year.

Here’s the admittedly not too punchy punchline, which synthesizes some thinking from my recent research:

The ‘legalisation’ of international affairs has attracted significant scholarly attention over the last several decades. According to this research, international regimes are more ‘legalised’ when states delegate to third parties the ability to determine compliance.  By this dimension, the World Trade Organization’s (‘WTO’) Dispute Settlement Body (‘DSB’) — where states whose measures are challenged cannot veto the outcome of third party adjudication — represents ‘legalisation’ par excellence.

Regimes are also more ‘legalised’ when more binding and more precise.  Here, the status of the WTO is more uncertain. On the one hand, WTO rulings — with the threat of commercial sanctions for non-compliance — are reasonably binding by the lax standards of international legal regimes.  On the other hand, powerful nations have flouted rulings for years, apparently assured of their ability to weather the diplomatic and commercial storms.  And many key WTO obligations are imprecise and appear to regularly confound respondent governments.

Indeed, subsequent scholarship has questioned the coherence of the ‘legalisation’ concept,  noting that high imprecision and high delegation appear to go together.  Moreover, in the absence of a supranational entity with a monopoly of legitimate force, some scholars have suggested that regimes that regularly rule against the preferences of powerful governments will not be able to elicit compliance.

I call this the ‘counter-legalisation’ problem: delegated authority plus textual imprecision empowers international regimes to fill in textual gaps in ways that states did not intend and do not control. Over time, these regimes increasingly refer to their own case law and logic,  but as a consequence may create resistance to compliance. But this does not make ‘legalised’ entities irrelevant. Their formal determinations continue to exist, serving as a justificatory resource for domestic groups interested in aligning local policy with global determinations. The result is a potential ‘legalisation pendulum’. Put differently, state behaviour in response to international legal decisions may be determined by political and structural factors exogenous to the law, but international rulings provide discursive resources that can be used to influence subsequent interactions with states.

It seems that public interest advocacy (such as efforts to regulate tobacco) is particularly susceptible to being curtailed by these pendulum effects. Unlike industry, it does not control jobs or campaign donations that put clear ‘costs’ and ‘benefits’ in the minds of policymakers that might justify deviance from international law norms.  It is also not the province of the military, where states appear particularly willing to go against international legal determinations.  Instead, public interest law may have two strengths: its reliance on empirical evidence and the domestic legitimacy that comes from weighing and balancing different interests. International adjudicatory regimes — which often have their own approach to evidence and balancing — seem well positioned to mimic the strengths of public interest law.

This chapter explores a case study of a potential ‘legalisation pendulum’ problem. In 2011 and 2012, a WTO Panel and the Appellate Body (‘AB’) ruled against aspects of the US Family Smoking Prevention and Tobacco Control Act (‘FSPTCA’).  Indonesia successfully argued before the WTO  that the US policy of banning clove (mostly imported from Indonesia) as a characterising cigarette flavour — while allowing (mostly US-produced) menthol flavourings — constituted discrimination under Article 2.1 of the WTO’s Agreement on Technical Barriers to Trade (‘TBT’). Commentators have noted that two compliance options would be either to weaken the FSPTCA by allowing cloves or to eliminate differential treatment by banning menthols. Many observers and US policymakers — who appeared to engage in a prolonged balancing act of competing interests to pass and implement the legislation — have responded by criticising the WTO decisions for being out of step with health and regulatory prerogatives.  As a consequence, the prospect for near-term US compliance to Indonesia’s satisfaction appears to be remote.

I argue that these outcomes should not be surprising. The lack of strong principal-agent controls by states on WTO adjudicators leads to overreaching decisions. As a result, powerful states simply cannot comply when they lose to weaker states and do not wish to change challenged policies. However, tobacco regulations — public interest regulations with a weak and dispersed base of domestic support — are the type of policy that we might expect to be vulnerable to legalised regimes like the WTO over the longer term.

Read the full piece here.