International Governance in the WTO: Judicial Boundaries and Political Capitulation. By Tomer Broude, Cameron May, 2004, ISBN 1‐87-469-8791, 352 pp.

This book deals with institutional governance from the point of view of political science. The general question it addresses is the judicialization of international relations. The specific topic is the functioning of the dispute settlement mechanism in the World Trade Organization (WTO).

The author develops a theory of relative judicial power to analyse the relations between the judicial and the legislative organs of the WTO, that is to say the Panels and the Appellate Body on one side and the Membership on the other. Relative judicial power is defined as the power of the judicial organ inside an international organization in relation to the power of its legislative branch.

This study invalidates the two main currents of thought regarding the dispute settlement mechanism of the WTO. The first criticizes it for assuming legislative powers and calls for a reduction or elimination of the judicial power of the organization. The second hails it as a model for international judicial institutions, one that could entail greater legalization of the international system.

According to Broude, both the critic and the laudatory discourses start from the same assumption, namely that the dispute settlement is, by its institutional design, a relatively strong power inside the WTO. Both resort to what the author calls the constitutional narrative of judicialization. In other words, they see international judicialization through the lenses of domestic political structures. Therefore, they esteem that international institutions should follow a system of separation of powers, which are kept within the limits of their competencies by a structure of checks and balances, in the lines of the traditional State theory.

The author proceeds to an analytical and comparative study to show that this assumption is false. On the one hand, he evaluates the relative power of the dispute settlement mechanism inside the organization in relation to the legislative power of the Membership. On the other hand, he compares the relative position of the WTO judiciary with that of other international judiciaries within their own systems, viz. the International Court of Justice and the European Court of Justice. He concludes that the WTO judiciary is relatively weak in both aspects. It is subjected to judicial boundaries imposed by the Membership through the international legal agreements that constitute the organization.

Nevertheless, the dispute settlement mechanism acquired a prominent position since the WTO succeeded the former GATT in 15 April 1994. After a general comment on the difficulty of implementing plans as they were designed, Broude analyses the specific case of the WTO, inquiring why the power has shifted from the Membership to the judiciary.

The core of Broude’s analysis is that the Membership has voluntarily waived a share of its political powers and invested the dispute settlement system with them. This was caused by a series of political frictions inside the organization, which can be assembled in five groups: (a) national sovereignty against international authority; (b) trade values against non-trade values; (c) developed countries against developing countries; (d) non-governmental policy actors against traditional state-centred government; and (e) judicial against political decision-making in the WTO. This last one is particularly important, because it shows the conflict between the diplomatic conception inherited from the former GATT and the legalization brought by the WTO agreements, which institute a standing judiciary with compulsory jurisdiction. This last friction is connected to all the others, because those issues are ultimately resolved by the dispute settlement system, submitted to political pressures. It is the conflict between political and judicial power that has enhanced the relative power of the dispute settlement mechanism.

This transfer of power from the political to the judicial instance, the author argues, occurred by the will of the Members of the WTO. In fact, the Membership, which is in charge of law-making, is hemmed by the consensus system and thus unable to deal with the tensions mentioned above. Complex issues with political consequences can hardly be resolved unanimously by the representatives of 148 States but can be settled by a small group of specialists gathered in Panels or in the Appellate Body. Moreover, the dispute settlement instances are relatively preserved from external political pressure by the institutional structure of the organization, in which the judiciary is bounded to the political organs.

This transfer of normative function to the dispute settlement mechanisms is called political capitulation. It does not happen, therefore, because of judicial ambition, as some critics will have it, but because of the will of the Membership. The Members have the power to make some decisions by majority but usually neglect to use it, because they favour consensus rule-making. By avoiding to decide, they practically invite the dispute settlement to happen, because the path laid out by the agreements points to dispute settlement when political negotiation fails.

Broude states that the reasons for the political capitulation, i.e. why Members prefer to transfer normative capacity to the judiciary, are numerous. The most important are (a) the political cost to governments of a consensus decision, in which they must necessarily renounce to some of their claims; (b) the reduced transaction cost of judicial decision-making, in terms of personnel, time, and money invested in the negotiation; (c) the predominance of short-term interests that can be more easily satisfied through judicial decision; and (d) the legitimation of the decision for domestic political ends, because the outcome of judicial decisions can de more easily justified at home for it demands less political compromise.

The author then proposes an alternate dialectical description of judicialization, in which the powers inside the international organization are more interdependent and their competencies shared. Thus, the Membership has political control over the judiciary, but it voluntarily waives a part of its legislative power to it. The structure of the WTO, he argues, favours the shift of law-making capacities to the dispute settlement system, which becomes responsible for the political issues. In this new light, this phenomenon is not seen as a malfunctioning but rather as a corollary of the type of institutional governance existing in the WTO. It is a conscious choice of the Members that enables the organization to operate circumventing significant political pressures.

As a conclusion, the author opposes himself to the proposals of de-judicialization of the WTO and supports a move towards more politicization of the rule-making process to make it more effective. Some suggestions are to adopt majority decision under certain conditions and to establish smaller law-making groups with specific competencies. These conclusions lead to another more general one about global governance. The present state of affairs in the WTO, where the judicial organ shares the normative function, can be an intermediate phase in the evolution of the international system, which would eventually shift to political rule-making processes.