DECISION-MAKING PROCESS IN THE WORLD

TRADE ORGANIZATION (WTO): AN APPRAISAL OF

THE CONSENSUS PRINCIPLE IN GENERAL

DECISION-MAKING

BY

FATEH BELHACEL

A dissertation submitted in fulfilment of the requirement for

the degree of Master of Comparative Laws

Ahmad Ibrahim Kulliyyah of Laws

International Islamic University Malaysia

SEPTEMBER 2016

ii

ABSTRACT

The legitimacy and the credibility of any international organizations depend primarily

on the effectiveness of its decision-making process, in particular the extent to which

such a process could produce dependable and acceptable decisions. The inability of

World Trade Organization (WTO) to address its overwhelming problems is essentially

the failure of the consensus principle in the general decision-making which drastically

failed to harmonise distinct and varied contending interests. This study compares the

application of the consensus-based decision-making under both the GATT and WTO

system. It elaborates on the reasons that have led to more successes in the decision-

making mechanism of the former (GATT) compared to that of the latter (WTO). The

principle of consensus has various advantages, most especially in terms of protecting

the sovereign equality of the WTO members by granting each and every one the right

of veto. However, with the enlargement of the WTO membership and scope, and

considering the binding nature of the WTO rules, the consensus practice has become

extremely cumbersome, and increasingly caused delays and stagnated the WTO

negotiations. In view of these developments, this study has revealed an imminent need

for reforms in the WTO decision-making process, within the parameters of the

consensus principle. Though available literature calls for reforms in the process of

consensus-based decision-making, but these proposals are unclear, obscure and

complex. The proposition within the purview of this study is that the WTO primarily

needs to differentiate between procedural matters (“housekeeping”) and substantive

matters. It submits that the majority vote system should be used for the former

whereas the latter would continue to be decided according to the consensus principle.

However, such a principle must be flexible in a way that if a critical mass of members

is in favor of the proposed decision, other members will abstain from blocking the

consensus (the Critical Mass approach). Finally, it proposes the establishment of an

Elected Executive Board to ease the process of building consensus rather than the

informal Green Room meetings.

iii

خلاصة البحث

ABSTRACT IN ARABIC

الدولية مرهونة أساسا بمدى قدرتها على إتخاذ القرارات التجارةإن شرعية ومصداقية منظمة التي تحقق قبولا واسعا على مستوى الأعضاء وكذا مرونة الإجراءات التنظيمية المساعدة و

في التصدي لغالبية نظمةالم هذه ن عدم قدرةالمفضية لإستصدارها. وبناء على هذا، فإلذي يعد الركيزة الأساسية في الآلية التي إشكالاتها راجع بالأساس لفشل مبدأ الإجماع وا

تتبناها المنظمة لإتخاذ قراراتها العامة. إن هذا المبدأ فشل فشلا ذريعا في التوفيق بين تعارض المصالح المختلفة للدول الأعضاء. هذه الدراسة تقارن تطبيقات مبدأ الإجماع في عملية صنع

مع منظمة التجارة GATT ةلجمركية والتجار عامة للتعريفات االقرار لكل من الاتفاقية الأ في التي أدت إلى نجاح هذا المبدالرئيسية توضيح الأسباب وهذا بغية ،WTOالدولية

فشله في النظام الحالي. لا يختلف اثنان أن لمبدأ الإجماع و GATTالنظام السابق ألا وهو جميع الدول الأعضاء من خلال إيجابيات متعددة أهمها تجسيد مبدأ المساواة في السيادة بين

منح كل عضو في المنظمة حق النقض. إلا أن الطبيعة الإلزامية لقرارات المنظمة و زيادة عدد على ضوء هذا ية في الصعوبة.غا مبدأ هذا أعضائها واتساع نطاق اختصاصها جعل تطبيق

هذه الدراسة عن الضرورة الملحة لإجراء إصلاحات في آلية صنع القرار تكشف التطور،لمنظمة التجارة الدولية، ولكن مع المحافظة على مبدأ الإجماع كمحرك أساسي لهذه الآلية. وتجدر الإشارة أنه على الرغم من توفر العديد من الدراسات التي جاءت في السياق نفسه إلا

يجب أنه. وإستنادا على هذا، أقرت هذه الدراسة ضة وغير فعالةتها كانت غامأن جل مقترحائية والمسائل على أعضاء منظمة التجارة الدولية التفرقة بين القرارت المتعلقة بالمسائل الإجرا

فتبقى الثانية الانتخاب بالأغلبية، أمالأولى يتم إقرارها بالإعتماد على نظام االموضوعية، بأسلوب مرن. بمعنى أنه في حالة تبني القرار من قبل الأغلبية كنخاضعة لمبدأ الإجماع ول

تؤكد الدراسة على كماالأقلية الإلتزام بعدم الإعتراض.الساحقة للأعضاء، فيجب على الدولية يحل محل تلك الإجتماعات ضرورة تأسيس مجلس تنفيذي منتخب في منظمة التجارة

.جماع بين أعضاء المنظمةل تأسيس إغير الرسمية التي تهدف إلى تسهي

iv

APPROVAL PAGE

I certify that I have supervised and read this study and that in my opinion, it conforms

to acceptable standards of scholarly presentation and is fully adequate, in scope and

quality, as a thesis for the degree of Master of Comparative Laws.

…………….…………………

Haniff Ahamat

Supervisor

I certify that I have read this study and that in my opinion it conforms to acceptable

standards of scholarly presentation and is fully adequate, in scope and quality, as a

thesis for the degree of Master of Comparative Laws.

…………….…………………

Mohammad Naqib Ishan Jan

Internal Examiner

…………….…………………

Mohd Yazid bin Zul Kepli

Internal Examiner

This dissertation was submitted to the Civil Law Department and is accepted in

fulfilment of the requirement for the degree of Master of Comparative Laws.

…………….…………………

Farid Sufian Shuaib

Head, Civil Law Department

This dissertation was submitted to the Ahmad Ibrahim Kulliyyah of Laws and is

accepted in fulfilment of the requirement for the degree of Master of Comparative

Laws.

…………….…………………

Ashgar Ali Ali Mohamed

Dean, Ahmad Ibrahim

Kulliyyah of Laws

v

DECLARATION

I hereby declare that this dissertation is the result of my own investigations, except

where otherwise stated. I also declare that it has not been previously or concurrently

submitted as a whole for any other degrees at IIUM or other institutions.

Fateh Belhacel

Signature ........................................................... Date .........................................

vi

COPYRIGHT PAGE

INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

DECLARATION OF COPYRIGHT AND AFFIRMATION

OF FAIR USE OF UNPUBLISHED RESEARCH

DECISION-MAKING PROCESS IN THE WORLD TRADE

ORGANIZATION (WTO): AN APPRAISAL OF THE CONSENSUS

PRINCIPLE IN GENERAL DECISION-MAKING

Copyright © 2016 by Fateh Belhacel and International Islamic University Malaysia. All rights reserved.

No part of this unpublished research may be reproduced, stored in a retrieval system,

or transmitted, in any form or by any means, electronic, mechanical, photocopying,

recording or otherwise without prior written permission of the copyright holder except

as provided below

1. Any material contained in or derived from this unpublished research may be

used by others in their writing with due acknowledgement.

2. IIUM or its library will have the right to make and transmit copies (print or

electronic) for institutional and academic purposes.

3. The IIUM library will have the right to make, store in a retrieved system and

supply copies of this unpublished research if requested by other universities

and research libraries.

Affirmed by Fateh Belhacel

……………………………. ………………..

Signature Date

DEDICATION

vii

Dedicated to those who have supported me with much love and patience,

my Father Mouhamed Said Belhacel

And

To the dearest to my heart, my beloved Mother Melizi Habiba

May Allah (SWT) grant mercy and Aljannah for them, Aameen.

viii

ACKNOWLEDGEMENTS

Glory and gratitude be to Allah (SWT) Who has ordained law and guidance, may the

peace and blessings of Allah be upon Prophet Muhammad (PBUH), members of his

household, his companions and the rest of the believers till the day of judgement.

My profound appreciation goes to my supervisor, Dr. Haniff Ahamat for his

guidance and support throughout the undertaking of this research. May Allah (SWT)

continue to bless him and his family and increase his knowledge and wisdom for the

services of Islam, Ummah and humanity in general.

My appreciation also goes to all my lecturers in AIKOL for their great

contributions toward the success of my studies. I remain indebted to all of them, may

Allah (SWT) reward them abundantly.

I also tender my unreserved gratitude to my parents Mouhamed Said Belhacel,

and Melizi Habiba to whom this dissertation is dedicated. I content myself with

praying to Allah for mercy and forgiveness upon them. Special thanks also go to my

role model in patience and struggle; my dear sister Mounira, and to all my brothers

and sisters in my Family; Abd Elhakim, Razika, Sabrina, Souad, Fares, Assia, and the

extended families.

My specific thanks also go to all my friends and my country mates in our

beloved IIUM. I also thank the staff of Ahmad Ibrahim Kulliyyah of Laws especially

in the Post Graduate office, for their usual kind response and patient attitude to my

frequent enquiries.

I also exclusively thank my brothers in the sake of Allah Moh”d Amin Umar,

Nadjar Bashir, for their kind concern and care throughout the period of my research.

Finally, May I sincerely acknowledge and thank my dear friends Nuchjarin

Petchpaneewong and khadidja boukaaboube who had the concern about this research

as if it is theirs. May Allah (SWT) bless them all.

I again thank Allah (SWT) for His uncountable blessings upon us

Wasalla Allahu ala Nabiyial-Kareem

ix

TABLE OF CONTENTS

Abstract ................................................................................................................... ii Abstract in Arabic .................................................................................................. iii Approval Page ........................................................................................................ iv Declaration .............................................................................................................. v

Copyright Page ....................................................................................................... vi Dedication ............................................................................................................... vi Acknowledgements ................................................................................................ viii Table of Contents ................................................................................................... ix

List of Reports ........................................................................................................ xiii List of Tables .......................................................................................................... xiv List of Cases ............................................................................................................ xv

List of Statutes ........................................................................................................ xvi List of Abbreviations ............................................................................................. xvii

CHAPTER ONE : INTRODUCTION ................................................................. 1 1.1 Background of the Study ........................................................................ 1

1.2 Statement of the Problem........................................................................ 4 1.3 Research Objectives................................................................................ 5

1.4 Research Questions ................................................................................. 5 1.5 Research Hypothesis ............................................................................... 6

1.6 Scope and Limitation of the Study ......................................................... 6 1.7 Literature Review ................................................................................... 7

1.8 Research Methodology ........................................................................... 21

CHAPTER TWO : NATURE AND THE DEVELOPMENT OF THE

WTO ........................................................................................................................ 23 2.1 Introduction............................................................................................. 23 2.2 From GATT to WTO .............................................................................. 24

2.2.1 The Establishment of the Bretton Woods Institutions .................. 25 2.2.2 The General Agreement on Tariffs and Trade (GATT) 1947 ....... 28

2.2.2.1 The Interim Commission (ICITO) .................................... 29 2.2.2.2 The Contracting Parties .................................................... 29 2.2.2.3 The GATT Council ........................................................... 30

2.2.3 The Main Principles of the GATT 1947 ....................................... 30 2.2.3.1 The Non-Discrimination Principle ................................... 30

2.2.3.2 Protection through Tariffs Only (Prohibition of

Quantitative Restrictions) ................................................. 32

2.2.3.3 The Principle of Transparency ......................................... 32 2.2.3.4 The Principle of Reciprocity............................................. 32 2.2.3.5 GATT Dispute Settlement is Based on the Negotiation

Approach .......................................................................... 33 2.2.3.6 Special and Differential Treatment for Developing

Countries .......................................................................... 33 2.2.4 The Multilateral Trade Negotiations (MTNs) ............................... 34

2.2.4.1 An Overview on the First Five Trade Negotiations ......... 35

x

2.2.4.2 The Kennedy Round ......................................................... 35

2.2.4.3 The Tokyo Round ............................................................. 36 2.2.5 The Uruguay Round ...................................................................... 38

2.2.5.1 Background on the Uruguay Round ................................. 38

2.2.5.2 The Initiation of the Uruguay Round ............................... 40 2.2.5.3 The Results of the Uruguay Round .................................. 42

2.3 The World Trade Organization ............................................................... 43 2.3.1 The Objectives of the WTO .......................................................... 46 2.3.2 The Functions of the WTO ........................................................... 47

2.3.2.1 Implementing the Covered Agreements ........................... 48 2.3.2.2 Providing Forum for Negotiations .................................... 48 2.3.2.3 Overseeing Dispute Settlements ....................................... 48 2.3.2.4 Reviewing National Trade Policies .................................. 49

2.3.2.5 Achieving Coherence in Global Economic

Policy-making .................................................................. 50 2.3.3 The Structure of the WTO ............................................................ 51

2.3.3.1 The Ministerial Conference .............................................. 53 2.3.3.2 The General Council ......................................................... 53 2.3.3.3 Specialized Councils......................................................... 54 2.3.3.4 ‘Horizontal’ Committees, Working Parties and Working

Groups .............................................................................. 55 2.3.3.5 ‘Miscellaneous’ Committees, Working Parties and

Working Groups ............................................................... 56

2.3.3.6 WTO Secretariat and the Director General ...................... 56 2.3.4 Main Principles of the WTO ......................................................... 58

2.3.4.1 Enforcement of Obligations .............................................. 58 2.3.4.2 Safety Valves .................................................................... 59

2.3.4.3 The Single Undertaking Requirement .............................. 60 2.3.5 WTO Covered Agreements ........................................................... 60

2.4 Conclusion .............................................................................................. 62

CHAPTER THREE : AN ANALYSIS OF EVOLUTION AND

DEVELOPMENT OF DECISION-MAKING PROCESS FROM GATT

TO WTO AND THE IMPACTS OF THE CONCENSUS PRINCIPLE .......... 64 3.1 Introduction............................................................................................. 64 3.2 The Process of Decision-Making in the GATT System ......................... 65

3.2.1 Decision-Making as Provided in the GATT Rules ....................... 66

3.2.2 GATT Decision-Making in Practice ............................................. 66 3.2.3 Preference of Consensus Principle in the GATT Decision-

Making .......................................................................................... 68 3.3 Decision-Making Process in the WTO ................................................... 69

3.3.1 Types of Decisions in the WTO .................................................... 70 3.3.1.1 Interpretation of the WTO Rules ...................................... 70 3.3.1.2 Amendments of the WTO Rules ...................................... 71 3.3.1.3 Waivers of WTO Obligations ........................................... 72

3.3.2 General Decision-Making as Provided in the WTO Agreement .. 73

3.3.2.1 The Consensus Principle .................................................. 74 3.3.2.2 Voting as a Fallback Rule ................................................. 75

3.3.3 The Practice of General Decision-Making .................................... 77

xi

3.3.3.1 The Green Room Meetings ............................................... 78

3.3.3.2 Other Informal Groupings ................................................ 80 3.4 Comparision Between Decision-Making Under GATT and WTO

System .................................................................................................... 81

3.4.1 Membership and Homogeneity ..................................................... 81 3.4.2 Scope Covered in the Negotiations ............................................... 82 3.4.3 The Role of Developing Countries and the Issue of Free-Ride .... 82 3.4.4 “GATT a la Carte” Vs Single Undertaking Requirement ............. 83

3.5 The Impacts of the Consensus Principle in the WTO Decision-

Making Process ...................................................................................... 85 3.5.1 Advantages of the Application of Consensus ............................... 85

3.5.1.1 Greater Degree of Democratic Legitimacy ...................... 85 3.5.1.2 Sovereign Equality of WTO Members ............................. 86

3.5.1.3 Disregarded the Numerical Strength of Developing

Countries .......................................................................... 86 3.5.1.4 Providing a Safeguard Against Domination ..................... 87

3.5.1.5 Promoting the Implementation of Decisions and Protect the

National Sovereignty ........................................................ 87 3.5.1.6 Leveling the Playing Field ................................................ 88

3.5.2 Disadvantages of the Application of Consensus ........................... 89

3.5.2.1 Paralysis of Decisions Due to the Difficulty in Achieving

Consensus ......................................................................... 89 3.5.2.2 The Impact of the Single Undertaking Requirement on the

Consensus Practice ........................................................... 90 3.5.2.3 Disregarding the Absent Members ................................... 91

3.5.2.4 Consensus Involves Difference in Power ......................... 92 3.5.2.5 The Impacts of Adopting the Consensus Through the

Green Room Practice ....................................................... 93 3.6 The Need to Reform the Decision-Making Process in the WTO ........... 94

3.7 Conclusion .............................................................................................. 95

CHAPTER FOUR : DISCOURSE ON OPTIONS TO IMPROVE

DECISION-MAKING PROCESS IN THE WTO .............................................. 97 4.1 Introduction............................................................................................. 97

4.2 Voting System ........................................................................................ 98 4.2.1 Simple Majority Voting as an Option ........................................... 98

4.2.1.1 The Advantages of Simple Majority Voting System........ 98

4.2.1.2 The Disadvantages of the Simple Majority Voting System

.......................................................................................... 99 4.2.2 Weighted Voting as an Option ...................................................... 101 4.2.3 Combination Between Majority Voting System and the

Consensus Practice ....................................................................... 104 4.3 Critical Mass Decision-Making .............................................................. 105

4.3.1 Formalizing the Critical Mass Practice In Line With the

Multilateral System....................................................................... 106 4.3.2 The Impact of Adopting the Critical Mass approach .................... 107

4.4 Reforming The Green Room Meetings .................................................. 108 4.4.1 The Establishment of an Executive Board .................................... 109

4.5 Improving The Role Of The Secretariat And The Director General ...... 113

xii

4.6 Conclusion .............................................................................................. 114

CHAPTER FIVE : CONCLUSION AND RECOMMENDATIONS ............... 116 5.1 Conclusion .............................................................................................. 116

5.2 Recommendations................................................................................... 121

BIBLIOGRAPHY .................................................................................................. 123

xiii

LIST OF REPORTS

“Decision-making Procedures under Articles IX and XII of the WTO Agreement,”

Statement by the Chairman as agreed by the General Council on 15 November 1995,

WT/L/93, 24 November 1995.

General Council decision on “Minutes of Meeting held on 15 November 1995,”

WT/GC/M/8, 13 December 1994.

General Council, Minutes of Meeting Held in the Centre William Rappard on 17 and

19 July 2000, WT/GC/M/57, 14 September 2000.

Sutherland, P, et al, The Future of the WTO: Addressing Institutional Challenges in

the New Millennium, Report by the Consultative Board to the Director-General

Supachai Panitchpakdi, Geneva: World Trade Organization, (2004).

The Report of the Working Party on “Arrangements for Japanese Participation” in

1953.

The Warwick Report, The report of the first Warwick Commission, The Multilateral

Trade Regime: Which Way Forward? University of Warwick, UK, (December 2007).

xiv

LIST OF TABLES

Table No. Page No.

2.2.4 The Multilateral Trade Negotiations 34

xv

LIST OF CASES

Brazil — Desiccated Coconut case, WT/DS22/AB/R, 21 February 1997.

The US-shrimp case, Appellate Body Report, United States — Import Prohibition of

Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 6 November 1998,

DSR 1998: VII, 2755.

xvi

LIST OF STATUTES

1. Agreement on the Application of Sanitary and Phytosanitary Measures.

2. Agreement on the Technical Barriers to Trade

3. Agreement on Trade-Related Investment Measures

4. Annex 3, Trade Policy Review Mechanism

5. Covenant of the League of Nations, adopted in Paris on 29 April 1919

6. DSU Agreement

7. Final Act Embodying the Results of the Uruguay Round of Multilateral Trade

Negotiations

8. The General Agreement on Tariffs and Trade (GATT) 1947

9. WTO Agreement (Marrakesh Agreement)

10. WTO Agreements with the IMF and The WB, as contained in Annex I and II

respectively, WT/L/195, Approved by the General Council at its meeting on the

7, 8 and 13 November 1996

11. WTO, Rules of Procedure for Sessions of the Ministerial Conference and for

Meetings of the General Council, WT/L/161, 25 July 1996.

xvii

LIST OF ABBREVIATIONS

CAs WTO Covered Agreements

CTG Council for Trade in Goods

CTS Council for Trade in Services

DG Director General

DSB Dispute Settlement Body

DSU Agreement on Dispute Settlement Understanding

EC European Community

ECOSOC UN subordinate body of the Economic and Social Council

EEC European Economic Community

EU European Union

FCN Bilateral Friendship, Commerce, and Navigation Treaties

GATT General Agreement on Tariffs and Trade 1947

GC General Council

GDP Gross Domestic Product

ICITO Interim Commission for the International Trade Organization

IMF International Monetary Fund

ITA Information Technology Agreement

ITO International Trade Organization

MC Ministerial Conference

MFN Most Favored Nations

MTAs Multilateral Trade Agreements

MTNs Multilateral Trade Negotiations

MTO Multilateral Trade Organization

NGO Non-Governmental Organizations

NT National Treatment

NTBs Non-Tariff Barriers

PPA Protocol of Provisional Application

PTAs Plurilateral Trade Agreements

SDT Special and Differential Treatment

SPS Sanitary and Phytosanitary Measures

TBT Technical Barriers to Trade

TNC Trade Negotiation Committee

TPRM Trade Policy Review Mechanism

TRIMS Trade-Related Investment Measures

TRIPS Trade-Related Aspects of Intellectual Property Rights

UN United Nations

UNCTAD United Nations Conference on Trade and Development

WB World Bank

WTO World Trade Organization

1

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Trade between states and its regulation is as old as human civilization, and with the

rapid development that the world goes through day by day, the need for an institution

or an organization which can regulate the trade relations between states becomes more

imperative. At the first stage, the General Agreement on Tariffs and Trade (GATT)

was entered into by several countries establishing the rights and the obligations that

imposed on the signatory parties regarding the international trade. Its purpose was to

liberalize the international trade by the reciprocal reduction of tariffs. Technically, this

agreement was not an international organization with a legal nature but an agreement

among countries that have provisionally applied for almost five decades.1 However,

by the increase in the number of countries joining GATT, establishment of a real

organization becomes necessary and convenient.

Indeed, after seven years of Uruguay Round Talks on the General Agreement

on Tariff and Trade, the World Trade Organisation (WTO) was established as a

permanent institution on the first of January 1995 based on the Marrakesh Agreement.

The WTO is presently considered as one of the most important international

organizations in existence. Its basic function is to liberalize and conduct the world

trade according to multilaterally agreed rules. That is the reason why the WTO

contains a set of agreements that affects the ability of governments to impose the trade

1 Lester, S., Mercurio, B., Davies, A., & Leitner, K., World Trade Law: Text, Materials and

Commentary, US: Hart Publishing, 2008, at 67.

2

barriers. On the other hand, the main criteria which is implemented by the WTO on

the decision-making process is the consensus principle.

The decision-making process in the case of international trade means the

process by which members’ states make principles of conduct for the management of

international trade and then using them to resolve issues concerning the conduct of

trade negotiations.2 Nevertheless, decision-making of the WTO relies on two major

principles. First, WTO provides that each and every member of the WTO has one

vote. However, the European Union is allowed to use the bloc voting despite the fact

that consideration has to be taken of the number of votes representing the number of

its members who are members of the WTO.

The second significant provision is that the bodies, which are responsible for

the decision-making, must be the Ministerial Conference and the General Council

only. Even the Director-General and the Secretariat staff do not have any influence on

the decision-making in the WTO. The membership of these bodies is open to all WTO

members. This means that every member of the WTO has the right to contribute in the

process of decision-making. The combination of these two provisions make the WTO

a member-driven organisation.3

In addition, based on the Articles IX and X of the WTO Agreement, WTO

decisions can be categorized in four main types. These are: First, general decisions or

ordinary decisions. Second, decisions on interpretations of the WTO Agreement and

the Multilateral Trade Agreements (MTAs). Third, decisions on waivers of

2 Ghimire, R. P., “Decision Making in the WTO: Does it Truly Represent the Developing Countries,”

<https://scholar.google.com/scholar?q=Decision+Making+in+the+WTO%3A+Does+it+Truly+Represe

nt+the+Developing+Countries&btnG=&hl=en&as_sdt=0%2C5&as_vis=1> viewed on 22 October

2015, at 1. 3 Ansong, A., “The WTO Decision-Making Process: Problems and Possible Solutions,” (January,2012),

<http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2180230> viewed on 25 October 2015, at 9.

3

responsibilities under the WTO Agreement and the MTAs, and the forth, decisions on

amendments to the WTO Agreement and the MTAs.4

For general decision-making, the Ministerial Conference and the General

Council of the WTO continue to follow the practice of the GATT 1947 where

decision-making is based on consensus and in a situation where the consensus failed,

voting will be applied. Unfortunately, the practice of consensus has become more

difficult to be achieved due to the increase in number of the WTO membership and

the broad divergence of the issues covered in the negotiations. Moreover, it has to be

taken into consideration that the consensus here does not refer to unanimity because it

does not require all the members to vote in favour or totally accept a proposed

decision. Rather if there is no member who formally raises an objection to such a

particular proposed decision, then the consensus is deemed to have been reached. In

other words, any member, no matter how large or small its economy, has the ability to

go against any proposed decision by clearly and formally objecting to it during the

decision-making process. Silence means consent.

However, when it is difficult to achieve a consensus, voting will take place.

This alternative solution for making a decision will be taken by a majority of the

members either in the Ministerial Conference or the General Council, unless otherwise

specified in the relevant WTO agreement.5 An example of a certain specific situation

whereby voting is not applicable at all can be seen under the Dispute Settlement

Understanding (DSU) Article 2.4. According to this Article, the dispute settlement

body still needs to take decisions by consensus though on the face value, it appears

4 Ibid., at 10. 5 Article IX: 1, WTO Agreement.

4

that the decision-making can be reached by voting.6 Although, the WTO agreement

provides that the decision-making can be reached by voting, in practice, it is

preferable for the WTO members to achieve it by the consensus principle. It was only

once in the history of the WTO where the decision-making was achieved by voting,

with Ecuador’s accession in 1995.

1.2 STATEMENT OF THE PROBLEM

The consensus is not an unwanted principle of decision-making within an

international organization for its member to rely on. In fact, it recognizes the principle

of sovereign equality by providing the one-country one-vote system. Moreover,

consensus protects the right of all members to contribute in the decision-making

process which is important to them because decisions can have an impact on their

legally protected interests. The significance and the effectiveness of the consensus

principle was a successful panacea that heralded the advancement of the GATT

system, but the same cannot be said of the WTO due largely to increasing membership

and complex overlapping interests in the WTO crowded membership. This strenuous

development has impacted negatively on the efficient and effective processes, prompt

and timely disposal of negotiations due to imagine trajectories in the consensus

principle that overwhelmed the decision-making process. Therefore, this study

addresses the issue of the application of the consensus principle in the decision-

making process and the possibility of adopting some reforms to make the WTO

system more effective and to ensure that the WTO successfully achieves its goals.

6 Olsen, B. E., Steinicke, M., & Sorensen, K. E., WTO law: From a European Perspective, Netherlands:

Kluwer Law International, 2012, at 29.

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1.3 RESEARCH OBJECTIVES

The main objectives of this study are as follows:

1. To identify the main reasons that make the consensus principle during the

GATT more effective than under the GATT/WTO system.

2. To evaluate the advantages and the disadvantages of the application of the

consensus principle in the WTO decision-making process.

3. To prove that the WTO has to make some changes to strengthen the consensus

principle as the central decision-making method.

4. To propose new alternative options in the WTO decision-making process

where the consensus is not effective

1.4 RESEARCH QUESTIONS

Based on the statement above the following questions are closely examined.

1- What is the difference between the consensus under the GATT, and the

GATT/WTO system? And what are the reasons behind the success of this

principle under the former?

2- What are the advantages and the disadvantages of the application of

consensus in the process of decision-making in the WTO?

3- Whether or not removing the consensus principle is going to make the

decision-making process more effective?

4- What are the alternative options that can be adopted to enhance the

consensus principle? And why these options are chosen?

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1.5 RESEARCH HYPOTHESIS

The reason behind the success of the consensus principle in the GATT era is

that the number of countries joining GATT were few.

The abolition of the consensus principle would make the WTO lose its

characteristics as a member-driven organization.

Voting is not a feasibly alternative option for the consensus.

The best solution to enhance the decision-making process in the WTO is to

maintain the consensus as the general principle and allow the majority voting

system to complement it.

1.6 SCOPE AND LIMITATION OF THE STUDY

The study is limited to the decision-making process in the World Trade Organization

drawing upon a legal analysis of among others Article IX and Article X of the

Marrakesh Agreement. Moreover, the study is mainly focused on the general decision-

making where the principle of consensus is used.

Therefore, the study will exclude other types of decisions such as

interpretations, amendments, and decisions on waivers as well as decision-making in

pursuant to other covered agreements (than the Marrakesh Agreement). For example,

decision-making in relation to Dispute Settlement Understanding and decision-making

in the committees created by covered agreements.

Although this study is largely on the doctrinal conceptualisation of the

consensus principle in the WTO general decision-making, it will focus a particular

attention on the non-doctrinal exposition towards prescriptive dimensions that agitate

for more practical review of the consensus-based decision-making in the WTO. This

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is a paradigm shift in view of the available literature calling for reform without more

i.e without feasible or realizable recommendation.

1.7 LITERATURE REVIEW

Over the last two decades, WTO has provided a forum of negotiation agreements for

its members based on the principle of consensus. However, some agreements cannot

be concluded and therefore they are unable to reach their real purposes. Among

arguments and discussions regarding that matter, the first question that might come up

is whether or not there is a need to reform the decision-making process in the WTO?

The number of studies on the decision-making process in the WTO is increasing

among the researchers and analysts, due to the crucial role that this process has been

playing since the establishment of the WTO and the challenges that it has been facing.

Numerous books, articles, and studies have been published regarding the WTO

decision-making process, mainly on the principle of consensus. The most striking

aspect is that all the scholars who have conducted those studies have observed that the

consensus should be reformed, regardless of its advantages to the decision-making

process. However, the scholars differed from those who believe in a radical

reformation to those who are calling only for an improvement on the application of the

consensus.

This research focuses on the current debates on matters such as, whether the

consensus principle fulfils its purposes as stated and promises to be the most effective

method used in the process of decision-making and represents all the members, or it

needs to be reformed to do so.

The first group, which represents the minority of the studies, is concerned with

a complete abandonment of the consensus principle in order to enhance the