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).
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
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