The EU as an Effective Trade Power Strategic Choice of Judicial Candidates in the Context of the World Trade Organization

Working Paper No 2013/28| June 2013 The EU as an Effective Trade Power? Strategic Choice of Judicial Candidates in the Context of the World Trade Organization Manfred Elsig Abstract Drawing on the literature on effectiveness, this paper studies how the European Union chooses judges to serve on the World Trade Organizations’ key judicial institution: the Appellate Body Conceptually, the paper differentiates between effectiveness in representation and effectiveness in impact The paper shows how delegation to the European Commission has increased the strategic agenda-setting power for championing its preferred candidates The paper further compares European and US practice in nominating candidates Overall, the paper finds that effectiveness in representation has increased In terms of effectiveness in impact, the paper shows how the international environment conditions EU influence The paper also exhibits the difficulties to study effectiveness of EU external relations due to the peculiar decision-making processes dominant in judicial bodies Keywords: International Organization, Legalization, Court, World Trade Organization, European Union, Foreign Policy, Effectiveness NCCR TRADE WORKING PAPERS are preliminary documents posted on the NCCR Trade Regulation website () and widely circulated to stimulate discussion and critical comment These papers have not been formally edited Citations should refer to an “NCCR Trade Working Paper”, with appropriate reference made to the author(s) The EU as an Effective Trade Power? Strategic Choice of Judicial Candidates in the Context of the World Trade Organization (Forthcoming: International Relations) Actor, power and effectiveness The European Union in trade politics: Actorness from day one In the area of external trade the European Community (EC 1) has been an influential international actor from its very beginning As Member States decided to create a Common Market and a functioning Customs Union, the step of delegating sufficient power to the Community institutions in order enable them to speak with ‘one voice’ in trade negotiations was a logical act Not only was there a need to coordinate foreign economic policies among Member States, but in the area of trade policy it was necessary to pursue a single policy on the treatment of imports and exports of goods (in particular administrating a single tariff system and implementing uniform product standards) The EC quickly became accepted as a heavyweight in multilateral trade talks conducted in the context of the General Agreement on Tariffs and Trade (GATT) The EC was recognized as a trade power and its presence in the 1960s, defined by the influence it exerted on other actors, was felt instantly While Member States continue to be official members of the GATT and its successor organization, the World Trade Organization (WTO), to this day, other contracting parties quickly accepted the European Commission as the representative voice and chief negotiator of the Community in the respective trade rounds (eg, the Dillon Round (1960–61) and the Kennedy Round (1964–67)).2 Therefore, the mainstream trade literature did not pay particular attention to concepts related to actorness that I refer to EC when explicit reference is made to the pre-Maastricht period, otherwise I use the term European Union (EU) Michael Johnson, European Community Trade Policy and the Article 113 Committee (London: The Royal Institute of International Affairs, 1998); Manfred Elsig, The EU’s Common Commercial Policy: Institutions, Interests and Ideas (Aldershot: Ashgate Publisher, 2002) developed in the foreign policy literature Today, the EU has achieved (facilitated by various rounds of enlargement) the status of the most powerful trading entity as measured in terms of overall trade flows in goods and services and the market access it can offer to foreign products Notwithstanding the strong presence of the EC (and later the EU) as a trade actor, there was surprisingly little research into the functioning and the effects of trade policy until the second half of the 1990s.4 In addition, many authors started to place EU trade policy in a comparative perspective in order to avoid falling into some romantic N=1 trap.5 To sum up, a growing number of students of European trade policy accepted the similarities to statehood and questioned a potential sui generis character of the polity What type of trade power? In recent years, a growing number of scholars have studied extensively the EU’s position in various regulatory venues (multilateral, regional, bilateral) as well as its use of unilateral trade measures (eg in the area of anti-dumping or related to preferential schemes such as duty-free access for certain products from least-developed countries) As the study on EU trade policy had a late start, the younger generation of scholars was strongly socialized within an international relations literature that took domestic politics seriously Research focused on societal preferences and the effect of the institutional setting on preference aggregation Various middle-range theories from comparative politics and international relations were successfully applied in the field (eg, principal–agent theory, historical institutionalism, or pluralism) Interestingly and ironically, discussions Arne Niemann and Charlotte Bretherton, ‘EU External Policy at the Crossroads: The Challenge of Actorness and Effectiveness’, this issue Stephen Woolcock and Michael Hodges, ‘EU Policy in the Uruguay Round’, in Helen and William Wallace (eds.) Policy-Making in the European Union (Oxford: Oxford University Press, 1996), pp 301–24; Sophie Meunier and Kalypso Nicolaïdis, ‘Who Speaks for Europe? The Delegation of Trade Authority in the European Union’, Journal of Common Market Studies, 37(3), 1999, pp 477–501; Alasdair Young, ‘The Adaptation of European Foreign Economic Policy: From Rome to Seattle’, Journal of Common Market Studies, 38(1), 2000, pp 93–116 Dirk De Bièvre and Andreas Dür, ‘Constituency Interests and Delegation in European and American Trade Policy’, Comparative Political Studies, 38(10), 2005, pp 1271–96; see also Arlo Poletti and Dirk De Bièvre, ‘The Political Science of European Trade Policy: A Literature Review with a Research Outlook’, Comparative European Politics, 2013, forthcoming on civilian or normative power, while prominent in other foreign policy fields, were largely absent among students of trade policy, even though the raison d’être for these concepts relied heavily on the attractiveness of Europe’s economic success With the exception of a few scholars using critical political-economy approaches (in the tradition of neo-Marxist and dependency theories), the field has hardly focused on (normative) concepts related to the nature of EU trade policy One of the few notable attempts to capture EU trade policy in terms of a power concept was the contribution by Meunier and Nicoläidis.6 While these authors call the EU a ‘conflicted trade power’, their contribution adds to the perception that the EU is a normal, statelike trading power whose policies are shaped by domestic interests and that, given a multitude of foreign policy objectives, a lack of coherence (‘conflicted outcomes’) is a normal phenomenon They argue that ‘the EU is conflicted within, as different member state governments, influenced by a host of domestic actors, hold very different views on how to wield such power through trade The EU is also conflicted between its own guiding principles, which often appear to contradict one another – such as championing multilateralism while blanketing the planet with bilateral trade agreements, or promoting the cause of economic development while protecting European agriculture.’7 The internal complexity of the EU exacerbates the lack of a grand design or overall objective and makes trade policy appear to be simply a negotiated result of private groups with vested interests, Member States’ (changing) preferences and (more or less) activism by the European Commission.8 Meunier and Nicolaïdis view the observed trade policy outcome more as a result of efforts to replicate internal market liberalization than crude forms of domination Put differently, the power pattern we witness is less a realist-type of ‘trade as foreign policy tool’, than a result of the path-dependency linked to the decision to create an internal market that should be ‘externalized’ In the end, their concept casts doubt about the possibility of clearly labelling the Sophie Meunier and Kalypso Nicolaïdis, ‘The European Union as a Conflicted Trade Power’, Journal of European Public Policy, 13(6), 2006, pp 906–25 Meunier and Nicolaïdis, ‘Conflicted Trade Power’, p 907 This supports the point made in the introduction that ‘studies have exposed the lack of (genuinely) normative intentions/commitment’ (Niemann and Bretherton, ‘Challenge of Actorness and Effectiveness’) EU in terms of an exclusive ‘type’ or ‘category’ of power and therefore they add to those voices that stress the limitations of a ‘what sort of power’ debate in respect to trade policy Effectiveness in trade policy While measuring the effects of power in trade policy, as in other fields, is a difficult task, there is consensus in the literature that the EU has not been ineffective In this sense, I disagree with Smith and concur with Ginsberg when focusing on trade policy There is enough evidence that the EU has shown various forms of effective representation Effectiveness, however, is linked to the question of institutional set-up The development of the institutional machinery of EU trade policy and the constitutional changes needed to switch from the intergovernmental approach (mixed competence) to the community approach (exclusive competence) were significantly affected by debates about effectiveness The recurring demands by the European Commission in the run-up to intergovernmental conferences to be delegated additional competence in trade policy were always framed within a discourse centring on the lack of ‘effective’ representation.10 The drivers for increasing the EU’s competence were on the one hand largely external, as the nature of trade politics shifted from tearing down high tariffs to regulating trade-related concerns ranging from intellectual property rights, public procurement, and product standards to newer areas including investment liberalization, competition policy, taxation or environmental protection On the other hand, a growing number of EU Members made consensual decisionmaking and shared competence untenable as a means to aggregate preferences internally This article mainly focuses on effectiveness and addresses three questions outlined in the introduction.11 First, how can ‘effectiveness’ be evaluated? Second, how does the external environment condition EU effectiveness? And third, how does the EU’s effectiveness compare Hazel Smith, European Union Foreign Policy: What Is It and What It Does (London: Pluto, 2002); Roy H Ginsberg, The European Union in International Relations: Baptism by Fire (Lanham, MD: Rowman and Littlefield, 2001) 10 Arne Niemann, ‘Conceptualising Common Commercial Policy Treaty Revision: Explaining the Stagnancy and Dynamics from the Amsterdam IGC to the Treaty of Lisbon’, European Integration online Papers, 15, Article 6, 2011; Elsig, The EU’s Common Commercial Policy 11 Niemann and Bretherton, ‘Challenge of Actorness and Effectiveness’ with that of other important powers? In addressing these questions, I distinguish two dimensions of ‘effectiveness’: ‘effectiveness in representation’ and ‘effectiveness in impact’ Effectiveness in representation suggests that those speaking on behalf of the EU are able to aggregate the different demands into a unified position The emphasis here is on avoiding a multitude of views being signalled externally and abstaining from acting in an uncoordinated fashion.12 In other words, the focus is on the nexus between the intra-EU institutional setting and the ability of the European Commission to act as the ‘single voice’ The idea of ‘effectiveness in impact’ can be equated with ‘goal attainment’.13 In the EU context, the objective could be defined as the pursuit of European societal interests at large (as opposed to short-term gains one-sidedly pushed by special interest groups or veto players among the Member States) Overall EU impact (attaining its stated policy goals), however, is conditioned by two factors: first, the degree of EU coordinated action, and second, the external context In other words, reaching a defined objective (effectiveness in impact) is dependent upon effective representation and is conditioned by external factors, such as the behaviour and interest constellation of other states and the institutional setting at the international level (eg, decision-making procedures) In order to address the first two questions, the empirical part of this article focuses on the effectiveness of the EU in nominating candidates to serve in one of the most legalized international court-like institutions: the World Trade Organization’s Appellate Body (hereafter AB) It addresses the performance of the EU in selecting its own candidates The case study that follows covers the period from 1995 to 2009 During that period the external environment remained largely stable (the EU continued to be a key trade power), 14 while the EU’s internal-set up underwent significant modifications This allows us to 12 Such a conceptualization fuses two of the elements proposed to capture actorness: ‘output cohesion’ and ‘autonomy’, see Joseph Jupille and James A Caporaso, ‘States, Agency and Rules: the European Union in Global Environmental Politics’, in Carolyn Rhodes (ed.) The European Union in the World Community (Boulder, CO: Lynne Rienner, 1998), pp 213–29 ; see also Niemann and Bretherton, ‘Challenge of Actorness and Effectiveness’ 13 Oran R Young, International Governance: Protecting the Environment in a Stateless Society (Ithaca, NY: Cornell University Press, 1994) 14 India and Brazil have been active members in the GATT/WTO system since the late 1980s The Russian Federation joined the organization in 2012 Only, the impact of China that acceded to the WTO in 2001 has been increasing in recent years draw conclusions about the nexus between internal institutions and external outcomes The case study shows that delegation to EU institutions (the European Commission) increased effectiveness in representation; the record for effectiveness in impact is, however, more ambiguous This is largely a result of the conditioning factors and in particular is a reflection of the nature of courts Finally, we discuss effectiveness with respect to the US experience in nominating candidates to address the third question Empirical discussion The empirical part first outlines some of the key features of the WTO’s dispute settlement system with special focus on the appeals institution It then describes the key processes of nominating and selecting judicial candidates and outlines the strategic options for powerful trade actors This is followed by a discussion on how effective the EU has been over time (and in comparison with the US) relying on the above conceptualization Appointment of judicial candidates at the World Trade Organization During the Uruguay Round talks, negotiators agreed on a drastic reform of the system for settling trade conflicts 15 In the transformation from a system of diplomatic bargaining to a highly legalized institution one of the things that stands out is the creation of an appeals institution: the Appellate Body (AB).16 This new court-like institution makes final recommendations that de facto can not be overturned The AB consists of seven members who are elected for a term of four years, renewable once Three AB Members (ABMs) serve on individual cases brought to the AB (called division), following a secret rotation principle which makes it impossible for WTO ‘contracting parties’ to 15 Thomas Bernauer, Manfred Elsig and Joost Pauwelyn, ‘The Dispute Settlement Mechanism: Analysis and Problems’, in Amrita Narlikar, Martin Daunton, and Robert M Stern (eds.) Oxford Handbook on the World Trade Organization (Oxford: Oxford University Press, 2012), pp 485–506 16 Other reform steps include the ‘right to a panel’ (eg, agreement to abandon the option to block the launching of a case), the automatic adoption of reports (eg, the losing party can no longer block a report), an institutionalized ‘decentralized’ system of sanctioning, where the winning party is granted the authority to apply sanctions against the losing party if the latter does not comply with the reports’ recommendations anticipate the composition of the AB for a specific case.17 The role of the AB in interpreting WTO law has increased over the years fuelled by the lack of progress in trade negotiations (the legislative arm of the WTO) Many contentious cases have been brought to the AB and by the end of 2011 the AB had issued 105 reports as last instance By default the AB has engaged in precedentsetting and has closed some contractual gaps which parties (in particular losing parties) object to as judicial rule-making As members of international courts, such as the WTO, are difficult to control once they are selected, WTO Members pay particular attention to the selection of new ABMs.18 In 1994, a preparatory Committee was mandated to provide guidance as to the implementation of the negotiated provisions 19 It suggested a two-stage system of nomination and selection of candidates While WTO Members nominate candidates (1 st stage), a group of six officials (comprising the Director-General (DG) and the Chairpersons of five important WTO bodies (General Council, Dispute Settlement, Goods, Services, and Trade-related Intellectual Property Rights)) select candidates who are subject to being accepted by consensus by the Membership (2 nd stage) Against the background of approval by consensus, this Committee ‘consults’ closely with Members throughout the process Over time, selection of candidates to serve on the AB has become more politicized and the limited wiggle room for the Group of Six (G6) has further decreased The first selection process concerned all seven ABMs at the same time, which allowed the G6 some strategic options (as all seven ABMs had to be accepted or rejected as a group) Over time, the selection processes have de facto transformed into single seat competitions As a result of politicization, candidates today spend much more time in bilateral meetings in Geneva (and increasingly travel to Washington, DC and Brussels) where they undergo a careful screening process as Members attempt to find out the exact preferences of the candidates The WTO AB is a ‘selective court’ as opposed to a ‘representational court’ where each country can nominate judges who 17 Given that the EU and US are often involved in disputes (as complainant or defendant), it is not unusual to find the US or the EU ABM is sitting on a division that hears such cases 18 Manfred Elsig and Mark Pollack, ‘Agents, Trustees, and International Courts: Nomination and Appointment of Judicial Candidates in the WTO Appellate Body’, European Journal of International Relations (forthcoming 2013) 19 WT/DSB/1 (10 February 1995) in turn are accepted by others without much discussion (see for instance European Court of Human Rights).20 This implies that the process is competitive and nominating states have to be very strategic in choosing who they propose at the first stage The WTO treaties remain rather general regarding the profile and composition of the AB The drafters of the Dispute Settlement Understanding (DSU) agreed that ABMs ‘shall be broadly representative of membership’ (Art 17.3 DSU) This was partially clarified by the preparatory Committee in 1994, which suggested that ‘factors such as different geographical areas, levels of development, and legal systems shall be duly taken into account’.21 In addition, the expertise was circumscribed to allow for the resolution of ‘issues of law covered in the panel reports and legal interpretations developed by the panel.’ 22 This meant that not only candidates with extensive legal training were qualified to act as Court members The strategic options for powerful states In terms of representation, the WTO treaties did not suggest that some Members would have the privilege of having a permanent seat at the AB table Yet, from the beginning the US and the EU demanded a seat and this was not contested by other WTO Members.23 A quasipermanent seat enlarges the agenda-setting power of the parties concerned Knowing that a candidate is not in competition with other countries’ candidates, de facto gives the nominating party the strategic advantage of proposing a candidate who closely matches its preferences Put differently, the nominating states (US and EU) in a ‘two-stage game’ are less constrained in agenda-setting (they have 20 Erik Voeten, ‘The Politics of International Judicial Appointments: Evidence from the European Court of Human Rights’, International Organization, 61(4), 2007, pp 669– 701 21 See Elsig and Pollack, ‘Agents, Trustees and International Courts’; WT/DSB/1 (10 February 1995) 22 23 WT/DSB/1 (10 February 1995) This acceptance is significant from a presence perspective, see David Allen and Michael Smith, ‘Western Europe’s Presence in the Contemporary International Arena’, Review of International Studies, 16(3), 1990, pp 19–37 The EU and the US even demanded two seats each in the run-up to the first selection This demand, however, was not seen as legitimate by other parties and was not accepted Yet, it bolstered the case for a permanent seat (Elsig and Pollack, ‘Agents, Trustees and International Courts’) less need to incorporate the preferences of the WTO membership).24 Besides the de facto permanent seat, the views of the powerful states (in particular the US and the EU) are also important when it comes to appointing the other ABMs Similar to the US, the EU holds power of veto over the selections of other candidates, not least because it has no need to fear that if it behaves uncooperatively in the selection process in one round (eg blocks a certain candidate) that countries will veto (all) EU candidates in the next round While all WTO Members can potentially veto individual candidates by signalling to the Chair of the G6 that they will not support that candidate, it is clear that more powerful states face fewer constraints in actually using this blocking power Against the background of strategic agenda-setting and gatekeeping roles (through the power to block candidates), I argue that the EU has increased its overall effectiveness However, it has not yet developed the same strategic behaviour on the level of agenda-setting as the US exhibits The same applies in respect to its influence on the selection of other candidates Increased effectiveness in representation and, partially, in impact is a result of more delegation to the European Commission in managing this process, as shown below In the following section, we focus on the EU and in particular on the nomination of its own candidates The EU: The relationship between delegation and effectiveness The first selection In the 17 years of the existence of the AB, the EU has so far been called upon to fill three vacancies (1995, 2001, and 2009) Below, I discuss these three individual selections by focusing on developments in the politics of WTO dispute settlement (external environment), EUinternal changes at the level of processes (internal environment) and resulting EU effectiveness (representation and impact) The very first selection process was chaired by Australian Ambassador Don Kenyon The G6 (supported by the majority of the Membership) laid emphasis on selecting highly qualified individuals who were able to build up the reputation of this novel institution in the context of a member-driven organization.25 Members of the WTO themselves were not concerned 24 Elsig and Pollack, ‘Agents, Trustees and International Courts’ 25 WT/DSB/M9 (1 and 29 November 1995): the original members of the AB were from the EU, the US, New Zealand, Egypt, the Philippines, Uruguay, and Japan 10 about the personal preferences of the candidates; it was largely a diplomatic contest over which contracting party would get a seat 26 The European Commission favoured a highly qualified individual who would contribute to establishing a legitimate and autonomous dispute settlement body for the new organization which was under public scrutiny.27 However, the European Commission played a marginal role in the nomination of EU candidates Agenda-setting was decentralized as the right to make a nomination rested with the EU Member States Overall, EU Member States put forward a total of 13 candidates Belgium even nominated multiple candidates Most candidates had a legal background It was largely a question of prestige for countries to get their preferred candidate accepted in Geneva As the G6 could only propose one of the EU candidates, it nominated German candidate Claus-Dieter Ehlermann, who gained the widespread support of the Membership due to his profile and his performance in the talks with the Selection Committee It helped that Ehlermann was a national from an important EU Member State.28 As he was not the only German candidate, the chair of the G6 asked the German WTO Ambassador whether ‘it was ok if we went for Ehlermann; and the Ambassador said he agreed.’29 Overall the G6 proposed a mix of elderly and experienced trade practitioners, lawyers and even a former constitutional judge to serve on the bench.30 While the European Commission was supportive of the European candidate chosen, after the selection it criticized the make-up of the AB as a whole for its lack of balance The European Commission’s spokesperson complained that five seats had gone to nationals from APEC countries and one seat to Egypt, which was another close ally of the US The European Commission announced that it would elaborate a new proposal for rebalancing the composition, 26 ‘It was political in the sense that countries wanted to be represented; (…) it was a question of prestige, (…) and ambassadors worked hard for pushing one of their nationals through’ (Interview, July 2010) 27 The EU Commissioner for External Trade Leon Brittan and the USTR Mikey Kantor agreed to support candidates who were working for the integrity of the system and would not represent WTO Members (Interview, 23 September 2010) 28 Interview June 2010; Interview, July 2010 Ehlermann was a former DirectorGeneral of the Legal Service of the European Commission and had acted as Director-General of the Directorate-General Competition Around the time of appointment he also was appointed professor at the European University Institute in Florence 29 Interview, July 2010 30 Elsig and Pollack, ‘Agents, Trustees and International Courts’ 11 to be discussed in the upcoming Singapore Ministerial in 1996, a proposal that did not see the light of day.31 In summary, the European Commission was pleased by the selection of a former EU official; however, the European Commission stood on the sidelines during this first appointment procedure, and its role was marginal (even though it supported Ehlermann) 32 In terms of candidates for the AB nominated by other WTO Members, European states as well as the European Commission lacked influence in the proceedings as witnessed by the sharp EU criticism following the selection To sum up, effectiveness by representation was low Effectiveness by impact is more difficult to judge, not least because the WTO has no records of individual positions taken by judges on the various cases This makes it notoriously difficult to evaluate the performance of single members of the court and one has to rely on anecdotal evidence Judging by the prevailing interests of the leading WTO Members (including the European Commission) in 1995 in having an ‘independent court’ (goal attainment), Ehlermann was probably contributing to this objective as he had retired from the European Commission and was an autonomous thinker 33 In particular, the first seven ABMs were not only able to draft the Working Procedures of the AB, they also actively ‘embraced’ the Vienna Convention rules on treaty interpretation Both acts were very strong signals of building legitimacy.34 At the same time, Ehlermann and his colleagues invested ample time and resources in establishing a credible new body that would not shrink from ruling against the powerful states.35 The second selection 31 32 33 WT/DSB/M9 (1 and 29 November 1995) Ehlermann himself had good relations with the German State Secretary for Economic Affairs and former EU trade negotiator Hugo Paeman who encouraged him to run He also knew WTO Director-General Renato Ruggiero who served on the G6 (Interview, June 2010) Interview, June 2010 34 Peter Van den Bossche, ‘From Aftermath to Centerpiece: The WTO Appellate Body and its Rise to Prominence in the World Trading System’, University of Maastricht Working Paper, Faculty of Law, 2005 35 James Bacchus, Trade and Freedom (London: Cameron May, 2004); Former ABM Julio Lacarte, public statement at a Conference on ‘Face to Face with AB Members’ organized by the Graduate Institute of International and Development Studies, Geneva, 27 May 2008 12 In 2001, the terms of office for the ABMs from the EU, Uruguay and the Philippines ended.36 By 2001, given an increasing case-load and important decisions with distributional consequences for the Members, the attention given to the AB (and therefore to the selection process) increased This was in particular reflected in the growing use of the bilateral screening process where Members tested candidates’ positions vis-à-vis a number of important judicial matters (eg, general approach to gap-filling, how the AB dealt with unsolicited briefs, and the growing number of trade remedy cases where the US was strongly opposing the developing AB jurisprudence) Candidates also started to travel to the key capitals to meet with capital-based officials Candidates with strong views on some of the key issues raised by Members had a hard time gathering sufficient support.37 The European Commission’s overall preference had not changed since the first selection; it continued to support an autonomous body However, the European Commission attempted to exert more influence on the selection of candidates The European Commission invited EU Member States to cooperate more in the nomination of EU candidates and urged them to put forward fewer candidates 38 In addition, the European Commission managed to invite internal candidates to Brussels for an informal exchange However, this incremental change was not yet a formalized process and took place ‘over a cup of coffee not taking more than 30 minutes.’39 In Geneva, the EU delegation offered its services, but the campaigning was left to delegations (and the capitals) of those EU countries which put forward candidates 40 The European Commission continued to maintain a low profile regarding the use of the diplomatic machinery to influence other Ambassadors in Geneva regarding their priorities.41 EU Member States continued to be mostly concerned with diplomatic prestige This time, the successful EU candidate was 36 These three judges were selected initially for two years and were reappointed for another four years The idea was to decouple future selections and not to face the situation again of having to select seven new ABMs at once However, the fact that two ABMs died during their tenure and that some did not seek reappointment (or were no longer supported by the nominating state for a second term) meant that over time selections were no longer grouped in large packages 37 Elsig and Pollack, ‘Agents, Trustees and International Courts’ 38 Interview, 30 August 2010 39 Interview, 15 July 2010 40 Interview, June 2010 41 Interview, 30 August 2010 13 nominated by Italy (Giorgio Sacerdoti) He was not known in Brussels and Geneva and he had no former working relationship with DG Trade unlike other candidates from Belgium and Germany 42 The successful candidate was a professor of international economic law with consultancy experience with the Organisation for Economic Cooperation and Development (OECD) He was also an experienced arbitrator in investment cases The other two prominent EU nominees were not only closer to the European Commission; they were also experienced trade law experts and former GATT and WTO panellists Moreover as academics, they had written widely on the WTO Both these candidates were rejected by the US 43 In the end, many Members felt that independence from the European Commission was important as the EU was often involved in legal disputes.44 In addition, Sacerdoti’s experience as an arbitrator was a sign interpreted by some WTO Members to mean that the candidate would be less likely to engage in law-making and be more attentive to parties’ interests in preserving their negotiated rights and obligations Finally, the successful candidate had not published in the field of trade law; therefore he had not taken a firm position on a trade issue that could potentially offend a powerful WTO Member In a nutshell, the second selection shows the first timid attempts by the European Commission to be more active in the process for selection of the EU candidate Yet, WTO Members did not select the most desirable candidate from a DG Trade perspective, a Belgian trade lawyer who had a close working relationship with DG Trade 45 This time, the WTO Members did go against the European Commission’s preferences As to the European Commission in its role in the selection of other WTO Members’ candidates, DG Trade became more informally involved Yet, even when candidates came to see the EU representative, the European Commission did not signal its preferences to the G6 in any meaningful or strong way 46 Effectiveness by representation slightly increased as the EU managed to put forward fewer candidates; however, the selected candidate was clearly not explicitly endorsed by the European Commission 42 Interview partners recalled candidates from Belgium, Germany and Italy 43 Interview, July 2010; Interview, 15 July 2010 44 Interview, 30 August 2010 45 Interview, 30 August 2010 46 Interview, 30 August 2010 14 Effectiveness by impact is again hard to measure For once, the AB gained in prominence over time and WTO Members were quite vigilant, as witnessed in the infamous amicus curiae brief episode 47 WTO Members started to limit the autonomy of the AB by voicing increasing concerns over substantive issues This observed change of external ‘environment’ partially explains why the second generation of ABMs adopted a more cautious approach to the evolving case law which led to less criticism from the WTO Members They proved more pragmatic in their interpretative approach and pushed less towards a judicial style by building precedents 48 Overall, the decisions of the AB continued to be oriented towards finding consensual positions within the AB with a view to offering long-term guidance on treaty obligations The third selection The political environment for the third selection was characterized by controversy over how the AB dealt with a number of trade remedy cases In particular, the US lamented that an established practice of calculating dumping margins (the so-called zeroing method) had been ruled by the AB to be WTO-incompatible In addition, questions such as whether to allow dissenting opinions or restriction of the interpretation space came up during reform discussions that started in parallel to the Doha trade negotiations in 2001 This was reflected by the increased interest of WTO Members in screening candidates As one of the candidates recalled ‘Members quiz candidates on the role of the dispute settlement body and WTO jurisprudence, about the role of AB vis-à-vis negotiated agreement, they have some strong concerns about filling gaps and the AB making law, they want to learn whether candidates have experience in dispute settlement and they ask about specific issues, including agricultural policy or zeroing (…) One issue that was also important for some Members, was the issue of dissenting views, whether this should become more possible in the future.’49 47 WTO Members did not like the position of the AB that unsolicited briefs by nongovernmental organizations were to be accepted by panels, see for instance Petros Mavroidis, ‘Amicus Curiae Briefs before the WTO: Much Ado about Nothing’, NYU Law School Jean Monnet Working Paper, 2, 2001 48 One ABM suggested that the AB was more holistic in its approach towards interpretation, Interview, June 2010 49 Interview, 25 June 2010; there are only a few examples where a single ABM would 15 The European Commission’s overall preference for a candidate, wellversed in trade law and socialized within a broader European view, did not change Yet, its attempts to manage the process more actively had become successful in the meantime In the run-up to the EU nominations, the European Commission had this time persuaded Member States of the need to coordinate the internal nomination process better In particular, the European Commission argued that the EU had to increase its ‘effectiveness’.50 Therefore, nominations had to be discussed in the main Committee for coordination between the European Commission and the Member States (the Trade Policy Committee (TPC)) First, nominees from Member States were invited to attend a formal interview in Brussels with a Committee composed of officials from DG Trade, the Legal Service, and a representative of the Presidency.51 The European Commission then ranked the candidates and made a nomination proposal to the TPC explaining the criteria for the selection Through this change of procedure the European Commission obtained control over who was to be nominated For the successor to Giorgio Sacerdoti, the European Commission nominated two candidates who were approved by the TPC, one from Belgium and one from the Netherlands The nomination process, however, took a bit longer, as the Spanish representative in the TPC demanded that a third candidate be sent to Geneva 52 After a couple of weeks, Spain gave up its opposition For the Geneva process, the European Commission adopted a low profile as usual One candidate remembered that ‘DG Trade said that they would not take sides – that would have backlashed and Member States would have been offended.’53 In addition, the two candidates met and agreed that their countries would not organize active lobbying in Geneva 54 Both candidates went to the numerous bilateral meetings with other WTO Ambassadors, accompanied by a representative of the European offer a dissenting or concurring opinion This has been a deliberate policy of the first generation of ABMs However, the pressure on candidates to dissent is increasing 50 Interview, June 2010 51 Interview, June 2010; Interview, July 2010 52 E-mail exchange, 30 April 2012 Spain also had a candidate who was not ranked in the top The intervention was an attempt to push for its preferred candidate knowing that the WTO Ambassadors in Geneva might opt for this candidate Interview, 23 April 2012; e-mail exchange 30 April 2012 53 Interview, 18 June 2010 54 Interview, 18 June 2010 16 Commission.55 The candidates also flew to Washington, DC Both had quite similar profiles The European Commission favoured having WTO insiders on the bench Unlike Sacerdoti, both nominees were well known trade lawyers and had gained insights into the WTO by working for the AB Secretariat and the Legal Division of the WTO respectively One of them was even involved in the negotiations on the creation of the DSU during the Uruguay Round It seemed clear that the European Commission wanted a strong personality with extensive expertise in WTO law who could shape the court’s deliberations The key difference was that the candidate from the Netherlands was perceived to be much closer to the European Commission as he had worked for many years for the Commission The Members opted for Peter van den Bossche from Belgium Similar to the 2001 EU selection, a key factor was that the successful candidate had not worked for the European Commission and was not perceived as a ‘Commission candidate’.56 In addition, the successful candidate received a lot of support from developing countries as he had provided extensive technical assistance and training in the past The US was not happy with either of the candidates and China had some concerns with the successful candidate, though both abstained from blocking To sum up, in the most recent nomination and selection process, the European Commission took over the control and management of the internal nomination This allowed the European Commission to field a candidate who it believed represented the European Commission’s views on the role of the AB Given the information about the candidates, the problem of adverse selection was also minimized 57 In the third selection, the European Commission did not fully attempt to use its strategic agenda-setting by nominating only one candidate This could be explained by ‘established practice’ in the case of the US and the EU to allow some choice to the Membership and to offer an alternative should Members not support one of the candidates This third case shows that effectiveness in representation was increased Both candidates were acceptable to the European Commission, highly competent in WTO law, and it was not possible to divide the European position In regard to effectiveness in impact, it is 55 Interview, 18 June 2010 56 Interview, 18 June 2010; Interview, June 2010; Interview, July 2010 57 Adverse selection exists when principals (Members) choose the wrong agent (candidate) who is able to hide his true intentions before delegation takes place 17 too early to judge how the European ABM will influence the debates within the group of seven ABMs To sum up, overall effectiveness (in particular in representation) seems to have been improved as a result of allowing the European Commission to coordinate the process and act as a gate-keeper in the internal nomination game Comparing effectiveness: The case of the US As outlined above, agenda-setting power depends whether a state has de facto a permanent seat (US, EU, and potentially China in the future)58 and whether it can push through its preferred candidate even against the will of others Evidence suggests that the US has been able to follow its preferred strategy since the creation of the AB, 59 whereas the EU (and the European Commission) has only recently been able to achieve a similar strategic position At the beginning the choice was determined by actors outside Brussels’ influence If we focus on how preferences developed in the context of the US nomination procedures, we witness important changes over time In the first selection procedure, the US (and in particular Mikey Kantor, United States Trade Representative (USTR)) shared the widespread concern for selecting a first group of ABMs that were characterized by strong personalities reflecting both expertise in law and diplomacy USTR had a preference for one of its own candidates, a former Member of Congress who helped to push the WTO treaties through US ratification (James Bacchus).60 USTR was also concerned that the AB would have to deal with the political realities of trade policy and therefore needed to have an excellent first group of ABMs The USTR Mikey Kantor sat down with EU Commissioner for External Trade Leon Brittan and WTO Director-General Renato Ruggerio to find candidates They agreed that ‘the WTO dispute settlement system was the most important part and that needed to be protected.’61 Yet, USTR also anticipated that the US would be more on the winning than on the losing side.62 The US deliberately put forward two candidates neither of 58 Japan has lost this privilege (strictly speaking it never had a permanent seat); Brazil and India rotate with other countries in their respective regions 59 Elsig and Pollack, ‘Agents, Trustees and International Courts’ 60 The other US candidate was a well-known academic in the field of international economic law, but not a WTO insider 61 Interview, 23 September 2010 62 Interview, 23 September 2010 18 whom would have any issue with ruling against the US if necessary Over time, the concerns of the US, related to evolving case law, grew In order to address this US-internal worry, USTR proposed, in the second round of selections, one candidate who was a critic of the AB and another candidate who was a bit closer to USTR preferences However, USTR anticipated that the Members would abstain from selecting an AB critic, so it was de facto a single candidacy The WTO membership, as widely expected, opted for the candidate who was more in line with the overall orientation of the system 63 However, it turned out that USTR was not happy with the performance of the new US ABM (Merit Janow) She sat on a number of trade remedy cases that went against the US Ultimately, she did not seek re-appointment after the first four years, so 2007 saw the start of a new selection process In the third round of nominations, USTR put forward two former USTR negotiators The choice of the Membership was again very limited While the Membership expressed concerns about the strong links to USTR, a former textile negotiator, USTR chief legal council and member of the US International Trade Commission was finally accepted (Jennifer Hillman) As the US more openly encouraged ABMs to use the option to dissent, the US ABM reacted to these calls and wrote in one important trade remedy case a subtle dissenting view After only one term, USTR officially blocked the re-nomination of Jennifer Hillman in summer 2011 They were not entirely happy with her performance and started a new internal nomination process where the need for dissenting views in AB reports has become even more openly advocated.64 To summarize, the US was more effective (in representation) than the EU in getting their preferred candidates selected For the EU it took longer and a delegation to the EU level was necessary The EU process shifted from a decentralized, Member States-dominated one to a more streamlined Commission-orchestrated approach The strategic gap was observable in the first two selections While, in the first selection, major WTO powers had a shared understanding of the need to have independent judges, the EU candidate was in line with EU preferences In the second selection, within a changing context, the European Commission ended up with a little-known candidate, which represented some risks Finally, by gaining significant control over the process, in the most recent selection DG Trade was able to present two candidates who were largely in line with EU preferences 63 Elsig and Pollack, ‘Agents, Trustees and International Courts’ 64 Inside US Trade, September 2011 19 Effectiveness in impact is more difficult to evaluate and compare Like the EU, the US can only nominate one national to sit on the bench While it tries to influence the choice of other ABMs, it is hard to gauge the effects of its intensified screening over time Its discourse on the AB filling contractual gaps and the will of the negotiators has, however, led to the AB exercising more care in using expansive interpretation methods, including building precedents.65 Conclusion The article conceptualizes effectiveness by differentiating between effectiveness in representation and effectiveness in impact The article shows empirically that with increasing delegation to the European Commission effectiveness in representation in particular has increased Over time, by centralizing the nomination process, the European Commission has achieved more strategic leeway to put its preferred candidate forward This probably affects effectiveness in impact Yet, as the case study illustrates, effectiveness in representation is dependent largely upon internal institutional factors, whereas effectiveness in impact is conditioned by the external environment In this case, the external environment is a group of seven AB Members who develop, mostly by consensus (and with great caution), case law A major difficulty in measuring the impact is the nature of legal processes which are buffered widely from public attention due to the secrecy surrounding internal deliberations In addition, the few dissenting views not offer sufficient observational data points for studying individual behaviour This might change in the future due to pressure from the US and other countries However, given the high degree of politicization of the selection process, the US nominees are put in an uncomfortable position knowing that the demands from USTR and the demands from the AB as a collegial team are more and more difficult to reconcile The US hire-and-fire attitude towards its AB members could paralyse the work of the AB in the future more than USTR might want; thereby contributing to ineffectiveness of the body it had once pushed to create Put differently, if USTR achieves its shortterm objectives by appointing a judicial agent close to its preferences, this might complicate the inner workings of the AB, lead to more 65 Richard Steinberg, ‘Judicial Lawmaking at the WTO: Discursive, Constitutional and Political Constraints’, American Journal of International Law, 98(2), 2004, pp 247– 75; Elsig and Pollack, ‘Agents, Trustees and International Courts’ 20 conflicts and undermine longer-term objectives of a stable predictable system by weakening the legitimacy of the AB Finally, will the Lisbon Treaty challenge the current EU internal nomination process? It is quite possible that the European Parliament, given its new prerogatives, reflected for instance in co-decision powers in trade negotiations, will also demand more influence over the nomination of EU candidates At a time when public actors are increasingly subject to democratic control, the European Parliament might be tempted to use its privileged position to demand a say in the internal nomination process This would most likely weaken ‘effectiveness in representation’ as more voices will favour the search for acceptable candidates rather than the most suitable candidates, curtailing the strategic agenda-setting power gained by the European Commission in recent years However, given that final decisions over nomination are still in the hands of EU Member States and that the European Commission is now dominating the process, these EU institutions will not easily give in to parliamentary participation In addition, the Parliament is currently more interested in influencing the course of bilateral and regional trade agreements, as exemplified by the debates on ratification of the EU–Korean free trade agreement 66 The distributional consequences of these negotiations automatically translate into greater process involvement by the directly elected representatives of the EU’s citizens 66 Manfred Elsig and Cédric Dupont, ‘European Union Meets South Korea: Bureaucratic Interests, Exporter Discrimination and the Negotiations of Trade Agreements’, Journal of Common Market Studies, 50(3), 2012, pp 492–507 21 .. .The EU as an Effective Trade Power? Strategic Choice of Judicial Candidates in the Context of the World Trade Organization (Forthcoming: International Relations) Actor, power and effectiveness... from acting in an uncoordinated fashion.12 In other words, the focus is on the nexus between the intra -EU institutional setting and the ability of the European Commission to act as the ‘single... of the EC (and later the EU) as a trade actor, there was surprisingly little research into the functioning and the effects of trade policy until the second half of the 1990s.4 In addition, many