member commented, “it was not a good case, but we can say we argued what they [Kodak]
wanted.”
8
This appears to be a poor strategy since losing a panel makes it more difficult
to pressure the trade partner than before the adjudication process. A State department
official suggested that he often counsels groups that it would be better to get 10 percent
of what they want through bilateral negotiations rather than pursue adjudication with
the risk of getting nothing if there is not a favorable ruling.
9
Nevertheless, preferences of
industry groups and U.S. trade law both pressure for going beyond a bilateral compromise.
In the Fuji-Kodak dispute, industry pressure was sufficient to over-ride the tendency to
pursue adjudication only for cases where legal victory can be anticipated.
In the respondent state, the protectionist industry demands push in the opposite direc-
tion. Being singled out in a violation ruling issued by a WTO dispute settlement panel is
the worst scenario. A violation ruling represents an authoritative recommendation for an
end to the protectionist policy. The rules system has established a strong success record
for compliance with GATT/WTO rulings.
10
Given the strong pressure from a ruling, one
would expect protectionist interest groups to resist the adjudication forum. Under the ear-
lier GATT rules, it was possible for the defendant government to block the establishment
of a panel, and this was practiced by the European Community in the 1980s on several
panels related to agricultural protection. Yet even when legally possible, most governments
declined to use this tactic. For example, Japan initially tried to block the establishment of
a panel and the adoption of a violation report in 1987 during a case against its agricultural
import quotas, only to back down at both stages under international pressure and domes-
tic criticism. Furthermore, the establishment of the WTO in 1995 closed this loophole by
bringing greater “automaticity” to the establishment of a panel and adoption of rulings
(Jackson, 1998, 164). Consequently, the respondent government has little choice in the
matter of negotiation forum if the initiating government decides to file a complaint.
8
Interview by author. Washington, D.C. 3 April 2000.
9
Interview by author. Washington, D.C. 6 April 2000.
10
Hudec (1993, 353) shows that from 1945 to 1989 under the weaker GATT rules, dispute settlement cases
achieved a remarkable 88 percent success rate in dealing with trade problems. The WTO dispute settlement
process has also performed well in its early years. Among the first 11 cases that were completed with full
information on implementation available by the end of 1999, 9 led to adoption of the recommendations in
the ruling within the implementation period (Butler and Hauser, 2000, p.518).
18
Convention