THE MANDATORY DISCRETIONARY DOCTRINE IN WTO LAW The US--Section 301 Case and Its Aftermath#The Mandatory/Discretionary Doctrine in WTO Law

Yoshiko Naiki

Journal of International Economic Law, 2004, vol. 7, issue 1, 23-72

Abstract: This article focuses on the policy concerns or justifications underlying the so-called 'mandatory/discretionary' doctrine in GATT/WTO law, and reviews the application of this doctrine to specific cases. Under the mandatory/discretionary doctrine, enactment of a 'mandatory' law (a law requiring a government to do or not to do a particular act) can constitute a violation of the WTO obligations, but a 'discretionary' law (a law giving a government discretion to do or not to do a particular act) does not constitute a violation until a government actually commits a prohibited act. However, in 1999, the famous Section 301 Panel appeared to rule that even a discretionary law can constitute a violation, suggesting a change in the mandatory/discretionary doctrine. Such a change could have a great impact on the WTO-legality of national trade laws, making it possible to find a number of WTO violations in national trade laws that provide governments some discretion to violate their WTO obligations. This article examines the Section 301 decision critically, and traces the aftermath of this celebrated decision. The article starts by describing the general operation of the mandatory/discretionary doctrine under GATT. It first examines the rationale underlying the doctrine, established by the Superfund decision in 1988. But the article argues that the rationale implied in that case was insufficient, and offers a different rationale to explain why GATT came to accept the doctrine. It then examines the Section 301 case in light of the Uruguay Round negotiating history, and argues that the reasons cited by the Panel for changing the mandatory/discretionary doctrine were not convincing. It suggests that specific aspects of the Section 301 case motivated the Panel to change the mandatory/discretionary line. The article also discusses the status of the mandatory/discretionary doctrine after the Section 301 decision. The doctrine was promptly challenged again in the US -- 1916 Act case. Moreover, recent complaints have targeted administrative practices, raising a further challenge to the doctrine. It remains to be seen whether the mandatory/discretionary doctrine follows the same approach established under GATT. Oxford University Press 2003, Oxford University Press.

Date: 2004
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