Treaty Interpretation by the WTO Appellate Body in Natural Resource Subsidy Disputes:

Fixing a Loophole or Kicking off a Debate?

Van Hoc Duong

 

ABSTRACT: Legal interpretation by the WTO Appellate Body has been a controversial topic in international trade law discourse. Adding matters that were debated in the negotiating history or unfamiliar with in the legal texts may raise concerns about the overuse of this judiciary’s powers. The subsidy capture over natural resource exploitation rights in Softwood Lumber IV and subsequent disputes is perhaps an example of such an interpreting preference. The article discusses the manner in which the WTO Appellate Body exercised its treaty interpretation for the case of natural resources in the subsidy context. This trade law tribunal seemed to consider natural resource exploitation rights as a mechanism of the economic transfer; however, this judgment appears to contradict the property rights’ perception that natural resource exploitation rights are considered a kind of economic resource like intellectual property rights. This expansive interpretation should not be encouraged due to the sovereignty sensitiveness of the matter at issue and the politically delicate position of WTO dispute settlement mechanism. Therefore, the subsidy question of natural resource exploitation rights should be discussed by further negotiations rather than be resolved by the existing jurisprudence.