Dangers of Unregulated Counsel in the WTO, The

Georgetown Journal of Legal Ethics, The, Summer 2005 by McCalley, Priscila

I. INTRODUCTION

Despite growing concerns that the World Trade Organization ("WTO") is ill-equipped to handle the myriad ethical issues that accompany the use of non-governmental counsel, the Appellate Body decided to defer to the sovereignty of its members and permit private attorneys to represent parties in trade disputes. Some reasoned that the WTO's progression away from the diplomatic roots of the General Agreement on Tariffs and Trade ("GATT") into a more rule-based adjudication process warranted the intrusion of private lawyers. With this decision, the WTO finally settled the contentious debate over whether to permit private counsel, but created a more delicate controversy: it allowed a large body of non-governmental persons who are not bound by any WTO code of ethics to gain access to privileged governmental trade secrets. Rather than promulgate its own code of conduct to restrain such counsel, the WTO has chosen to defer regulation to the members whom those counsel represent. In so doing, the WTO is shirking its own responsibility and creating poor incentives for its member states. The WTO should heed the call of the American Bar Association ("ABA") and others who urge the promulgation of a code of ethics for private counsel in its dispute settlement proceedings.

II. ANALYSIS

The initial reluctance to allow private counsel into the WTO can be attributed to the organization's roots in the GATT.1 That history also explains why no rules of conduct were included in the WTO's founding documents.2 What is more difficult to rationalize is the fact that the WTO eventually permitted outside counsel into the Dispute Settlement Body ("DSB") without first taking into account the accompanying ethical concerns. Now, cases in the DSB are argued by a group of unregulated attorneys with access to sensitive government documents and whose regulation is deferred to the very members who have incentives to overlook unethical conduct.

A. THE WTO'S BASIS IN THE GATT: WHY THE PRESENCE OF PRIVATE COUNSEL WAS CONTROVERSIAL

To understand the initial prejudice against private counsel in the WTO and the subsequent lack of ethical rules once private counsel were permitted, one must first examine the DSB 's roots in the GATT. In brief, the stillbirth of the International Trade Organization left the GATT with an ineffective dispute settlement system.3 Since the GATT recognized trade disputes as inevitable, it compensated for its lack of a formal adjudicatory forum by finding less formal means to settle controversies.4 In doing so, it developed a procedure that was part mediation and part arbitration, and that "depended on the good offices of experienced representatives of unaffected members to help the disputing parties find common ground to settle their differences."5 Because the hearings were less an adjudication of legal issues and more a diplomatic resolution of misunderstandings, private counsel were assumed to have no role.6

With the Uruguay Round came the WTO and its accompanying Understanding on Dispute Settlement ("DSU"), which "changed the nature of the dispute settlement process from a diplomatic to a legalized process and from a power-based to a rule-based procedure .... The DSU created a legalized, predictable, and reliable system for settling disputes."7 As the dispute settlement system became "much more focused on the law and its application,"8 the issue of whether governments should be permitted to retain private counsel began to emerge.9 While the WTO has no rules concerning private counsel, some members had assumed that no such counsel would be permitted since none had been allowed in its predecessor, the GATT.10 Others reasoned that despite the history of the DSU, the process had become significantly more juridical, such that the parties should be permitted to represent themselves as they would in any other court of law.11

B. ETHICAL AND OTHER CONTROVERSIES IN THE DECISION TO ALLOW PRIVATE COUNSEL

The ABA, while a chief proponent of allowing governmental representation by private counsel,12 issued words of warning concerning ethical regulation of those counsel.13 In a recommendation and report to the WTO, the ABA cautioned that

the use of private counsel creates risks of conflicts of interest and other ethical concerns which the WTO is not equipped to address ... [pjrivate lawyers would be subject to no effective discipline for misconduct or breach of obligations of confidentiality or conflicts of interest. There is no 'WTO bar', and the lawyer's home bars may be either unable or unwilling to exercise effective discipline.14

The lack of ethical rules was considered especially dangerous in the realm of confidentiality.15 World Trade Organization proceedings are closed to the public because the government secrets revealed during the hearings are regarded as too sensitive to be disclosed.16 It is possible that many governments would not participate in the DSU without these extreme safeguards. So a hazard arises when private counsel, who are subject to no WTO confidentiality constraints are permitted to participate in such hearings.17