The Rule of Precedent and the Role of the Appellate Body James BACCHUS * & Simon LESTER ** The crisis over appointments to the WTO’s Appellate Body has been one of the most challenging conflicts the GATT/WTO system has ever seen, threatening to destroy a core institution of the world trading system. The Appellate Body has played a valuable role in dispute settlement, by providing a coherent set of jurisprudence to guide WTO Members as to the meaning of WTO law. The Appellate Body does not create formal ‘precedent’, but nevertheless its reasoning in past cases serves informally to create expectations as to the meaning of the WTO agreements. The United States has objected to the Appellate Body’s treatment of past rulings, arguing that the Appellate Body has elevated these rulings to ‘binding precedent’. However, a careful reading of the language used by the Appellate Body to describe its views indicates that the Appellate Body has not done so. The US objections are one part of its series of concerns justifying its blocking of appointments. Losing the Appellate Body over this dispute would be devastating to the WTO, and engagement on these issues must continue in good faith in order to find a resolution. Keywords: WTO Dispute Settlement, Appellate Body, Panels, Precedent, Stare Decisis, Cogent Reasons, Rule of Law, Walker Principles In many domestic legal systems, including especially those of the United States and other countries that follow the Anglo-American common law tradition, the high- est court in the land has a special role in interpreting the constitutional or other foundational documents of the society. The ‘precedents’ it sets through its inter- pretations do more than simply resolve a dispute. They also create a body of law for lower courts to apply and for the high court itself to follow in the future. This reliance on precedent provides certainty and foreseeability to individuals, busi- nesses, and other domestic actors within the society. They can have confidence that they know what the law is and how it will be applied. In the arena of international law, there is no single high court. There are, however, various international tribunals and other judicial and quasi-judicial bodies Bacchus, James & Lester, Simon. ‘The Rule of Precedent and the Role of the Appellate Body’. Journal of World Trade 54, no. 2 (2020): 183–198. © 2020 Kluwer Law International BV, The Netherlands * Founder member and former Chairman of the Appellate Body of the World Trade Organization, a Distinguished University Professor of Global Affairs at the University of Central Florida and an Adjunct Scholar at the Cato Institute. Email: James.Bacchus@ucf.edu. ** Founder of WorldTradeLaw.net and the Associate Director of the Herbert A. Stiefel Center for Trade Policy Studies at the Cato Institute. Email: slester@cato.org.