Turning Private Action into State Action - Discrepancy Between WTO’s Jurisprudence and 2001 ILC Draft Articles on State Responsibility -

International law basically regulates the action of a state and the WTO Agreements are no exception to this basic rule. A difficult issue arises, however, when ostensibly private action is in fact a disguised attempt of governmental action and the private entity at issue exercises de facto governmental authority. The 2001 ILC Draft Articles was apparently aware of this situation and incorporated provisions to effectively address this situation. Although the ILC Draft Articles provides important guidance as to the attribution of private action to governmental action, the persisting problem is the lack of a clear standard to be applied in specific instances. This problem has been further exacerbated by the increasing close interaction between the governmental sector and private sector in many respects. The ILC Draft Articles, however, does offer an important piece of general direction for the discussion of this issue. It has adopted a cautious approach in determining when private action becomes governmental action. It stipulates thresholds and requirements to be satisfied beforehand, so that this notion does not change private action into governmental action merely because of certain a governmental flavor contained in it. This approach of the ILC Draft Articles largely reflects the customary international law. The WTO panels’ and Appellate Body’s precedents as identified in recent disputes, however, do not seem to have taken such a cautious approach adopted by the ILC Draft Articles when it comes to the issue of treating private action as governmental action. In recent disputes, the WTO panels and Appellate Body have apparently applied a looser standard in discussing when private action should be regarded as governmental action. This stance of the WTO would run the risk of stoking further disputes among WTO members, as different governments possess different views regarding the role of the government and as recent economic situations further invite governments' involvement in the markets. It seems that the WTO panels and the Appellate Body should more rigorously reflect the jurisprudence of the ILC Draft Articles in its analysis of private action being elevated to governmental action.