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Australian Year Book of International Law |
Gillian White[∗]
The World Trade Organization (WTO) with its compulsory dispute settlement system including an appellate tier has been in existence for just over five years as at March 2000. In that short time, a large number of disputes have been resolved, either by direct consultations, which members must undertake before they can request a panel determination, or by panel or Appellate Body decisions[1] adopted by the Dispute Settlement Body (DS Body).
There is now a growing harvest of case law produced by rulings of these independent bodies, judicial in character. Substantive WTO law is being clarified constantly, but this jurisprudence offers also rich primary material for so-called ‘general’ international lawyers interested in treaties and their interpretation. The case law has developed with some continuity with pre-WTO and General Agreement on Tariffs and Trade (GATT) panel decisions, albeit there is no doctrine of precedent. Coincidentally or not, this development has come about almost in parallel with the unprecedented expansion of the docket of the International Court of Justice since the early 1990s, with numerous issues of treaty interpretation coming before that Court. It is a scene very different from that envisaged in 1968 by Schwarzenberger who considered it
unlikely that, in the future, many more issues affecting the interpretation of treaties will come before international judicial organs than, at present, is the case. Thus, in cases of disagreement, the typical situation is likely to remain one of conflicting views on treaty clauses by the parties in a state of “auto-interpretation”.[2]
Similarly, Greig wrote in 1976:
in the international community judicial settlement is the exception rather than the rule, so that many disputes over the interpretation of a treaty are the subject of political compromise as to the “meaning” of the relevant term.[3]
While it is impossible here to outline the structure and principal provisions of the several WTO agreements,[4] some perspective on their fundamental nature will be helpful as the context for this review of selected decisions involving issues of treaty interpretation.
In his 1968 article critiquing the draft provisions that became Articles 31 and 32 of the Vienna Convention on the Law of Treaties (Vienna Convention),[5] Schwarzenberger advised future treaty drafters to bear in mind another rule not contained in the draft. It is ‘to be content with the creation of substantively reciprocal and mutually advantageous rules of treaty law’. He opined that if the draft articles were applied to the interpretation of treaties based on this psychological foundation, ‘they are likely to do little harm and may even do some good’.[6] This meta-legal norm should help to make any treaty interpretation unnecessary or, at least, would reduce differences on interpretation and application to a minimum.
Greig is surely right (and not alone) to point out that the general rule of interpretation in Article 31 of the Vienna Convention, ‘is not necessarily the total acceptance of the textual approach that the editors [of the 9th edition of Oppenheim] assert’.[7] He observed that the wording is sufficient ‘to give some comfort to supporters of both the intentions and the object and purpose schools’. Further, the margins established by Article 31 enable a contextualist to operate, despite the subsidiary status of the ‘supplementary means of interpretation’ allowed by Article 32. Greig’s concluding observation on Article 31 welcomes the possibility it offers for justification of
both a limited and an expansive view of a treaty’s meaning, given the range of circumstances to which it is to apply — to informal bilateral agreements, as well as to large-scale multilateral conventions, including the constitutions of major international organisations, the needs and aspirations of which may have departed significantly from the intentions of the original framers or even the strict meaning of the text which they designed.[8]
Much WTO treaty law predates the Vienna Convention and was not negotiated or drafted against the backdrop of the Vienna Convention provisions on interpretation. However it is clear that the principles of equality, in the sense of non-discrimination and the unconditional most-favoured-nation clause, reciprocity and mutual advantage, form the core of the obligations accepted by the parties to the GATT. The Preamble to GATT 1947 declares their commitment to:
enter into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce.
Notwithstanding the various exceptions and qualifications to these principles and norms in the GATT itself, and the numerous instances of non-compliance by parties with their GATT obligations, particularly in the period immediately preceding the Uruguay Round, this commitment was repeated in the Preamble to the WTO Agreement. A link was added to the parties’ declared objectives, including raising living standards, expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the aim of sustainable development, and seeking to protect and preserve the environment. The Preamble to the WTO Agreement ends with the parties’ statement of their determination, ‘to preserve the basic principles and to further the objectives underlying this multilateral treaty system’.[9] Thus large portions of the WTO bundle of treaties and agreements seem to be based on a sound ‘psychological foundation’.
The WTO judiciary[10] has to weigh the differing interpretations submitted by contending members in the disputes reaching panels or the Appellate Body and decide on particular interpretations with conscious awareness of the reaffirmed basic principles of the multilateral trading system, now embodied in the large and complex ‘single package’ of the WTO agreements, to which some 135 states or territories are parties. In performing its difficult and politically sensitive function, this judiciary is mandated to:
preserve the rights and obligations of the Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law.[11]
In its first report, the Appellate Body ruled that Article 31 of the Vienna Convention embodies the general rule for the interpretation of treaties and has attained the status of customary international law.[12] It was together with Article 32, the rule to be applied by WTO dispute-settlement bodies. This was no revolution in GATT jurisprudence. One element in the progressive transformation of the original GATT from a primarily diplomatic forum to a rule-oriented system was ‘the now regular use by panels of the customary law methods of treaty interpretation’.[13]
The seven members of the Appellate Body are all persons, ‘of recognised authority, with demonstrated expertise in law, international trade and the subject matter of the covered agreements generally’.[14] Several of the present seven members have specialised in the practice of international trade and economic law; some have diplomatic experience and some are academics, again with relevant specialisation. Panel members are more often diplomats or government officials with specialised GATT, General Agreement on Trade and Services (GATS) and WTO experience.
The Appellate Body’s understanding of the Vienna Convention rules on interpretation and its appreciation of their implications for the application and implementation of the WTO agreements have been manifested in several of its early decisions. To illustrate, two important reports in the sensitive area of environmental concerns as they are impacted on by GATT provisions have been selected. Both disputes required the Appellate Body to expound and interpret Article XX of the GATT 1994, a key provision of General Exceptions to the trade rules embodied in other GATT articles.
In its first report, United States: Gasoline,[15] the Appellate Body ruled that the Panel had erred in its approach to Article XX. Having found, correctly, that the United States ‘Gas Rule’ which laid down quality standards for domestic refiners and importers of reformulated and conventional gasoline discriminated against imported gas in violation of Article III.3 of the GATT, the Panel determined that the Gas Rule fell outside Article XX(g) as it was not a measure ‘relating to’ the conservation of an exhaustible natural resource, namely, clean air. Hence, it was unnecessary to determine whether the measure satisfied the requirements of the introductory clause or chapeau to Article XX. This provides:
Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any party of measures …
There follow specific exceptions or justifications (a) to (j).
Overruling the Panel, the Appellate Body found that the Gas Rule was a measure ‘relating to conservation’.[16 ]Invoking Article 31(1) of the Vienna Convention, ‘that the words of a treaty, like the GATT are to be given their ordinary meaning, in their context and in the light of the treaty’s object and purpose’, the Appellate Body observed that the Panel had not taken proper account of the actual wording of Article XX in its several paragraphs. The Article uses different terms in respect of different categories of national, exceptional measures. For example, in paragraphs (a) (b) and (d) the term is ‘necessary’, in (j) it is ‘essential’, but in (c) (e) and (g) — the paragraph here invoked — it is simply ‘relating to’. It was apparent from the text that WTO members did not intend to require for each category the same kind or degree of connection between the national measure and the interest or policy sought to be protected or achieved. The Panel had ignored this difference of language, apparently finding that the United States failed to show that its Gas Rule was ‘necessary’ for conservation of clean air (Article XX(g)) as well as being ‘necessary’ for protection of human, animal, plant life or health, the term used in Article XX(b) which the United States also invoked.
It will be harder for a member to show that a measure inconsistent with some provision of the GATT is justified as ‘necessary’ to secure a recognised policy goal than to show that a measure comes within Article XX because it is a measure ‘relating to’ a policy goal. These textual differences intentionally lead to differing outcomes in respect of national measures aimed at different policy interests.
The interpretation of Article XX(g) was disputed in the United States: Import Prohibition of Certain Shrimp and Shrimp Products.[17] India, Malaysia, Pakistan and Thailand challenged the GATT compatibility of a 1996 United States measure prohibiting imports of shrimp from countries that do not require commercial trawlers to use turtle excluder devices to allow the escape of endangered species of sea turtle. United States’ shrimp trawlers had to comply with parallel national environmental regulations. The United States relied on Article XX(a) — measures ‘necessary to protect animal life or health’— and Article XX(g) — measures ‘relating to conservation of exhaustible natural resources’, namely, the endangered turtle species. The complainants argued that ‘exhaustible natural resources’ is limited to non-living resources such as minerals. The Panel did not reach the interpretation of Article XX(g) or (b) as it first determined that the United States’ measure was not permitted by the terms of the chapeau, an approach to Article XX criticised and corrected by the Appellate Body.[18]
In upholding the United States’ interpretation of Article XX(g) the Appellate Body based its reasoning on the mandate from Article 31(1) of the Vienna Convention to interpret a provision in its context, but stated that this must be the contemporary context in which the dispute settlement bodies have to adjudicate. Rapidly disposing of the contention that living resources are always renewable and so cannot be ‘exhaustible’,[19] the Appellate Body noted that Article XX(g) had been crafted over 50 years ago, but that its terms, ‘must be read by a treaty interpreter in the light of contemporary concerns of the community of nations about the protection and conservation of the environment’. Article XX had not been modified in the Uruguay Round, but the Preamble to the WTO Agreement showed full awareness by signatories in 1994 ‘of the importance and legitimacy of environmental protection as a goal of national and international policy’.[20] Significantly, the Appellate Body emphasised that this Preamble informs not only the GATT 1994 but also the other ‘covered agreements’,[21] and that it expressly recognises the ‘objective of sustainable development’.[22 ] The way was now open for the Appellate Body to adopt a dynamic or evolutionary interpretation of the generic term ‘natural resources’, citing the statement of the International Court of Justice (ICJ) in the Namibia Advisory Opinion that some terms are not static but rather ‘by definition evolutionary’.[23] The Appellate Body had no difficulty in pointing to numerous international conventions and declarations, not least the United Nations Convention on the Law of the Sea (UNCLOS) 1982, which ‘make frequent references to natural resources as embracing both living and non-living resources’.[24] Regarding the position of the United States as a non-signatory to UNCLOS, the Appellate Body noted that at the hearing the United States had declared that they accepted its provisions on fisheries as reflecting customary law.
It was therefore, ‘too late in the day to suppose that Article XX(g) of the GATT 1994 may be read as referring only to the conservation of exhaustible mineral or other non-living natural resources’. Further, the drafting history showed no intent on the part of the framers of GATT 1947 to exclude living resources from its scope. The Appellate Body characterised its conclusion on this issue by declaring it to be ‘in line with the principle of effectiveness in treaty interpretation’, citing its decisions in United States: Gasoline, Japan: Taxes on Alcoholic Beverages and United States: Imports of Cotton Underwear, and numerous references to the literature in English, French and Spanish.[25]
The two selected cases both turned on the correct approach to the analysis of Article XX. In both the Appellate Body found the panels to have fallen into error of law in this regard. In United States: Gasoline the Appellate Body held that whenever a member invokes an Article XX exception to justify an otherwise impermissible measure restricting trade, a two-tiered analysis is required by the overall design and objectives of the article. First, a panel must determine whether the measure before it falls within one or more of the listed exceptions in Article XX(a) to (j). If not, cadit quaestio — the matter admits of no further argument. If it does fall within an exception, the measure is provisionally justified, but its application must then be appraised to determine whether it satisfies the chapeau. In both cases the Appellate Body held that the United States measure did not meet the requirements of the chapeau and did not therefore qualify for exemption.[26]
The Appellate Body Report in United States: Shrimp illustrates clearly both the rationale for this two-tiered analysis, and the possibility that failure to follow this sequence will result in a flawed analysis and determination of the issue. Declaring that the Panel had not followed all the steps of applying the customary rules of interpretation of public international law, the Appellate Body rehearsed the basic rules,
A treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted. It is in the words constituting that provision, read in their context, that the object and purpose of the states parties to the treaty must be sought. Where the meaning imparted by the text itself is equivocal or inconclusive, or where confirmation of the correctness of the reading of the text itself is desired, light from the object and purpose of the treaty as a whole may usefully be sought.[27]
The Panel erred in not expressly examining the ordinary meaning of the words of Article XX. The chapeau speaks of the ‘manner’ in which the national measures are ‘applied’, but the Panel did not inquire into how the application of the United States’ measure might constitute arbitrary or unjustifiable discrimination between comparable states, or a disguised restriction on international trade. Rather, the Panel focused on the design of the measure. The Appellate Body said that a measure’s general design, as distinct from its application, should be examined in the course of determining whether it fell within one of the listed exceptions.
More seriously, the Panel had failed to scrutinise ‘the immediate context’ of the chapeau, namely, paragraphs (a) to (j) of Article XX.[28] Instead, it had looked into the object and purpose of the whole of GATT 1994 and the WTO Agreement, describing this object and purpose ‘in an overly broad manner’, so reaching the conclusion that measures which ‘undermine the WTO multilateral trading system’ must be held to fall outside the scope of measures permitted under the chapeau. The Appellate Body’s pronouncement on this approach gives a clear signal of guidance to panels dealing with Article XX, a provision which is bound to be the subject of future disputes:
Maintaining, rather than undermining, the multilateral trading system is necessarily a fundamentally pervasive premise underlying the WTO Agreement; but it is not a right or an obligation, nor is it an interpretative rule which can be employed in the appraisal of a given measure under the chapeau of Article XX.[29]
These flaws in the Panel’s analysis flowed from its disregard of the essential sequence of steps, namely, the two-tiered approach. This sequence ‘reflects not inadvertence or random choice, but rather the fundamental structure and logic of Article XX.’[30]
In United States: Gasoline the Appellate Body said that the purpose and object of the chapeau to Article XX was, generally, the prevention of abuse of the exceptions:
The chapeau is animated by the principle that while the exceptions of Article XX may be invoked as a matter of legal right, they should not be so applied as to frustrate or defeat the legal obligations of the holder of the right under the substantive rules of the General Agreement.[31]
Measures falling within particular exceptions were to be applied reasonably, with regard to the legal duties of the party invoking the exception and the legal rights of other parties.
The Panel in United States: Shrimp had erred in formulating a broad standard or test for appraising measures under the chapeau, in relation to whether the measures undermined the multilateral trading system. This standard, said the Appellate Body, had no basis in the text either of the chapeau or of the exceptions claimed by the United States in paragraphs (a) and (g). There is no a priori test that defines a category of measures that ratione materiae fall outside the justifying protection of the chapeau.[32]
In interpreting the chapeau to Article XX the Appellate Body confirmed its view that each of the exceptions in paragraphs (a) to (j) is a limited and conditional exception from the substantive obligations of the GATT, by reference to the negotiating history of the chapeau. This history pre-dates the GATT 1947, as what became Article XX was included in the Draft Charter for an International Trade Organisation discussed at the Preparatory Committee of the United Nations Conference on Trade and Employment in late 1946.[33 ] The Appellate Body quoted the unconditional phrasing of a United States’ proposal for the provision, contrasting this with modifications proposed by the Benelux countries and the United Kingdom which urged qualified language in the chapeau to prevent protectionist abuse of the various exceptions. The Benelux/United Kingdom proposal was accepted. This negotiating history confirmed the limited and conditional nature of the exceptions. To qualify finally for exception, the requirements of the chapeau must be satisfied: ‘[t]his is a fundamental part of the balance of rights and obligations struck by the original framers of the GATT 1947’.[34]
Significantly, the Appellate Body followed this clear pronouncement by declaring that the chapeau is an expression of the principle of good faith:
This principle, at once a general principle of law and a general principle of international law, controls the exercise of rights by states. One application of this general principle, the application widely known as the doctrine of abus de droit, prohibits the abusive exercise of a state’s rights and enjoins that whenever the assertion of a right “impinges on a field covered by [a] treaty obligation, it must be exercised bona fide, that is to say, reasonably”.[35] An abusive exercise by a Member of its own treaty right thus results in a breach of the treaty rights of other Members and, as well, a violation of the treaty obligation of the Member so acting. Having said this, our task here is to interpret the language of the chapeau, seeking additional interpretative guidance, as appropriate, from the general principles of international law.[36]
The principle of good faith as an element in the interpretation of treaties pursuant to Article 31 of the Vienna Convention, rather than its broader application as the doctrine of abuse of rights, has been invoked by WTO panels and the Appellate Body. In United States: Restrictions on Imports of Cotton Underwear[37 ]Costa Rica requested findings that unilateral restrictions on imports of such products imposed and renewed by the United States in 1995 were in breach of provisions of the Agreement on Textiles and Clothing (ATC), one of the ‘covered agreements’ in the WTO package. Article 2.4 of the ATC prohibits any new restrictions on relevant products of members except under the provisions of the ATC itself or those of GATT 1994. Safeguard action is allowed under Article 6 of the ATC when certain conditions are shown to exist by the importing member.
The Panel recited Article 31 of the Vienna Convention, observing that the entire context of the ATC was relevant in order to interpret Article 6. The ATC’s overall purpose is to integrate the textiles and clothing sector into GATT 1994 by the year 2004. New restrictions additional to those notified under Article 2 are allowed only exceptionally, as was clear from the wording of Articles 2.4 and 6.1. The latter provides:
The transitional safeguards should be applied as sparingly as possible, consistently with the provisions of this Article and the effective implementation of the integration process under this Agreement.[38]
The Panel then recalled that provisions have to be interpreted in good faith:
Based upon the wording, the context and the overall purpose of the Agreement, exporting Members can legitimately expect that transitional safeguards, adopted under Article 6 of the ATC, would only be applied sparingly in order to serve the narrow purpose of protecting domestic producers of like and/or directly competitive products. Members can, in other words, legitimately expect that market access and investments made would not be frustrated by importing Members taking improper recourse to such action.[39]
There is an echo in this last phrase of the broader, substantive aspect of good faith, as a bulwark against abuse of rights.
Article 31(3)(b) of the Vienna Convention requires the treaty interpreter to take into account any subsequent practice in the application of the treaty that establishes the parties’ agreement as to its interpretation. In Japan: Taxes on Alcoholic Beverages the Appellate Body overruled the Panel which had declared that adopted panel reports[40] ‘constitute subsequent practice in a specific case by virtue of the decision to adopt them’.[41] The Appellate Body outlined the vital characteristics of subsequent practice, emphasising the need for evidence of agreement by the parties on a particular interpretation:
Generally, in international law, the essence of subsequent practice in interpreting a treaty has been recognised as a “concordant, common and consistent” sequence of acts or pronouncements which is sufficient to establish a discernible pattern implying the agreement of the parties regarding its interpretation. An isolated act is generally not sufficient to establish subsequent practice; it is a sequence of acts establishing the agreement of the parties that is relevant.[42]
The practice under GATT 1947 was that the conclusions in an adopted panel report bound the parties to that dispute, but later panels were not bound by the reasoning of previous reports. The Appellate Body did not believe that the contracting parties in adopting a report intended their decision to be a definitive interpretation of relevant provisions of GATT 1947. Nor was there such intention in relation to GATT 1994. Article IX.2 of the WTO Agreement confers exclusive authority on the WTO political organs, the Ministerial Conference and the General Council, to adopt interpretations of the WTO Agreement and the several Multilateral Trade Agreements. This specific conferment of authority ‘is reason enough to conclude that such authority does not exist by implication or inadvertence elsewhere’.[43]
Adopted panel reports were an important part of the GATT acquis by which the WTO is to be guided, pursuant to Article XVI.1, WTO Agreement. This provision refers to ‘the decisions, procedures and customary practices’ followed by the Parties to the former GATT 1947. In an important statement the Appellate Body declared that ‘they create legitimate expectations among WTO members, and, therefore, should be taken into account where they are relevant to any dispute’.[44] But they are binding only with respect to the particular dispute between parties to that dispute, and do not constitute ‘subsequent practice’ for Article 31 Vienna Convention.
In Turkey: Restrictions on Imports of Textiles the Panel examined GATT and WTO practice in the application of the customs union and free trade agreement provision, Article XXIV of the GATT. It found no consensus had been reached by the contracting parties ‘nor was any practice agreed upon regarding Article XXIV’.[45] Governments had taken differing, indeed opposed, views in the Committee examining the conformity of the European Economic Community (EEC) Treaty with Article XXIV, and in Working Parties considering the accession of new members to the EEC, on the permissibility of new quantitative restrictions imposed by these states on trade with non-EEC and GATT parties. Hence the Panel correctly ruled that there was no ‘subsequent practice’ as understood in Article 31 Vienna Convention, or ‘customary practice’ as used in Article XVI.1 of the WTO Agreement.[46]
Article XXIV of the GATT allows WTO members to form customs unions or participate in regional trade agreements provided these arrangements satisfy certain criteria. By their nature, customs unions or regional free-trade agreements are likely to discriminate in favour of trade between their members and against trade in goods from states that are non-members but which are members of the WTO. In Turkey: Restrictions on Imports of Textiles and Clothing[47] India claimed that discriminatory quotas applied to its textile products imported into Turkey since January 1995 were imposed in violation of Articles XI and XIII of the GATT 1994. In defence, Turkey invoked its Customs Union/Association Agreement with the European Communities (EC)[48] and Article XXIV paragraphs 5 to 8. Having rehearsed the relevant principles of interpretation, including Articles 31 and 32 of the Vienna Convention and past GATT/WTO decisions and customary practices, the Panel highlighted the general principle that WTO obligations are cumulative, in the sense that members must comply with them all at all times unless there is a formal conflict between them. The principle flowed from the nature of the WTO Agreement as a ‘Single Undertaking’.[49 ] On this, the Panel followed the approach taken by the Appellate Body in Brazil: Desiccated Coconut.[50] Unlike the previous GATT system of distinct agreements, the WTO is a single-treaty instrument, accepted by members as a single undertaking.[51]
How do we test for the presence of a formal conflict between two or more agreements touching the same subject matter, or between two or more such provisions in the same agreement? The Panel invoked Jenks’ conclusion that a conflict arises only where simultaneous compliance with the obligations of different instruments or provisions is impossible. There is no conflict if the obligations of the one are stricter than, but not incompatible with, those of the other, or if compliance with one is possible by refraining from exercising a privilege or discretion afforded by another.[52] WTO jurisprudence has consistently applied this principle as a presumption of law against conflict,[53]
and it was discussed in Indonesia: Autos [54] with extensive reference to the literature.[55 ] The Panel in that case linked the single undertaking character of the WTO agreements with the interpretative principle of effectiveness, ‘all provisions of a treaty (and in the WTO system all agreements) must be given meaning, using the ordinary meaning of words’.[56]
In Turkey: Restrictions on Imports the Panel rightly considered the cumulative nature of the WTO obligations as the basic principle to guide its interpretation of Article XXIV. Did this article authorise measures that Articles XI and XIII of the GATT and Article 2.4 of the Special Agreement on Textiles otherwise prohibit? The Panel said it would pay due regard to the presumption against conflict, ‘to the extent possible, any interpretation of these provisions that would lead to a conflict between them should be avoided’.[57] The issue was resolvable given the flexibility in Article XXIV.8(a)(ii), which defines a customs union as the substitution of a single customs territory for two or more territories so that ‘substantially the same duties and other regulations of commerce are applied’ by each member to the trade with non-members.[58] The Panel duly interpreted this language as allowing ‘harmonious interpretation’.
Moreover, this interpretation accorded with the provision’s context and with the object and purpose of the WTO Agreement — the expansion of world trade and increasing freedom of trade. At the same time, it respected Turkey’s right to enter into a customs union with other WTO members. But Article XXIV did not authorise Turkey to impose new, discriminatory restrictions on its imports of textiles from India. Turkey was neither obliged nor authorised to align its external trade regulations completely with those of the EC that were lawfully maintained for a period, under the Agreement on Textiles. Turkey’s imposition of new restrictions on this trade with India was incompatible with its obligations under Articles XI and XIII of GATT. Further, other means were available to Turkey to secure its legitimate aims relating to the formation of its customs union with the EC, for example, increased tariffs and rules of origin. These were permissible alternatives to imposing quota restrictions on imports from third states.[59]
In United States: Gasoline, discussed above, the Appellate Body said that one of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention is that interpretation must give meaning and effect to all the terms of a treaty: ‘An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility’.[60]
Applying this principle, the Appellate Body held that the provisions of the chapeau to Article XX of the GATT do not refer to the same standards by which a violation of a substantive rule has been determined to have occurred. So to interpret the chapeau would be to empty it of its content, and to deprive the exceptions in paragraphs (a) to (j) of meaning. Whether inconsistency with a substantive rule is justified under the chapeau is a further and separate question from the prior one, whether inconsistency with a substantive rule exists.
The Panel in Turkey: Restrictions on Imports of Textiles[61] recalled the principle of effectiveness, otherwise known as l’effet utile or ut res magis valeat quam pereat.[62] All provisions must, to the extent possible, be given full meaning so that parties can have their rights and obligations effectively applied. The principle
prevents us from reaching a conclusion on the claims of India or the defence of Turkey, or on the related provisions invoked by the parties, that would lead to a denial of either party’s rights or obligations.[63]
The Panel applied the principle in rejecting Turkey’s claim that it was ‘required’ by Article XXIV.8(a)(ii) of the GATT when forming the customs union with the EC to adopt exactly the same trade policies with non-EC WTO members as those of the EC. Apart from this interpretation being at odds with the text of the provision, the argument would produce an absurd result. The foreign trade regimes of Turkey and the EC would have to become immediately identical. Assuming, as was the case, that Turkey was unable lawfully to maintain quota restrictions with non-members of the union but that the EC could lawfully do so, the EC would have to align its textiles and clothing regime to Turkey’s, at once phasing out its permitted restrictions. The text of Article XXIV clearly recognises a right in WTO members to form a customs union with other members. In practice, the EC would not be willing to pay this high ‘price’ to form a union with Turkey. Recalling the effective interpretation principle, the Panel held Turkey’s argument unsustainable, as it would produce this absurd result. There had to be another ‘realistic interpretation’ of Article XXIV that reconciles the various interests of members. The Panel was satisfied that it had reached such an interpretation, respecting the principles of interpretation against conflict and effective interpretation of treaties.[64]
Whereas in this case the effective interpretation respected the ordinary meaning of Article XXIV.8(a)(ii), it is equally clear that the Vienna Convention general rule bars an interpreter from disregarding the plain wording of a provision on the basis of a ‘need’ to give ‘real effect’ to the provision. In European Communities: Bananas III the Appellate Body overturned the Panel’s interpretation of the Lomé waiver to GATT 1994 that reads:
Subject to the terms and conditions set out hereunder, the provisions of paragraph 1 of Article I of the General Agreement [the Most-favoured Nation Provisions] shall be waived, until 29 February 2000, to the extent necessary to permit the European Communities to provide preferential treatment for products originating in ACP States as required by the relevant provisions of the Fourth Lomé Convention.[65]
The Panel concluded that the Lomé waiver should be read so as to apply not only to Article I.1 but also to Article XIII of GATT 1994, on non-discrimination — administration of quantitative restrictions. This interpretation was justified by the close relationship between the two articles and the need to give ‘real effect’ to the waiver. The wording of the waiver was clear and unambiguous; it referred only to Article I.1:
Neither the circumstances surrounding the negotiation of the Lomé Waiver, nor the need to interpret it so as to permit it to achieve its objectives, allow us to disregard the clear and plain wording … by extending its scope. Moreover, although Articles I and XIII … are both non-discrimination provisions, their relationship is not such that a waiver from the obligations under Article I implies a waiver from the obligations under Article XIII.[66]
In the celebrated disputes arising from the EC’s ban on imports of meat from cattle treated with certain growth-promoting hormones, the Appellate Body had to interpret several key provisions of the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS).[67] Space considerations preclude a review of most of these determinations, but one example is noteworthy as it involves a guarded reference to the presumption or maxim that in case of doubt a provision imposing a limitation on state sovereignty should be interpreted restrictively.
The Appellate Body rejected the Panel’s interpretation of Article 3.1 of the SPS that measures ‘based on’ international standards means ‘conform to’, so that SPS measures of members must conform to the standards, guidelines and recommendations of the Codex Alimentarius Commission. Whether real doubt exists as to the meaning of the provision must itself be a matter of debate, as the Appellate Body’s path of reasoning reveals.
Considering first the ordinary meaning, ‘based on’ differed clearly from ‘conform to’. A measure might be based on a Codex standard yet not incorporate all of its elements and so would not conform to the standard. Second, both phrases were used in the SPS Agreement in different articles, and in different paragraphs of the same article, implying deliberate choices by the negotiators and an intention to convey different meanings. The inference of deliberate choice could be overturned only by convincing argument showing that the use of different terms to mean the same was accidental.[68]
Third, the Appellate Body found that the object and purpose of Article 3 SPS, the harmonisation of members’ SPS measures on the basis of international standards, was projected as a goal to be realised in future. To read it as requiring members to harmonise now by conforming their measures with international standards and guidelines would be to vest those standards and guidelines with obligatory force. The SPS contained no indication of such an intent.
Only after careful and persuasive analysis of the text and context of Article 3 did the Appellate Body venture to refer to restrictive interpretation:
We cannot lightly assume that sovereign states intended to impose upon themselves the more onerous, rather than the less burdensome obligation by mandating conformity or compliance with such standards, guidelines and recommendations.[69]
The footnote to this passage cites the interpretative principle of in dubio mitius as ‘widely recognised in international law as a supplementary means of interpretation’ and quotes from the Jennings and Watts edition of Oppenheim including the following,
If the meaning of a term is ambiguous, that meaning is to be preferred which is less onerous to the party assuming an obligation, or which interferes less with the territorial and personal supremacy of a party, or involves less general restrictions upon the parties.[70]
Copious references to international case law and literature follow.
Over 30 years ago McNair thought that the ‘so-called rule’ of restrictive interpretation was declining in importance and would soon disappear from the books.[71] Hersch Lauterpacht criticised the International Court in his 1958 monograph for not discouraging ‘the plea’ of restrictive interpretation as clearly as it should.[72 ]All are agreed that the in dubio mitius maxim may be invoked only when there remains a genuine doubt as to the parties’ intention, after textual and contextual analysis has been undertaken. Article 32 of the Vienna Convention mentions only preparatory work as ‘supplementary means’ of interpretation, but as Greig observed:
it is to be supposed that they are intended to cover the various, and often conflicting, legal presumptions that a tribunal might refer to in the course of interpreting a treaty, e.g. that restrictions upon the sovereignty of states will not be presumed, or that a treaty should be interpreted in order to make it effective.[73]
The Appellate Body reversed the Panel’s conclusion that Article 3.1 of the SPS requires national measures to ‘conform to’ international standards, such as those set by the Codex Commission. A measure may be ‘based on’ such standards, in which case it does not benefit from the presumption of consistency with the SPS and GATT 1994 afforded to a national measure which ‘conforms to’ relevant international standards.
Tough negotiation in the final days of the Uruguay Round resulted in a unique formulation of the mandate for panels interpreting the Anti-Dumping Agreement. In examining complaints relating to anti-dumping measures, Article 17.6(ii) requires the Panel to:
interpret the relevant provisions of this Agreement in accordance with customary rules of interpretation of public international law. Where the panel finds that a relevant provision of the Agreement admits of more than one interpretation, the panel shall find the authorities’ measure to be in conformity with the Agreement if it rests upon one of these permissible interpretations.[74]
Some governments, including the United States, had proposed that the national measure be justified if based upon a reasonable interpretation of the Agreement’s provisions. Indeed, this proposal would have applied widely, governing Panels’ review powers in relation to many (perhaps all) of the WTO agreements. Concerns were raised that a reasonableness criterion, ‘would constrain panels too much, and make it difficult to successfully challenge objectionable practices that were inconsistent with various WTO rules’.[75] The final compromise included the restriction of this review criterion to the anti-dumping text, and the substitution of ‘permissible’ for ‘reasonable’ in the interpretative mandate, supposedly shifting the balance away from what was considered too great a degree of deference to national authorities.
However, commentators quickly pointed out that the application of the ‘customary rules of interpretation’ in Articles 31 and 32 of the Vienna Convention might in most, if not in all, cases lead to the Panel resolving any textual ambiguities, so that the last part of the second sentence, requiring a finding of conformity if the measure rests upon one of the permissible interpretations, would not be reached.[76]This occurred in an early case on the Agreement, United States: Anti-Dumping Duty on DRAMS from Korea.[77] Article 11.2 prescribes that national authorities must conduct reviews of anti-dumping measures either on their own initiative, or on request by an interested party, supported by ‘positive information’ substantiating the need for review. The United States anti-dumping order of May 1993 on Korean DRAMs had been reviewed by the Department of Commerce in two consecutive years. The United States Regulations provide for revocation of an order where the respondent is found to have zero or de minimis dumping margins for three years and the Department determines that it is ‘not likely’ that the respondent will resume dumping in future.
On the third review two Korean producers sought revocation based on absence of dumping for three consecutive years. The United States domestic industry objected, proffering information regarding changed market conditions that arguably showed the likelihood of resumed dumping. The Department of Commerce, after hearings, found that the second requirement for revocation was not met. It could not make a finding that it was ‘not likely’ that the respondents would resume dumping.
The Panel found this Commerce Regulation to be inconsistent with Article 11.2 of the Agreement. The negative formulation that it is ‘not likely’ that the producer will resume dumping is not equivalent to an affirmative finding that there is likelihood of resumption if the anti-dumping order is revoked. Article 11.2 requires a finding based on positive evidence of the need to maintain the order and does not contemplate the use of presumptions to establish such need.[78]
The Panel referred to Article 3.2 DSU — interpretation in accordance with customary rules of interpretation of international law — and Article 17.6(ii) of the Anti-Dumping Agreement. The United State had submitted that certain of its arguments constituted ‘permissible interpretations’ of the Agreement, but the Panel noted that it had rejected those arguments for inconsistency with the Agreement, ‘on the basis of the customary rules of interpretation of public international law’. Therefore, the Panel did not have to consider whether Article 11.2, ‘admits of more than one permissible interpretation’.[79] The United States revised its revocation regulation accordingly, and applied it in the third review proceeding, completed in late 1999.
This principle has been recognised to a limited extent in Article 5.7 of the SPS Agreement which authorises WTO members to impose a provisional SPS measure restricting trade in a situation where, ‘relevant scientific information is insufficient’ and the measures are adopted, ‘on the basis of available pertinent information’. Strict requirements apply to the maintenance of any provisional measure.
In European Communities: Hormones the EC did not rely on Article 5.7. Its ban on meat imports from cattle fed with specified hormones was not provisional. Instead the EC invoked the precautionary principle more generally, as a key to the interpretation of the crucial risk assessment clause, Article 5.1. The Appellate Body agreed with the Panel that the principle, whatever its status, does not override or modify the obligation imposed by Article 5.1 to base SPS measures on a risk assessment.[80]
The Appellate Body regarded the status of the precautionary principle in international law as debatable. Some consider it to be a general principle of environmental law but it was unclear whether WTO members accepted it as a principle of general customary international law.[81] The principle had not been written into the SPS Agreement as a ground for justifying measures otherwise inconsistent with members’ obligations under the Agreement. Certain provisions reflected the principle, including the important clause recognising members’ right to set their own level of sanitary protection which can be higher, and more cautious, than that agreed in existing international standards. Moreover, in determining whether ‘sufficient scientific evidence’ exists to justify a member maintaining a given SPS measure, panels are to bear in mind
that responsible, representative governments commonly act from perspectives of prudence and precaution where risks of irreversible, eg, life-terminating damage to human health is concerned.[82]
But the Appellate Body made it clear that it is the text of the SPS Agreement, interpreted in accordance with Vienna Convention rules, which must prevail over any interpretation derived from applying the precautionary principle:
the precautionary principle does not, by itself, and without a clear textual directive to that effect, relieve a panel from the duty of applying the normal (i.e. customary international law) principles of treaty interpretation in reading the provisions of the SPS Agreement.[83]
The focus of this selective review of some of the WTO dispute settlement reports has been the operation in practice, in this relatively new and complex field of international trade law, of the Vienna Convention rules on interpretation of treaties. It must be borne in mind that the WTO Panels and Appellate Body are instructed to preserve members’ rights and obligations under the covered agreements, and to clarify their existing provisions in accordance with customary rules of interpretation of international law.[84] The exclusive authority to adopt interpretations of the WTO Agreement and the annexed Multilateral Trade Agreements abides in the WTO political organs — the Ministerial Conference and the General Council.[85] A decision to adopt an interpretation needs a three-quarters majority of the members. This procedure is not to be used so as to undermine the amendment provisions that are subject to more rigid voting requirements.[86] To date, the WTO organs have not used these provisions. These and other provisions[87] emphasise that the member governments retain ultimate control over the development of WTO law, although the reports of its judiciary must inevitably exert a degree of influence on the positions taken in future negotiating rounds, and on draft proposals for amending existing agreements or sponsoring new ones.
The question to be asked, therefore, is not what modifications or refinements to provisions of WTO law have resulted from the application of the Vienna Convention rules on interpretation of treaties; it is, rather, whether in the practice of the WTO dispute-settlement bodies these rules have been suitable and apt tools to aid in the resolution of these disputes, within the framework laid down by the DSU? From a study of many of the panel reports and all of the Appellate Body reports issued to date, the writer is satisfied that an affirmative answer is justified, at any rate from the reasoning and general approach of the Appellate Body to their task of clarification. GATT panels from the early 1980s were using the customary law methods of treaty interpretation, with input from lawyers in the GATT Secretariat. This usage is now mandated, and the unique appellate review system should ensure that these ‘methods’ are adequately understood by all concerned so as to achieve the aims of the dispute settlement system, namely, ‘providing security and predictability to the multilateral trading system’ and ‘achieving a satisfactory settlement of the matter in accordance with the rights and obligations under this Understanding and under the covered agreements’.[88]
This review has had to be selective. In particular, space considerations have prevented the inclusion of examples of the interpretation of the DSU itself, already a rich field for clarification of the notion of due process in international litigation. The aim has been to give some idea or flavour of the results produced by the employment in skilled hands of the Vienna Convention provisions on treaty interpretation.
CASES
Aegean Sea Continental Shelf Case (Greece v Turkey) (Preliminary Objections) [1978] ICJ Rep 3 7
Anglo-Norwegian Fisheries [1950] ICJ Rep 142 10
Border and Transborder Armed Actions [1988] ICJ Rep 105 10
Brazil: Measures Affecting Desiccated Coconut, WT/DS22/AB/R, 13, adopted 20 March 1997 13
Canada: Periodicals, WT/DS31/AB/R, 30 July 1997 13
Case Concerning the Gabčikovo-Nagymaros Project (Hungary v Slovakia) [1997] ICJ Rep 3 15
Corfu Channel Case [1949] ICJ Rep 4 14
EC Measures Concerning Meat and Meat Products (Hormones), WT/DS/26/AB/R, WT/DS48/AB/R 16, 19, 20
EC: Bananas III, WT/DS27/AB/R, 25 September 1997 13, 15
Guatemala: Cement, WT/DS60/AB/R, 25 November 1998 13
Indonesia: Autos WT/DS54,55,59 and 64/R, 23 July 1998 13
Japan: Alcoholic Beverages, WT/DS/8,10,11/AB/R 7, 11
Japan: Taxes, WT/DS8/AB/R, 1 November 1996 7, 11
Legal Consequences for States of the Continued Presence of South Africa in Namibia (South West Africa) Notwithstanding Security Council Resolution 276 (1970) [1971] ICJ Rep 16 7
Reparation for Injuries Case [1949] ICJ Rep 174 14
Rights of US Nationals in Morocco [1952] ICJ Rep 176 10
South West Africa (Ethiopia and Liberia v South Africa) Cases [1962] ICJ Rep 319 14
Turkey: Restrictions on Imports of Textiles WT/DS34/R 12, 13, 14
United States: Anti-Dumping Duty on DRAMS from Korea WT/DS99/R, adopted 19 March 1999 18
US: Cotton Underwear, WT/DS24/AB/R, 25 February 1997 7, 14
US: Import Prohibition of Certain Shrimp and Shrimp Products WT/DS 58/AB/R, 12 October 1998 6, 7, 8, 9, 10
OTHER AUTHORITIES
Convention on the Law of the Sea 1982 7
General Agreement on Tariffs and Trade 1947 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18, 21
General Agreement on Trade in Services 1994 2, 4, 6
Marrakesh Agreement Establishing the World Trade Organisation 1994 16
United Nations Charter 1945 9
[∗] Emeritus Professor of International Law, University of Manchester, United Kingdom.
[1] Technically these are reports to the DS Body, representing all WTO members. For a summary of the dispute settlement system see G White, ‘Leather Car Seats, Salmon and Apples: Australia and the WTO Dispute Resolution Process’ (1997) Australian International Law Journal 145, 149–160.
[2] G Schwarzenberger, ‘Myths and Realities of Treaty Interpretation: Articles 27–29 of the Vienna Draft Convention on the Law of Treaties’ (1968) 9 Virginia Journal of International Law 1, 18.
[3] D W Greig, International Law (2nd ed, 1976) 477.
[4] Several of these Agreements are reproduced in (1994) 33 ILM 1141ff, namely: the Agreement Establishing the WTO, ibid 1144; the General Agreement on Tariffs and Trade 1994 (GATT 1994), ibid 1154 and the Several Understandings on various GATT provisions, ibid 1156–1166; the General Agreement on Trade in Services (GATS), ibid 1168; Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs), ibid 1197; the Dispute Settlement Understanding (DSU), ibid 1226. A Porges has produced a full and informative Introductory Note to these Agreements, ibid 1125. The numerous Annexed Agreements to the multilateral Agreements on Trade in Goods, such as the Agreement on Agriculture and the Agreement on Subsidies, are not reproduced in International Legal Materials. Texts are available in WTO publications, on the WTO website: <www.wto.org> and in various commercial publications.
[5] 1155 UNTS 331 (1969).
[6] Schwarzenberger, above n 2, 19.
[7] ‘Oppenheim Revisited: An Australian Perspective’ [1992] AUYrBkIntLaw 6; (1993) 14 Aust YBIL 227, 269–270.
[8] Ibid 270.
[9] Brownlie succinctly states that international economic law is still a treaty law, and its problems are those of interpreting instruments ‘with reference to a community or treaty policy if one is extant’. I Brownlie, Principles of International Law (4th ed, 1990) 262.
[10] According to a former Director of the Legal Affairs Division of the WTO ‘the Appellate Body has firmly established itself as the judicial overseer of the WTO system’. Davey submits that in the future consideration should be given ‘to having a permanent panel body, like the Appellate Body, from which all or most panelists are drawn’, and regards such a change as inevitable. W J Davey, ‘The WTO Dispute Settlement System’ (2000) 3 Journal of International Economic Law 15, 16. The present writer agrees with McRae’s evaluation: ‘The WTO dispute settlement mechanism does more than resolve individual disputes. It provides a basis for the development of international trade law through judicial decision-making.’ He characterises the task of both panels and the Appellate Body as ‘essentially judicial’ in nature. D M McRae, ‘The WTO in International Law: Tradition Continued or New Frontier?’ (2000) 3 Journal of International Economic Law 27, 30.
[11] Understanding on Rules and Procedures Governing the Settlement of Disputes (Annex 2 to the WTO Agreement) (hereafter DSU).
[12] United States: Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, 17, 29 January1996; reproduced in (1996) 35 ILM 621 (hereafter United States: Gasoline). The Appellate Body referred to ample supporting authority for the proposition that Articles 31 and 32 represent customary law, including ICJ and European Court of Human Rights judgments, and writings of academic and practising international lawyers.
[13] E-U Petersmann (legal counsel in the GATT Secretariat 1981–1990, and a leading expert on WTO law, in particular, dispute settlement), ‘The Dispute Settlement System of the World Trade Organization and the Evolution of the GATT Dispute Settlement System since 1948’ (1994) 31 Common Market Law Review 1157, 1188.
[14] DSU Article 17.3. Three members chosen by a random procedure make up a division to hear an appeal.
[15] WT/DS2/AB/R, adopted 20 May 1996; see above n 12.
[16] There was no dispute that clean air was an ‘exhaustible natural resource’. See below for interpretation of this phrase in relation to biological, living resources.
[17] Appellate Body Report WT/DS 58/AB/R, 12 October 1998; also in (1999) 38 ILM 118 (hereafter United States: Shrimp).
[18] See below n 26 and accompanying text.
[19] Appellate Body Report [127]–[128], invoking modern biological science which teaches that living species, while in principle ‘renewable’ are susceptible in certain circumstances of depletion and extinction.
[20] Ibid [129].
[21] Namely, those covered by the DSU, including the WTO Agreement, the several Multilateral Agreements on Trade in Goods such as the Subsidies Agreement and the Agreement on Agriculture, the GATS, the TRIPs Agreement, the DSU itself, and four Plurilateral Trade Agreements to which only some WTO members are party.
[23] [1971] ICJ Rep 31; also Aegean Sea Continental Shelf Case [1978] ICJ Rep 3; R Y Jennings and A D Watts, Oppenheim’s International Law (9th ed, 1992) 1282.
[25] Ibid [131] and fn 115. Japan: Taxes, WT/DS8/AB/R, 1 November 1996; United States: Cotton Underwear, WT/DS24/AB/R, 25 February 1997. See below n 60 and accompanying text.
[26] WT/DS2/AB/R, Section IV at 22; (1996) 35 ILM 636. See White, above n 1, 166–168.
[27] United States: Shrimp, above n 17 [115]; (1996) 38 ILM 150.
[28] Ibid [116] (emphasis in original).
[29] Ibid.
[30] Ibid [119].
[31] United States: Gasoline, above n 12, 22.
[32] United States: Shrimp above n 17 [121].
[33] See generally, J H Jackson, World Trade and the Law of GATT (1969) and I A Tzionas, ‘Structure and Operation of the GATT’ in H Fox (ed), International Economic Law and Developing States: An Introduction (1992) 149, 150–151.
[35] B Cheng, General Principles of Law as Applied by International Courts and Tribunals (1953) ch 4, 125; Jennings and Watts above n 23, 407–410: see also Border and Transborder Armed Actions [1988] ICJ Rep 105; Rights of US Nationals in Morocco [1952] ICJ Rep 176; Anglo-Norwegian Fisheries [1950] ICJ Rep 142.
[36] United States: Shrimp, above n 17 [158], citing Article 31(3)(c) Vienna Convention. For discussion and analysis of the principles of international law as reflected in the UN Friendly Relations Declaration of 1970 (UNGA Res 2625 (XXV)) see V Lowe and C Warbrick (eds), The United Nations and the Principles of International Law: Essays in Memory of Michael Akehurst (1994). The writer contributed chapter 11, ‘The Principle of Good Faith’ to this work.
[37] Panel Report WT/DS24/R, 8 November 1996.
[38] Ibid [7.19] (emphasis in original).
[39] Ibid [7.20].
[40] That is, reports adopted by the GATT contracting parties pre-1995, or by the WTO DS Body.
[41] Panel report WT/DS 8,10 and 11/R, 11 July 1996 [6.10].
[42] WT/DS 8,10,11/AB/R, 25 September 1996, 11. Authorities cited include I Sinclair, The Vienna Convention on the Law of Treaties (2nd ed, 1984) 137–138; M K Yasseen in (1976–III) 151 Hague Recueil 48; and the Year Book of the International Law Commission (1966–II) 22.
[43] WT/DS 8, 10, 11/AB/R ibid 12.
[44] Ibid.
[45] WT/DS34/R [9.166].
[46] Ibid [9.166]–[9.168].
[47] Panel Report, WT/DS34/R, 31 May 1999.
[48] Beginning with the Ankara Association Agreement of 1963, with Supplementary Protocols of 1970 to 1973, and culminating in Decisions of the Turkey, EC Association Council of December 1995. The entry into force of the final phase of the EC, Turkey Customs Union was notified to the WTO on 22 December 1995 under Article XXIV of the GATT.
[49] Panel Report above n 47 [9.92].
[50] Brazil: Measures Affecting Desiccated Coconut, WT/DS22/AB/R, 13, adopted 20 March 1997.
[51] WTO Agreement, Article II.2 provides that the Multilateral Trade Agreements in Annexes 1, 2 and 3 are ‘integral parts’ of the WTO Agreement, binding on all members.
[52] W Jenks, ‘The Conflict of Law-making Treaties’ (1953) 30 British Yearbook of International Law 401, 426–427.
[53] See Appellate Body Reports in Canada: Periodicals, WT/DS31/AB/R, 30 July 1997, 19; European Communities: Bananas III, WT/DS27/AB/R, 25 September 1997 [219]–[222]; and Guatemala: Cement, WT/DS60/AB/R, 25 November 1998 [65].
[54] Panel Report WT/DS54,55,59 and 64/R, 23 July 1998 [14.28] (not appealed).
[55] Including Jenks’ article above n 52; the Encyclopaedia of Public International Law (1984); Sinclair, above n 42; and the Jennings and Watts edition of Oppenheim’s International Law above n 35.
[56] See above n 54 [14.28]. See below n 60 and accompanying text.
[58] Emphasis added.
[59] The Panel recorded that it was interpreting Article XXIV in such a way as to avoid conflict with other WTO provisions. The Appellate Body did not have to review the Panel’s reasoning on these aspects of its interpretation of the article. The Appellate Body focused on the central importance of the introductory chapeau to Article XXIV.5, which the Panel had not properly considered.
[60] WT/DS2/AB/R, Section IV, fn 45; see also Appellate Body Reports in Japan: Alcoholic Beverages, WT/DS/8,10,11/AB/R, 12; United States: Restrictions on Cotton Underwear, WT/DS/24/AB/R, 16.
[62] See, eg, the Reparation for Injuries Case [1949] ICJ Rep 174, 184; Corfu Channel Case [1949] ICJ Rep 4, 24; South West Africa Cases [1962] ICJ Rep 319, 335 and following; and Case Concerning the Gabčíkovo-Nagymaros Project (Hungarian Dam Case) [1997] ICJ Rep [135], [139] emphasising the multiple objectives of the 1977 Treaty between Czechoslovakia and Hungary, and holding that the Parties are obliged to consider how these can best be served now ‘keeping in mind that all of them should be fulfilled’.
[63] Ibid [9.96].
[64] Ibid [9.185]. For the Panel’s interpretation see the preceding section. It relied on the flexible language, ‘substantially the same … regulations of commerce’ on trade with non-members of the customs union.
[65] ACP States are African, Caribbean and Pacific countries having a special trading relationship with the EC, negotiated in successive Conventions since 1966.
[66] WT/DS27/AB/R, 25 September 1997 [183].
[67] EC Measures Concerning Meat and Meat Products (Hormones), WT/DS/26/AB/R, WT/DS48/AB/R, adopted 13 February 1998. There were two separate challenges to the EC measures, by the United States and Canada, and two separate Panel and Appellate Body reports, covering almost identical issues and arguments. See especially, R Quick and A Bluthner, ‘Has the Appellate Body Erred? An Appraisal and Criticism of the Ruling in the WTO Hormones case’ (1999) 2 Journal of International Economic Law 603.
[68] Ibid [164] ‘conform to’ is used in Article 3.2.
[69] Ibid [165] (emphasis in original).
[70] Oppenheim’s International Law above n 35, 1278.
[71] A D McNair, ‘Treaties and Sovereignty’ in Symbolae Verzijl (1958) reprinted with additional citations in The Law of Treaties (1961) 754, 765.
[72] H Lauterpacht, The Development of International Law by the International Court (1958) 302–303.
[73] Greig, above n 3, 480–481.
[74] Emphasis added.
[75] S P Croley and J H Jackson, ‘WTO Dispute Procedures, Standard of Review and Deference to National Governments’ (1996) 90 American Journal of International Law 193, 199.
[76] Ibid 200–201; G H Kaplan, M D Esch and C R Revaz, 'Commentary on the Anti Dumping Agreement' in Law and Practice of the World Trade Organization (1999) 35.
[77] DRAMs are dynamic random access memory semi conductors. Panel Report (not appealed) WT/DS99/R, adopted 19 March 1999.
[78] Ibid [6.55].
[79] Ibid [6.54] fn 499.
[80] Hormones above n 67 [125]. For a helpful review of Appellate Body rulings in the first cases under the SPS see J Pauwelyn, ‘The WTO Agreement on Sanitary and Phytosanitary (SPS) Measures as Applied in the First Three SPS Disputes: European Communities: Hormones, Australia: Salmon, and Japan: Varietals’ (1999) 2 Journal of International Economic Law 64–664.
[81] See, eg, A Boyle, ‘Economic Growth and Protection of the Environment: The Impact of International Law and Policy’ in A E Boyle (ed), Environmental Regulation and Economic Growth (1994) 173, 178; Principle 15 of the Rio Declaration (United Nations Conference on Environment and Development 1992, Declaration on Environment and Development) states that in the event of threat of serious environmental damage, lack of full scientific certainty shall not stop preventive action. Quick and Bluthner, above n 67, 623, observe that since United Nations Conference on Environment and Development (UNCED) this principle ‘has influenced virtually every recent international treaty related to environmental protection’. See also P Sands, ‘International Law in the Field of Sustainable Development’ (1994) 65 British Yearbook of International Law 303, 346, 389.
[82] Hormones, above n 67 [124].
[83] Ibid.
[84] DSU, Article 3.2, emphasis added. Article 3.2 stipulates that rulings of the DS Body cannot add to or diminish the rights and obligations in the covered agreements.
[85] WTO Agreement, Article IX.2.
[86] Ibid, see also Article X.
[87] Eg, DSU Article 3.5, 3.9.
[88] DSU Articles 3.2, 3.4.
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