Overview, general Features and Principles

Overview, general Features and Principles
WTO Legal Order Overview, general Features and Principles

Legal Order – International Trade
Trans-border transactions In goods In services In capital Legal Order Norms are an institutional framework Structuring the trade transactions As clearly as possible Efficient, trustworthy, enforceable

Scope of the Legal Trade Order
Global Order Goods and Services – WTO Capital - IMF Regional Orders (Art. XXIV GATT) Free Trade Agreements Customs Unions Common Markets Branch Orders Multi-Fibre Agreement Semiconductor Agreement

General Function of WTO-Law
Securing state behavior Rule orientation ≠ Power orientation Third-party clarification of rules Predictability and security Building confidence among private individuals Section 301 decision (WT/DS 152) Stabilizing agents (governments) against aspirations of protectionists WTO Law is part of International Economic Law

Section 301 case WT/DS152/R: UNITED STATES – SECTIONS OF THE TRADE ACT OF 1974 Sec. 301 was authorizing certain actions by the United States Trade Representative (USTR) in response to trade barriers imposed by other countries. The actions encompassed the suspension or withdrawal of concessions or the imposition of duties or other import restrictions. The position of the individuals The final addressees of WTO law, although they may not be able to rely on direct application Art. 23 DSU prohibits unilateral actions Every chilling effect by the mere threat of unlawful interference is unlawful

WTO Law WTO – Law is International economic law
Public international law A comprehensive Legal Order With different normative character A comprehensive legal order with rules on conflicts It constitutes a particular legal order;

International Economic Law
IEL Transactional Law Private (International) Law <-Trade Law -> Regulatory Law Public International Law

WTO Law is Public International Law
Treaty System between Members Subjects of PIL (Art. XI, XII) Coordinated by the WTO Agreement Particular Flexibility – Economic Results – „Nullification or impairment“ (see XXIII GATT, 3.8 DSU) Special Rules, e.g. about the adaptation of obligations, about dispute settlement and about enforcement General Rules of PIL apply Single Undertaking principle – common set of obligations Almost worldwide validity (153 members) Consensus Principle

Pillars of the WTO legal order (Art. II WTOA)
The agreements and associated legal instruments included in Annexes 1, 2 and 3 (the MTAs) are integral parts of this Agreement, binding on all Members. The PTAs are also part of this Agreement for those Members that have accepted them, and are binding on those Members. They do not create either obligations or rights for Members that have not accepted them. GATT 1994 is legally distinct from GATT 1947

Multilateral Trade Agreements
Legal Order WTO Agreement Overarching and coordinating the whole order Multilateral Trade Agreements Single Undertaking GATT 1994 (goods), GATS (services), TRIPS (Intellectual property) MTAs putting GATT norms in more concrete form Plurilateral Trade Agreements Ad libitum Sectors: government procurement, trade in civil aircraft DSU Covering automatically all MTAs and, if provided, also the PTAs

The Legal Order of the WTO
World Trade Organization (WTO) Legal Order WTO Agreement Multilateral Trade Agreements (MTA) Single Undertaking Approach GATT (1947 and 1994) GATS, TRIPS, . Antidumping, Subsidies etc. „Side Agreements“ Dispute Settlement Understanding Trade Policy Review Mechanism Plurilateral Trade Agreements (PTA) Civil Aircraft Trade Public Procurement Optional Membership The legal order of the WTO consists of a single comprehensive treaty system on 26,000 pages of official documents. However this system is not without frictions. This is a natural, since the wording of the difference costs of the agreements has been formulated by different groups of negotiators Norms of behavior, negative or positive Legal obligations Observe the law Economic obligations Preserve the balance of benefits Binding under PIL At least the legal obligations Non-application XIII WTO, XXXV GATT Is there a basic legal obligation to observe the economic obligations? Preserving levels and results Rather than petrifying dos and don'ts But then.there is no reason to call it: non-violation Performance or compensation? Future? Past? Enforceable On the international level Within a regulating and regulated system Exemptions Safeguards (XIX) Security (XXII) Protection of public interests (XX) Regional integration (XXIV) Performance structure Nullification or impairment Unlawfulness: prima facie To be rebutted (3.8) Performance obligation? WTO (?) 3.7 22.1, 22.4 Are rights or are benefits decisive Finally decisive: performance or compensation? rule: performance (3.7, 19.1, 21.I, 22.8, 26.1 b) Compensation only for a limited time (ibid.) What happens, if a member chooses to take retaliations without being ready to reinstall legal behavior Since DSU retaliation is not more than compensation for nullification (22.4) Example: the EU attitude in the Hormones case Restoration of the benefit Of the state member Not only as a monetary value But also the restitution of the policy goals that caused a government to negotiate a particular benefit So it's not only compensation, but restoring the concrete benefit, that might require full restitution Contractual modification possible? Temporarily (ibid.) Consequences Weak states may come under pressure (system is still lopsided in favor of economic and political power) Weak position of individuals Increased prices for the consumers But: lager margins of discretion for states' governments

Comprehensive Legal Order
Treaty System 20 treaties 6 understandings 1 protocol About 25 „decisions“ by the TNC or the ministerial meeting Schedules for every member state Very developed and efficient dispute settlement system Mandatory and Exclusive Two levels of deciding bodies (Panels and AB) Homogenized jurisprudence Limited scope of jurisdiction (the „covered agreements“) Supervised Enforcement Authorization necessary Proportionality Cross-Retaliation principles But: only countermeasures possible

Conflict rules Art. XVI.3 WTOA (Conflict WTOA – MTA)
3. In the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict. See the parallel rules in the WTOA and the GATT, e.g. Art. XIII WTOA and XXXV GATT Annex 1A zum WTOA (Conflict GATT – MTA) General interpretative note to Annex 1A: In the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the Agreement Establishing the World Trade Organization (referred to in the agreements in Annex 1 A as the “WTO Agreement”), the provision of the other agreement shall prevail to the extent of the conflict See e.g. Art. XIX GATT and Art. 2 Safeguards Agreement

DSU Coverage A Trade Policy Review Mechanism
Décisions, Déclarations, etc. GATT 1994 Agriculture SPS Textiles and Clothing TBT TRIMs Antidumping (GATT VI) Customs valuation (VII) PSI Rules of Origin Import Licensing Subsidies & Couterv. M Safeguards Schedule of Tariff Concessions A General Agreement on Trade in Services List of specific commitments List of MFN Exemptions TRIPS Agreement Trade Policy Review Mechanism Dispute Settlement Understanding Marrakesh Agreement establishing the WTO

prevailing rules, see Art. XVI.3 WTOA (conflicts) Institutional rules
WTO Agreement The “common roof” – prevailing rules, see Art. XVI.3 WTOA (conflicts) Institutional rules Common rules about amendments to the agreements (Art. X WTOA) Authentic interpretation (Art. IX 2 WTOA) Membership, accession, withdrawal Rules about particular Non-application Rules about the force of the Treaties Annex -> other treaty norms pertaining to the “WTO legal order” Art. XVI.3 WTOA (Conflict WTOA – MTA) 3. In the event of a conflict between a provision of this Agreement and a provision of any of the Multilateral Trade Agreements, the provision of this Agreement shall prevail to the extent of the conflict.

Multilateral Agreements (MTA)
WTO - Agreement GATT 1947 GATT 1994 Understanding Art. II 1 b Understanding Art. XII Understanding Art. XVII Understanding Art. XXIV Understanding Art. XXV Understanding Art. XXVIII GATS (Trade in Services) TRIPS (Intellectual Property Rights) DSU (Dispute Settlement Understanding) TPRM (Trade Policy Review Mechanism) TRIMS (Trade Related Investment Measures) Antidumping SCMA (Subsidies and Countervailing Measures) Safeguards Agreement SPS (Sanitary und Phytosanitary Measures) TBT (Technical Barriers to Trade Rules of Origin Customs Valuation Import Licensing Textiles Agriculture - 16 -

Plurilateral Agreements (PTA)
Agreement on Trade in Civil Aircraft Agreement on Government Procurement International Dairy Agreement International Bovine Meat Agreement Not part of the single undertaking!!

Renewing the GATT “The General Agreement on Tariffs and Trade 1994 as specified in Annex 1A (hereinafter referred to as "GATT 1994") is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as "GATT 1947")” (2.4 WTOA) State C wants to remain Member of GATT 1947, but not to become a WTO member. Why would it want to do this and is it possible?

Relation between GATT 1994 and GATT 1947
An interesting technique for renewing a whole legal order consisting of a plurality of legal instruments Build a new house - Similar to the old one

Add some other houses to the new settlement

Ask the old inhabitants to move to the new settlement

Tear down the old building Who didn‘t move is left in the rain

GATT 1994 (Introductory Note No. 1) is the:
Continuity GATT 1994 – GATT 1947 GATT 1994 (Introductory Note No. 1) is the: GATT 1947 plus selected additional subsequent treaty law (excluding PTAs, MTAs and the Protocol of Provisional Application), such as: Protocols relating to tariff concessions Protocols of accession But not: the Protocol on Provisional Application Decisions of the CONTRACTING PARTIES Decisions on waivers still in force All other decisions Uruguay Round Understandings Marrakesh Protocol (plus the annexed schedules of concessions by each member country) 1. The General Agreement on Tariffs and Trade 1994 (“GATT 1994”) shall consist of: (a) the provisions in the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment (excluding the Protocol of Provisional Application), as rectified, amended or modified by the terms of legal instruments which have entered into force before the date of entry into force of the WTO Agreement; (b) the provisions of the legal instruments set forth below that have entered into force under the GATT 1947 before the date of entry into force of the WTO Agreement: (i) protocols and certifications relating to tariff concessions; (ii) protocols of accession (excluding the provisions (a) concerning provisional application and withdrawal of provisional application and (b) providing that Part II of GATT 1947 shall be applied provisionally to the fullest extent not inconsistent with legislation existing on the date of the Protocol); (iii) decisions on waivers granted under Article XXV of GATT 1947 and still in force on the date of entry into force of the WTO Agreement;(1) (iv) other decisions of the CONTRACTING PARTIES to GATT 1947; (c) the Understandings set forth below: (i) Understanding on the Interpretation of Article II:1(b) of the General Agreement on Tariffs and Trade 1994; (ii) Understanding on the Interpretation of Article XVII of the General Agreement on Tariffs and Trade 1994; (iii) Understanding on Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994; (iv) Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade 1994; (v) Understanding in Respect of Waivers of Obligations under the General Agreement on Tariffs and Trade 1994; (vi) Understanding on the Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994; and (d) the Marrakesh Protocol to GATT 1994.

GATT 1994 (Explanatory Notes, No. 2)– New terminology
Modifications in GATT 1994 GATT 1994 (Explanatory Notes, No. 2)– New terminology Contracting Party = Member CONTRACTING PARTIES = WTO or General Council Less developed contracting party = Developing country member Developed contracting party = developed country member Executive Secretary = Director – General of the WTO Limited “Grandfather Clause” in No.3 for prohibitions of “the use, sale or lease of foreign-built or foreign-reconstructed vessels in commercial applications between points in national waters or the waters of an exclusive economic zone.“ To be reviewed and controlled 3. (a) The provisions of Part II of GATT 1994 shall not apply to measures taken by a Member under specific mandatory legislation, enacted by that Member before it became a contracting party to GATT 1947, that prohibits the use, sale or lease of foreign-built or foreign-reconstructed vessels in commercial applications between points in national waters or the waters of an exclusive economic zone. This exemption applies to: (a) the continuation or prompt renewal of a non-conforming provision of such legislation; and (b) the amendment to a non-conforming provision of such legislation to the extent that the amendment does not decrease the conformity of the provision with Part II of GATT 1947. This exemption is limited to measures taken under legislation described above that is notified and specified prior to the date of entry into force of the WTO Agreement. If such legislation is subsequently modified to decrease its conformity with Part II of GATT 1994, it will no longer qualify for coverage under this paragraph.

Complementing the GATT
Most MTAs: More concrete regulation of aspects of GATT rules Health controls -> SPS Security standards -> TBT Controls: preshipment inspection Controls against dumping and subsidies: ADA, SCMA DSU Leges speciales, see Interpretive Note to Annex 1a WTOA (Conflict GATT – MTA) “the provision of the other agreement shall prevail to the extent of the conflict.“ E.g. art. XIX vs. Safeguards Agreement ? Interpretive Note to Annex 1a WTOA (Conflict GATT – MTA) “In the event of conflict between a provision of the General Agreement on Tariffs and Trade 1994 and a provision of another agreement in Annex 1A to the Agreement Establishing the World Trade Organization (referred to in the agreements in Annex 1A as the "WTO Agreement"), the provision of the other agreement shall prevail to the extent of the conflict.“ But only, if there is a conflict. See the Steel Safeguards decision about Art. XIX and the SA

Broadening the regulatory scope
GATS Four modes of services (Art. I GATS) Rules similar to GATT: MFN, NT, transparency, market access, exceptions But more limited: Scope of application conditioned by concessions and their limits (see e.g. XVI, II, VI, VII) DSU and TPRM applicable TRIPS Minimum harmonization of IPL General rules (MFN, NT etc.) Sectoral rules Incorporation of IP treaties (e.g. Art. 2.1, 9 TRIPS)

Single Undertaking Approach
Art. 2.2 & 3 WTOA „The agreements and associated legal instruments included in Annexes 1, 2 and 3 (hereinafter referred to as "Multilateral Trade Agreements") are integral parts of this Agreement, binding on all Members. The agreements and associated legal instruments included in Annex 4 (hereinafter referred to as "Plurilateral Trade Agreements") are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create either obligations or rights for Members that have not accepted them. „

Single Undertaking: Accession
Art. XI, XII Members can only become a party to the WTOA and MTAs together to the PTA optionally

Single Undertaking: Reservations
Art. XVI.3 WTOA – Reservations 5. “No reservations may be made in respect of any provision of this Agreement. Reservations in respect of any of the provisions of the Multilateral Trade Agreements may only be made to the extent provided for in those Agreements. Reservations in respect of a provision of a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.” An applicant state wants to make a reservation equivalent to the old „Grandfather Clause“ of GATT 1947 and to refuse submission of disputes to the DSB

Single Undertaking: Withdrawals
Art. XV.1 WTOA WTOA – Withdrawal: not “à la carte” Article XV WTOA Withdrawal 1. “Any Member may withdraw from this Agreement. Such withdrawal shall apply both to this Agreement and the Multilateral Trade Agreements and shall take effect upon the expiration of six months from the date on which written notice of withdrawal is received by the Director-General of the WTO.” 2. “Withdrawal from a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.” The US want to leave the Antidumping Agreement. Possible?

Art. XXV GATT / IX.3 WTOA – Waivers Art. XXVIII GATT Re-Negotiation
Flexible Obligations Art. XXV GATT / IX.3 WTOA – Waivers Art. XXVIII GATT Re-Negotiation Art. XIX GATT / Safeguards Agreement Art. XXIV GATT Regional Arrangements Special Rules for Developing Countries

Re-Negotiation Art. XXVIII GATT: Modification of schedules
after revolving periods of 3 years upon notification and negotiation either consensually with compensation maintaining a ”general level of reciprocal and mutually advantageous concessions not less favourable to trade than that provided for in this Agreement prior to such negotiations“ or unilaterally with correspondent and proportional suspension of relating obligations or concessions See „Understanding on the Interpretation of Article XXVIII of the General Agreement on Tariffs and Trade 1994” After a while a state realizes that its concessions concerning cotton textiles given to another state are less valid than the reciprocal concessions concerning rubber articles? How to get out of the obligation? Function of Art. XXVIII GATT in the treaty regime? What, if a State does not wait until the end of the 3 years period?

Performance or Compensation?
"The only truly binding WTO obligation is to maintain the balance of concessions Judith Hippler Bello, The WTO Dispute Settlement Understanding: Less Is More, 90 Am. J. Int'l L. 416, 418 (1996) "An adopted dispute settlement report establishes an international law obligation upon the member in question to change its practice to make it consistent with the rules of the WTO Agreement and its annexes.". John H. Jackson, The WTO Dispute Settlement Understanding-Misunderstandings on the Nature of Legal Obligation, 91 AM. J. INT'L L. 60, 62 (1997)

Performance or Compensation? - 2
Efficient breach of contract? XVI.4 WTOA 3.2 DSU 21.1 and 3 DSU “Prompt compliance” is recognized as essential to the credibility of the system (21.1 DSU ) “Immediate” compliance is expected wherever practicable (21.3 DSU ) Where immediate compliance is impracticable, the Member must implement within a “reasonable period of time” (21.3 DSU ) Ambiguous language in 3.7 and 22.1 DSU Efficient Breach of Contract: not awaiting the three years deadline for de-consolidation. Offering compensation? Lawful? Consequences? In 2002 Alan Sykes and Warren Schwartz attacked Jacksons position in stating, that they do not regard the policies underlying the WTO: rebalancing, efficient breach, renegotiation, no binding if it is not economically advantageous Sykes, A.O. / Schwartz, W., The Economic Structure of Regeneration and Dispute Resolution, Journal of Legal Studies 31 (2002), 179 Is that in conformity with art. 3.2?

The historic argument Under the GATT 1947 there was no doubt among states, practitioners and scholars that it contained obligations to perform and opened no choice for alternative compensation without the consent of the other state See Art. XVI.1 WTOA: „the WTO shall be guided by the decisions, procedures and customary practices followed by the contracting parties to GATT 1947“

Policy (teleological argument)
Security and predictability (3.2) Not only for the members, but also for the individuals Function of WTO law: incentive for increased private activities in global trade Insecurity about the content and the implementation of the legal rules has a „chilling effect“ Section 301 case panel: The security and predictability in question are of "the multilateral trading system". The multilateral trading system is, per force, composed not only of States but also, indeed mostly, of individual economic operators. The lack of security and predictability affects mostly these individual operators (7.76) It is a circumspect use of the teleological method to choose that interpretation of Article 23 of the DSU that provides this certainty and eliminates the undesired "chilling effects" which run against the object and purpose of the WTO Agreement. (7.92)

Goals of WTO Law The main conceptual focus of GATT and now the WTO is trade liberalization better allocation of economic resources integration of the developing countries management of the risks of globalization securing peace

Different types of rules
Institutional rules Organization Dispute settlement Review Mechanism Regulating state behavior Basic principles Non-Discrimination Transparency Tariffication Level playing field Operative rules MTAs PTAs Private rights to complain: trade remedies Dumping Subsidies Safeguards

Structural WTO Principles
Second best: Tariffication Binding of Tariffs (Art. II GATT) Reduction of Tariffs (Art. XXVIII bis GATT) Reduction of still permissible NTBs Art. XI, XIII GATT Various Multilateral Trade Agreements Non-discrimination MFN Principle (Art. I GATT, MFN) National Treatment Principle (Art. III GATT) Transparency (Art. II, X) Injury avoidance Safeguards (Art. XII, XIX GATT, SA) Antidumping (Art. VI GATT, ADA) Countervailing Duties (Art. VI, XVI GATT, SCMA)

Non-Discrimination Externally: MFN (I GATT)
Non-discrimination between foreign products Internally: National Treatment (III GATT) Non-discrimination between foreign products after importation and domestic products Freedom of Transit (V GATT) Reason discrimination distorts the allocation of resources Multilateral Trade Order Preamble WTO Shrimp-Turtle Panel: multilateral, not unilateral approach Present Principles: Negative integration Reciprocal tariff reduction Non-discrimination Rationale Protectionism Trade Deflection Dependability Safeguard of trade concessions Among foreign products (MFN) Better transparency National treatment Tariffication NTB control Prohibition in principle Controlled exceptions Transparency Ancillary national measures Enhanced transparency Grant of individual rights Narrowing the margin of options for the state powers Instrumentalizing individual interest against agency risks Protection of individual rights Positive integration International legal order Sovereignty problems Legitimacy problems Separation of powers Democratic control Less democracy-less prone to lobbyism (cf. the case of central banks) Margins in decisionmaking and control Of the members Of the WTO Competence problems Specialized Regimes Conflict potentials Different groups of parties Incoherent binding structure Impact on flows of trade Different decisionmaking structures Representation in organs Voting and vetoing rules Minimum Rules TRIPS Coordination with other PIL substantive legal orders Special rules Specialized IOs Nullification or Impairment concept

General Safeguards (Art. XIX GATT)
result of unforeseen developments and of the effect of GATT obligations product is being imported in such increased quantities and under such conditions as to cause or threaten serious injury to domestic producers in that territory of like or directly competitive products suspension of the obligation or withdrawal or modification of the concession in respect of such product, and to the extent and for such time as may be necessary to prevent or remedy such injury

if notified and after negotiation of possible compensation
Safeguards - 2 if notified and after negotiation of possible compensation but also unilateral and – as an answer – suspension (.3) however: not before 3 years, „provided that the safeguard measure has been taken as a result of an absolute increase in imports and that such a measure conforms to the provisions of this Agreement“ See also the „Agreement of Safeguards“ Safeguards for Balance of Payments purposes (Art. XXII GATT) interface to IMF law

Price discrimination - unfairness
Antidumping Measures Art. VI GATT Dumping Private Behavior: firms are selling goods cheaper abroad than at home Export Price lower than Domestic Price Reproach: Price discrimination - unfairness Predatory Pricing – danger for future competition AD (Countervailing) Duties to neutralize the dumpng margin See the „AGREEMENT ON IMPLEMENTATION OF ARTICLE VI OF THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994 “

Subsidies and Countervailing Measures
Art. VI and XVI GATT Subsidies States give monetary advantages to their enterprises These enterprises can therefore sell their goods cheaper Thereby gaining a competitive edge over their competitors That is not based on cost effectiveness, but on state money Thus distorting competitive chances and jeopardizing competition as an indicator of effective use of resources The effect of subsidization may be neutralized by countervailing duties

Subsidies and Countervailing Measures - 2
See also „AGREEMENT ON SUBSIDIES AND COUNTERVAILING MEASURES „Traffic Light approach“ red (forbidden) subsidies yellow (countervailable) subsidies green (in principle not countervailable) subsidies

Selective Application
XIII WTOA Reservation at the time of accession Or existing under Art. XXXV GATT 1947 on the entry into force of the WTOA See Botswana, Haiti, Lesotho vs. Japan, Morocco and Tunisia vs. Israel, US vs. Hungary and Romania Bilateral Non-Application of MTAs PTAs: special provisions

Restricted Nature of the Internationalisation
but a „level playing field“ with conditions that are as liberal as possible opening up national markets to international trade to an extent considered fair and justifiable to the national economy The WTO system does not (yet) create a common and single market with completely equal opportunities for all competing producers and products, domestic or foreign

Specific Goods and Services
Treaties on Textiles (ended) Agricultural Goods Aircraft GATS – General Agreement on Trade in Services Only Covers Services expressly committed by the member States Additional Protocols like eg. on Basic Telecommunications Financial Services But for all the other goods: WTO Law applies exclusively Art b Safeguards Agreement: „ ... a Member shall not seek, take or maintain any voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side”.

General Protection (XX) Security Reasons (XXI) Economic policy
*Exceptions General policies General Protection (XX) Security Reasons (XXI) Economic policy Regional Arrangements (XXIV + A) Waivers (XXV + A) General Safeguards (XIX + A) Balance of Payments Safeguards (XII) [Re-Negotiation (XXVIII) Selective Application (XXXV GATT + XIII WTO)]

Public Reason for protection, e.g. „public morals“ (a)
Art. XX Exceptions Public Reason for protection, e.g. „public morals“ (a) human, animal or plant life or health (b) prison labor (e) national heritage (f) exhaustible national resources (g) Limitation by the „chapeau“ no arbitrary or unjustifiable discrimination between countries where the same conditions prevail no disguised restriction on international trade

Actions necessary for the protection of essential security interests
Art. XXI Exceptions Disclosure of information against national essential security interests Actions necessary for the protection of essential security interests nuclear matters traffic in weaponry and dual-use products time of war or national emergencies Actions mandated by the UN Security Council under chapter VII of the UN Charter Justiciability?

Development Exceptions
Art. XVIII GATT Part IV GATT (Art. XXXVI to XXXVIII GATT) 1979 Decision on “Differential and More Favourable Treatment, Reciprocity and Full Participation of Developing Countries” (the “Enabling Clause”) Basis of the General Scheme of Preferences (GSP): „differential and more favourable treatment to developing countries” Graduation Clause Doha Ministerial Declaration

Regional Arrangements – Art. XXIV GATT
XXIV.4: desirability of closer integration through free trade areas and customs unions (creating one „customs territory“) not aiming at fencing the union against outside trade (trade deflection) but at facilitating trade between the members (trade creation) XXIV.8: definition of FTAs and CUs with respect to „substantially all the trade between the constituent territories“ XXIV.5: no higher tariffs or more burdensome regulations for imports than before either in an average (level) or directly if necessary: compensatory adjustment (XXIV.6) Particular waiver (XXIV.10) See the „Understanding on the Interpretation of Article XXIV of the General Agreement on Tariffs and Trade 1994 „

With the consent of two thirds in the council
Waiver Art. XXV GATT In exceptional circumstancres not elsewhere provided for in this Agreement With the consent of two thirds in the council For a limited period, renewable upon scrutiny See the „Understanding in Respect of Waivers of Obligations under the General Agreement on Tariffs and Trade 1994 „

Regulatory concept of WTO Law - 1
Remove the costly and distorting trade barriers Non-tariff barriers (Art. XI, XIII GATT) Discrimination between foreign sources (Art. I, II GATT, MFN-Principle) Discrimination between imports and domestic products and services (Art. III GATT) Replace them with tariffs (Art. II GATT) which will be lowered periodically and other rules of market access Remove or neutralize other distortions (unfair trade) Dumping, Subsidies (Art. VI, XVI GATT)

Regulatory concept of WTO Law – 2
Create transparency (Art. X GATT) Allow safeguards, waivers, regional cooperation etc. (Art. XIX, XXV, XXIV GATT) Allow the protection of some public interests by exceptions (Art. XX, XXI GATT) Create some harmonized rules, where necessary Protection of intellectual property rights (TRIPS) Standards of protection (SPS, TBT) Open the markets for free trade in services (GATS) SDT: Different rules for Developing countries (e.g. Art. XVIII and part IV of GATT)

The „Level Playing Field“
Least Restriction of Imports and Exports under the condition that Imports are not dumped so that it causes material injury (VI GATT + A) Imports are not subsidized so that it causes material injury (XVI + A) Imports do not jeopardize non - economic national goals of protection (XX) Imports do not jeopardize national security (XXI)

The „Level Playing Field - 2“
Imports do not cause serious injury to domestic producers (XIX) Imports do not affect economic development (XVIII, part IV) Imports are not affecting national branches (XXVIII) Imports do not injury the national balance of payments (XII) Imports do not contravene policies of bilateral non - liberalization (XXXV GATT + XIII WTO) Imports do not contravene policy objectives ratified by a waiver of the WTO (XXV + A)

Relation to Public International Law
PIL treaty Self-contained regime Or application of general PIL rules if special rules are absent ? „the General Agreement is not to be read in clinical isolation from public international law.“ (AB in "United States - Standards for Reformulated and Conventional Gasoline" (WT/DS2/AB/R) ) In the Mexican Soft Drink case (DS308) the Appellate body has drawn the conclusion: 56. […] Even assuming, arguendo, that the legal principle reflected in the passage referred to by Mexico is applicable within the WTO dispute settlement system, we note that this would entail a determination whether the United States has acted consistently or inconsistently with its NAFTA obligations. We see no basis in the DSU for panels and the Appellate Body to adjudicate non-WTO disputes. Article 3.2 of the DSU states that the WTO dispute settlement system "serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements". (emphasis added) Accepting Mexico's interpretation would imply that the WTO dispute settlement system could be used to determine rights and obligations outside the covered agreements.

Relation to Public International Law - 2
AB and panels have applied general principles of law and of PIL as well as rules of PI customary law: Proportionality of retaliation State responsibility Good faith (US Shrimp – WT/DS58) Due process Judicial economy Non-retroactivity of legal obligations Principle of effective interpretation „In dubio mitius“ (??, AB in EC Hormones, WT/DS26/AB/R, WT/DS48/AB/R, fn. 154) They have considered, but not applied, the rules of: Estoppel (Acquiescence) Res Judicata Abus de droit „Customary International Law applies generally to the economic relations between the WTO Members. Such international law applies to the extent, that the WTO treaty agreement do not “contract out” from it”. (Panel in WT/DS163 Korea: Measures affecting government procurement )

Can the dispute settlement bodies apply customary international law ?
CUSTOMARY PIL Can the dispute settlement bodies apply customary international law ? „Customary International Law applies generally to the economic relations between the WTO Members. Such international law applies to the extent, that the WTO treaty agreement do not “contract out” from it”. (Panel in WT/DS163 Korea - Procurement: Measures affecting government procurement ) India - Autos (Panel) <panel/india-autos(dsc)(panel).pdf> (Res Judicata) (Because the Panel concluded that res judicata "could not apply" to the facts of this dispute, it therefore did not rule on the question of whether the doctrine of res judicata applies to WTO dispute settlement more generally) U.S. - Cotton Yarn (AB) <ab/us-yarn(dsc)(ab).pdf> (Proportionality) (In support of its conclusion that a comparative analysis of serious damage must be carried out for each relevant Member individually, referred to the general principle of international law of "proportionality") U.S. - Hot-Rolled Steel from Japan (AB) <ab/us-hotrolled(dsc)(ab).pdf> (Good Faith) (Invoked the principle of "good faith" twice in its examination of this case (when interpreting Annex II(2) in paragraph 101 and when interpreting "objective examination" in Article 3 in paragraph 193); confirmed that "good faith" is "a general principle of law and a principle of general international law, that informs the provisions of the Anti-Dumping Agreement, as well as the other covered agreements"; also appeared to rely on principles of fundamental fairness as they apply to the AD Agreement, outside the specific context of the principle of "good faith") Guatemala - Cement II (Panel) <panel/guatemala-cementII(dsc)(panel).pdf> (Harmless Error, Estoppel) (Rejected Guatemala's use of the harmless error doctrine, finding that the principle as presented by Guatemala has not attained the status of a general principle of public international law; rejected Guatemala's claim that Mexico had acquiesced to Guatemala's late notifications) Korea - Government Procurement (Panel) <panel/korea-govprocurement(dsc)(panel).pdf> (Good Faith, Error in Treaty Formation) (Considered the "non-violation" remedy to be an extension of the good faith obligation contained in VCLT Article 26; examined the negotiations on the GPA for the possibility of an error in treaty formation under VCLT Article 48; found that while an error might have occurred, it did not vitiate the agreement because the U.S. was on notice of the possible error) EC - Hormones (AB) <ab/ec-hormones(dsc)(ab).pdf> (Precautionary Principle) (Upheld Panel's finding that the precautionary principle does not "override" the provisions of SPS Agreement Articles 5.1 and 5.2; noted that whether the precautionary principle has been accepted as a principle of general or customary international law is "less than clear"; said that the precautionary principle is, in fact, reflected in SPS Agreement Article 5.7, as well as the sixth paragraph of the preamble and in Article 3.3; stated that "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")

GENERAL PIL Can the Appellate Body or a Panel apply the general rule of public international law, that trade sanctions may be used as countermeasures against violations of Human rights obligations? Any violation of a customary international law? Any violation of international treaties? See the Mexican Soft Drinks Case - Appellate Body Report, WT/DS308/AB/R 3.2. Rules of Interpretation Rules of other PIL applicable between the parties? (retaliation) May they be invoked? Bilateral Multilateral Difference between interpretation and application in 31.3 c)? If not invokeable Selective result of legal evaluation only a slice of the problem May lead inevitably to authorization to retaliate But the finding of violation would only be provisional Possible solution: non liquet! If invokeable DS system comprehensively covers all areas of PIL in retaliation cases Problem of competence In questions of law you could not generally grant a large margin of state discretion Would a non liquet be better? Implies, that mere reliance on the retaliation defense would end the case If not, some scrutiny would always be necessary Not more deference than any other court

MEXICO – TAX MEASURES ON SOFT DRINKS AND OTHER BEVERAGES (WT/DS308/AB/R)
Mexico imposed a series of tax measures on soft drinks and other beverages that use sweeteners other than cane sugar, that is produced in Mexico. Other sweeteners come from abroad Mexico had relied – among other reasons – that the measure was justified as a countermeasure for violation of NAFTA law by the United States The Appellate Body refused this argument, since it could not deal with such legal questions outside WTO law:

Mexican Soft Drinks - 2 78. […] Mexico's interpretation would imply that, in order to resolve the case, WTO panels and the Appellate Body would have to assume that there is a violation of the relevant international agreement (such as the NAFTA) by the complaining party, or they would have to assess whether the relevant international agreement has been violated. WTO panels and the Appellate Body would thus become adjudicators of non-WTO disputes. As we noted earlier, this is not the function of panels and the Appellate Body as intended by the DSU. 56. […] Even assuming, arguendo, that the legal principle reflected in the passage referred to by Mexico is applicable within the WTO dispute settlement system, we note that this would entail a determination whether the United States has acted consistently or inconsistently with its NAFTA obligations. We see no basis in the DSU for panels and the Appellate Body to adjudicate non-WTO disputes. Article 3.2 of the DSU states that the WTO dispute settlement system "serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements". (emphasis added) Accepting Mexico's interpretation would imply that the WTO dispute settlement system could be used to determine rights and obligations outside the covered agreements.

Amendment of a Treaty: Between all MS
Art. 40 VCLT Amendment of multilateral treaties 4. “The amending agreement does not bind any State already a party to the treaty which does not become a party to the amending agreement; Art. 30, para 4(b), applies in relation to such State.” Art b VCLT When the parties to the later treaty do not include all the parties to the earlier one: (b) “as between a State party to both treaties and a State party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations.”

Art. X WTOA 2. Basic rules that can only be amended unanimously
Amendment of WTO Law Art. X WTOA 2. Basic rules that can only be amended unanimously 3. Amendment by 2/3 of the MS. Exclusion of MS that do not ratify by ¾ in the Ministerial Conference Art. IX WTOA 2. Amendments to the provisions of this Article and to the provisions of the following Articles shall take effect only upon acceptance by all Members: Article IX of this Agreement; Articles I and II of GATT 1994; Article II:1 of GATS; Article 4 of the Agreement on TRIPS. 3. Amendments to provisions of this Agreement, or of the Multilateral Trade Agreements in Annexes 1A and 1C, other than those listed in paragraphs 2 and 6, of a nature that would alter the rights and obligations of the Members, shall take effect for the Members that have accepted them upon acceptance by two thirds of the Members and thereafter for each other Member upon acceptance by it. The Ministerial Conference may decide by a three fourths majority of the Members that any amendment made effective under this paragraph is of such a nature that any Member which has not accepted it within a period specified by the Ministerial Conference in each case shall be free to withdraw from the WTO or to remain a Member with the consent of the Ministerial Conference.

Amendment of a Treaty: Between some MS
Art. 41 VCLT: Agreements to modify multilateral treaties between certain of the parties only 1. “Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone if: (a) the possibility of such a modification is provided for by the treaty; or (b) the modification in question is not prohibited by the treaty and: (i) does not affect the enjoyment by the other parties of their rights under the treaty or the performance of their obligations; (ii) does not relate to a provision, derogation from which is incompatible with the effective execution of the object and purpose of the treaty as a whole.”

Bilateral Modifications of WTO Law ?
May MS agree bilaterally on rules different from WTO Law? Art b) SA Is a bilaterally agreed settlement of disputes by agreements between the conflicting parties possible? See Art. 3.7, but also 3.5 DSU EU offer in the Hormones Case: refused anyway. But would an agreement possible granting compensation for the ongoing ban of imports of Hormone Beef? Art. 3 DSU 4. Recommendations or rulings made by the DSB shall be aimed at achieving a satisfactory settlement of the matter in accordance with the rights and obligations under this Understanding and under the covered agreements. 5. All solutions to matters formally raised under the consultation and dispute settlement provisions of the covered agreements, including arbitration awards, shall be consistent with those agreements and shall not nullify or impair benefits accruing to any Member under those agreements, nor impede the attainment of any objective of those agreements. Art b) SA (b) Furthermore, a Member shall not seek, take or maintain any voluntary export restraints, orderly marketing arrangements or any other similar measures on the export or the import side., These include actions taken by a single Member as well as actions under agreements, arrangements and understandings entered into by two or more Members. Any such measure in effect on the date of entry into force of the WTO Agreement shall be brought into conformity with this Agreement or phased out in accordance with paragraph 2. An import quota applied as a safeguard measure in conformity with the relevant provisions of GATT 1994 and this Agreement may, by mutual agreement, be administered by the exporting Member. Examples of similar measures include export moderation, export-price or import-price monitoring systems, export or import surveillance, compulsory import cartels and discretionary export or import licensing schemes, any of which afford protection.

Special Rules for the Amendment of Concessions
Art. XXVIII GATT: Re-Negotiation Art. XXVIII bis GATT: (Multilateral Trade Negotiations)

Termination of a Treaty
Article 54 VCLT “The termination of a treaty or the withdrawal of a party may take place: (a) in conformity with the provisions of the treaty; or (b) at any time by consent of all the parties after consultation with the other contracting States.”

Termination of WTO Agreements
Article XV WTOA Withdrawal 1. “Any Member may withdraw from this Agreement. Such withdrawal shall apply both to this Agreement and the Multilateral Trade Agreements and shall take effect upon the expiration of six months from the date on which written notice of withdrawal is received by the Director-General of the WTO.” 2. “Withdrawal from a Plurilateral Trade Agreement shall be governed by the provisions of that Agreement.”

INTERPRETATION - Limits
Art. 3.2 DSU … “Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.” Chile Alcoholic Beverages (WT/DS87,110/AB/R) "we have difficulty in envisaging circumstances in which a panel could add to the rights and obligations of a Member of the WTO if its conclusions reflected a correct interpretation and application of provisions of the covered agreements."

Objective of the DS system
INTERPRETATION - PIL Objective of the DS system “…to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law….” (Art. 3.2 DSU) Customary rules are contained in the VCLT cf. AB US Gasoline (WT/DS2/AB/R), „This rule has received its most authoritative and succinct expression in the“ VCLT That direction reflects a measure of recognition that the General Agreement is not to be read in clinical isolation from public international law. Art. 31 VCLT cf. Japan Alcoholic Beverages (WT/DS8,10,11/AB/R) referring in the same way to Art. 32 VCLT

INTERPRETATION – ART. 31 VCLT
Art. 31 VCLT General rule of interpretation “1. A treaty shall be interpreted good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. 3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended.” Die allgemeine Spruchpraxis kristallisierte die Bestimmungen der Wiener Vertragsrechtskonvention (WVK) als maßgebliche Interpretationsnorm heraus. Der Appellate Body entschied bezüglich Artikel 31 WVK im Fall United States – Standards for Conventional and Reformulated Gasoline[1], daß das GATT 1994 nicht “klinisch isoliert” vom allgemeinen Völkerrecht gesehen werden kann.[2] Darauf aufbauend, bestätigte der Appellate Body in den Fällen Japan – Taxes on Alcoholic Beverages, EEC - Measures Affecting the Importation of Certain Poulty Products und EEC – Customs Classification of Certain Computer Equipment, daß Artikel 31 und 32 WVK relevante Interpretationshilfsmittel darstellen.[3] [1] Op. cit. [2] Ibidem, S. 17. [3] Japan – Taxes on Alcoholic Beverages, Report of the Appellate Body, WT/DS8,10,11, 1. November 1996, p ; EEC – Measures Affecting the Importation of Certain Poulty Products, Report of the Appellate Body, WT/DS69, 23. Juli 1998, Paragraph 26; EEC – Customs Classification of Certain Computer Equipment, Report of the Appellate Body, WT/DS62,67,68, 5 Juni 1998, Paragraph 84.

INTERPRETATION - ART. 31 VCLT
Starting point Interpretation in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose (including the preamble) Context Any agreement concluded in connexion with the treaty Any instrument made in connexion with the conclusion and accepted by the other parties Subsequent agreement on interpretation or the application of the treaty Subsequent practice in the application of the treaty Any relevant rules of international law applicable in the relations between the parties Article 31VCLT General rule of interpretation 1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. 2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes: (a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty; (b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. 3. There shall be taken into account, together with the context: (a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions; (b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation; (c) any relevant rules of international law applicable in the relations between the parties. 4. A special meaning shall be given to a term if it is established that the parties so intended. See United States – Import Prohibition of Certain Shrimp and Shrimp Products, Report of the Appellate Body, WT/DS58/AB/R, 12. Oktober 1998, paragraph 114.

INTERPRETATION - STEPS
„The Panel did not follow all of the steps of applying the "customary rules of interpretation of public international law" as required by Article 3.2 of the DSU.” Ordinary meaning of the words of a treaty, read in their context, and in the light of the object and purpose of the treaty involved. 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 first 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.“ Cited : United States – Import Prohibition of Certain Shrimp and Shrimp Products, Report of the Appellate Body, WT/DS58/AB/R, 12. Oktober 1998, paragraph 114.

TELEOLOGICAL INTERPRETATION
What does Art. 3.2 DSU last sentence mean ? May the AB or a panel use an extensive teleological interpretation ? „WTO rules are reliable, comprehensible and enforceable. WTO rules are not so rigid or so inflexible as not to leave room for reasoned judgements in confronting the endless and ever-changing ebb and flow of real facts in real cases in the real world.“ (Japan – Taxes on Alcoholic Beverages, Report of the Appellate Body, WT/DS8,10,11, 1. November 1996, p ) „that a teleological interpretation should consider the provisions itself being interpreted, not the whole of the WTO Agreement”.(United States – Import Prohibition of Certain Shrimp and Shrimp Products, Report of the Appellate Body, WT/DS58/AB/R, 12. Oktober 1998, paragraph 114.) „concepts embodied in a treaty are by definition, evolutionary ... (and their) interpretation cannot remain unaffected by the subsequent development of law”. (ibid.) May they apply peremptory norms of public international law?

INTERPRETATION – ART. 32 VCLT
Art. 32 VCLT - Supplementary means of interpretation “Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.”

SUPPLEMENTARY MEANS OF INTERPRETATION – ART. 32 VCLT
Preparatory work Circumstances of the conclusion But only To confirm a meaning found under Art. 31 VCLT Or to avoid a result that is Ambiguous or obscure or Manifestly absurd or unreasonable Article 32 VCLT - Supplementary means of interpretation Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.

INTERPRETATION – PREAMBLE WTO-AGREEMENT
The Preamble of the WTOA „while allowing for the optimal use of the world's resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development“ United States - Import Prohibition of Certain Shrimp and Shrimp Products (WT/DS58/AB/R) …”This preambular language reflects the intentions of negotiators of the WTO Agreement, and adds "colour, texture and shading" to the interpretation of the agreements annexed to the WTO Agreement, in this case, the GATT…”

Rule Orientation - 1 GATT was a power–oriented system
Positive consensus (consent of the loosing party necessary) necessary under Art. XXIII GATT 1947 Gray area agreements (OMAs, VERs) WTO Law is a more rule-oriented system DSU: System with negative consensus (cf. e.g. Art DSU) > Art DSU: binding recommendations Prohibition of Grey Area Agreements (Art. 11 SA) Art. 3.7 DSU: consistent settlements Giving the weaker states a day in court and the possibility to retaliate – although with low impact Rule of Law ? Rule orientation is less than the rule of law. However it should provide for a solid orientation for all the decentralized decision-makers in the international economic order. The statistics of dispute settlement in the WTO shows, that it is a successful feature of the organization. Until 2000 for more than 300 disputes were brought, and more than half of that were resolved by decisions. In 39 % of all these disputes developing country members were complaining members. This shows, that the procedure is a factor in rebalancing economic disparities by the rule of law. In 80% of the cases, the complaining parties were successful.

Interpretation by an international Body (DSU)
Rule Orientation – 2 Clarity Interpretation by an international Body (DSU) International Dispute Settlement (DSU) Predictability Legal security Cost reduction Enforceability Supervision Retaliation Individual Rights ?

Direct Applicability of PIL
Application by national courts and administrations without national legislation Ordered by national constitutional law At the discretion of the MS EC: Unconditional and clear Agreed by the parties of a treaty WTO – Law USA: Uruguay Round Agreements Act – NO Complaint Procedure Sec. 301 Trade Act (WT/DS152) EU: Council Decision on Ratification – NO ECJ: WTO Law is not “among the sources of law to be considered by the Court”, if the legislator does expressly state that it wants to fulfil a WTO obligation. Complaint Procedure Trade Barriers Regulation Application of Public International Law (PIL) by national courts and administrations Objectively or as an individual right Without transformation into national law Because of unequivocal and unconditional regulation (quality) Question of international or national law Did the parties want to make PIL directly applicable or not? See e.g.: the law of the EU Does national law make PIL of this quality directly applicable or not? Yes e.g. in the EU, Germany and the US, if the legislator does not explicitly object No e.g. in the United Kingdom Problems Individuals can claim lawful behavior of their State Asymmetric situation if this is only unilaterally so Different courts of different nations may apply PIL differently USA Uruguay Round Agreements Act: no direct application Complaint Procedure under sec. 301 Trade Act may lead to a dispute settlement claim of the US in Geneva EU Council Decision of acceptance of the Marrakech Agreement: no direct application by its nature Direct Application only if the Community legislator expressly refers to WTO law as a yardstick of lawfulness: express implementation ECJ Fediol, 70/87 Rep. 1989, 1825; C69/89, Nakajima Rep. 1991, I2069; C53/96, Hermès Rep. 1998, I3603 But generally no direct application ECJ C149/96, Portugal/Council Rep. 1999, I8395: No asymmetries: arts. 22 (1) and (2) DSU call for negotiations and there is no reciprocity in the WTO system (USA !). not even a right for member states to bring claims to court Arguments of the ECJ in the Portugal Decision (C149/96) State consensus is prevailing. Courts are only free if there is no agreed solution Courts cannot prejudice the solutions provided for in art. 22 para 1 and 2 DSU WTO Law is designed for symmetrical solutions, i.e. no direct application where other important partners refuse it. The executive and legislative powers of the EC should be as free as in the other WTO States Exception: only if deliberate connection between community law and WTO law (Fediol and Nakajima) EuGH – 280/93, Germany/Council – Rep. 1994, I4973 However: a complaint Procedure under the Trade Barriers Regulation may lead to a dispute settlement claim of the US in Geneva

By DS decisions (recommendations) ?
Lawmaking By DS decisions (recommendations) ? Value of precedent ? See Art. 59 Statute of ICJ But see the Zeroing Case WT/DS344/AB/R U.S. – Stainless Steel (Mexico). AB: Panels are bound (?) Subsequent practice ? See Art. 31 VCLT Not one isolated act (Japan-Alcohol II – DS 8/10/11) By WTO decisions (Art. IX WTOA) Authoritative interpretations (Art. IX.2) Waivers Other Ministerial Conference decisions (Aids drugs, implementation issues) Other Committee decisions (SPS Committee on equivalence) Basis of power is often unclear Art. IX WTOA 2. The Ministerial Conference and the General Council shall have the exclusive authority to adopt interpretations of this Agreement and of the Multilateral Trade Agreements. In the case of an interpretation of a Multilateral Trade Agreement in Annex 1, they shall exercise their authority on the basis of a recommendation by the Council overseeing the functioning of that Agreement. The decision to adopt an interpretation shall be taken by a three-fourths majority of the Members. This paragraph shall not be used in a manner that would undermine the amendment provisions in Article X.

Specific Activities for Development
Status of a DC: Self-selection 31 LDCs (UN selection) „Doha Development Round“ Technical assistance and education financed by a special Trust Fund (Capacity Building) Special and differential Treatment (e.g. Art. XVIII GATT) Problems Marginalization Capacity problems

Overview, general Features and Principles

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