1 The contracting parties to the GATT are styled “CONTRACTING PARTIES” in GATT documents when acting jointly. General Agreement on Tariffs and Trade, Oct. 30, 1947, Art. XXV, TIAS No. 1700, 55 UNTS 194. The term will simply be capitalized (“Contracting Parties”) in the text below when used in that sense, except for quotations of GATT materials. The current version of the GATT is in Annex 1A to the WTO Charter, The Legal Texts, infra note 2, at 17, 33 ILM 1154 (1994) [hereinafter GATT].

2 As used herein, “WTO Agreements” refers to the Marrakesh Agreement Establishing the World Trade Organization [hereinafter WTO Charter] and the substantive multilateral agreements attached thereto, Apr. 15,1994, in World Trade Organization, The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations 3 (1999) [hereinafter The Legal Texts], 33 ILM 1143 (1994).

3 Panel Report, Argentina—Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/R (Nov. 25, 1997) (adopted Apr. 22,1998), as modified by Appellate Body Report, WT/DS56/AB/R & Corr.1, DSR 1998: III, 1033 [hereinafter Argentine Footwear].

4 Panel Report, India—Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products, WT/DS90/R (Apr. 6, 1999) (adopted Sept. 22,1999), as modified by Appellate Body Report, WT/DS90/AB/R,AB- 1999-3 [hereinafter India Balance of Payments].

5 Articles of Agreement of the International Monetary Fund, July 22, 1944, 60 Stat. 1401, 2 UNTS 39, as amended through June 28, 1990, available at <http://www.imf.org/external/about.htm>.

6 General Agreement on Trade in Services, WTO Charter, Annex IB, The Legal Texts, supra note 2, at 284, 33 ILM at 1167 [hereinafter GATS].

7 John, H. Jackson, Managing the Trade System: The World Trade Organization and the Post-Uruguay Round GATT Agenda, in Managing the World Economy: Fifty Years After Bretton Woods 131 (Peter, B. Kenen ed., 1994)Google Scholar. “ Parlin, Christopher, Current Developments Regarding the WTO Financial Services Agreement (May 16, 2002)Google Scholar (paper delivered at IMF Legal Department and IMF Institute Seminar on Current Developments in Monetary and Financial Law).

9 See, e.g., Kenneth, W. Abbott, The Many Faces of International Legalization, 92 ASIL Proc. 57(1998)Google Scholar.

10 For a useful historical review, see Ahn, Dukgeun, Linkages Between International Financial and Trade Institutions: IMF, World Bank and WTO, J. World Trade, Aug. 2000, at 1, 3–5 Google Scholar.

11 Article XXV authorizes the GATT contracting parties to act jointly and to give effect to those provisions in the GATT “which involve joint action and, generally, with a view to facilitating the operation and furthering the objectives of” the GATT. According to Frieder Roessler, former director of legal services of the GATT, the Contracting Parties used this authority “to establish relations with States, international organizations and private persons and to assume legal personality under international and municipal law for that purpose.” Roessler, Frieder, The Competence of GATT, J. World Trade L., No. 3, 1987, at 73, 75 Google Scholar.

12 WTO Charter, supra note 2, Art. 111:1, 2.

13 As noted in the overview of Fund jurisdiction below (part V), exchange restrictions may be maintained under certain circumstances.

14 Indeed, the managing director is required to bring instances of breach of obligation to the Executive Board. International Monetary Fund, By-Laws, Rules and Regulations, Rule K-l (Fifty-eighth Issue, 2001). An executive director may bring a complaint to the attention of the Executive Board, or the board itself may raise the matter, but in practice they have rarely done so.

15 The Executive Board of the Fund has not made it a condition that members eliminate existing exchange restrictions in order to receive Fund financing, although it is a standard condition for continued receipt of Fund financing that the member refrain from imposing or intensifying import restrictions for balance-of-payments reasons. See infra note 25 and corresponding text.

16 Judith, Hippler Bello, The WTO Dispute Settlement Understanding: Less Is More, 90 AJIL 416, 417 (1996)Google Scholar. This point of view has been put forward in the United States to make membership in the WTO more palatable to constituencies concerned about the supranational powers of the organization.

17 Id.

18 John, H. Jackson, The WTO Dispute Settlement Understanding—Misunderstandings on the Nature of Legal Obligation, 91 AJIL 60,62–64 (1997)Google Scholar (emphasis omitted). Professor Jackson contrasts the language of Article 94 of the United Nations Charter: “Each Member of the United Nations undertakes to comply with the decision of the International Court of Justice in any case to which it is a party.”

19 Somewhat representative of the different roles of the staffs in the two institutions, significant asymmetries in bureaucratic aspects remain, such as in staff size and travel budget. See, e.g., Ahn, supra note 10, at 1 n.l (“The difference in the sizes of these institutions is still substantial. As of April 2000, the WTO Secretariat has 534 staffs and the total budget for year 2000 amounts to 125,386,460 SFR (about $75 million).”; see WTO, 2000 ANNUAL REPORT. The Fund currently has more than 2000 working staff members and its administrative budge t for the fiscal year 2000 was about $576 million. FUND, 1999 ANNUAL REPORT. These annual reports are available online at the respective Web sites of the two organizations.

20 One example is the U.S. law known as section 301, 19 U.S.C. §§2411-2420 (2000), which is now linked to the results of the WTO dispute settlement mechanism.

21 Compared with 18 members that accepted Article VIII status during the 1980s, 83 countries have done so during the past ten years (including 24 out of the 32 that joined the Fund after 1990). As of this writing, 153 members out of the total membership of 183 do not avail themselves of Article XIV. IMF Members’ Quotas and Voting Power, and IMF Governors (May 21, 2002), at <http://www.imf.org/external/np/sec/memdir/members.htm>.

22 Decision No. 1034-(60/27), para. 1 (June 1, 1960), Selected Decisions and Selected Documents of the International Monetary Fund 428,428 (Twenty-fifth Issue, 2000) [hereinafter SELECTED DECISIONS].

23 A 1955 working party on Fund/GATT relations commented that the potential use of the technical criteria “is inevitably somewhat arbitrary in some respects.” Report Relating to the Review of the Agreement, GATT B.I.S.D. (3d Supp.) at 170, 196 (1955).

24 Robert Sharer With IMF Staff, Trade Liberalization in IMF-Supported Programs (World Econ. & Financial Surveys, 1998).

25 See, for example, the standard form for standby arrangements, SELECTED DECISIONS, supra note 22, at 174.

26 Ahn, supra note 10, at 2 n.4; Omnibus Consolidated and Emergency Supplemental Appropriations Act, 1999, Pub. L. No. 105-277, §622, 112 Stat. 2681, 2681-116 (1998).

27 Concern about Fund advice on antidumping laws was expressed in Jackson, supra note 7, at 143.

28 Excessive subsidies or trade restrictions may also invite surveillance as giving rise to fiscal imbalances or more generally indicating poor macroeconomic policies. Additionally, according to the principles for conducting surveillance under Article TV of the Fund’s Articles, the Fund may raise the existence of trade restrictions as a sign of inadequate exchange rate policies in its discussions with members. Decision No. 5392-(77/63) (Apr. 29, 1977), SELECTED DECISIONS, supra note 22, at 10.

29 The problem may be exacerbated by the fact that a few government officials representing the member’s trade interests in Geneva may bring with them any of their government’s frustrations with the Fund generated in the context of an adjustment program supported by the Fund. “ [T] he IMF’s much feared Structural Adjustment Program places tremendous hardship on ‘the weakest and poorest people of the victim countries.’“ Atik, Jeffery, Uncorking International Trade, Filling the Cup of International Economic Law, 15 Am.U.Int’l L.Rev. 1231, 1238 (2000)Google Scholar.

30 Declaration on the Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking, para. 5, The Legal Texts, supra note 2, at 386, 33 ILM at 1249, 1249. The Declaration on the Relationship of the World Trade Organization with the International Monetary Fund is discussed in part V infra.

31 Ahn, supra note 10, at 7.

32 Agreement Between the International Monetary Fund and the World Trade Organization, Dec. 9, 1996, reprinted in SELECTED DECISIONS, supra note 22, at 705 [hereinafter Cooperation Agreement]. 33 See supra note 1. Although the GATT 1947 is “legally distinct” from the GATT 1994, the text of the provisions discussed herein is identical. WTO Charter Art. 11:4.

34 In this context, because the WTO was created as an international organization in 1995, the references to the contracting parties, used to refer to parties to the GATT, should now be understood as “WTO members.” Similarly, the “WTO” replaces the “CONTRACTING PARTIES,” see GATT Art. XXXVIII.

35 Under Article XII, section 2(b) of the Fund’s Articles, “[t]he Board of Governors may delegate to the Executive Board authority to exercise any powers of the Board of Governors, except the powers conferred directly by this Agreement on the Board of Governors.” Under the same article, section 3(a), “[t]he Executive Board shall be responsible for conducting the business of the Fund, and for this purpose shall exercise all the powers delegated to it by the Board of Governors.”

36 Because the Fund is not itself bound by these provisions, Article XV:3 of the GATT instructed the Contracting Parties to “seek agreement with the Fund regarding procedures for consultation under paragraph 2 of this Article.” The WTO Charter contains a corresponding requirement on the WTO: “The General Council shall make appropriate arrangements for effective cooperation with other intergovernmental organizations that have responsibilities related to those of the WTO.” WTO Charter Art. V:l. Neither the exchange of letters nor the Cooperation Agreement creates an obligation for the Fund to consult the GATT/WTO on trade matters. As hypothesized by Roessler in discussing the exchange of letters, a provision to do so may have been understood to require an amendment of the Fund’s Articles. Roessler, Frieder, Selective Balance-of-Payments Adjustment Measures Affecting Trade: The Roles of the GATT and the IMF, 9 J. World Trade L. 622,644 (1975)Google Scholar. While Article X of the Fund’s Articles authorizes cooperation with other international organizations, it stipulates that “ [a]ny arrangements . . . which would involve a modification of any provision of this Agreement may be effected only after amendment to this Agreement.”

37 Cooperation Agreement, supra note 32, para. 4. Pending conclusion of the Cooperation Agreement, an interim letter covered the agreement to consult on balance-of-payments matters, including those that might have arisen under the GATS.

38 Id., para. 8.

39 Comment to author by Seade, Jesus, Then deputy director-general of the WTO (1996)Google Scholar. Whether the Fund’s input has any impact on the independence of panels is addressed further in the India Balance-of-Payments case, discussed in part IV below.

40 Cooperation Agreement, supra note 32, para. 8 (emphasis added).

41 The decision states in part:

Decision Adopted by the General Council Concerning Agreements Between the WTO and the IMF and the World Bank at Its Meeting on 7, 8, and 13 November 1996, WT/L/194, para. 4(b) (Nov. 18, 1996), reprinted in SELECTED DECISIONS, supra note 22, at 701.

42 The Executive Board’s decision states:

Decision No. 11381-(96/105) (Nov. 25, 1996), SELECTED DECISIONS, supra note 22, at 701.

43 Supra note 4; see part TV infra.

44 GATT Art. XV:2 (emphasis added). The reference to a “special exchange agreement” deals with the situation where a GATT contracting party was not a member of the Fund. Such a member was required to enter into the special exchange agreement to replicate the obligations to avoid imposing exchange restrictions that are concomitant with Fund membership. See, e.g. Gold, Joseph, Membership and Nonmembership in the International Monetary Fund 426 (1974)Google Scholar, John, H. Jackson, World Trade and The Law of GATT 486–91 (1969)Google Scholar. Although such cases are now rare, they are still relevant under the WTO (e.g., Taiwan Province of China, as it is known in the Fund). While these special exchange agreements raise important issues in Fund/WTO relations, a detailed discussion of such issues is beyond the scope of this article.

45 GATT Art. XV:2 (emphasis added).

46 See part IV infra.

47 See part V infra.

48 GATS Art. XII:5(e). The GATS provision is more complex because the GATS extends to payments relating to the scheduled services, which overlaps with the Fund’s Articles. This article does not address the details of the GATS balance-of-payments safeguard.

49 GATS Art. Xl:2; see also part V infra. The reference to “request by the Fund” refers to Article VI, section 1 of the Fund’s Articles authorizing the Fund to request that a member impose capital controls so as to prevent the use of the Fund’s resources to meet a large or sustained outflow of capital. The Fund has never done so.

50 Cooperation Agreement, supra note 32, para. 3.

51 Argentine Footwear, supra note 3.

52 Id., Panel Report, para. 6.70.

53 Id., paras. 3.276-3.282.

54 Id., paras. 3.283-3.305.

55 Fund Articles of Agreement Art. V, §3. Conditionality may take several forms, such as features that the Fund calls performance criteria, benchmarks, prior actions, and measures considered in a review. Fund, Conditionality in Fund-Supported programs—Policy Issues §II.C (2001), available at <http://www.imf.org/external/np/pdr/cond/2001/eng/struct>. These conditions cannot extend to measures outside the Fund’s competence (e.g., calling new elections), or involve matters that would be impermissible as conditionality under the Fund’s Articles (e.g., opening up an identified sector to foreign investment, because Article VI, section 3 allows members to maintain capital restrictions).

56 Fund, Conditionality in Fund-Supported Programs—Overview, paras. 24-25 (2001), available at <http://www.imf.org/external/np/pdr/cond/2001/eng/struct>.

57 See recent Fund papers on conditionality, supra notes 55-56.

58 As explained by the former Fund general counsel, Sir Joseph Gold, there were political and diplomatic reasons for avoiding the legal status of breach of obligation:

Gold, Joseph, The Stand-By Arrangements of the International Monetary Fund 45 (1970)Google Scholar.

59 Guidelines on Conditionality, Decision No. 6056-(79/38) (Mar. 2, 1979), SELECTED DECISIONS, supra note 22, at 149, para. 3.

60 Certain conclusions flow from the fact that noncompliance with Fund conditionality can result only in interruption of financing (absent further Executive Board action) and does not involve breach of obligation. For example, if necessary for the adjustment program, an arrangement from the Fund may include a condition for a trade liberalization measure such as lowering a tariff below the rate “bound” in the member’s WTO tariff schedules. If the member maintains the tariff above the level set as such a condition, the Fund may withhold financing under the arrangement. As there is no breach of obligation to the Fund, however, the Fund has no other recourse against the member in the form of any other sanction. Similarly, as the condition for a reduced tariff creates no obligation to the Fund, it cannot be used to create an obligation to, or right of recourse by, any other member. Additionally, the Fund may not include in an arrangement a condition that a member take on an obligation under the law of another institution (such as “binding” a tariff rate or committing itself to liberalization of a particular service under the GATS). The fact that a trade-liberalizing measure taken in the context of a Fund-supported program amounts to unilateral liberalization on the part of the member has led to discussion of “crediting” countries in subsequent rounds of trade negotiations. Coherence in Global Economic Policy-making: WTO Cooperation with the IMF and the World Bank, Autonomous Trade Liberalization, WT/TF/COH/S11 (June 18, 1999).

61 Argentine Footwear, supra note 3, Panel Report, para. 6.79. 62 Id., Appellate Body Report, para. 84 [hereinafter AB Report].

62 Id., paras. 72,

64 Id., para. 73.

65 Id., para. 65.

66 Ahn, supra note 10, at 24.

67 Notification of Appeal, Argentina—Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items, WT/DS56/8, para. 4 (Jan. 21, 1998).

68 Argentine Footwear, supra note 3, AB Report, para. 86.

69 WT/DSB/M/45, at 8 (June 10, 1998).

70 India Balance of Payments, supra note 4.

71 For a description of the GATT’s balance-of-payments exception and its applicability to this case, see, for example, Thomas, Chantal, Balance-of-Payments Crises in the Developing World: Balancing Trade, Finance and Development in the New Economic Order, 15 Am. U. Int’l L. Rev. 1249 (2000)Google Scholar.

72 The GATS provision (Art. XII) is analogous, but is more complex because the GATS extends to payments relating to the scheduled services, which overlaps with the Fund’s jurisdiction over payments and transfers for current international transactions.

73 Also compare the reference in Article XVIII:9 to the need “to ensure a level of reserves adequate for the implementation” of a country’s “programme of economic development” to the standard in Article XII for the implementation of such restrictions to “safeguard” the “external financial position.”

74 GATT, Annex I, Ad Art. XVIII: 11.

75 Ahn, supra note 10; Thomas, supra note 71.

76 See text at notes 34, 44—45 supra (quoting the provision in full).

77 India Balance of Payments, supra note 4, Panel Report, paras. 3.305-3.358.

78 Id., para. 3.305. The United States made a similar argument before the Appellate Body:

79 India Balance of Payments, supra note 4, Panel Report, para. 3.309.

80 Id., para. 3.315.

81 Id., para. 3.320.

82 Id., para. 3.309.

83 Id., para. 3.306.

84 Id., para. 3.307.

85 Id., para. 3.313 (emphasis added).

86 In 1971, in connection with the introduction of a temporary import surcharge by the United States, the Fund had found that “in the absence of other appropriate action and in the present circumstances, the import surcharge can be regarded as being within the bounds of what is necessary to stop a serious deterioration in the United States’ balance-of-payments position.”The Fund representative did not suggest an alternative measure at that time. Nonetheless, the working party reported that it considered that the “trade surcharge, as a trade restrictive measure, was inappropriate given the nature of the United States balance-of-payments situation and the undue burden of adjustment placed upon the import account with consequent serious effects on the trade of other contracting parties.” General Agreement on Tariffs and Trade, Analytical Index 299-300 (6th ed. 1994) [hereinafter GATT ANALYTICAL INDEX] .

87 India Balance of Payments, supra note 4, Panel Report, para. 3.317.

88 Id., para. 3.312.

89 Id., para. 3.319.

90 Roessler, supra note 36, at 648. Roessler also provides an interesting historical review of the debate concerning the Fund’s role in providing balance-of-payments assessments under the GATT. Id. at 645-48.

91 Thomas, supra note 71, at 1261.

92 See text at note 76 supra.

93 Organisation for Economic Co-operation and Development, Multilateral Agreement on Investment: Draft Consolidated Text, DAFFE/MAI (98)7/REVl, “Temporary Safeguard” (1998) [hereinafter MAI]. Drafts of the consolidated text of the MAI and commentary are available online at <http://www.oecd.org/daf/mai>. For a discussion of the considerations leading to inclusion of such a safeguard in international investment agreements (especially as they relate to Fund jurisdiction), see UNCTAD, TRANSFER OF Funds, UN Doc. UNCTAD/ITE/IIT/23, UN Sales No. E.00.II.D.38 (2000) (written by IMF Assistant General Counsel Sean Hagan).

94 For measures that were within the Fund’s jurisdiction, the measure was considered to have met the terms of the temporary safeguard if it had been approved by the Fund under the Articles of Agreement, thereby avoiding conflicting rights and obligations. MAI, supra note 93, Temporary Safeguard, para. 4. This result is analogous to the situation regarding GATT Article XV:9(a), discussed below.

95 The negotiators were considering whether to go further than the GATT and either authorize or require the Parties Group to seek the Fund’s determination of the justification for the measure overall. Id., para. 5 (b). This aspect of the Fund’s role, however, was not agreed upon at the time the negotiations were terminated, and the text on this point remained in brackets.

96 India Balance of Payments, supra note 4, Panel Report, paras. 5.12-5.13 (quoting DSU Art. 13.1). The panel’s statements did not fully rule out Article XV:2 as a basis for it to consult with the Fund. For example: “Subsequently, having regard to Article XV:2 of GATT 1994 and Article 13 of the DSU, we have consulted the IMF on a number of issues related to India’s balance-of-payments situation.” Id., para. 5.120. Nonetheless, this seems to relate only to the principle of consultation. The panel made no statement about a requirement to accept the Fund’s determinations; also, it appeared to give equal weight to portions of the Fund’s statement that were covered by Article XV:2 and those that were not.

97 Id., AB Report, paras. 149 (quotations), 150.

98 Ahn, supra note 10, at 25.

99 Understanding on Rules and Procedures Governing the Settlement of Disputes, WTO Charter, Annex 2, THE LEGAL TEXTS, supra note 2, at 354, 33 ILM at 1226 [hereinafter DSU].

100 Appellate Body Report, United States—Import Prohibition of Certain Shrimp and Shrimp Products, WT/ DS58/AB/R, AB-1998-4 (Oct. 12, 1998) (adopted Nov. 6, 1998).

101 This author does not agree with the statement to this effect in Terence, P. Stewart & Amy Anne, Karpel, Review of the Dispute Settlement Understanding, 31 L. & Pol’y Int’l Bus. 593, 636 (2000)Google Scholar.

102 In contrast to a perception of Fund “interference” in the GATT balance-of-payments exception, Roessler wrote in the 1970s:

Roessler, supra note 36, at 636.

103 North American Free Trade Agreement, Dec. 17, 1992, Can.-Mex.-U.S., Art. 2104:2(b), 107 Stat. 2066,32 ILM 289 & 605 (1993). The GATT contains only an outdated and little-used provision: Article XIV, which links the application of the safeguard to exchange restrictions that may be imposed pursuant to the Fund’s Articles—it allows a member applying measures under the balance-of-payments safeguard to do so inconsistently with the rules against nondiscrimination in a way “having equivalent effect” to any restrictions that may be imposed under Articles VIII or XTV of the Fund’s Articles. This provision has limited utility, as under Fund policy restrictions would generally not be approved under Article VIII if they were discriminatory, and members that continue to impose restrictions under the transitional provisions of Article XIV are not necessarily those that have had a Fund-supported program.

104 Even though the WTO Agreements came into effect after the Fund’s Articles, the explicit accommodation of Fund jurisdiction obviates the lex posterior interpretive rule, such as Article 30(3) of the Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, 1155 UNTS 331 [hereinafter Vienna Convention], which provides that the “later in time treaty” would take precedence.

105 See text following note 47 supra. Additionally, under Article XV, paragraph 9(6), WTO members are not precluded from using restrictions or controls on imports or exports “to make effective such exchange controls or exchange restrictions.” This provision is not discussed herein.

106 See text at note 49 supra. The reference in the GATS to “exchange actions” follows the language in Article XV:2 of the GATT, which requires consultation with the Fund on “action . . . in exchange matters.”

107 See 3 Gold, Joseph, The Fund Agreement in the Courts 769 (1986)Google Scholar, in the context of discussing Article VIII, section 2 (b) of the Fund’s Articles. A member that imposed a restriction that is not consistent with the Fund’s Articles could not, with respect to such restriction, claim the benefit of Article VIII, section 2 (b). Under that provision, which must become part of the domestic law of each Fund member, judicial or administrative authorities must not require performance or award damages for nonperformance of exchange contracts that involve the currency of any member of the Fund and are contrary to the member’s exchange control regulations if they are maintained or imposed consistently with the Fund’s Articles. Aspects of this provision have been subject to varying interpretations. See, e.g., François, Gianviti, Réflexions sur l’article VIII, section 2(b) des Statuts du Fonds Monétaire International, 62 Revue Critique de Droit International Privé [RCDIP] 471-87,629-61 (1973)Google Scholar.

108 A description of Fund jurisdiction as it relates to investment agreements was recently published in UNCTAD, supra note 93, at 11-17.

109 Fund members also undertake obligations with regard to exchange rate management under Article IV of the Fund’s Articles. The scope of this provision and its relationship to the WTO Agreements are beyond the scope of this article.

110 Decision No. 1034-(60/27), supra note 22, para. 1, at 428. Note, for example, the premise of the Fund’s decision establishing special procedures for approval of exchange restrictions applied for national security reasons: “Article VIII, Section 2 (a), in conformity with its language, applies to all restrictions on current payments and transfers, irrespective of their motivation and the circumstances in which they are imposed.” Decision No. 144-(52/51) (Aug. 14, 1952), SELECTED DECISIONS, supra note 22, at 422.

111 Roessler, supra note 36, at 640-43, summarizes the Executive Board’s considerations before establishing this rule. He laments that the technical approach could lead to “forum shopping” between the two organizations:

Id. at 642. However, the fact that the Fund’s approval of exchange restrictions is only temporary partially cures this problem on the Fund side.

112 Gianviti, supra note 107, at 638. In contrast, in 1981 the GATT Secretariat described the GATT/WTO approach as having “been to examine particular restrictive measures affecting trade independent of the form that these measures took.” GATT ANALYTICAL INDEX, supra note 86, at 402 (discussing an Italian deposit requirement for purchases of foreign currency). This position seems to reflect evolution from an earlier approach expressed in the 1954— 1955 review of the GATT in a report by a working group on the relations between the Fund and GATT in the field of quantitative restrictions for balance-of-payments reasons. After observing that there is generally “a fairly clear division of work” between the Fund and the GATT Contracting Parties, the report stated:

Reports Relating to the Review of the Agreement, GATT B.I.S.D. (3d Supp.) atl70, 196 (1955) (emphasis added).

113 The type of foreign exchange that must be made available has generally been understood as either the currency of the nonresident or a currency that the nonresident can readily convert into his or her own currency. UNCTAD, supra note 93, at 14.

114 Decision No. 3153-(70/95) (Oct. 26, 1970), SELECTED DECISIONS, supra note 22, at 430. Whether any delay is “undue” is assessed by the Fund on a case-by-case basis, taking into account the administrative capacity of the member.

115 GATT Annex I, Ad Art. VIII(l). Similarly, the prohibition in the GATT of certain export subsidies (other than those on primary products) under Article XVI, section B effectively excludes subsidies that were to result from a multiple currency practice approved by the Fund, as explained in an interpretative note to Article XVI: “Nothing in Section B shall preclude the use by a contracting party of multiple rates of exchange in accordance with the Articles of Agreement of the International Monetary Fund.” See also Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade, Art. 9, para. 1, GATT B.I.S.D. (26th Supp.) at 56 (1979).

116 GATT Annex 1, Ad Art. XVI, §B n. 1. Nonetheless, as is the rule for all subsidies, these subsidies must be notified to the Contracting Parties. Review Pursuant to Article XVI:5, GATT B.I.S.D. (9th Supp.) at 188,192, para. 13 (1961).

117 See UNCTAD, supra note 93, at 15.

118 Article VIII, section 3 is, however, limited to current transactions, as the Executive Board has not treated multiple currency practices on capital transactions as violations of Article VIII.

119 This conclusion was conveyed at a press conference on June 22, 2001. Dawson, Thomas, director, External Relations Department, International Monetary Fund, Press Briefing (June 22, 2001)Google Scholar, available at <http://www.imf.org/external/np/tr/2001/tr010622.htm>.

120 Decision No. 1034-(60/27), supra note 22, at 428. A different approval policy applies to exchange restrictions imposed for national and international security reasons. The member is required to notify the Fund promptly of these restrictions (in any event no later than thirty days after they are imposed) and, unless the Fund informs the member within thirty days after receiving such notice that it is not satisfied that the restrictions were proposed for national security reasons, the restrictions are treated as approved. Decision No. 144-(52/51) (Aug. 14, 1952), SELECTED DECISIONS, supra note 22, at 422. Also, in certain limited circumstances a multiple currency practice may be approved even if it is not based on balance-of-payments reasons.

121 Article XIV, section 2 contains the hortatory statement that the members shall withdraw Article XIV restrictions “as soon as they are satisfied that they will be able, in the absence of such restrictions, to settle their balance of payments in a manner which will not unduly encumber their access to the general resources of the Fund.” Under section 3 of that article, the Fund may only, in exceptional circumstances, make “representations” to any member that “conditions are favorable” for the partial or complete withdrawal of such restrictions. If, after a suitable time for reply, the Fund finds that the restrictions are continuing to be maintained inconsistently with its purposes, the Fund may declare the member ineligible to use Fund resources. This section has never been invoked.

122 François, Gianviti, Le Contrôls des changes étranger devant le juge national, 69 RCDIP 659, 665–66 (1980)Google Scholar; see also, e.g., 2 GOLD, supra note 107, at 410 (1982); 3 id. at 791 (1986); Gianviti, supra note 107, at 475, 643-45.

123 See Gianviti, supra note 122.

124 Article VI, section 3 of the Fund’s Articles provides:

125 See infra “Fund Jurisdiction and the GATS” at p. 596.

126 For example, under Article XXX of its Articles, the Fund’s jurisdiction applies to payments of interest or moderate amounts of amortization on permissible foreign loans, although a prohibition on the underlying transaction involving borrowing from abroad is outside the Fund’s jurisdiction.

127 Reports Relating to the Review of the Agreement, supra note 112, at 198. Indeed, in 1981 a working party decided to hold consultations in the Balance-of-Payments Committee on a deposit scheme introduced by Italy, notwithstanding the monetary character of the measure and its approval by the Fund. The committee did not discuss countermeasures but evaluated the measure in light of the Declaration on Trade Measures Taken for Balance of Payments Purposes, GATT Doc. BOP/R/119, C/M/152 (1981). The committee urged the Italian authorities to remove the measure as soon as possible and agreed to review the progressive elimination of the deposit requirement. GATT ANALYTICAL INDEX, supra note 86, at 402, 406.

128 The GATT contains an “Ad Note” attempting to describe circumstances that would frustrate the provisions of the GATT, but it is not enlightening. This provision also requires a WTO member not to frustrate the Fund’s Articles, but this issue has not been pursued in either organization.

129 Reports Relating to the Review of the Agreement, supra note 112, at 198.

130 Black’s Law Dictionary 684 (6th ed. 1990) (“Generalia specialibus non derogant”).

131 In the original draft of the GATT, paragraph 9 of Article XV began with the qualifying words, “Subject to the provisions of paragraph 4 of this Article.” The text was amended by the Contracting Parties at their first and second sessions in 1948 to take account of the most important changes in the Charter for the International Trade Organization made at the Havana Conference. These amendments included deletion of this qualifying clause to conform to a similar deletion in Article 24 of the ITO Charter that addressed the relationship of the ITO with the Fund. GATT ANALYTICAL INDEX, supra note 86, at 407-08.

132 Greece described the contribution as a “tax on foreign exchange allocated for the payment of imports,” which would be covered by GATT Article XV:9(a) if the measure were applied in accordance with the Fund’s Articles. France and the United Kingdom considered the measure an “internal tax” in violation of the “national treatment” requirement of Article III of the GATT, since domestic goods were not similarly taxed. It was also argued that the contribution constituted a “charge” in violation of Article II, which prohibits such charges on products included in the Schedules of Tariff Concessions by Greece. Special Import Taxes Instituted by Greece, G/25 (report adopted Nov. 3, 1952), GATT B.I.S.D. (1st Supp.) at 48 (1953).

133 Id. at 50. The panel stated that there was insufficient information on the nature of the measure to determine whether it was covered by Articles II or III and left open the issue of how Article XV:4 would be addressed. The panel suggested that the disputing parties collect further information and that the Contracting Parties consult with the Fund to determine whether the measure was a multiple currency practice, and whether it was in conformity with the Fund’s Articles. Greece eliminated the measure and the matter did not return to the panel.

134 JACKSON, supra note 44, at 484 (emphasis added). Furthermore, Professor Jackson cited the portion of GATT Article XV:2 on accepting the Fund’s determination regarding consistency with its Articles and stated: “if the Greek argument prevailed, then a determination by the IMF would have been necessary to a finding that Greece had not violated GATT.” Id. at 485.

135 Roessler, supra note 36, at 643.

136 Another question—perhaps hypothetical, yet interesting—concerns the applicability of the WTO concept of “nonviolation nullification and impairment.” GATT Article XXIII:1 (b) provides for redress in a case where, even though the agreement was not violated, a contracting party’s benefits were being nullified or impaired or the attainment of any objective of the GATT was impeded. Panel Report, European Communities—Measures Affecting Asbestos and Asbestos-Containing Products, WT/DS135/R (Sept. 18, 2000) (adopted Apr. 5, 2001). This concept of nonviolation nullification and impairment is carried over into the WTO (DSU Art. 26). Even though the member would not be required to remove the measure, the member is expected to provide compensation or be subject to retaliatory action.

One view is that such remedies would be permissible even for a measure that is consistent with the Fund’s Articles. This view relies in part on the coexistence of this “nonviolation” provision with the “nonfrustration” provision in Article XV:4. The opposite view seems supported by the principle and text of the provisions avoiding conflicting rights and obligations. If such provisions protect measures consistent with the Fund’s Articles from sanctions based on a finding of breach of obligation, they should a fortiori protect them in the absence of such a finding. The issue may also turn on the debate as to whether the remedies are coequal alternatives or involve a hierarchy with a preference for compliance. If the latter, then the other remedies could serve as a means to pressure the member to remove a measure that violates the WTO Agreements. If the measure is intended to be protected by the provisions governing the institutional relationship, then this pressure should not be applied through case-by-case litigation.

137 In another expression of the GATT’s continued role concerning the subsidy despite this exception, a 1960 working party reiterated the obligation to notify any such subsidies, stating that interpretative note 1 to Article XVI, section B “was intended not to preclude the use by a country of multiple exchange rates which were approved by the [IMF], but that there was a clear obligation to notify to the CONTRACTING PARTIES multiple exchange rates which have the effect of a subsidy.” Review Pursuant to Article XVI:5, supra note 116, at 192, para. 13.

138 An interpretative note to GATT Article VI states:

GATT Annex I, Ad Art. VI.

199 See, e.g., Marco C., E.J. Bronckers, More Power to the WTO ? 4 J. Int’l Econ. L. 41, 47 (2001)Google Scholar (stating that “the Marrakesh Agreement does not clearly establish the relationship between the different WTO Agreements” (footnote omitted)).

140 WTO Charter, Annex 1A, THE LEGAL TEXTS, supra note 2, at 20, 33 ILM at 1154.

141 Final Act, Declaration on the Relationship of the World Trade Organization with the International Monetary Fund, Apr. 15, 1994, LEGAL TEXTS, supra note 2, at 447, 33 ILM at 1252. The ministerial declaration is an integral part of the legal documentation constituting the Final Act.

142 The phrase was also included so as not to preclude new aspects of cooperation that would result from the establishment of the WTO and its expanded activities (as compared to the GATT) and was thus intended to avoid a reading that the scope of the old relationship constrained the new one. It was based on the explanation of the director of the Legal Affairs Division of the GATT Secretariat that the existing relationship under GATT 1947, even if it were to continue on the basis of Article XV and other relevant provisions of GATT 1947, would have to be affected by the provisions of the Final Act that deal explicitly with the WTO’s future cooperation with the Fund (e.g., Article 111:5 of the WTO charter and the Understanding on Balance-of-Payments Provisions of the General Agreement on Tariffs and Trade 1994, WTO Charter, Annex 1A, LEGAL TEXTS, supra note 2, at 22, 33 ILM at 1158).

143 The Vienna Convention, supra note 104, Article 31(1) provides: “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 light of its object and purpose.” According to Sir Ian Sinclair, the International Law Commission apparently believed that these references to “good faith” and “the object and purpose of a treaty” expressed the principle of effectiveness: “When a treaty is open to two interpretations one of which does and the other does not enable the treaty to have appropriate effects, good faith and the objects and purposes of the treaty demand that the former interpretation should be adopted.” Sinclair, Ian, The Vienna Convention on The Law of Treaties 75 (1973)Google Scholar (quoting [1966] 2 Y.B. Int’l L. Comm’n 39, UN Doc. A/CN.4/SER.A/1966/Add.l (Part 2)).

144 Agreement on Trade-Related Investment Measures, Art. 2, WTO Charter, Annex 1A, LEGAL TEXTS, supra note 2, at 143 [hereinafter TRIMs].

145 TRIMs, Annex, para. 2(b).

146 TRIMs Art. 3.

147 Agreement on Subsidies and Countervailing Measures, Annex 1 (b), WTO Charter, Annex 1 A, LEGAL TEXTS, supra note 2, at 231.

148 GATS Art. XI:2, quoted in text at note 49 supra. These provisions will not win awards as a model of clarity. At the point when Fund staff were invited to participate in the drafting process, aspects of these provisions had already been agreed upon, and the issues of Fund/WTO jurisdiction were “grafted” onto them. This approach clearly does not produce the same clarity as might be expected in cooperative drafting from scratch. Separately, it may be noted that the GATS does not contain a provision similar to GATT Article XV:4, prohibiting “frustration” of the intent of the provisions of the GATS Agreement.

149 Thus, any beneficial terms for international payment afforded to one member must be afforded to all members. Article II, paragraph 1 of the GATS requires each member to afford “most favored nation” treatment to other members (although at the time a member joins the Agreement, it is permitted to identify domestic discriminatory measures that may be “grandfathered”).

150 GATS Art. XVI:1 n.8.

151 Id. The term “cross-border movement of capital” in the first category suggests that the requirement covers both inward and outward movements of capital, whereas the second category does not appear to govern repatriation of capital. The minimum requirements are not individually negotiated as part of the schedules; it would therefore appear that a member not prepared to commit to these minimum requirements on movement of capital in a given sector would effectively be restrained from offering market access in that sector through these types of service suppliers. It would also seem that if the service is provided through the other modes of delivery, the GATS would not prevent the member from drafting its schedule to restrict any associated capital movement (but this does not appear to have been done).

152 Fund Articles of Agreement Art. XXX(d); see also text at notes 105—25 supra.

95 This policy was one of the central planks of the special regime. See YDIT, supra note 15, at 46-47.

96 Bothe, supra note 30, at 6.

97 For the constitutive documents of the “oil-for-food” program, see the UN Iraq Web site, supra note 7.

98 OHR, Decision on the Deadlines for the Implementation of the New Uniform License Plate System (May 20, 1998); see supra note 8.

99 On the return agenda generally, see note 61 supra and corresponding text; for the supervisor’s return program mandate, see Brcko Award 1997, supra note 58, paras. 54,104. On property legislation, see the section “Decisions in the Field of Property Laws, Return of Displaced Persons and Refugees and Reconciliation” of the list Decisions by the High Representative, supra note 8.

100 See SC Res. 1244, supra note 11, para. 11 (k). The figures come from Report of the Secretary-General on the United Nations Interim Administration Mission in Kosovo, UN Doc. S/1999/779, paras. 8-9, quoted by Matheson, supra note 11, at 78 n.22.

101 For this appointment, see note 9 supra.