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NORM CONFLICT BETWEEN WTO COVERED AGREEMENTS—REAL, APPARENT OR AVOIDED?

Published online by Cambridge University Press:  26 October 2012

Claude Chase
Claude Chase*
Affiliation:
Legal Officer, Appellate Body Secretariat, World Trade Organization, [email protected].
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Abstract

This article explores the issue of norm conflict in the context of specific multilateral agreements that are administered and enforced by the World Trade Organization (WTO), namely, the General Agreement on Tariffs and Trade 1994 (GATT), the General Agreement on Trade in Services (GATS), and the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). Any discussion of norm conflict between treaty provisions must necessarily draw a critical distinction between an apparent conflict, on the one hand, and a real conflict, on the other hand. An apparent conflict is one where the content of two or more norms is at first glance contradictory, yet the conflict can be avoided, most often by interpretative means. A real conflict represents an irreconcilable divergence between norms which cannot be interpreted away and can only be solved by the application of a conflict rule. The notion of intra WTO conflict is largely unexplored and consequently under-theorized. It is explored here not as an abstract notion, but rather against the backdrop of the institutional and normative environment of the WTO. It is submitted that intra WTO norm conflict is hardly likely to arise as a legal issue under WTO law. This is because the normative and institutional environment of the WTO militates against treating overlapping WTO provisions as situations of real norm conflict. This environment allows for, and potentially mandates a judicial approach to intra WTO conflict that accords with the telos of the single undertaking nature of WTO rights and obligations. In the result, intra WTO conflict will possibly never be real; will often be deemed as merely apparent; and will sometimes be avoided.

Keywords

effective interpretationlex posteriorlex specialisnorm conflictsingle undertakingtreaty conflicttreaty interpretationVienna Convention on the Law of TreatiesWTO covered agreementsWTO dispute settlement
Type
Articles
Information
International & Comparative Law Quarterly , Volume 61 , Issue 4 , October 2012 , pp. 791 - 821
Copyright
Copyright © British Institute of International and Comparative Law 2012

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References

1 WJ Davey, ‘The Quest for Consistency: Principles Governing the Interrelation of the WTO Agreements’ in S Griller (ed), At the Crossroads: The World Trading System and the Doha Round (Springer 2007) 105.

2 There are four annexes to the WTO Agreement. Annex 1 consists of substantive trade agreements regulating trade in goods, trade in services and trade-related aspects of Intellectual Property rights. Annex 2 contains the Dispute Settlement Understanding (DSU) which regulates the use of the WTO's Dispute Settlement Mechanism. Annex 3 contains the Trade Policy Review Mechanism (TPRM) and Annex 4 contains plurilateral agreements of which only the Agreement on Civil Aircraft and the Agreement on Government Procurement is in force. All annexes of the WTO Agreement are binding on all WTO Members save for the plurilateral agreements in Annex 4 which only bind WTO Members who specifically agree to be bound by their terms.

3 Virtually the GATT 1947 text modified by the following six understandings on specific GATT provisions: Understanding on the Interpretation of Article II:1(b) of the GATT 1994; Understanding on the Interpretation of Article XXVII of the GATT 1994; Understanding on Balance-of-Payment Provisions of the GATT 1994; Understanding on the Interpretation of Article XXIV of the GATT 1994; Understanding in Respect of Waivers of Obligations under the GATT 1994; and Understanding on the Interpretation of Article XXVIII of the GATT 1994.

4 Agreement on Agriculture; Agreement on the Application of Sanitary and Phytosanitary Measures; Agreement on Textiles and Clothing; Agreement on Technical Barriers to Trade; Agreement on Trade-Related Investment Measures; Agreement on Implementation of Article VI of the GATT 1994; Agreement on Implementation of Article VII of the GATT 1994; Agreement on Preshipment Inspection; Agreement on Rules of Origin; Agreement on Import Licensing Procedures; Agreement on Subsidies and Countervailing Measures; and Agreement on Safeguards.

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7 Appellate Body Report, Brazil — Desiccated Coconut 12. See also Appellate Body Report, Argentina — Footwear (EC) para 81; Appellate Body Report, Korea — Dairy para 74 agreeing with the statement of the Panel in that dispute that (‘[i]t is now well established that the WTO Agreement is a “Single Undertaking” and therefore all WTO obligations are generally cumulative and Members must comply with all of them simultaneously’).

8 Panel Report, Brazil — Desiccated Coconut para 227; Panel Report, Turkey — Textiles para 9.92.

9 Davey (n 1) 103.

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13 Davey (n 1) 120.

14 GATT Panel Report, Italy — Discrimination Against Imported Agricultural Machinery, BISD 7S/60 para 12. The broad scope of GATT art III:4 has been subsequently confirmed in WTO jurisprudence. See eg, Panel Report, Canada — Certain Measures Affecting the Automotive Industry para 10.80.

15 J Pauwelyn (n 10) 400.

16 The Interpretative Note to Annex 1A provides: ‘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.’ [Emphasis added.]

17 Another example is art 1.5 of the TBT Agreement which defines the relationship between the TBT agreement and the SPS agreement: ‘The provisions of this Agreement do not apply to sanitary and phytosanitary measures as defined in Annex A of the Agreement on the Application of Sanitary and Phytosanitary Measures.’

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30 Panel Report, Indonesia — Autos para 14.49. There are dicta in the Panel Report in Turkey — Textiles that subsequently approved of a narrow definition. See Panel Report, Turkey — Textiles, paras 9.92–9.95.

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33 Appellate Body Report, EC — Bananas III para 225. See also Mercurio and Tyagi (n 32).

34 See eg, Marceau (n 22) 1084.

35 Jenks (n 27).

36 Panel Report, Indonesia — Autos para 14.49; Panel Report, Turkey — Textiles para 9.92.

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43 Jenks (n 27) 426–7. See also the Panel Report on Turkey — Textiles para 9.92 (citing Jenks).

44 Appellate Body Report, US — Gasoline 23. See also Appellate Body Report, Japan — Alcoholic Beverages II 18; and Appellate Body Report, US — Shrimp para 121 reversing the Panel's reading of the chapeau of GATT art XX on the ground that the Panel's interpretation would render ‘most if not all of the specific exceptions of Article XX inutile, a result abhorrent to the principles of interpretation we are bound to apply’. See also JHJ Bourgeois, ‘Comments on the Paper Presented by William J Davey and Werner Zdouc’ in T Cottier and P Mavroidis (eds), Intellectual Property: Trade, Competition and Sustainable Development (University of Michigan Press 2003) 93.

45 Marceau (n 22) at 1085 and 1086 criticizing the broad definition of conflict adopted by the Panel in EC — Bananas III.

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50 Article 3.2 of the DSU provides: ‘The dispute settlement system of the WTO is a central element in providing security and predictability to the multilateral trading system. The Members recognize that it serves to preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law. Recommendations and rulings of the DSB cannot add to or diminish the rights and obligations provided in the covered agreements.’ It should be noted that the call for the preservation of rights is strengthened by Article 19.2 of the DSU which provides: ‘In accordance with paragraph 2 of Article 3, in their findings and recommendations, the panel and Appellate body cannot add to or diminish the rights and obligations provided in the covered agreements.’

51 Bartels (n 37) 132.

52 See Appellate Body Report, Japan — Alcoholic Beverages II 21.

53 Bartels (n 37) 131.

54 Milanovic (n 47) 73. See also Pauwelyn (n 10) 178. Sir Hersch Lauterpacht in his commentary to the Draft Articles of the Vienna Convention on the Law of Treaties, in his capacity as Special Rapporteur of the International Law Commission also recognized the distinction between real and apparent conflicts. See H Lauterpacht, Special Rapporteur, Report by the Special Rapporteur on the Law of Treaties, UN Doc A/CN.4/87 (1954) at 136. See also Jenks (n 25) 425.

55 See Davey (n 1) at 108 noting that, ‘(A)n actual conflict cannot be interpreted away…’. In the same vein, see Marceau (n 21) 1084. See also Pauwelyn (n 10) 404.

56 Appellate Body Report, Japan — Alcoholic Beverages II p 10 affirming the Appellate Body's statement in US — Gasoline at 17. Art 31 of the VCLT mandates that a treaty is to be interpreted in good faith, in accordance with the ordinary meaning to be given to its terms, in their context and in light of the treaties object and purpose. Art 32 provides for recourse to a treaty's travaux préparatoires as a supplementary means of interpretation, to confirm a meaning arising from an interpretation under art 31 or to clarify the meaning of a provision when an interpretation under art 31 is not sufficient to resolve an ambiguity.

57 See eg, Appellate Body Report, EC — Computer Equipment paras 83–99; Panel Report, EC — Chicken Cuts paras 7.104–7.424; Appellate Body Report, US — Gambling paras 158–212; Appellate Body Report, Chile — Price Band System paras 204–79.

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78 Lindroos (n 69) 57.

79 ibid 56, 57.

80 In respect of the ban on imports of split-run periodicals, Canada did not contest the applicability of GATT but in fact conceded a violation of GATT art XI and sought, unsuccessfully, to justify the violation under GATT art XX(d). See Panel Report, Canada — Periodicals para 5.3.

81 Panel Report, Canada — Periodicals para 5.18.

82 Pauwelyn (n 10) 404–5.

83 Panel Report, Canada — Periodicals para 5.17.

84 ibid.

85 Appellate Body Report, Canada — Periodicals 19–20.

86 Panel Report, EC — Bananas III paras 7.277–7.286; Appellate Body Report, EC — Bananas III paras 217–22.

87 Panel Report, EC — Bananas III para 7.286.

88 Appellate Body Report, EC — Bananas III para 218.

89 Panel Report, Canada — Periodicals para 5.18.

90 Appellate Body Report, EC — Bananas III para 221.

91 Bourgeois (n 44) 94.

92 In Pauwelyn's contribution to the study of the conflict of norms, he posits that norms interact in one of two ways: (i) they can accumulate in which case both norms can be complied with or (ii) they can conflict in which case a conflict rule will have to be applied. See Pauwelyn (n 10) 161 ff.

93 Panel Report, EC — Trademarks and Geographical Indications para 7.36.

94 ibid.

95 ibid.

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98 Davey and Zdouc (n 12) 68.

99 MFN and National Treatment obligations are contained in: GATT arts I and III respectively; GATS arts II and XVII respectively and TRIPS arts 4 and 3 respectively.

100 Panel Report, India — Patents (US) para 7.19.

101 Heiskanen, V, ‘The Regulatory Philosophy of International Trade Law’ (2004) 38(1) JWT 12Google Scholar.

102 Art 1.1 of the TRIPS agreement provides: ‘Members shall give effect to the provisions of this Agreement. Members may, but shall not be obliged to, implement in their law more extensive protections than is required by this Agreement, provided that such protection does not contravene the provisions of this Agreement. Members shall be free to determine the appropriate method of implementing the provisions of this Agreement within their own legal system and practice.’

103 See Gaffney (n 96) 138.