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A second line of criticism of the ECJ's GATT direct effect doctrine attempts to impugn the Court's motive for denying direct effect. This criticism has largely been based upon an analysis of the ECJ's treatment of the second element of reciprocity found in international agreements- i.e., reciprocity in the enforcement of obligations. The ECJ's critics have argued that it was improper for the Court to use the lack of absolute reciprocity in the GATT 47 as a reason for denying direct effect because unilaterally granting direct effect would have ensured that at least the Community strictly adhered to its GATT 47 obligations.[51] The critics have claimed that this would be beneficial because it would have prevented the Community institutions from acting arbitrarily in the context of foreign trade policy.[52]
Kuilwijk attempts to extend this critique by endowing it with moral significance. He states that the ECJ's doctrine shows that it maintains a "persistent adherence to the traditional mercantilist, negative and defensive view of foreign trade policy."[53] He argues that the ECJ focuses on the reciprocity of enforcement in order to disguise a desire to allow the Community institutions maximum flexibility in creating foreign trade policy. He concludes that this harms the Community because "the true reason that the political institutions do not want to have their hands tied is that they wish to retain the freedom to confer special favors on specific industries, not because they are convinced that they are capable of better serving the public interest by retaining such freedom."[54]
Before accusing the Court of undue protectionism, one must determine if there are any valid legal reasons for denying direct effect to the GATT. First, it must be acknowledged that the reciprocity of enforcement in the GATT is much different from that in the Community or the other international agreements to which the Court has granted direct effect.[55] The U.S. has explicitly stated that the GATT will not have direct effect in U.S. courts.[56] It also appears that direct effect for the GATT does not exist in Japan.[57] Because both the U.S. and Japan, the two other large players in GATT dispute settlement besides the Community [58], explicitly deny direct effect to the GATT, this position may represent the common understanding of the GATT members about the nature of the agreement.
Second, it should be acknowledged that the GATT dispute settlement mechanism actually utilizes the lack of direct effect to help resolve disputes. As previously noted, the lack of direct effect allows GATT members to settle a dispute by means of a negotiated agreement prior to a formal ruling on the GATT validity of trade measures. This is useful because it allows member-to-member tradeoffs and cross-sectoral bargaining over concessions which would not occur if the dispute were resolved by means of a panel report or by national courts applying GATT law.[59] Thus, direct effect might actually inhibit the operation of the GATT by denying GATT members some of the flexibility contained in the DSU.
Third, one must recognize that direct effect may actually deprive the Community of rights which it possesses under the GATT after the issuance of an adverse panel report. If the ECJ required the withdrawal of a Community measure because it violated the GATT before a GATT panel had even decided that the measure actually did violate the agreement, then the Community would be deprived of the right to choose the method of remedying the injury caused by the measure. That is, a Court ruling by means of direct effect would mandate specific performance as the only remedy for all GATT violations and deny the Community the ability to offer compensation as a remedy for its GATT violations. This limitation on the policy discretion of the Community might be particularly harmful in the context of the GATT because the agreement has such broad economic consequences.[60]
There is some debate over whether a GATT member which has been found to be in violation of a GATT obligation actually may choose the method of remedying its violation.[61] Judith H. Bello has argued that the new GATT preserves the GATT 47 principle that "the only sacred, inviolable aspect of the GATT [is] the overall balance of rights and obligations of benefits and burdens, achieved among members through negotiations...[so that]...a government could renege on its negotiated commitment not to exceed a specified tariff on an item, provided it restored the overall balance of GATT concessions through compensatory reductions in tariffs on other items."[62] Therefore, she concludes that a GATT member found to be violating the GATT may do one of the following: 1) withdraw the offending measure, 2) maintain the measure but provide compensatory benefits, or 3) decline to withdraw the measure or provide compensation and instead allow the injured member to retaliate.[63]
In response, John H. Jackson has argued that the withdrawal of the offending measure is the proper method of remedying GATT violations.[64] He notes the historical practice of "the GATT contracting parties [to treat] the results of an adopted panel report as legally binding" and argues that eleven clauses of the DSU support the notion that a GATT panel report imposes an international law obligation on the member to which it is directed to perform the recommendations of the panel.[65] Thus, he concludes that the GATT "clearly establishes a preference for an obligation to perform the recommendation...and provides that in nonviolation cases, there is no obligation to withdraw an offending measure, which strongly implies that in violation cases there is an obligation to perform."[66]
While the language of the Dispute Settlement Understanding does establish a preference for specific performance, it also supports the notion that compensation is a possible remedy. DSU Article 22(1) states that "compensation and the suspension of concessions or other obligations are temporary measures available in the event that the recommendations and rulings [of the panel] are not implemented within a reasonable time" and that "neither compensation nor the suspension of concessions or other obligations is preferred to full implementation of a [panel] recommendation." DSU Article 21(3)-(4) establishes the reasonable period of time for implementation as 15 months from the date of adoption of a panel or Appellate Body report.[67] Thus, full compliance is indeed the preferred remedy for a GATT violation.
But, DSU Article 22(2) states that if a GATT member "fails to bring the measure found to be inconsistent with a covered agreement into compliance...within the reasonable period of time..such member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation." Thus, the DSU clearly states that compensation is a possible, even if not a preferred, remedy for a GATT violation. The fact that the GATT members may agree on compensation during the reasonable period of time given for the implementation of panel decision suggests that compensation may be used as the final means of remedying a GATT violation.
This idea is further supported by the DSU language pertaining to retaliation. DSU Article 22(2) also states that if an agreement on compensation is not reached, the invoking GATT member may request authorization from the DSB to suspend GATT concessions granted to the violating member. DSU Article 22(8) states, however, that "the suspension of concessions...shall only be applied until such time as the measure found to be inconsistent with a covered agreement has been removed, or the Member that must implement recommendations or rulings provides a solution to the nullification or impairment of benefits." Under the language of DSU Article 22(2) cited above, one possible solution would be compensation. Thus, while retaliation is truly temporary, it may be the case that compensation can be a permanent remedy to a violation. This may make sense within the context of the GATT because retaliation would in effect counter one GATT violation with another GATT violation while compensation counters a violation with monetary payments.
Thus, the GATT may actually be a unique international agreement in that it attempts to utilize the "realpolitik" of the environment in which it operates to its benefit by providing methods of remedying GATT violations which are flexible enough to maintain the functioning of the agreement. That is, the GATT may provide a choice of remedy precisely because allowing such a choice helps preserve momentum for the trade liberalization process which is the ultimate purpose of the agreement. Permitting GATT members to preserve domestic legislation that arguably violates GATT provisions, as long as they are willing to pay for them in the form of compensation, may help convince those members to accept other restrictions upon their foreign trade policy autonomy.
This possible function of GATT dispute settlement can be illustrated using the recent Beef Hormones GATT decisions. In this case, both a GATT panel and a WTO Appeals Body have ruled that the Community's non-discriminatory ban on the sale of hormone-treated beef violated the GATT because it was not supported by sufficiently strong scientific evidence. However, both of these bodies upheld the right of the Community to set the level of consumer protection it deemed appropriate under the 1994 Sanitary and Phytosanitary Agreement. Thus, the Community was allowed to keep the ban in place until April 1999 while it attempted to produce stronger evidence for the scientific validity of its ban.
Rather than forcing the Community to produce evidence for the scientific validity of its ban, perhaps it would be best to allow the Community merely to pay compensation to the U.S. producers of hormone treated beef in order to keep its ban in place. This would avoid the need for a ruling on debatable scientific evidence and give expression to the desires of Community consumers. In fact, during the dispute, Community officials admitted that the beef hormones ban was specifically designed to placate consumer suspicions about chemical additives in food.[68] After the initial panel ruling, some Community officials also suggested that they would prefer to pay compensation than to remove the ban.[69] Thus, it may be the case that the welfare which consumers in the Community derive from knowing that their beef has not been treated with hormones exceeds the compensation which the Community will have to pay to maintain the beef ban in the face of the panel ruling.[70]
By allowing the Community the flexibility to pay compensation, the GATT would help to ensure its own survival and reconcile domestic political interests with the requirements of the world trade regime. For example, one should consider what would happen if it were not the U.S., but instead a single small country, that was the sole producer of hormone treated beef. In this case, it seems entirely disproportionate and unfair to require the Community to abolish a complex domestic policy regime when it could easily pay compensation instead. Direct effect becomes a very troublesome proposition in such a situation because the ECJ could not realistically do anything other than order specific performance for a GATT violation. Thus, direct effect would deny the Community the ability to choose the compensation remedy under the GATT.[71]
Finally, one should consider the possible outcomes for the Community if the ECJ actually did begin to rule on the GATT compatibility of Community measures. If the ECJ correctly held that a Community measure violated the GATT, then the Community could be deprived of its ability to choose the method of remedying the violation. Thus, the Community would be worse off than if a GATT panel had decided that the Community measure violated the GATT. If the ECJ incorrectly held that a Community measure violated GATT, then the ECJ would also be worse off because it would be forced to repeal a measure which did not really violate the GATT.
If the ECJ held that a Community measure was compatible with the GATT, then the Community would remain in the same position as when direct effect did not exist because either the ECJ's decision would be correct, in which case there would never be an adverse GATT panel decision, or the ECJ's decision would be incorrect, in which case it could be overturned by a future GATT panel. Therefore, it is not clear that the Community would ever be placed in a better position within the GATT framework by granting direct effect to the GATT.[72] Given all of the foregoing, it may be the case that the Court has only denied direct effect to the GATT out of a desire to preserve the best possible legal position for the Community within the GATT system rather than to satisfy a mercantilist agenda for the benefit of specific traders.[73]
Having recognized the possibility of non-mercantilist motives for denying direct effect to the GATT, it is necessary to examine the ECJ's method of analysis to determine if it proves that the Court's direct effect doctrine is motivated by a protectionist agenda. Kuilwijk attempts to do this by noting that the ECJ's method of analysis has been inconsistent. He argues that while the Court has considered the direct effect of individual provisions of the other international agreements "in the case of GATT the Court has unequivocally denied direct effect of the whole agreement as such."[74] He claims that the Court has done this in order to cloak its true protectionist motives for denying direct effect to the GATT.[75] Thus, he concludes that the Court's inconsistency is proof of its mercantilist agenda.
This criticism misconstrues the ECJ's method of analysis. The Court has considered the direct effect of all international agreements, including the GATT, by means of a two level inquiry. First, the Court determines if the nature and purpose of the agreement precludes all provisions from having direct effect. If that threshold inquiry is met, then the Court examines a particular provision of the agreement to determine if it has direct effect. This second level inquiry necessarily involves a second consideration of the nature and purpose of the agreement as the Court must establish the role of the particular provision within the framework of the agreement.
A close examination of the ECJ case law clearly shows consistency in the Court's method of analysis. In Recital 21 of Kupferberg, the Court stated that "neither the nature nor the structure of the Agreement concluded with Portugal may prevent a trader from relying on the provisions of the said Agreement before a court in the Community."[76] Thus, direct effect is possible. In Recital 22, the ECJ stated that the "question whether such a stipulation is unconditional and sufficiently precise to have direct effect must be considered in the context of the Agreement of which it forms part...[and]...it is necessary to analyse the provision in the light of both the object and purpose of the Agreement and of its context."[77] Thus, the Court must examine the specific provision in the context of treaty to determine if it has direct effect. In Recital 26, the Court held that the particular provision did have direct effect. Therefore, the references to the nature and purpose of the agreement not only establish that the agreement passes the first level inquiry but also relate to the second level inquiry as well.
International Fruit Company shows the ECJ using this same method of analysis with respect to the GATT 47. In its decision, the Court stated that it in order to determine "whether the provisions of the General Agreement confer rights on citizens of the Community on which they can rely before the courts in contesting the validity of a Community measure...the spirit, the general scheme and the terms of the General Agreement must be considered."[78] Thus, the Court must engage in the first level inquiry. The ECJ never got to the second level inquiry, however, because "those factors [spirit, general scheme and terms of the GATT 47] are sufficient to show that, when examined in such a context, Article XI of the General Agreement is not capable of conferring on citizens of the Community rights which they can invoke before the courts."[79] Therefore, it held that Article XI, and all other provisions of the GATT 47, could not have direct effect. Thus, the ECJ's different direct effect doctrines may be due to differences between the other international agreements and the GATT 47 rather than to a deliberate policy of trade protectionism.[80]
The Court's treatment of direct effect for the GATT 47 may have been not only consistent with its prior jurisprudence but also logical given the structure of the GATT 47. The GATT 47 did not contain any references to the possibility of direct effect for its provisions and, as a result, the U.S. and Japan denied direct effect. This left the Court with a policy choice. It could hold, as it had with the other international agreements, that because the GATT 47 did not preclude direct effect and because it was desirable to enhance enforcement of the agreement in the Community, the GATT 47 was directly effective. Alternatively, the Court could hold that direct effect was not appropriate for the GATT 47.
It is true, that the ECJ deferred to the wishes of the Community institutions in making this policy choice. For example, in FEDIOL III, Advocate General van Gerven noted that while Articles 1 and 2 of the New Commercial Policy Instrument "confine themselves to making a general reference to international law and to generally accepted rules...the background to Regulation 2641/84 leaves no doubt that the reference to `international law' is a reference to GATT."[81] Likewise, in Nakajima, the ECJ stated that New Basic Anti-Dumping Regulation "was adopted in accordance with existing international obligations, in particular those arising from Article VI of the General Agreement and from the Anti-Dumping Code"[82] Thus, the Court did allow the Community institutions to determine when they wished to be explicitly bound to the GATT 47 obligations in the Community legal setting.
This position may have been entirely appropriate, however, given the structure of the GATT 47. If the GATT 47 contracting parties had truly wished to have private rights of action for the agreement then they would have negotiated provisions guaranteeing such rights or at least would have provided greater specificity with respect to the domestic implementation of the agreement's provisions.[83] As Hudec has noted, while courts can certainly aid in the furtherance of an existing trade policy, governments must actually fully commit themselves to a policy before courts can perform the substantive function of judicial review.[84] Because the GATT 47 contracting parties had not committed themselves to direct effect, the ECJ's hands were not tied. In this situation, it may have been entirely appropriate for the Court not to require direct effect but instead to leave the policy choice to the Community institutions.[85]
This situation has not changed with respect to the new GATT. The GATT still does not require direct effect and the U.S. and Japan continue to deny the agreement direct effect. The Community institutions also continue to make their opposition to direct effect clear. The Commission proposal concerning the implementation of the Uruguay Round agreements stated that "it is important for the WTO Agreement and its annexes not to have direct effect [because] without an express stipulation of such exclusion in the Community instrument of adoption, a major imbalance would arise in the actual management of the obligations of the Community and other countries."[86] The Council endorsed this proposal in its decision approving the conclusion of the WTO agreement and its annexes.[87] Thus, the Community institutions continue to express a desire for the GATT not to have direct effect except in the specific instances in which they declare that they do desire direct effect.
The Court's policy position does not necessarily lead to a situation in which the Community institutions have completely unfettered discretion in the exercise of foreign trade policy.[88] The ECJ can still hold that direct effect does exist after GATT panel and WTO Appeals Body rulings. This would allow individuals and member states to enforce the Community's GATT obligations as determined by the WTO while preventing them from denying the Community of its rights under the GATT. Thus, the Court would be responsible for ensuring that the Community does either alter its law, or provide compensation if permissible, after the WTO ruled that the Community was in violation of GATT law.
The banana case, which led to the Court's denial of direct effect for the GATT in Germany v. Council, demonstrates the Community's desire to comply with its GATT obligations once they are firmly established by the WTO. On September 5, 1997, the Community lost its appeal of the GATT panel ruling which held that the Community's banana regime violated the GATT. At this time, Community officials stated that the Community would abide by the WTO Appeals Body ruling.[89] However, the Community was not able to develop a new banana regime which was GATT compatible by the October 16, 1997 deadline for submitting a proposal to implement the WTO ruling. At this time, the Community cited the complexity of the banana regime for its failure to implement the WTO ruling and stated that it might decide to pay compensation instead.[90] In either case, though, the Community clearly expressed a desire to remedy its GATT violation.
On January 14, 1998, the Community did propose a new banana regime which it claimed satisfied all of its GATT obligations. On February 13, 1998, however, the six original plaintiffs in the GATT panel ruling issued a declaration stating that this proposed regime still violated the GATT.[91] Given the complexity of implementing GATT panel rulings by means of specific performance, which is illustrated by the banana case, it may well be wise for the Court to deny direct effect for the GATT until after GATT panel and WTO Appeals Body rulings. This would not necessarily prevent individuals or member states from suing the Community to enforce compliance with GATT rulings. It would only appropriately leave the possible choice of remedy up to the Community. Thus, it is not clear that the Court's denial of direct effect for the GATT prior to a WTO ruling necessarily proves that the Court acts with protectionist motives.
[51] See, e.g., Petersmann (1986), supra note 11.
[52] See, e.g., Petersmann (1993), supra note 11.
[53] Kuilwijk, supra note 2, at 340. One should recognize, however, that the language and structure of the GATT itself is mercantilist. Within GATT parlance, reductions of tariffs and other trade barriers are termed "concessions." Because these concessions are made from the current levels of protection without regard for harmonization, it cannot be said that the GATT is intended to create a level playing field. Therefore, it may be wrong to assume that GATT provisions always maximize economic welfare and that the ECJ must have mercantilist motives for denying direct effect to the GATT. The relationship between economic theory and direct effect will be examined in more detail in section 4.1 below.
[54] Id. at 341.
[55] In the Community legal setting, the ECJ has held that a member state cannot escape a breach of its Treaty obligations by claiming that either another member state or a Community institution has breached its Treaty obligations. See, e.g., Case 232/78, Commission v. France, 1979 E.C.R. 2729, and, Cases 90-91/63, Commission v. Luxembourg and Belgium, 1964 E.C.R. 625.
The Court dealt explicitly with the issue of reciprocity of enforcement in regard to the other international agreements only in Kupferberg. The reciprocity issue arose in this case because a Swiss court had denied direct effect to a free trade area agreement similar to the EC-Portugal one. The Court concluded that the structure of the EC-Portugal free trade area agreement, in which a Joint Committee engaged in political resolution of all disputes, did not contain a lack of reciprocity. Kupferberg, supra note 3, at 3650.
[56] The U.S. GATT implementing legislation, 19 U.S.C. §102(c), provides the following:
No person other than the United States (A) shall have any cause of action or defense under any of the Uruguay Round Agreements or by virtue of congressional approval of such an agreement, or (B) may challenge, in any action brought under any provision of law, any action or inaction by any department, agency, or other instrumentality of the United States, any State or any political subdivision of a State on the ground that such action or inaction is inconsistent with such agreement.
[57] While Article 98(2) of the Japanese Constitution states that international agreements must be respected, a 1984 Kyoto District Court held that a GATT violation by the Japanese government merely triggers the right of other countries to demand negotiations and does not invalidate domestic law. This decision was affirmed by the Japanese Supreme Court which held that "a violation of a provision of GATT pressures the country in default to rectify the violation by being confronted with a request from another member country for consultation and possible retaliatory measures. However, it cannot be interpreted to have more effect than this. Therefore, it cannot be held that the legislation in question is contrary to the GATT and null and void." Jackson, Davey, and Sykes, Jr., LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC RELATIONS, 3rd edition (1995), at 224-226.
Cf., Iwasawa, "Implementation of International Trade Agreements in Japan," National Constitutions and International Economic Law, Eds. Meinhard Hilf and Ernst-Ulrich Petersmann, Deventer, The Netherlands: Kluwer, 1993, for a criticism of the Supreme Court's reasoning and an argument that the GATT should have direct effect in Japan because GATT dispute settlement resembles arbitration more than political negotiation.
[58] Of all the complaints brought between 1948 and 1989, the U.S., Japan, and the Community, or its member states, were involved as plaintiffs 62% of the time and as defendants 76% of the time. Hudec, supra note 38.
[59] Lee and Kennedy, supra note 11, at 88, argue that allowing an individual importer to successfully challenge the validity of an agreement settling a GATT dispute such as the U.S.-Japan agreement on cars and car parts could lead to a case of double jeopardy because "a state having already made concessions in other fields may then also be forced to withdraw the measure impugned by its national court." They conclude that this would then decrease the incentive to settle disputes through negotiated agreements and might threaten the functioning of the GATT. Cf., Petersmann (1991), supra note 11, for an argument that reciprocity is a bilateral concept which should not be used in a multilateral treaty such as the GATT.
[60] See, Kuijper, supra note 11, at 64, for a discussion of why a country which specifically excludes direct effect when others do grant direct effect "places itself in such a favorable position that it becomes fundamentally unfair to its trading partners."
[61] Petersmann has argued extensively that international law requires the specific performance of all international obligations, including WTO obligations, in good faith. See, e.g., Petersmann, "Constitutional Functions and Constitutional Problems of International Economic Law," Foreign Trade Law and Policy in the USA, the EC, and Switzerland (1991); Petersmann, Proposals for a New Constitution for the European Union, 32 Common Market Law Review 1123 (1995); Petersmann, Constitutionalism and International Organizations, 17 Northwestern Journal of International Law and Business 398 (1996/97).
However, it should be acknowledged that compensation has been recognized as a valid remedy in some international law contexts. This has occurred particularly in cases involving the breach of a concession agreement. For example, dictum of the Permanent Court of Justice in Chorzów Factory, PCIJ, Series A, No. 9 (1927), first suggested that while restitution was the preferred remedy, compensation would serve as a valid secondary remedy if restitution were not possible. Although the arbitrator in Texaco v. Libya, 53 ILR 389 (1974), equated restitution with specific performance, the eventual remedy in this case was the payment of compensation. And in BP v. Libya, 53 ILR 296 (1974) the arbitrator rejected the primacy of specific performance and ordered the payment of compensation.
Furthermore, Derek Bowett has argued that the US/Iranian Claims Tribunal decisions explicitly establish the international law principle that the remedy for the breach of a state contract with an alien is compensation. He claims that there is a distinction between the remedies for unlawful takings, lawful ad hoc takings, and lawful takings that are part of a general program of nationalization. In the case of an unlawful taking, he states that the appropriate remedy includes all potential profits up to the date of the judgment. The remedy for ad hoc takings is the value of the lost going concern, i.e. the value of all tangible and intangible assets, but does not include lost profits. Finally, the remedy for a taking that is part of a nationalization program is the value of the tangible assets lost. Derek William Bowett, State Contracts with Aliens: Contemporary Developments on Compensation for Termination or Breach, 59 The British Yearbook of International Law 49 (1988). These principles might be relevant if one viewed a GATT violation as equivalent to the taking of one nation's going concerns by another.
[62] Bello, The WTO Dispute Settlement Understanding: Less Is More, 90 A.J.I.L. 416 (1996), at 417.
[63] Id. See, also, Roessler, "Diverging Domestic Policies and Multilateral Trade Integration," Fair Trade and Harmonization Vol 2: Legal Analysis, Eds. Jagdish Bhagwati and Robert E. Hudec, Cambridge, MA: MIT Press, 1996, at 47, who argues that an integrated dispute settlement system under which violations of commitments in one sector can be remedied by retaliatory action in another helps preserve the entire negotiated package of concessions of the GATT.
[64] John H. Jackson, Editorial Comment: The WTO Dispute Settlement Understanding - Misunderstandings on the Nature of Legal Obligation, 91 A.J.I.L. 60 (1997).
[65] Id. at 62.
[66] Id. at 61.
[67] DSU Article 21(3)(c) states that the reasonable period of time may be shortened or lengthened in binding arbitration depending on the particular circumstances of the case. The reasonable period of time for implementation has been arbitrated in two cases- Japan and Taxes on Alcoholic Beverages and the European Communities and the Banana Regime. In the Alcoholic Beverages case, WT/DS8/15 (14 February 1997), the arbitrator rejected the Japanese argument that political difficulties in passing tax reform legislation and the adverse effects on consumers and producers demanded an implementation period longer than 15 months. In the Banana Regime case, WT/DS27/15 (7 January 1998), the arbitrator did give credence to the Community arguments that the complexity of the banana regime legislation and the need to consult the ACP countries mandated an extension of the reasonable period of time but only gave the Community one week beyond the 15 month period to implement the panel decision. Neither of these arbitration rulings touched on the issue of compensation as an alternate remedy.
[68] Andrews, In Victory for U.S., Europe Ban on Treated Beef is Ruled Illegal, N.Y. TIMES, May 9, 1997, Section A, at 1.
[69] French Agriculture Minister Vasseur went so far as to state that "France is entirely prepared to pay penalties if that is what is needed to prevent hormone-treated American meat from gaining entry to our territory." Reuters, France May Ban U.S. Meat Over Hormones, L.A. TIMES, May 12, 1997, Part D, at 2.
[70] Estimates state that the U.S. beef industry lost $250 million dollars of sales in 1996 because of the Community measure. Clark, U.S. Hails EU Beef Imports Ruling by WTO, FINANCIAL TIMES, May 10, 1997, at 2.
[71] See, Roessler, "The Constitutional Function of the Multilateral Trade Order," National Constitutions and International Economic Law, Eds. Meinhard Hilf and Ernst-Ulrich Petersmann, Deventer, The Netherlands: Kluwer, 1993, for an argument that the GATT is not really intended to resolve conflicts of interest between nations but rather within nations. Roessler concludes, however, that this calls for the constitutionalization of the GATT in domestic legal settings.
[72] These considerations point to another possible motive for the ECJ's decision not to grant direct effect to the GATT. If one looks at the ECJ as a domestic court within the GATT context, the Court may not want to grant direct effect because it does not want to make incorrect GATT decisions. That is, the ECJ may not be much different from national courts in the Community context or lower courts in a domestic context, in that it does not want to operate outside its area of expertise and risk having its decisions reversed.
[73] The fact that Kuilwijk fails to acknowledge this argument is telling as much of his critique is based on the underlying assumption that the GATT is designed to protect the individual rights of consumers. The effect of making such an assumption on the direct effect question will be explored further in section 4.1 below.
[74] Kuilwijk, supra note 2, at 105.
[75] Id., at 158.
[76] Kupferberg, supra note 3, at 3664.
[77] Kupferberg, supra note 3, at 3665.
[78] International Fruit Company, supra note 3, at 1227.
[79] Id.
[80] Kuilwijk actually implicitly recognizes the possibility of consistency in the Court's direct effect analysis by virtue of the fact that he examines the same four criteria in analyzing both the other international agreements and the GATT. Kuilwijk, supra note 2, at 106. However, the necessity to prove his thesis that the Court is deliberately protectionist prevents him from fairly acknowledging the differences in the two types of agreements and noting the consistency of the Court's analysis.
[81] FEDIOL III, supra note 3, at 1805.
[82] Nakajima, supra note 9, at 2178.
[83] See, e.g., Petersmann (1994), supra note 11, and, Hauser, "Foreign Trade Policy and the Function of Rules for Trade Policy Making," Foreign Trade in the Present and a New International Economic Order, Eds. Detlev Chr. Dicke and Ernst-Ulrich Petersmann, Fribourg, Switzerland: University Press, 1988, for discussions of this possibility.
[84] Hudec, "The Role of Judicial Review in Preserving Liberal Foreign Trade Policies," National Constitutions and International Economic Law, Eds. Meinhard Hilf and Ernst-Ulrich Petersmann, Deventer, The Netherlands: Kluwer, 1993.
[85] That is, the direct effect decision may fall into an area of law and politics where it is perhaps appropriate for the ECJ to carefully reflect on the political acceptability of its decision. See, e.g., Everling, "The Law in the External Economic Relations of the European Community," The European Community and GATT, Eds. Meinhard Hilf, Francis G. Jacobs, and Ernst-Ulrich Petersmann, Deventer, The Netherlands: Kluwer, 1986, at 98, and, Lee and Kennedy, supra note 11, at 88, for general discussions.
[86] COM(94) 414 final.
[87] Council Decision 94(800) EC, OJ L336 (22 December 1994).
[88] See, Petersmann, "Constitutional Functions and Constitutional Problems of International Economic Law," Foreign Trade Law and Policy in the USA, the EU and Switzerland, (1991), for the argument that the Court's position does lead to a situation in which the rule of law has been abandoned. He claims that it is a mistake to reject stricter constitutional and judicial controls on foreign trade policy powers on the grounds that a constitutional democracy needs unfettered powers to survive in a world of international power politics. He concludes that the lack of an effective foreign policy constitution can even undermine the effectiveness of the domestic policy constitution.
[89] Bananas: EU Agrees to Abide by WTO Ruling, EUROPEAN REPORT, September 29, 1997.
[90] EU Requests "Time to Think" Over WTO Banana Ruling, EUROPEAN REPORT, October 18, 1997.
[91] EU Agriculture Ministers Seek Second Opinion on Bananas, EUROPEAN REPORT, February 18, 1997.
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