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The General Agreement on Tariffs and Trade of 1947 was part of the Bretton Woods complex of international economic institutions established to reconstitute the international economy following the Second World War. The GATT 1947 embodied several foundational principles of international trade relations. The most important of these was the unconditional most favored nation (MFN) principle embodied in Article I. The MFN rule obligated each GATT member to extend any tariff (or related) concession granted to one GATT member to all other GATT members.
The MFN rule should have the effect of accelerating the process of trade
barrier elimination since it requires a wide dispersion of concessions among
GATT members. [12] However, there was a core
political motive for adoption of an unconditional MFN rule. In the pre-War
environment, trade concessions were widely used as an instrument of diplomacy.
Political alliances were created and maintained through economic preferences.
Since diplomatic decisions were often made for reasons apart from improving
world prosperity, an economic system in which trade concessions were used as
political instruments would be unlikely to generate a global welfare-optimizing
result. The MFN principle is intended to de-politicize the trading system so as
to reduce the chances of breakdown into a system of diplomacy-based alliances.
The net effect should be to distribute the benefits of trade widely. The MFN
principle was the key "multilateralism" provision in the GATT 1947.
When the GATT 1947 was drafted, it was recognized that some form of
accommodation would be necessary for customs unions and free trade areas. The
concept of a European economic union was already under consideration, and the
political and economic advantages of creating a pan-European market were
apparent. The GATT incorporated in Article XXIV a mechanism for relieving the
members of customs unions and free trade areas from the obligation to extend
the preferential treatment granted within the CU or FTA to non-members.
[13] The central criterion used by Article
XXIV to determine whether a CU or FTA should be allowed to maintain its
preferential character is whether its members have agreed to eliminate
substantially all tariffs and other restrictive regulations of commerce on
trade between its members. [14] This criterion
was intended as a mechanism for limiting the number of CU/FTAs since it
precluded GATT members from using Article XXIV as a cover for eliminating
tariffs on a limited number of goods. The "substantially all" criterion
demanded a seriousness of purpose.
The Article XXIV mechanism for
evaluating CU/FTAs under the GATT is much criticized. The main ground of
critique is that it does not subject CU/FTAs to meaningful review even in
respect to its own defined criteria since the outcome of the review process is
controlled by members of the CU/FTA. [15]
Customary practice of the GATT was that decisions on matters such as Article
XXIV review were made by consensus, and the members of the CU/FTA under review
had the right to block a decision that might have required them to effect a
change to their implementation plan. Just as agricultural trade barriers have
been a weak point in GATT-WTO liberalization efforts on the whole, so
agriculture has been a weak spot in the regional integration process. A number
of important regional groups have made liberalization commitments in the
agriculture area which might be problematic under a rigorous application of the
requirement that such groups eliminate substantially all tariffs and other
restrictive measures of commerce.
The WTO Agreement adds an
Understanding that clarifies elements of the GATT 1994 Article XXIV review,
[16]but none that affects the right of members
to control the outcome of the mandatory review process.
[17] The Understanding makes clear that a
non-member of a CU/FTA may bring a dispute settlement action in respect to the
application of Article XXIV, and this clarification may lead to increased
attention to the CU/FTA phenomenon from the WTO dispute settlement organs.
[18]
The Uruguay Round brought trade
in services within the purview of the WTO, and the General Agreement on Trade
in Services (GATS) establishes an additional mechanism for review of regional
services arrangements (RSAs). GATS Article V permits members of RSAs to
eliminate barriers on trade in services as among themselves without extending
these concessions to non-members, provided that such RSAs involve substantial
"sectoral" coverage, involve the elimination of substantially all
discrimination in covered sectors, and do not raise barriers to non-members
within covered sectors. [19] The inclusion of
a provision requiring that the benefits of an RSA be extended to businesses
with commercial presence within the RSA significantly ameliorates the potential
discriminatory impact of these arrangements on non-Party national service
providers. [20]
The NAFTA clearly
meets the criteria prescribed by the WTO Agreement for a free trade area (under
GATT Article XXIV) and a regional services arrangement (under GATS Article V).
By any reasonable measure, the NAFTA eliminates substantially all tariffs and
other restrictive regulations of commerce on trade between Canada, Mexico and
the United States, and eliminates substantially all barriers on trade in
services in a substantial number of sectors. [21]
The number of CU/FTAs among WTO members is
proliferating rapidly, and this trend has raised serious concern among WTO
members and in the WTO Secretariat. [22] It is
widely acknowledged, however, that if the subject of this proliferation is to
be concretely addressed, then reform of the existing review mechanisms is
required. The existing review mechanisms are not designed or applied to
significantly inhibit regionalization of the world trading system. A working
group has been established to consider this situation. This group has yet to
reach any conclusions. Since many WTO Members are party to one or more regional
integration arrangements, perhaps it is not surprising that WTO Members as a
body have not aggressively pursued additional methods to exercise control over
these arrangements.
Customs unions and free trade areas such as the
EU and NAFTA are derogations from a purely multilateral trading system. They
are systems of preference, and they are political alliances. The founders of
the GATT 1947 were concerned with preventing the international trading system
from breaking down into a system of preferential political and economic
alliances. The proliferation of regional integration arrangements appears to
carry with it a heightened risk that the multilateral trading system will break
down into a world economic system characterized by a series of regional
alliances with inter-linkages of varying types.
The NAFTA does not possess international legal personality, and is not a
member of the WTO. As a general matter, CU/FTAs are regulated by the WTO
through the participation of their nation-state members.
[23] Members of CU/FTAs are obligated to
assure that these arrangements are implemented in a manner which is
WTO-consistent. The Understanding on Article XXIV provides that CU/FTA members
are responsible for measures of regional bodies taken within their territory,
[24]thereby appearing to apportion
responsibility for operation of CU/FTAs on a territorial basis.
[25]
The European Community has
international legal personality and is a member of the WTO. The member states
of the EC also are members of the WTO. If the EC votes in the WTO, it does so
on behalf of all its member states which are members of the WTO.
[26] If a member state votes individually,
then each member state votes, and there is no separate vote for the EC. This
mixed situation of the EC in the WTO creates a complex internal governance
situation for the EC, and a complex legal situation for WTO members outside the
EC which seek to determine responsibility for EC and member state compliance
with the WTO Agreement. [27]
The juridical relationship between the NAFTA and WTO Agreement is of
considerable interest from the standpoints of policy and technical analysis of
legal norms. As a matter of policy, a decision by NAFTA negotiators whether to
accord legal priority to the NAFTA or WTO would appear to involve a choice
whether to accord a greater degree of attention and concern to more narrow
regional economic and political interests, or to broader multilateral
interests. In light of the importance that trade policy makers have ascribed to
the potential for conflict between the regional and multilateral integration
models, NAFTA negotiators might have been expected to make a clear choice in
this hierarchy of interests. Evidence from the text of the NAFTA and from the
early NAFTA dispute settlement panel reports suggests that no such overarching
policy determination was made or that, if it was made, the determination was
implemented in an uncertain manner.
The fact that the NAFTA
negotiations took place in the midst of the GATT Uruguay Round negotiations may
at least in part be responsible for the unsettled state of affairs. Yet each
set of international trade negotiations is a process that rarely occurs in
isolation from other such processes. The uncertainty surrounding the
relationship between the NAFTA and WTO Agreement may reflect the dynamic
political tensions faced by the NAFTA negotiators, tensions which continue to
influence the formation and implementation of policy in the NAFTA Parties.
[28] On one side, the NAFTA was and is
portrayed by its proponents as a means of accelerating integration on the North
American continent in a way which is consistent with the political and social
interests of a variety of disparate groups, including the business community,
labor unions and environmentalists. The NAFTA is politically justified by its
attention to interests which are more difficult to address at the WTO
multilateral level. If the results of NAFTA negotiations are placed beneath WTO
Agreement norms, then in theory this attention to regionally-specific interests
might be jeopardized by the superiority of more generalized WTO norms. There
are, therefore, political and social motivations for advocating priority for
the NAFTA.
On the other side, NAFTA negotiators were and remain well
aware of concerns among GATT-WTO Members about efforts by particular countries
and regions to gain advantages by extending regional preferences.
[29]NAFTA negotiators would be hesitant to
make a clear statement of regional legal preference that might galvanize
opposition to the agreement, or that might jeopardize future multilateral
negotiations. NAFTA negotiators may well have maintained a preference for
multilateralism among themselves, yet nevertheless have been reluctant to
clearly express such preference in the NAFTA because this might be found
objectionable by interest groups within the region whose support was required
to assure successful conclusion of the agreement.
Though the
NAFTA-WTO hierarchy of norms is uncertain, and while such uncertainty is bound
to lead to or exacerbate future NAFTA disputes, [30] the political and social forces which impelled the
initial state of ambiguity have not dissipated. While interests in political
stability and economic efficiency might be enhanced through the clarification
of this matter by the NAFTA Parties through the adoption of a clarifying
amendment or an inter-governmental understanding, the Parties may be in no more
favorable position to agree on such a clarification in the year 2000 than they
were in 1993. [31]
The legal relationship between the NAFTA and the WTO Agreement is
determined by examining the text of the treaties, the context in which the
treaties were made, and the rules of international law that govern the
relationship between treaties concerning the same or similar subject matter.
[32] Both the NAFTA and WTO Agreement are
written agreements between states governed by international law, and therefore
are "treaties" within the definition prescribed by the Vienna Convention on the
Law of Treaties (VCLT). [33]
The VCLT
provides that when states are parties to treaties governing the same subject
matter, the latter in time treaty takes precedence over the earlier in time.
[34] The NAFTA entered into force on January
1, 1994 and the WTO Agreement entered into force on January 1, 1995. The NAFTA
Parties are each original Members of the WTO. Though this temporal sequence
might suggest that the WTO Agreement prevails over the NAFTA, there are a
number of factors involving the express text of the NAFTA and the context in
which the two agreements were made that raise doubts about this general
proposition.
The NAFTA text incorporates a general principle
regarding its relationship to other international agreements. It also
incorporates a number of specific provisions concerning its relationship to
other international agreements.
The NAFTA provides:
Article 103: Relation to Other Agreements
1. The Parties affirm their existing rights and obligations with respect to each other under the General Agreement on Tariffs and Trade and other agreements to which such Parties are party.
2. In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided by this Agreement.
Article 104, NAFTA, provides an exception from the general rule of
Article 103(2). Obligations in certain environment and conservation agreements
(such as the Basel Convention on Transboundary Movement of Hazardous Waste) as
listed in Article 104, NAFTA, expressly prevail over NAFTA rules in the event
of inconsistency.
Article 301(1), NAFTA, as example, is a specific
NAFTA rule that defines a relationship with the GATT-WTO Agreement. It states:
Article 301: National Treatment
1. Each Party shall accord national treatment to the goods of another Party in accordance with Article III of the General Agreement on Tariffs and Trade (GATT), including its interpretative notes, and to this end Article III of the GATT and its interpretative notes, or any equivalent provision of a successor agreement to which all Parties are party, are incorporated into and made part of this Agreement.
There are various other provisions of the NAFTA which are directed to
defining relations with the GATT. [35]
The express text of Article 103(1), NAFTA, affirms existing obligations
among NAFTA Parties under the GATT and provides that the NAFTA prevails over
the GATT to the extent of any inconsistencies. Article 103(2) does not
expressly provide that the NAFTA prevails over any later in time agreements. By
way of contrast, for example, Article 301(1), NAFTA, expressly refers to a
"successor agreement" to the GATT. [36]If
NAFTA negotiators had intended that the NAFTA would in general take priority
over the agreements resulting from the Uruguay Round negotiations (i.e.
the WTO Agreement and related agreements), they might have referred to such
"successor agreement(s)" in Article 103, NAFTA.
Consider, however,
that reference to "successor agreement(s)" to the GATT may have a broader
meaning than reference to the GATT standing alone. The GATT 1994 is
incorporated as a Multilateral Trade Agreement binding on all WTO Members in
the WTO Agreement. The GATT 1994 is identical to the GATT 1947 which was an
agreement existing among the NAFTA Parties when the NAFTA was concluded. The
WTO Agreement specifically incorporates the acquis of interpretations
and understandings with respect to the GATT 1947 into its legal framework, and
signals an intention that there be a continuity between the GATT 1947 and GATT
1994.[37] The GATT 1994, as incorporated into
the WTO Agreement, is effectively an agreement to which the NAFTA Parties were
party when they entered into the NAFTA. This provides a basis for concluding
that the NAFTA continues to prevail over the GATT 1994 within the meaning of
NAFTA Article 103.
However, this conclusion may be undercut by
specific language in the WTO Agreement which states that the GATT 1947 and GATT
1994 are "legally distinct." [38] If the GATT
1994 is a new agreement only considered to have entered into force on January
1, 1995 (as part of the WTO Agreement), then it would not fall under the
express priority rule of NAFTA Article 103 with respect to existing agreements.
Yet the reason why the WTO Agreement creates a legal distinction between the
GATT 1947 and GATT 1994 was not to create a break in continuity between the
rights and obligations of the parties to the two agreements. The legal
distinction was provided for with the specific intention of facilitating the
institutional transition between the GATT and the WTO by allowing some members
of the old GATT to delay their entry into the WTO by remaining members of the
former institution, at least for a transition period.
[39] Outside of facilitating this transition,
the negotiators clearly signaled an intention not to break continuity between
the GATT 1947 and GATT 1994.
Whether the "General Agreement on
Tariffs and Trade" referred to in the NAFTA Article 103 rule of priority is
limited to the GATT 1947, or whether it encompasses also the GATT 1994, is not
susceptible to a categorical answer. If the NAFTA Article 103 reference to the
GATT is understood to encompass the GATT 1994, the resulting priority rule is
inelegant because the WTO Agreement incorporates significantly more than the
GATT 1994, including the new area agreements of the GATS and TRIPS, and a
number of supplemental agreements in areas such as technical standards and
agriculture. The NAFTA might take priority over the GATT 1994 and a limited
number of supplemental agreements, and yet not take priority over other WTO
Agreements. [40] The full panoply of WTO
Agreements might constitute the "successor agreement(s)" to the GATT referred
to elsewhere in the NAFTA.
The use of the term "successor
agreement(s)" to the GATT in contexts outside the Article 103 rules of priority
does not neatly resolve the uncertainty. Consider Article 301(1) of the NAFTA
as illustration. In that article the Parties incorporate GATT Article III and
its interpretative notes. This express incorporation encompasses the comparable
provision of a GATT "successor agreement". Yet if the negotiators of the NAFTA
thought that the results of the Uruguay Round would take priority over the
NAFTA by way of Article 103, the reference to a GATT successor agreement in
Article 301(1) would be superfluous. The new GATT or WTO article would by
operation of international law take priority over the old NAFTA and/or GATT
rule. We might conclude that the reference to "successor agreement" was
included in NAFTA Article 301(1) because its drafters assumed that the NAFTA
would otherwise take priority over the GATT resulting from the Uruguay Round.
Article 301(1) of the NAFTA may have been drafted to add clarity to a
particular part of the NAFTA, but it does not resolve ambiguity surrounding the
meaning of Article 103, NAFTA.
The first two cases decided under the
NAFTA general dispute settlement procedure, considered infra, reflect
the uncertainty surrounding the issue of NAFTA-GATT-WTO priority.
Determining as a matter of international law which obligation should
prevail in relations between states is different from determining what
authority should decide a dispute between these states. It is possible for a
dispute settlement authority to be limited in regards to which rules it may
apply in a dispute by the terms of its charter. Ultimately, states are bound in
their relations by the superior norms to which they have agreed, even if they
have not conferred on a particular dispute settlement body the authority to
make a determination concerning their rights and obligations. The question
whether NAFTA or WTO rules will take priority in a particular case involving
Canada, Mexico and the United States is distinct from the question which
dispute settlement authority will decide the case.
The NAFTA Chapter
20 dispute settlement rules generally permit a complaining Party to elect
either NAFTA or GATT-WTO dispute settlement in cases arising under both
agreements. [41]An exception is made in
respect to claims involving environmental, SPS and technical standards matters,
as to which the responding Party may demand that the matter be settled by a
NAFTA panel. [42] NAFTA Chapter 20 provides
that once a dispute settlement procedure is initiated in either the NAFTA or
GATT forum, and subject to the right of a responding Party to demand NAFTA
dispute settlement on environment-related claims, "the forum selected shall be
used to the exclusion of the other." [43] The
default terms of reference for a NAFTA panel are:
To examine, in the light of the relevant provisions of the Agreement, the matter referred to the Commission (as set out in the request for a Commission meeting) and to make findings, determinations and recommendations as provided in Article 2016(2).
The report of a panel is adopted by a majority of panelists. Panels are not empowered to issue orders to the Parties. The determinations of the panels are instead referred to the Parties for implementation. Article 2018 of the NAFTA provides:
1. On receipt of the final report of the panel, the disputing Parties shall agree on the resolution of the dispute, which normally shall conform with the determinations and recommendations of the panel, and shall notify their Sections of the Secretariat of any agreed resolution of any dispute.
2. Wherever possible, the resolution shall be non-implementation or removal of a measure not conforming with the Agreement or causing nullification or impairment ... or, failing such a resolution, compensation.
Failure by the Party in default to implement an adequate solution
entitles the aggrieved Party to withdraw concessions.
Just as there
is ambiguity surrounding the question whether NAFTA or WTO rules prevail in the
event of inconsistency, so there is ambiguity surrounding the question whether
NAFTA panels may apply the law of the WTO in cases before them. On one hand,
since the NAFTA expressly contemplates that claims arising under both
agreements may be brought under NAFTA Chapter 20, it can be argued that the
NAFTA implicitly allows the panelists to consider the law of the WTO. The NAFTA
accepts that cases involving the Parties may involve overlapping rules and
overlapping jurisdiction. If NAFTA panels are precluded from examining both
sets of rules, then it cannot completely adjudicate a claim, and the Parties
might be required to pursue a second proceeding in the WTO before a case is
resolved. Since the NAFTA demands that the first selected forum be used to the
exclusion of the other, it is clear that such dispute settlement procedures
should -- at the least -- take place in sequence.
On the other hand,
Article 2004, NAFTA, expressly provides that the Chapter 20 procedures shall
apply with respect to interpretation or application of "this Agreement".
Similarly, the NAFTA default terms of reference for panels refer to
determinations under "this Agreement". On the basis of this language which
identifies a specific legal instrument, it might be argued that only NAFTA
rules may be applied in a proceeding, at least as to matters in which the
Parties do not agree on alternative terms of reference incorporating WTO rules.
[44]
If the Parties accept that a
case arises under both the NAFTA and WTO, and yet a NAFTA panel may not
consider and apply WTO rules, a Party found in default which considers that WTO
issues were not adequately addressed may argue that it should not resolve the
claim (by withdrawing offending measures, etc.) until its WTO claim is
considered at the WTO. Though the NAFTA provisions on implementation may
authorize the NAFTA complainant to withdraw concessions based on the NAFTA
panel determination, a conflicting WTO result could authorize an off-setting
suspension of concessions.
The first NAFTA claim decided under the Chapter 20 procedure involved an
alleged conflict between WTO and NAFTA obligations. Prior to entry into force
of the NAFTA, Canada maintained certain agricultural quotas. The NAFTA
authorized Canada to maintain those quotas (by reference to an earlier
provision in the Canada-United States Free Trade Agreeement) (CUSFTA). The WTO
Agreement on Agriculture required Canada to eliminate its agricultural quotas,
which Canada (as other WTO Members) was entitled to accomplish by
tariffication. [46] Tariffs would replace
quotas. However, the NAFTA provides that its Parties may not raise tariffs
(including on agricultural products), and when Canada imposed new tariffs on
agricultural products from the United States, the United States objected and
filed a NAFTA complaint.
Canada argued that it was required by the
WTO Agreement to tarifficate its quotas, and that in any case it was allowed to
tarifficate its quotas under the NAFTA because it expressly "retained" certain
rights to restrain agricultural imports negotiated under the GATT. The United
States argued that the WTO Agreement did not obligate tariffication of quotas,
it only authorized tariffication. Canada might have eliminated its quotas
without imposing tariffs that violated the NAFTA, and without violating the WTO
Agreement. The United States further argued that the rights that Canada
retained under the GATT were limited to those that had been exercised when the
NAFTA entered into force, and that Canada could not thereafter adopt new
measures that were inconsistent with the NAFTA. [47]The NAFTA panel had to decide whether Canada's retention
of rights under the GATT included the authority to take new action under an old
GATT rule.
The panel observed that the NAFTA uses a variety of terms
and formulations to address relations between the GATT and WTO, as well as with
the CUSFTA. The panel said:
The interpretation of these agreements is complicated by a number of factors. The NAFTA incorporates obligations from other agreements including both the [CUS]FTA and the GATT. The terminology used in the drafting of the various provisions, both within and across these agreements, is not marked by uniformity or consistency. As discussed more fully below, words like "existing", "retain" or "successor agreements", appear in some contexts yet do not appear in others where their presence may have been thought apposite. As a result, the Panel has been faced not only with the task of determining meaning from the presence of certain words, but also with the more difficult task of divining meaning from the absence of particular words." [48]
The panel ultimately determined that the term "retain" as used in the
CUSFTA, and incorporated by reference in the NAFTA, does not import a temporal
limitation on the exercise of rights by Canada. A right that is "retained" may
be exercised in the future. Canada's retained rights under the GATT (and
agreements negotiated under the GATT) were not limited to those that had been
expressly exercised prior to the NAFTA, but could include rights exercised in
the future. Because Canada retained rights to impose agricultural restrictions
under the GATT, Canada could tarifficate its agricultural quotas in spite of
the NAFTA's prohibition of new tariffs. [49]
The panel notes at several points that the NAFTA
uses the term "successor agreement" to the GATT when it intends to make clear
that Uruguay Round results are to be included in relation to the NAFTA, but the
panel also observes that the NAFTA's terminology is sufficiently inconsistent
that general guidelines for interpretation are difficult to extract.
[50]There is no sweeping conclusion to be
drawn from the Canadian Agricultural Tariffs panel report in regard to whether
the NAFTA generally takes precedence over the GATT 1994. The panel effectively
confirms that this matter will require further sorting out in the context of
specific cases.
The second case to come before a NAFTA Chapter 20 dispute settlement
panel directly raised the question whether NAFTA panels are authorized to
adjudicate claims arising under both the NAFTA and WTO-GATT. In the Broom Corn
Brooms case, [51] Mexico objected to the
manner in which the United States had imposed safeguard measures against
imports of Mexican brooms. Mexico argued that the United States action failed
to apply the appropriate injury test under the GATT Article XIX safeguards
provision, which provision contains language equivalent to the language of the
NAFTA Chapter 8 safeguards text. Since Article 802(1) of the NAFTA provides
that "Each Party retains its rights and obligations under Article XIX of the
GATT or any safeguard agreement pursuant thereto ..", Mexico considered that it
was entitled to rely on GATT language and dispute settlement precedent under
which the U.S. safeguard action was allegedly taken upon an overly narrow
definition of injury to domestic industry.
The panel did not decide
whether it was authorized to adjudicate GATT legal claims. It found that the
United States had failed to comply with certain procedural rules that are
common to the NAFTA and GATT, and that Mexico's claim could be addressed at the
present stage by application of the NAFTA alone. [52] However, the panel summarized the legal arguments of the
United States and Mexico on this issue in a concise manner.
27. The United States argued that the Panel did not have jurisdiction to adjudicate legal claims based on the obligations of GATT Article XIX and the WTO Agreement on Safeguards. The United States took the position that both the Panel's terms of reference and the general provisions of Chapter Twenty under which the Panel was created limited the Panel's competence to legal claims based on NAFTA obligations. The United States thus argued that the Panel could not consider GATT obligations unless they had somehow been adopted by incorporation into the NAFTA agreement. In the view of the United States, the provisions of NAFTA Article 802, the NAFTA provision reserving to member governments the right to employ global safeguards authorized by GATT Article XIX and the WTO Agreement on Safeguards, did not incorporate the legal obligations of those GATT/WTO provisions into the NAFTA agreement [53].... The United States took the position that ... it was the intention of the parties that claims based upon the GATT/WTO safeguards provisions themselves would have to be pursued through the GATT/WTO dispute settlement mechanism.
28. Mexico noted that NAFTA Article 2005(1) generally gives parties the right to initiate dispute settlement either in GATT or in NAFTA whenever a dispute involves a matter "arising under both this Agreement and the General Agreement on Tariffs and Trade ." In Mexico's view [54]... the present dispute does "arise" under both NAFTA and GATT/WTO within the meaning of Article 2005(1), and therefore can be brought in either a NAFTA or a GATT/WTO forum. Furthermore, since NAFTA Article 2005(6) provides that once a NAFTA or GATT forum is selected that forum "shall be used to the exclusion of the other," a NAFTA forum selected under Article 2005(1) necessarily has jurisdiction to dispose of all overlapping GATT issues involved in that dispute.
The text of the NAFTA, including the dispute settlement chapter, allows
for reasoned argument on each side of the issue. The United States relies on
portions of NAFTA Chapter 20 referring to "this Agreement" and its standard
terms of reference, as well as differences in how references to the GATT are
styled in the NAFTA text. The United States accepts that its position would
demand that Mexico pursue claims in both the NAFTA and WTO to vindicate rights
(or assert defenses) that differ under the two agreements. The Mexican
government relies on the fact that the NAFTA Parties have authorized claims
arising under both agreements to be brought in the NAFTA (or WTO) as evidence
that the Parties must have intended that the panels charged with deciding cases
could apply both sets of rules, particularly in light of language that makes
the selected forum the exclusive one. [55]
It would be difficult on the basis of the NAFTA text to conclude
whether the Parties intended WTO-GATT rules to be considered by NAFTA panels
only in those cases in which the NAFTA appeared to directly incorporate
WTO-GATT rules. On a policy level, the U.S. position demands careful forum
shopping on the part of a prospective claimant. It would lead to delays in the
resolution of disputes as NAFTA Parties assert rights to pursue back-to-back
claims. It would appear to encourage political friction as Parties refuse to
reach adjudicated settlement of disputes pending lengthy procedures in two
fora.
There is no reason to believe that NAFTA panelists are any less
qualified than WTO panelists to determine the right of Parties under the WTO
Agreement. If, however, WTO dispute settlement is precluded once the NAFTA
panel procedure is initiated, this may result in reduced access by NAFTA
Parties to more comprehensive evaluation of claims as may be provided by the
more extensive WTO Dispute Settlement Understanding (DSU) (in particular,
Appellate Body review). Allowing NAFTA panels to adjudicate GATT-WTO legal
claims would perforce raise the possibility of a unique NAFTA jurisprudence on
WTO law.
Legal specialists are used to dealing with different court
interpretations of the same rules, and this prospect does not appear to raise
immediate concerns. However, assuming that over the long term a body of
regional WTO law that differed from authoritative WTO DSU law developed and
that this appeared to be causing difficulties, ways to address this problem
could be devised. The development of a procedure by which NAFTA or other
regional panel decisions could be subject to WTO Appellate Body review might
ultimately emerge, though this is not to discount potential political obstacles
to this result.
At a more modest level, there seems no reason based
on the text of the NAFTA or as a matter of policy why Parties to a NAFTA
dispute should not be allowed to decide on terms of reference in particular
cases authorizing panels to determine GATT-WTO legal issues. The WTO DSU itself
accepts that WTO Members may agree to resolve claims through arbitration,
albeit "within the WTO" and subject to WTO rules on surveillance and suspension
of concessions with respect to awards. [56]The
WTO Agreement contemplates that a body of arbitral jurisprudence outside the
formal Appellate Body/DSB system may develop.
Two fundamental issues
involving the juridical interface between the NAFTA and WTO have been examined.
The first is which agreement - the NAFTA or WTO - takes priority as among the
NAFTA Parties. There remains no categorical answer to this question. The NAFTA
text was drafted prior to conclusion of the GATT Uruguay Round. Negotiators
sought to address the prospects of a future agreement in different ways, and
perhaps without adopting an overarching view on the matter. As a consequence,
unless and until the NAFTA Parties decide to clarify this question by agreeing
to a definitive interpretation, the matter will be resolved through the
accumulation of a body of decision by government officials and dispute
settlement panels.
The second issue is whether NAFTA dispute
settlement panels may adjudicate WTO Agreement-based claims. Again, the NAFTA
text does not provide a clear answer. There are good policy reasons to allow
panels to consider WTO rules, but it may be necessary for the Parties to agree
to such consideration in prescribing their terms of reference. If NAFTA panels
cannot consider WTO claims, there is likely to be delay and political
controversy in the resolution of disputes.
The WTO Agreement does not directly address the issue of its
relationship with other international agreements as does the NAFTA, although it
does address the inter-relationship of its own component agreements, and the
status of its predecessor agreements. The WTO Agreement provides that it is
binding on all WTO Members, [57] and it
provides that each Member "shall ensure the conformity of its laws, regulations
and administrative procedures with its obligations as provided in the annexed
Agreements." The absence of a clearly defined relationship between the WTO
Agreement and other international agreements has been a source of concern and
controversy, particularly in relation to environmental agreements and measures,
and the WTO Committee on Trade and Environment has had this issue under
consideration for a number of years. [58]GATT
dispute settlement panels, and more recently the WTO Appellate Body, have
rendered several decisions in which the issue of the relationship between the
WTO Agreement and other international agreements is considered.
Until
very recently, GATT-WTO panels have shown considerable hesitancy in considering
legal rules from outside the GATT- WTO, although the possibility has not been
excluded. [59]In adjudication of claims under
the TRIPS Agreement, the WTO DSB will necessarily consider legal claims outside
the narrow confines of the WTO Agreement since the TRIPS Agreement incorporates
by reference terms, inter alia , from the Paris and Berne Conventions.
[60] However, because terms of these
agreements are incorporated by reference in the TRIPS Agreement, such
consideration may not necessarily provide a foundation for adjudicating rights
under non-incorporated agreements, for example, regional agreements.
A potentially far reaching development in GATT-WTO jurisprudence is evidenced
in the recent Shrimp-Turtles decision of the WTO Appellate Body. In the
Shrimp-Turtles case the WTO Appellate Body extensively consulted agreements and
context outside the WTO Agreement as an aid in interpretation of key provisions
of the GATT 1994. [61] Although the
Shrimp-Turtles decision does not directly involve the application of treaty
norms outside the WTO Agreement to resolve a WTO dispute, the Appellate Body's
extensive consultation of non-WTO sources of law in aid of interpretation
suggests a willingness on the part of the Appellate Body to put an end to the
view of the GATT-WTO as a self-contained legal regime.
If the
Appellate Body is prepared to construe GATT 1994 norms in the context of
multilateral environmental agreements, then it may also be prepared to construe
the WTO rights and obligations of WTO Members in the context of their regional
treaty commitments. For example, assume that NAFTA Parties agreed to require
compliance with certain health and safety -related labor standards in the
production of goods. One NAFTA Party then prohibited the import of goods
produced in another NAFTA Party in breach of this obligation. If the NAFTA
Party whose imports were blocked sought relief under the WTO DSU because of an
alleged breach of GATT Article XI (prohibition of quotas), the Appellate Body
might consider whether the express agreement by the NAFTA Parties to enforce
labor standards by trade measures might - as between those specific Parties -
provide a justification under GATT Article XX(b) for the protection of human
health, even if it would not otherwise justify a multilateral exception to
Article XI applicable to other WTO Members.
The prospective problem
that arises regarding application of non-WTO norms among parties to specialized
agreements is that the WTO would develop separate bodies of jurisprudence
applicable to limited numbers of its Members. Conceptually, this may not appear
a significant problem to the lawyer trained to deal with court decisions
limited in application among the parties to specific disputes. However, the
"single undertaking" characteristic of the Uruguay Round result was a major
achievement for the new WTO that eliminated the balkanized legal system that
prevailed following the Tokyo Round. WTO Members (and the Appellate Body) may
be reluctant to introduce a system of jurisprudence that might appear to create
different tiers of obligation. [62] This
reluctance might be overcome by careful attention to compartmentalizing
specialized rules, but it is important to call attention to the issues
involved.
There appears to be a trend in WTO jurisprudence toward
willingness to apply agreements outside the WTO Agreement to disputes among
Members, and this willingness might extend to the application of regional
integration agreements. There are prospective problems raised by the
development of specialized jurisprudence within the WTO legal system which
deserve careful study.
There is no provision of the WTO DSU that specifically contemplates the adjudication of legal claims outside the WTO agreements. Just as the NAFTA default terms of reference refer to consideration of the NAFTA, the default WTO DSU terms of reference for panels refer to examination of WTO agreements. [63] Though there is little precedent under which a WTO panel might adjudicate a NAFTA claim as between the NAFTA Parties, the WTO text does not appear to preclude such adjudication. There are policy arguments which might favor such action. As with respect to the NAFTA, there is a basic issue of adjudicatory and political economy. If the NAFTA Parties have claims arising under both the NAFTA and WTO Agreement, there may be no point in requiring two adjudications. WTO panelists and the Appellate Body would certainly be competent to review NAFTA rules. A more expeditious resolution of a dispute seems likely to mitigate political conflict. In those cases in which the NAFTA Parties to a WTO dispute agree on terms of reference which authorize the WTO DSB to consider NAFTA rules, there would appear to be constructive reasons to allow this.
The legal relationship between CU/FTAs and the GATT-WTO has been
explored at some length by the European Court of Justice. The ECJ has
consistently given priority to the EC Treaty over the GATT and WTO Agreement.
The ECJ has made two fundamental determinations regarding the relationship
between the EC Treaty and the GATT-WTO Agreement. The first was that the GATT
1947 is not directly effective in the law of the member states since the
"spirit, the general scheme and the terms" of the Agreement do not import such
effect. [64] The Council of the European
Communities, in a recital to its decision authorizing the ratification of the
WTO Agreement, expressed its support for carrying this view over to the new WTO
Agreement. [65] The legal effect of the
Council's declaration is not yet known. The ECJ's view on the direct effect of
the GATT 1947 is qualified to some extent by a decision that direct application
is possible if the Council has acted to incorporate a GATT obligation into EU
law. [66]
The second fundamental
determination made by the ECJ was that the GATT 1947 does not bind the EC in
its relations with its member states. [67] In
Germany v. Council , Germany invoked the GATT 1947 to challenge the
lawfulness of the EC banana regulations. It argued that the EC's adherence to
the GATT precluded the Council from adopting and applying regulations which
were GATT-illegal, and that Germany had the right to rely on these GATT
obligations in a dispute with the Council. The Court of Justice said that
Germany was bound by Community legislation - even if it had cast its vote
against that legislation - and that the Council had the inherent power to act
in a GATT-inconsistent manner if it chose to do so.
[68]
Should NAFTA rules as a general policy matter have priority over WTO
rules in the event of inconsistency? There are good arguments on both sides.
Priority of WTO rules would appear to encourage multilateralism. Priority of
NAFTA rules might result in more rapid progress in addressing social issues
within the context of regional integration, and the resulting rules might
provide a constructive model for the multilateral system.
The present
approach which is largely based on application of a "last in time" rule has
manifest drawbacks. The NAFTA and WTO Agreement are each likely to be subject
to continuing amendment, and this could lead to a rather confused situation
about which rule governs in particular circumstances. Some clarification of
general principles among the NAFTA Parties would help to avoid misunderstanding
and mitigate future disputes. However, in light of the various political and
social pressures affecting the Parties, the present ad hoc approach may
be the rule for some time.
[8]The first two NAFTA Chapter 20 panel
decisions are discussed infra at [].
[9]The NAFTA includes a separate dispute
settlement mechanism in respect to antidumping and countervailing duty
(AD/CVD)-related complaints (Chapter 19, NAFTA). The NAFTA contains no rules
regarding the substance of the AD/CVD laws of the Parties, requiring only that
each Party act in domestic AD/CVD actions in compliance with its own laws. In
the AD/CVD dispute settlement system, arbitral panels constituted on a
case-by-case basis make decisions as to whether a country Party has complied
with its own AD/CVD laws in a particular action. The decisions of AD/CVD panels
are directly binding on the country Parties. There are approximately 30
completed or active Chapter 19 panels reviewing AD/CVD decisions of Canadian,
Mexican and U.S. administrative authorities. NAFTA Secretariat,
www.nafta-sec-alena.org, August 13, 1998.
[10]The NAFTA also permits investors of
Parties to pursue third party arbitration against a host government in the
International Centre for the Settlement of Investment Disputes (ICSID) or under
UNCITRAL rules. NAFTA, arts. 1115, et seq . See Law and Policy,
at 102. The NAFTA obligates the Parties to make adequate provision for the
enforcement of resulting arbitral awards. Several proceedings based on NAFTA
investment rules have been initiated in the ICSID by U.S. nationals against the
government of Mexico, and claims both by U.S. nationals against the government
of Canada and by Canadian nationals against the government of the United States
have been initiated or threatened.
[11]The Parties may each elect to limit applicable tariffs to
the single highest tariff payable in any NAFTA Party (so as to avoid double
tariffing).
[12]A counter-argument
can be made that trade barrier reductions will be faster under bilateral or
minilateral negotiating strategies since governments may be more willing to
grant concessions to a limited number of countries for particularized reasons.
This counter-argument in part provides the theoretical basis for the customs
union/free trade area exception to the MFN principle.
[13]For details on Article XXIV, see
Law and Policy, Chapter 3.
[14]The
additional main criteria are that the members of a CU do not "on the whole"
establish external tariffs higher than those in place in each member prior to
the formation of the CU, and that the members of an FTA do not individually
raise their external tariffs.
[15]See, e.g. Frieder Roessler, The Relationship
Between Regional Integration Agreements and the Multilateral Trade Order ,
in REGIONAL INTEGRATION AND THE GLOBAL TRADING SYSTEM 311, 323 (Kym Andersen
& Richard Blackhurst eds., 1993).
[16]Understanding on the Interpretation of Article XXIV of
the General Agreement on Tariffs and Trade 1994.
[17]These amendments include a presumption
that a reasonable time for implementing the reduction of tariff and related
barriers is ten years (para. 3), and a mechanism for calculation of "on the
whole" tariff rates of customs unions (para. 2).
[18]Understanding on Article XXIV, para. 12.
[19]GATS, art. V:1. For details on
GATS Art. V, see Law and Policy, Chapter 3.
[20]GATS, art. V:4.
[21]The commitments of the Parties in the
areas of goods and services are reviewed for their GATT Article XXIV and GATS
Article V compatibility in Law and Policy, Chapters 4 and 5.
[22]See Renato Ruggiero (WTO Director
General), Regional Initiatives, Global Impact: Cooperation and the
Multilateral System , Nov. 7, 1997, speech to the 3 rd
Conference of the Transatlantic Business Dialogue, Rome (www.wto.org, visited
July 5, 1998).
[23]WTO membership is
not limited to nation-states, but may include autonomous customs territories.
WTO Agreement, art. XII.
[24]Understanding on Article XXIV, at paras. 13 & 14.
[25]Alternative bases for
attributing responsibility to CU/FTA members, such as joint liability for
measures taken pursuant to mandatory provisions of a CU/FTA agreement, are a
conceptual possibility.
[26]Stefan
Riesenfeld has pointed out that difficulties will arise if the EC admits new
member states which are not also members of the WTO. So far this has not
happened. See Stefan A. Riesenfeld, The Changing Face of Globalism
, in PUBLIC POLICY AND GLOBAL TECHNOLOGICAL INTEGRATION 67 (F.M. Abbott
& D.J. Gerber eds., 1997).
[27]The European Court of Justice has acknowledged some of
the difficulties inherent in "mixed" EU/member state treaties in its advisory
opinion on EC-member state adherence to the WTO Agreement. See Re
The Uruguay Round Treaties (Opinion 1/94) , Court of Justice of the
European Communities, [1995] 1 CMLR 205, 15 Nov. 1994.
[28]See generally, Foundation-Building,
supra note [].
[29]The
Canada-United States Free Trade Agreement (CUSFTA) which entered into force in
1989 was reviewed by a GATT Article XXIV Working Party. The Working Party did
not make any recommendations in respect to the CUSFTA, but rather limited
itself to preparing a summary of members' observations. A concern expressed by
a number of members of the Working Party was that the CUSFTA was given legal
priority over the GATT in trade relations between Canada and the United States.
No Article XXIV working party prior to the CUSFTA review had made any
recommendation -- affirmative or negative -- with respect to a CU/FTA.
Subsequent to the CUSFTA review, a working party recommended approval without
condition of the free trade area between the Czech and Slovak Republics. See
Law and Policy, at 41-42.
[30]Interestingly enough, the first two cases brought before
NAFTA Chapter 20 dispute settlement panels have involve questions of defining
the NAFTA-WTO legal relationship. The first - the Canadian Agricultural
products case (Canada/US) - is largely devoted to resolving a NAFTA/WTO
relational issue. The second case - Broom Corn Brooms (Mexico/US) - saw a
NAFTA/WTO relational issue extensively argued, but the panel found it
unnecessary to resolve the issue in its disposition of the case.
[31]In a 1995 book, this author identified
some aspects of this legal relationship, and suggested that it might be some
time before definitive pronouncements could be made, saying:
Because of the number of contextual factors involved in defining this relationship, it may be some years before an authoritative definition of the relationship emerges, whether through action taken by the NAFTA Parties to expressly establish the relationship, or through an accumulation of dispute settlement panel opinions that may establish a common law of interpretation.
Law and Policy, at 107.
[32]On the relationship among treaty norms , see generally
, PARLIAMENTARY PARTICIPATION IN THE MAKING AND OPERATION OF TREATIES: A
COMPARATIVE STUDY (S.A. Riesenfeld & F.M. Abbott eds., 1992)
[33]Although the United States has not
ratified the VCLT, it accepts that the VCLT substantially reflects customary
international law applicable to treaty relations. Canada and Mexico are parties
to the VCLT.
[34]VCLT, art. 30(3).
The parties to successive treaties may elect to vary this general rule by
agreement.
[35]Article 710, NAFTA,
sets forth a rule displacing Article 301, NAFTA, and its incorporation of
Article III of the GATT (as just stated above), in regard to NAFTA sanitary and
phytosanitary measures. NAFTA sanitary and phytosanitary rules are not governed
by Article III (or XX(b)) of the GATT, notwithstanding the terms of Article
301(1) of the NAFTA.
[36]The NAFTA
refers to GATT successor agreement(s) in a number of provisions, including in
the dispute settlement chapter, which is examined infra.
[37]WTO Agreement, art. XVI:1.
[38]Id., art. II:4.
[39]When the Uruguay Round was concluded, it
was not clear that all former GATT Contracting Parties would choose to join the
new WTO. At least for a transition period, it was contemplated that some states
might remain parties to the GATT 1947, and that relations between them, and
relations between them and Members of the new WTO would need to be defined. It
was foreseen that for an interim period two legally distinct agreements might
be needed. See First Report of the Committee on International Trade Law
, International Law Association, 66th Conf. (Buenos Aires, Aug.1994) (E.U.
Petersmann and F.M. Abbott, Rapporteurs). As it happens, they were not. All
GATT Contracting Parties became original Members of the WTO.
[40]The subject matter of these new area
agreements is generally outside the scope of the GATT 1947 and does not appear
to fall within the GATT continuum. There may be a gray area surrounding certain
of the WTO agreements that supplement the GATT 1994, since these supplemental
agreements in some cases embody GATT 1947 practices and in others largely
embody Tokyo Round Agreement rules.
[41]Art. 2005(1), NAFTA, refers to cases arising under the
GATT or "any successor agreement".
[42]Art. 2005(3) & (4), id.
[43]Art. 2005(6), id.
[44]Such difficulties might be avoided if the
Parties are able to agree on terms of reference which authorize a NAFTA panel
to consider both agreements, though this might indeed lead to difficulties in
the WTO if a NAFTA Party suspended concessions based solely on a NAFTA panel
determination. Difficult questions also are raised when considering whether the
WTO Dispute Settlement Body (DSB) may consider NAFTA rules in the context of
claims also arising under the WTO Agreement. The WTO Dispute Settlement
Understanding (DSU) does not make reference to agreements outside the WTO
Agreement, and a WTO panel may be presented with a claim in which conflicting
NAFTA and WTO rules might yield different results. This is considered
infra.
[45]Final Report of the
Panel in the Matter of Tariffs Applied by Canada to Certain U.S.-Origin
Agricultural Products, 1997 BDIEL AD Lexis 24, at 123 [hereinafter Canada Panel
Report].
[46]The Agreement on
Agriculture requires WTO Members to reduce tarrificated quotas over time.
Regarding the WTO Agriculture Agreement, see generally , UNDERSTANDING
TECHNICAL BARRIERS TO AGRICULTURAL TRADE (David Orden and Donna Roberts eds.,
1997).
[47]The United States also
argued that the rights Canada retained only extended to the imposition of
quotas, so that Canada might not in any case impose new "tariff-rate quotas".
[48]Canada Panel Report, at para.
123.
[49]Canada was not, however,
determined to be obligated to tarifficate by the WTO Agreement.
[50]The panel expressly refers to Article 104
of the CUSFTA, which is the predecessor to Article 103 of the NAFTA. Article
104, CUSFTA, provides:
Affirmation and Precedence
1. The Parties affirm their existing rights and obligations with respect to each other, as they exist at the time of entry into force of this Agreement, under bilateral and multilateral agreements to which both are party.
2. In the event of any inconsistency between the provisions of this Agreement and such other agreements, the provisions of this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
The panel observes:
"Existing" was used in [CUS]FTA Article 104 , which constitutes a general affirmation of rights and obligations under bilateral and multilateral agreements to which both states are parties. The use of the term "existing" would have made it clear [in regard to the provision invoked by Canada in this case] that the "rights and obligations" referred to were only those in existence at the time the agreement entered into force. Canada Panel Report, para. 136.
This statement by the panel is not particularly revealing in respect to
Article 103, NAFTA, because of differences in the construction of the two
provisions. Article 104, CUSFTA includes an additional phrase in paragraph 1.
It specifically refers to other agreements "as they exist at the time of entry
into force of this Agreement", which precludes a forward looking interpretation
of the relational provision of the CUSFTA. One may indeed ask whether the
elimination of such language in NAFTA Article 103 indicates an intention to
remove this temporal limitation, and thus to refer in Article 103(2) to the
GATT as it existed at the time of entry into force of the NAFTA, and as it
exists in the future.
[51]In the
Matter of the U.S. Safeguard Action taken on Broom Corn Brooms from Mexico
(USA-97-2008-01) before the panel established under Chapter Twenty of the North
American Free Trade Agreement, Final Panel Report, Jan. 30, 1998,
www.nafta-sec-alena.org.
[52]Id. at para. 50.
[53]The panel also said: "The United States
contrasted the language of NAFTA Article 802 ('Each party retains its rights
and obligations under Article XIX of GATT . . .') with the direct language of
incorporation employed in NAFTA Articles 301(1) and 309(1) ('Article [III and
XI] of the GATT and its interpretative notes . . . are incorporated into and
made part of this Agreement.')" (id. at para. 27).
[54]The panel also noted that Mexico included
in "its contentions with regard to the ITC's definition of "domestic industry"
[that this] raised an issue of U.S. compliance with the additional conditions
stated in NAFTA Article 802 and the definition of "domestic industry" in
Article 805 that pertains to those conditions, as well as U.S. compliance with
the process requirements stated in Article 803 and Annex 803.3"(id. at
para. 28).
[55]Article 2005(6),
NAFTA, does not expressly address whether a second claim may be pursued in the
alternate forum after the first claim has been adjudicated. The United States
appears to accept that this must be the case.
[56]WTO DSU, art. 25, referencing also arts.
21 & 22 with respect to awards.
[57]WTO Agreement, Article II:2.
[58]See Abbott reports to the Yearbook
on International Environmental Law, infra [].
[59]In the Tuna II GATT panel decision, the
panel accepted that GATT members might be subject to rules of international
agreements outside the GATT, which agreements might provide the basis for GATT
Article XX exception from compliance with otherwise applicable GATT rules.
However, the panel did not find such agreements to be pertinent to the case
under consideration. United States - Restrictions on Imports of Tuna (Tuna II),
Report of the Panel, 33 I.L.M. 842 (1994). In the January 1994 GATT Banana
decision, the panel rejected a claim by the European Community that certain
action could be justified because the Lomé Agreement constituted a free
trade agreement which provided an Article XXIV waiver. In doing so, the panel
construed the terms of the Lomé Agreement. However, this determination
was limited to whether an agreement constituted a measure justifying an
exception from otherwise applicable GATT rules, and so might be viewed more in
the context of a determination of GATT law than a determination of Lomé
Agreement law. General Agreement on Tariffs and Trade: Dispute Settlement Panel
Report on the European Economic Community - Import Regime for Bananas, January
18, 1994, (Not Adopted), 34 I.L.M. 177 (1995).
[60]Frederick M. Abbott, WTO Dispute
Settlement and the Agreement on Trade-Related Aspects of Intellectual Property
Rights , in INTERNATIONAL TRADE LAW AND THE GATT/WTO DISPUTE SETTLEMENT
SYSTEM 415 (E.-U. Petersmann ed., 1997).
[61]United States - Import Prohibition of Certain Shrimp and
Shrimp Products, AB-1998-4, WT/DS58/AB/R, 12 October 1998 (98-3899). For
example, the Appellate Body referred to a number of environment-related
treaties, such as the Convention on Biological Diversity, for aid in
interpreting the meaning of arbitrary discrimination in the adoption of
measures relating to the conservation of exhaustible natural resources under
GATT Article XX(g), at para. 173. The Appellate Body also considered the Rio
Declaration on Environment and Development, referred to in a WTO Ministerial
Decision on trade and environment, to illustrate international support for a
multilateral approach to adoption of environmental measures within the WTO.
Id.
[62]Concern has been
expressed by some judges of the International Court of Justice regarding the
jurisprudentially divisive potential of the Chambers procedure in which
disputing parties effectively select the panel of judges. See dissenting
opinion of Judge Shahabuddeen in Case Concerning the Land, Sea and Maritime
Frontier Dispute (El Sal. V. Hond.) , ICJ, 1990, Order Regarding
Application for Permission to Intervene, 1990 I.C.J. 3.
[63]WTO DSU, art. 7:1.
[64]International Fruit Company N.V. v.
Produktschap voor Groenten en Fruit (No. 3), Case 21-24/72, Court of Justice of
the European Communities, Dec. 12, 1972.
[65]Council Decision of 22 December 1994 concerning the
conclusion on behalf of the European Community, as regards matters within its
competence, of the agreements reached in the Uruguay Round multilateral
negotiations (1986-1994), 94/800/EC, 1994 OJ L 336, pub. date Dec. 23, 1994.
[66]Fédération de
l'industrie de l'huilerie de la CEE (Fediol) v. Commission, 1989 E.C.R. 1781, 2
C.M.L.R. 489 (1991).
[67]Germany v.
Council (Bananas -- Common organization of the market -- Import regime), Case
C-280/93, Judgment of the Court, 5 Oct. 1994.
[68]For a critical perspective on the Court's
decision, Ernst-Ulirch Petersmann, [].
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