The Role of WTO Law in the Development of International Law
Jiaxiang Hu
I. Introduction
The creation of the World Trade Organisation is one of the most important events in the international law sphere during the last decade of the 20th century. The combined membership of both sovereign States and separate customary territories, a uniform set of trade rules binding all the Member governments, a unique dispute settlement mechanism with the compulsory effect of the adopted rulings and recommendations, all these features are fascinating many international lawyers in their research on the WTO legal system. Furthermore, this legal system is not static but evolutionary. On the one hand, it will change with the development of general international law. On the other hand, the development of WTO law will also play a positive role upon international law. This mutual relationship brings a significant impact to the enhancement of the WTO legal system and general international law as well.
II. WTO law is not a closed system
With one possible exception, no academic author(or any WTO decision or document) disputes that WTO law is part of the wider corpus of public international law. Like international criminal law or human rights law, WTO law is just a new branch of public international law. In the dispute United States---Standards for Reformulated and Conventional Gasoline(hereinafter as Gasoline), the Appellate Body noted that “the general rule of interpretation set out in Article 31 of the Vienna Convention on the Interpretation of Treaties has been relied upon by all contesting parties and third parties in the WTO dispute settlement procedures, although not always in relation to the same issue”. That general rule of interpretation “has attained the status of a rule of customary or general international law”. As such, it forms part of the “customary rules of interpretation of public international law” which the Appellate Body has been directed, by Article 3(2) of the Dispute Settlement Understanding, to apply in seeking to clarify the provisions of the WTO agreements. Furthermore, in doing so, the Appellate Body acknowledged that the WTO is not a hermetically closed regime, impermeable to other rules of international law. In other words, the Appellate Body in the Gasoline case has “connected” the GATT/WTO sub-system of law to the rest of international legal order and imposed on panels and the Appellate Body itself the obligation to interpret the WTO agreements as any other international treaty, thereby putting an end to what Kuyper has termed “GATT Panels’ ignorance” of the basic rules of treaty interpretation.
A number of factors support the conclusion that WTO law is not a closed system. Firstly, the dimension regulated by the World Trade Organisation has been expanded, compared with that of its predecessor, the GATT. The existence of environmental, health, social, security and other exceptions to WTO obligations has linked WTO law with other systems of law and policy. The fact that these exceptions such as Article XX of GATT 1994 fail to provide WTO Members, panels and the Appellate Body adequate criteria for judging those subtle issues does not permit them to avoid their responsibility to adjudicate upon these issues. As it is recognised by the Appellate Body in the dispute United States---Import Prohibition of Certain Shrimp and Shrimp Products(hereinafter as Shrimp): “Pending any specific recommendations by the CTE(Committee on Trade and Environment) to WTO Members on the issues raised in its terms of reference, and in the absence up to now of any agreed amendments or modifications to the substantive provisions of GATT 1994 and the WTO Agreement generally, we must fulfil our responsibility in this specific case, which is to interpret the existing language of the chapeau of Article XX by examining its ordinary meaning, in light of its context and object and purpose in order to determine whether the United States measure at issue qualifies for justification under Article XX.”(Emphasis added). Obliged to adjudicate disputes arising from WTO Members, even when involving the interpretation of the most obscure provisions of the WTO agreements, and to do so in an “objective manner”, WTO panels and the Appellate Body have no alternative other than to look for information that will lead them to the reasonable and objective meaning of the terms of the treaty that they must ultimately interpret, apply and enforce. The scarcity of information within the WTO agreements, such as when dealing with those health and environment issues, necessarily obliges the honest and objective interpreter to take into account any relevant information, even those outside the WTO agreements.
Secondly, Article 3(2) of the Dispute Settlement Understanding(DSU) requires that the WTO agreements should be interpreted with the “customary rules of interpretation”, and as the Appellate Body stated in the Gasoline case that these agreements must not be interpreted “in clinical isolation from public international law”, the reference to the massive body of rules existing in public international law cannot be denied. In the dispute European Communities---Regime for the Importation, Sale and Distribution of Bananas(hereinafter as Bananas), the Panel stated that the Lome Waiver should be interpreted so as to waive not only compliance with the obligations of Article I:1, but also compliance with the obligations of Article XIII of GATT 1994. The Appellate Body, despite the fact that it recognised the Lome Waiver as part of GATT/WTO law, considered that the Panel’s conclusion was difficult to reconcile with the limited GATT practice in the interpretation of waivers, the strict disciplines to which waivers should be subjected under the WTO Agreement, the history of the negotiations of this particular waiver and the limited GATT practice relating to granting waivers from the obligations of Article XIII of GATT 1994, then, concluded that “the Panel erred in finding that ‘the Lome Waiver waives the inconsistency with Article XIII:1 to the extent necessary to permit the EC to allocate shares of its bananas tariff quota to specific traditional ACP banana supplying countries in an amount not exceeding their pre-1991 best-ever exports to the EC’”. This deliberation implies that WTO dispute settlement bodies, including panels and the Appellate Body, should not be prevented from seeking outside sources when the provisions of the covered agreements are obscure or ambiguous. In other words, they may still proceed to deduce a rule that will be relevant, by analogy from already existing rules or practices, or even from the general principles of law that guide this legal system. Such a situation is perhaps more likely to arise in the WTO because of the underdevelopment of its legal system in relation to the needs with which it is faced.
Thirdly, it can be argued that Article 32 of the Vienna Convention of the Law of Treaties, in terms of the WTO dispute settlement, requires any interpreting body, such as panels and the Appellate Body, to use or to take into account outside legal materials when interpreting those WTO obligations. In the dispute European Communities---Measures Concerning Meat and Meat Products(hereinafter as Hormones), the European Communities considered that the Panel, in seeking information from experts individually rather than from an expert group, violated Article 11(2) of the Agreement on the Application of Sanitary and Phytosanitary Measures(SPS Agreement) and Article 13(2) of the DSU. The Appellate Body did not accept this claim of the European Communities and stated that “in disputes involving scientific or technical issues, neither Article 11(2) of the SPS Agreement nor Article 13 of the DSU prevents panels from consulting individual experts. Rather, both the SPS Agreement and the DSU leave to the sound discretion of a panel the determination of whether the establishment of an expert review group is necessary or appropriate.” Here, the difference in the views of the European Communities and the Appellate Body is obvious. The former based its argument on a strict reading of Article 11(2) of the SPS Agreement, while the later made its deliberations counting on the actual suitability of using outside experts. It should be noted that some of the WTO agreements are very technical and complicated, therefore, recourse may be had to supplementary means of interpretation when the provisions of these agreements “leave the meaning ambiguous and obscure”.
Fourthly, the WTO Agreement Preamble commits WTO Members to the “optimal use of the world’s resources in accordance with the objectives of sustainable development”. The objective of sustainable development can only be understood in light of contemporary law and policy that defines and supports this goal. In this context, it may be worth noting the Marrakesh Decision on Trade and Environment in which the WTO Members has taken note of the Rio Declaration on Environment and Development, Agenda 21, and “its follow-up in GATT, as reflected in the statement of the Chairman of the Council of Representatives to the CONTRACTING PARTIES at their 48th Session in 1992…” Although all these international declarations and policy statements contained in the Marrakesh Decision are not legally binding, they have provided a widely-accepted parameter for the concept of sustainable development.
Finally, if interpreted and developed in isolation from the rest of international law, WTO law would risk “conflicts” with other international law rules, contrary to the general international law presumption against conflicts and for effective interpretation of treaties. More significantly, if WTO law cannot update itself with the social development, it will obstruct the flow of international trade, and eventually, fall into being disregarded and discarded by the WTO Members. In the Hormones case, before deciding whether the SPS(sanitary and phytosanitary) measures maintained by the European Communities are based on a risk assessment required by Article 5(1) of the SPS Agreement. the Appellate Body needed, first of all, to consider what factors were included in carrying out a risk assessment. The Panel intended to exclude all the matters “not susceptible of quantitative analysis by the empirical or experimental laboratory methods commonly associated with the physical sciences”. The Appellate Body, however, disagreed and stated: “There is nothing to indicate that the listing of factors that may be taken into account in a risk assessment of Article 5(2)(of the SPS Agreement) was intended to be a closed list.” This approach sounds persuasive, as the risk that is to be evaluated in a risk assessment under Article 5(1) of the SPS Agreement is not only the risk ascertainable in a science laboratory operating under strictly controlled conditions, but also the risk in human societies as they actually exist. In other words, all the actual and potential factors leading to adverse effects on human health should be considered if we need to make a risk assessment.
To state that WTO law is part of international law is one thing. Nevertheless, it is quite another thing to admit that there is nothing special in WTO law. In many respects, WTO law is lex specialis as opposed to the general rules of international law. But contracting out of some rules of general international law does not necessarily mean that one has contracted out of all of them, nor a fortiori that WTO law is created completely outside the system of international law. Therefore, with the development of general international law, WTO law itself also needs development.
III. WTO law needs development
Compared with its predecessor the GATT, the World Trade Organisation, through the successful settlement of the Gasoline dispute and the Shrimp dispute, has taken a giant step forward on the subtle issue trade and environment. Under the GATT’s jurisdiction, a number of cases, including Salmon-Herring, Thai Cigarettes and Tuna-Dolphin, were referred to GATT Article XX exceptions. However, the GATT panels generally adopted fairly conservative interpretations of the Article XX exceptions. They were reluctant to use external sources of law, including other treaties and general principles of international law, to assist in the interpretation of GATT provisions. Neither were they able to adjudicate upon those issues beyond trade with the limited mandate.
The World Trade Organisation has expanded its mandate. Meanwhile, the modified objective of this new institution has brought a change in our approach to some issues like the relationship between trade and environment. A number of factors may be invoked to account for this change. Firstly, the drafters of the WTO agreements have replaced the reference of “full use of the world’s resources” in the GATT Preamble with a new undertaking of “optimal use of the world’s resources in accordance with the objective of sustainable development” in the WTO Agreement Preamble. Secondly, the Uruguay Round negotiators decided to expand the dimension of the multilateral trade system to such new areas like intellectual property rights and services, and to add new disciplines over national laws in a number of areas including health and technical regulations. This, in turn, has increased the need for a careful balance to be struck between WTO disciplines and other national laws and policies. Thirdly, the Uruguay Round negotiations occurred alongside the United Nations Conference on Environment and Development(UNCED), which reflected a growing international concern over the increasing and unsustainable impacts of human society on the Earth’s ecosystems and the growing inequality in the patterns of development. Finally, the Appellate Body, after receiving the comprehensive acceptance from the WTO Members for its initial work, has acquired enormous power in clarifying WTO law and, eventually, in developing WTO law.
In the appellate review of the Gasoline dispute, the Appellate Body upheld the Panel’s decision that the US measures, i.e. the baseline establishment rules, ultimately failed to qualify for the protective application of GATT Article XX, but used a different legal reasoning. Whereas the Panel found that the US measures were not justified under GATT Article XX(b),(d)or (g), the Appellate Body allowed the measure under Article XX(g) and went on to examine the consistency of the measure with the Article XX chapeau. According to some scholars, this is the first thorough examination of the Article XX chapeau in the 50-year GATT/WTO dispute settlement history. The Appellate Body concluded that the US measure did not satisfy the chapeau requirements, in that it was applied in a discriminatory and abusive manner, and constituted a disguised restriction on trade. By examining the chapeau of Article XX, the Appellate Body noted the need to balance the market-access commitments embodied in the substantive GATT provisions against the right of WTO Members to invoke the Article XX exceptions.
After the Gasoline case, the next WTO trade dispute concerning GATT Article XX is the Shrimp case. This dispute arose from a challenge by some developing countries to a US import ban on shrimp products from countries without certain national policies to protect endangered sea turtles from drowning in shrimp trawling nets. On this occasion, the Appellate Body considered that the US measure was based on a policy covered by GATT Article XX(g), but then determined that the law was inconsistent with the language of the Article XX chapeau on the basis that it was applied in a manner that led to an arbitrary and unjustifiable trade discrimination. The legal reasoning of the Appellate Body to support this conclusion marks the most complete discussion of GATT Article XX so far, and therefore deserves careful consideration. It demonstrates that the Appellate Body is aware of the realities in different Members when they are implementing the WTO rules. Meanwhile, the Appellate Body in this case made extensive reference to other sources of international law when interpreting GATT 1994, thereby reinforcing its conclusion in the Gasoline case that the WTO Agreement must not be interpreted in clinical isolation from public international law.
From the trade and environment perspective, regardless of whether the Appellate Body’s approaches in the aforementioned cases are welcomed by the WTO Members, it is now open to the membership to define which measures are permitted as valid environmental actions, and which actions should be prohibited as disguised protectionism pursuant to GATT Article XX. The Appellate Body in the Shrimp dispute noted that the standards of the chapeau projected both procedural and substantive requirements. However, as a practical matter, the Appellate Body has provided national governments of WTO Members with little guidance about what is required before a measure is invoked under GATT Article XX. What kinds of production and process methods(PPMs) are permitted under GATT Article XX? To what extent, for example, must the WTO Members engage in multilateral discussions, provide financial and technical assistance or exhaust other options before implementing trade sanctions? What kinds of special efforts must be made to the rights of developing countries? What other disciplines should be placed on unilateral action to ensure that powerful countries do not use it as a way of transferring the cost of environmental protection to the weaker members of the international community of nations?
Among these unresolved issues are two other pressing issues that are the choice of forum and conflicts of law. Presumably, three situations may occur in the WTO dispute settlement. Firstly, in the event of a dispute which arises between WTO Members who are simultaneously parties of another multilateral agreement, both the WTO dispute settlement institutions(panels and the Appellate Body) and the judicial body designated by that multilateral agreement should have jurisdiction over the dispute. Generally, the disputing parties may agree on their choice, which may be the judicial body designated by that multilateral agreement. For example, Article 280 of the United Nations Convention on the Law of the Sea(UNCLOS) provides that “Nothing in this Part impairs the right of any States Parties to agree at any time to settle a dispute between them concerning the interpretation or application of this Convention by any peaceful means of their own choice”. Article 3(7) of the DSU can be deemed a similar provision, which partly states: “A solution mutually acceptable to the parties to a dispute and consistent with the covered agreements is clearly to be preferred”. But problems may arise if the disputing parties cannot agree on the dispute settlement body. This situation occurred in the Swordfish dispute between the European Communities and Chile. Although the disputing parties have reached a provisional settlement and agreed to suspend their respective claims in the International Tribunal for the Law of the Sea and the World Trade Organisation, the fundamental issue as how to avoid the “forum-shopping” in future disputes is still untouched. If both parties in the Swordfish case had insisted on their litigation in different tribunals, then the WTO dispute settlement mechanism would have become the only available choice as the jurisdiction of the WTO is compulsory, i.e., the WTO dispute settlement procedures may be initiated by the complaining party without the need to reach an agreement with the respondent party. Furthermore, the rulings and recommendations made by WTO panels and the Appellate Body(after they are adopted by the Dispute Settlement Body) have the binding effect on both parties. This distinguishes the WTO dispute settlement mechanism from the generally operational jurisdiction of the ICJ and many other international judicial bodies. Article 3(7) of the DSU only requires a complaining party “to exercise its judgement as to whether action under these procedures would be fruitful”.
Secondly, if the disputing parties are both WTO Members and parties of another multilateral agreement which provides for exclusive jurisdiction, the situation of “forum-shopping” seems unavoidable when both parties insist on litigation in different tribunals. An example of this kind of multilateral agreement is the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States(Convention). Article 64 of the Convention states: “Any dispute arising between Contracting States concerning the interpretation or application of this Convention which is not settled by negotiation shall be referred to the International Court of Justice by the application of any party to such dispute, unless the States concerned agree to another method of settlement”. As noted above, the WTO provides a compulsory jurisdiction and the DSB may adopt binding rulings and recommendations. But neither the WTO Agreement, nor the DSU, contains relevant provisions for the resolution of these “forum-shopping” issues. There is thus no assumption that a particular dispute must be settled by any particular tribunal. Insofar as the specific expertise of the tribunal is a relevant factor, a disputing party may choose the tribunal which is available to it. As a practical way, the parties to a dispute had better negotiate over the choice of tribunal. Pursuant to the Convention, the International Centre for Settlement of Investment Disputes(ICSID) provides facilities for the conciliation and arbitration of disputes between member countries and investors who qualify as nationals of other member countries. Recourse to ICSID conciliation and arbitration is entirely voluntary. If the disputing parties(the investors through their governments as individuals cannot bring their complaints to the WTO) agree to conciliation or arbitration through the WTO, then the WTO will have jurisdiction on this dispute.
Thirdly, in the case when a dispute arises between two WTO Members, but only one of them or none of them is a party of another multilateral agreement, then, the WTO will provide the only possible forum for resolving the dispute and, relevant WTO provisions will be invoked. But this does not mean that other multilateral agreements are irrelevant in the WTO dispute settlement process. In the Shrimp case, the Appellate Body referred to the UNCLOS, the Convention on Biological Diversity, and Agenda 21 when they interpreted the term “natural resources”. Generally, there are two categories of multilateral agreements which may become relevant in the WTO jurisdiction: pre-1994 multilateral agreements and post-1994 multilateral agreements. Obviously, whereas general international law is binding on all WTO Members, any of those non-WTO agreements with which the WTO agreements freely interact only has effect as between those WTO Members which both have accepted these agreements(pacta tertiis nec nocent nec prosunt). In the event of conflict, those non-WTO agreements either give way to WTO rules or prevail over them, depending on the applicable conflict rules. According to professor Joost Pauwelyn, those conflict rules can be found in three different places: (a)the non-WTO agreements; (b)the WTO agreements; (c)general international law. If the WTO agreement conflicts with the provision of another multilateral agreement, which is incidentally a peremptory norm of general international law, the provision of that other agreement prevails. Since there are no clear provisions which regulate the conflicts of WTO agreements and those post-1994 multilateral agreements, the Vienna Convention on the Law of Treaties becomes relevant when WTO Members have to modify obligations between each other. Article 41(1) of the Vienna Convention provides that “Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone if: (a)the possibility of such a modification is provided for by the treaty, or (b)the modification in question is not prohibited by the treaty and: (i)does not affect the enjoyment by the other parties of their rights under the treaty or the performance of their obligations; (ii)does not relate to a provision, derogation from which is incompatible with the effective execution of the object and purpose of the treaty as a whole.” Since there are no clear prohibitions on such modifications in the WTO agreements, WTO Members are free to contract out of the WTO agreements after 1994 provided that these modifications are not incompatible with the general principles of WTO law. As for the conflicts between WTO agreements and those pre-1994 multilateral agreements, Article 30 of the Vienna Convention is relevant in the resolution of such conflicts, which provides that “When all the parties to the earlier treaty are parties also to the later treaty but the earlier treaty is not terminated or suspended in operation under article 59, the earlier treaty applies only to the extent that its provisions are compatible with those of the later treaty”(Article 30[3]). “When the parties to the latter treaty do not include all the parties to the earlier one: (a)as between States Parties to both treaties the same rule applies as in paragraph 3; (b)as between a State Party to both treaties and a State Party to only one of the treaties, the treaty to which both States are parties governs their mutual rights and obligations”(Article 30[4]).
It has become clear that WTO law will continue to develop with the expansion of this institution’s membership and regulated dimension. WTO law, like general international law, does not reflect a once-and-for-all expression of consent. As Joost Pauwelyn noted: “It would be absurd and inconsistent with the genuine will of States to ‘freeze’ such rules into the mould of the time to, say, April 15, 1994”. Therefore, to keep WTO law workable, we may borrow the Appellate Body’s concept of a “line of equilibrium” as it reinforces the need for a delicate balance to be struck between WTO obligations and the right of WTO Members to pursue their own policies. However, to define the “line of equilibrium” is no easy task. The challenge for future WTO law will be to establish this balance in a way that promotes multilateral co-operation, predictability and the rule of law, and that ensures the coherence of international trade and national policies.
To refer to other international agreements in the situations where WTO agreements are not clear or even silent is just one way to develop WTO law; while to refer to the decisions of other international tribunals is another meaningful way in which the WTO dispute settlement bodies may deduce some relevant conclusions, although these decisions have no legally binding effect on WTO dispute settlement.
IV. The relevance of the decisions made by other international tribunals
Before discussing the relevance of the decisions made by other international tribunals to the WTO dispute settlement, we first need to clarify one important issue, i.e., the relationship of WTO law with those other legal sources including the decisions of other international tribunals. Since the WTO agreements have established rules which are expressly recognised by the contesting parties, it is only natural, when a dispute arises, to apply the rights and obligations from these agreements binding on both parties to the dispute. However, this rule of priority does not exclude the considerations of other legal sources. In practice, the ICJ judges tend to make an extensive reference to other sources of law in their decisions. The situation in the WTO is different from that of the ICJ. There are no clear provisions in WTO law like Article 38 of the ICJ Statute. Therefore, it is generally perceived that there are no legal obligations for the WTO panelists and Appellate Body members to apply legal sources outside WTO law. The “covered agreements” have laid the core foundations for the WTO dispute settlement system. All the interpretations of law should begin from here. It is only through the decisions of panels and the Appellate Body that decisions of other tribunals and publicists’ teachings are taken into account “as subsidiary means for the determination of rules of law”. Therefore, the proper interpretation of the WTO agreements for a panel or the Appellate Body is, “first of all, a textual interpretation”.
Despite the fact that the “covered agreements” constitute the basic framework of WTO law, it is still possible that there might be some law lacunae in the resolutions of some specific disputes, or some particular aspects of a dispute. Furthermore, it should be recalled that the WTO dispute settlement mechanism does not contain a remanding system, nor does it permit the respondent party to raise its counter-complaint in the same dispute settlement proceeding. In other words, a WTO panel or the Appellate Body has to make its recommendations and rulings on any dispute if it is raised. Under these circumstances, recourse to the sources outside the WTO agreements has to be possible. There are no clear provisions in the WTO agreements as to which international tribunals might be considered of their decisions. As a practical matter, WTO panels and the Appellate Body have often referred to the decisions made by the International Court of Justice(ICJ) and its predecessor, the Permanent Court of International Justice(PCIJ).
In the first appellate review of the WTO dispute settlement history, the Gasoline appeal, the Appellate Body adopted the “general rule of interpretation” of the Vienna Convention on the Law of Treaties, which has been reinforced by the ICJ in several of its decisions, and stated that “interpretation must give meaning and effect to all the terms of a treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility.” In the dispute Japan---Taxes on Alcoholic Beverages, the Appellate Body, following the mandate applied in its appellate review of the Gasoline case, repeated that the interpretation of Article 31 of the Vienna Convention on the Law of Treaties “must be based above all upon the text of the treaty”. The provisions of the treaty are “to be given their ordinary meaning in their context”. The object and purpose of the treaty are also “to be taken into account in determining the meaning of its provisions”. In the words of the Appellate Body, “A fundamental tenet of treaty interpretation flowing from the general rule of interpretation set out in Article 31 is the principle of effectiveness”.
In the Bananas case, the European Communities argued that the Panel infringed Article 3(2) of the DSU by finding that the United States had a right to advance its claims under GATT 1994. The European Communities asserted that, “as a general principle, in any system of law, including international law, a claimant must normally have a legal right or interest in the claim it is pursuing”. Furthermore, the European Communities used the ICJ and PCIJ judgements to support its argument that the concept of actio popularis “is not known to international law as it stands at present” The Appellate Body did not agree on this point, and stated: “We do not read any of those judgements as establishing a general rule that in all international litigation, a complaining party must have a ‘legal interest’ in order to bring a case. Nor do these judgements deny the need to consider the question of standing under the dispute settlement provisions of any multilateral treaty, by referring to the terms of that treaty.” In the view of the Appellate Body, the United States “has broad discretion in deciding whether to bring a case against another Member under the DSU.” Since the United States is a producer of bananas, the potential export interest by the United States cannot be excluded. The internal market of the United States for bananas could be affected by the EC banana regime, in particular, by the effects of that regime on world suppliers and world prices of bananas. Having taken into account all these considerations, the Appellate Body decided that the United States has its standing in the Bananas case.
The Bananas case, to a certain extent, reflects the attitude of the Appellate Body towards the decisions made by other international tribunals, particularly those made by the ICJ and the PCIJ. The Appellate Body pays deference to these decisions, but it does not mean that it is necessarily bound by them, particularly when the Appellate Body is still able to find some reasoning from the WTO agreements. After rejecting the EC’s arguments, the Appellate Body succeeded in drawing the legal reasoning from the chapeau of Article XXIII:1 of GATT 1994 and Article 3(7) of the DSU to uphold the Panel’s conclusion that the United States had a legal right to advance its claims in this case.
Despite the fact that the WTO panels and the Appellate Body have much freedom in their selections of the decisions made by other tribunals, the ICJ is still the most authoritative judicial body at the contemporary international level. Established according to Article 92 of the UN Charter, the ICJ makes its decisions which may involve not only the UN Members, but also the non-Members of the United Nations. In contrast, the World Trade Organisation is only a technical organisation which mainly deals with the trade affairs among its Members. The WTO dispute settlement mechanism is only relevant to the Members. Therefore, with its authoritative decisions and the coverage of affairs, the International Court of Justice will continue to take its major role in influencing other international tribunals which include WTO panels and the Appellate Body. Except for the ICJ decisions, the decisions made by other international tribunals have been, so far, rarely referred to. However, neither the WTO Agreement nor its annexed agreements excludes such possibilities. It is only a matter of time that future WTO panels and the Appellate Body will use the decisions made by other international tribunals than the ICJ to support their legal reasoning.
The WTO was not created in a vacuum(it emerged in the context of general international law and other treaties), nor does its legal existence continue in a vacuum. The influence in the inter-relationship of WTO law and general international law is mutual. On the one hand, international law has played its vital role in the formation and development of WTO law; while on the other hand, the emergence of WTO law has also altered the general landscape of international law.
V. The contributions and implications of WTO law to the development of international law
The WTO Agreement has laid the basis for a highly complex international treaty system which consists of some 20 multilateral trade agreements, with supplementary “Understandings”, “Protocols”, “Ministerial Decisions”, “Declarations” and more than 30,000 pages of “Schedules of Concessions” for trade in goods, and “Specific Commitments” for trade in services. The legal complexity of WTO law is increased by its numerous references to other international agreements and general international law rules, such as the Charter of the United Nations; international financial agreements such as the International Monetary Fund Agreement; international environmental agreements such as the International Plant Protection Convention; international “standards” promulgated by other “relevant international organisations open for membership to all (WTO)Members”; international services agreements on matters including air transport and telecommunications; international agreements on intellectual property rights, and the “customary rules of interpretations of public international law”(Article 3[2] of the DSU). The WTO legal system is, thus, to consist of more “rules of law” than any other international treaty system. It also requires each Member to “ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements”(Article XVI:4 of the WTO Agreement), thereby integrating the WTO rules into the domestic law of Members.
In terms of the contributions of WTO law to the development of international law, several points can be made here: firstly, the decision-making mechanism provides an elaborate matrix of procedures to ensure that the implementation of WTO rules will be carried on in a more predictable way. In general, the WTO has followed the GATT practice of “consensus” in making the decisions of the Ministerial Conference and the General Council. But the term “consensus” was not defined in the GATT and the word “consensus” was not used. As professor John Jackson pointed out: “The practice of consensus voting developed partly because of the uneasiness of governments about the loose wording of GATT decision-making powers, particularly that in GATT Article XXV”. In the WTO Agreement, however, “consensus” is defined as the situation when the decision occurs and “no Member, present at the meeting when the decision is taken, formally objects to the proposed decision”(Article IX:1). It should be noted that consensus is different from unanimity as the former does not need to take into account the views of those absent. This is a more efficient way. If consensus is not reached, a fall-back is the majority voting authority. Decisions of the Ministerial Conference and the General Council shall be taken by a majority of votes cast. Decisions to adopt interpretations of the WTO Agreement including those multilateral trade agreements in Annex 1 and decisions to grant a waiver to a WTO Member shall be taken by three-fourths of the Members. Amendments to the provisions of WTO agreements shall take effect for the Members that have accepted them by two-thirds or three-fourths of the Members and thereafter on each other Member upon acceptance by it. What is significant in Article X of the WTO Agreement is that it authorises the Ministerial Conference to decide by a three-fourths majority of the Members whether the Member which has not accepted the amendment within a specified period should withdraw from the WTO or remain as a WTO Member. This gives the Ministerial Conference extraordinary power to influence the WTO Members although it seems unlikely that the Ministerial Conference will exercise this power frequently. With regard to the voting system, Article IX:1 of the WTO Agreement states: “…At meetings of the Ministerial Conference and the General Council, each Member of the WTO shall have one vote.” This is an advantage to many small countries, particularly those small developing countries, as they can use their combined force to achieve the goals which their individual power is unable to do so.
Secondly, the appellate jurisdiction distinguishes the WTO dispute settlement bodies from many other international tribunals. The transposition of the appellate function to the international arena is a relatively novel development. There have been few examples of international tribunals exercising an appellate review over international judicial bodies. Even the International Court of Justice has made a review rather than exercised an appellate function in respect of certain international administrative tribunals. As professor Elihu Lauterpacht pointed out, in the example of the UIN Administrative Tribunal, “Initially, there was no appeal from this tribunal, though it was always possible, if the case aroused sufficient interest, for the General Assembly of the UN(or comparable organ of the Specialised Agencies) upon their own initiative to request an advisory opinion from the ICJ as to whether a specific question of jurisdiction or even of substance had been correctly dealt with by the Tribunal. This course has never been pursued and, if it had been, it would not really have been an appeal. It could not have been initiated by either the staff member or the UN Secretariat at their sole options”(Original notes omitted). Since there is no general guidance in international law on such matters as the scope of the appellate function, the nature of appellate procedures and the role of appellate judges, the practice in the WTO appellate review is particularly contributory to the development of international jurisdiction.
Thirdly, the compensation mechanism in the WTO dispute settlement system is a fundamental factor to ensure the implementation of WTO rules. The practice to suspend the application of concessions and obligations to the offending party is not new in the WTO. Article XXIII of GATT 1947 permitted the CONTRACTING PARTIES to authorise a contracting party or parties to suspend GATT obligations as a sort of “sanction”. Because of the contractual status of the GATT and lack of provisions on this issue, the formally authorised suspension in the GATT is rare. The DSU, in contrast, has a series of clauses relating explicitly to enforcement and implementation. The compensation mechanism in the WTO dispute settlement works as a “cross-retaliation” process, making the compensation available to the suffered party even from outside the field where its benefits have been impaired or nullified, or where the attainment of any objective of the “covered agreements” has been impeded. The specific provisions for compensation are included in Article 22 of the DSU. Although whether or not this compensation mechanism has benefited all WTO Members still awaits some time to see, the consequential fact is that this reform has helped WTO law to become more disciplined and authoritative. One possible effect is that such a mechanism will scare some potential Members who dare to breach the trade rules. With no doubt, this will bring significant impact upon the rule-orientation of WTO law.
The global integration of States requires a more effective “international rule of law”. This can be achieved only by rendering international law more effective and by interpreting and integrating “the national rule of law” and “the international rule of law” in a mutually consistent manner. The unified WTO law and the requirement that Members’ national laws, regulations and administrative procedures should be in conformity with WTO law have served as models for the “legalisation” and “judicialisation” of international relations for the benefit of all members in an international organisation. The practice of the Appellate Body, while interpreting WTO law in the light of general international law principles and with due regard to the jurisprudence of the ICJ, has enhanced legal security and consistency in the WTO legal system. Its case law, though still very limited, has already visibly strengthened the “international rule of law”, for instance by the regular adoption and implementation of its dispute settlement findings to date, and by inducing other WTO bodies(such as the Textiles Monitoring Body) and Member governments to apply international law more strictly. While the emphasis on literal interpretations of the WTO texts in the panel and Appellate Body reports so far is typical of the early jurisprudence for a new international tribunal, these developments have shown that WTO law is already an important part of international law.
WTO law has equally illustrated how important the “international law of cooperation” has become in the modern world. Its focus on economic welfare is particularly important to many developing countries. Since the World War Second, the participants of interstate relations are no longer a small club of Western nations, but a much larger number of nations representing different civilisations. Correspondingly, a new dimension has been given to the concern of international relations with matters of welfare. This is the public concern with international economic development. States, despite all their differences of political ideology, have acknowledged it as their indispensable task to enhance the welfare of their people. This change of views determines the change of structure of international law. As professor Friedmann pointed out, modern international law moves essentially on three different levels: “(a)The international law of existence, i.e., the classical system of international law regulating diplomatic interstate relations, orders the coexistence of States regardless of their social and economic structure. (b)The universal international law of cooperation, i.e., the body of legal rules regulating universal concerns, the range of which is constantly extending, extends from matters of international security to questions of international communication, health and welfare. (c)Close-knit regional groupings can proceed further with the common regulation of their affairs because they are linked by a greater degree of community of interests and values, and usually also of regional proximity, than mankind at large. They can therefore act as pioneers in the transition from international to community law.” These changes have expanded the dimension of international law both horizontally and vertically, bringing about a further reflection of those fundamental issues such as the allocation of power in this world, about democracy and accountability, and most important of all, about the objective of international law.
VI. Conclusion
Since its inception, modern international law has developed with the increasing of governmental cooperation. In the view of professor Patricia Birnie and professor Alan Boyle, the Congress of Vienna in 1815 and the series of international conferences that followed it were the precursors of the political cooperation in global terms. The creation of international bodies for functional, administrative purposes began with those innovative 19th century public unions such as the Universal Postal Union and the International Telegraphic Union. The first major law-making conferences, the Hague Peace Conferences of 1898 and 1907, represented another major development in the institutionalisation of international cooperation. International organisations began to flourish in the post World War II era. The representatives of them are the United Nations and the World Trade Organisation. Although each of these organisations functions differently, they represent the two most important additions to the machinery of international cooperation.
本文刊登于Journal of International Economic Law，2004年第1期