Closer Integration, Controversial Rules

[ 作者]: 胡加祥      [ 发布时间]: 2009-10-27     [ 独著/合著]: 独著     [ 期刊号]: Pace International Law Review,Vol. XVIII, No. II,2

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             Closer Integration, Controversial Rules

   Issues arising from the CEPA between mainland China Hong Kong Macao


Jiaxiang Hu*


Abstract: The coming into effect of the Closer Economic Partnership Arrangement (CEPA) implies that mainland China, Hong Kong and Macao have established a closer economic relationship between each other. While the CEPA has brought some substantial benefits to the participating parties, its contents need scrutinizing from a broader perspective. The current economic relationship between mainland China and its two special administrative regions is sometimes complicated not only by the fact that they are interacting on each other under the “One Country, Two Systems” policy, but by the fact that they are all formal WTO Members and required to comply with the WTO rules.      


I. Introduction

On June 29, 2003, the Central Government of the People’s Republic of China and the government of Hong Kong Special Administrative Region signed the Closer Economic Partnership Arrangement (hereinafter as CEPA).[1] Then, on October 17, 2003, with the same title and almost the same contents, the Chinese central government signed a similar document with the government of Macao Special Administrative Region. Both arrangements have become effective since January 1, 2004. As these two documents indicate a substantial step to further integrate the economies of mainland China, Hong Kong and Macao after China entered the World Trade Organization (WTO) about five years ago,[2] they have aroused much attention from both the academic and business circles as to the effect of these arrangements upon the economic development in these three areas. Furthermore, whether the rules in CEPA are in conformity with the provisions of the WTO agreements is another issue which merits our notice. In the following parts, the author of this article will examine the CEPA, particularly Article 7 and Article 8 of it, against a general prospect of GATT 1994, the Anti-dumping Agreement[3] and the Subsidies and Countervailing Agreement.[4]              


II. A Retrospective View of the Trade Relations between Mainland China Hong Kong Macao

Since mainland China, Hong Kong and Macao all have obtained full membership in the WTO, the current trade relations among them are regulated not only by those bilateral agreements like CEPA, but also by the WTO agreements. The fact that the WTO has both sovereign States and separate customs territories as its Members can be traced back to the GATT history. When the General Agreement on Tariffs and Trade (GATT) was signed in 1947, there were only 23 signatories.[5] Many countries, before they gained full independence, were the colonies of some western powers. They became GATT contracting parties with the sponsorship of their suzerain States under Article XXXIII of GATT 1947, which states: “A government not party to this Agreement, or a government acting on behalf of a separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement, may accede to this Agreement, on its own behalf or on behalf of that territory, on terms to be agreed between such government and the CONTRACTING PARTIES. Decisions of the CONTRACTING PARTIES under this paragraph shall be taken by a two-thirds majority.” Among this group of GATT contracting parties are Hong Kong and Macao.[6]

According to The Joint Declaration of the Government of the People’s Republic of China and the Government of the United Kingdom of Great Britain and Northern Ireland on the Question of Hong Kong[7] (hereinafter as the Sino-British Joint Declaration) which was signed on December 19, 1984, after the Chinese government resumes the exercise of sovereignty over Hong Kong with effect from July 1, 1997, “The Hong Kong Special Administrative Region will retain the status of a free port and a separate customs territory”(Point Three[6]). “Using the name of ‘Hong Kong, China’, the Hong Kong Special Administrative Region may on its own maintain and develop economic and cultural relations and conclude relevant agreements with States, regions and relevant international organizations”(Point Three[10]).[8] These principles are reaffirmed in similar words in Article 116 of The Basic Law of the Hong Kong Special Administrative Region of the People’s Republic of China (hereinafter as The Basic Law of Hong Kong).[9]

On April 13, 1987, the Chinese government and the Portuguese government signed The Joint Declaration of the Government of the People’s Republic of China and the Government of the Republic of Portugal on the Question of Macao[10] (hereinafter as the Sino-Portuguese Joint Declaration). Point Two(8) of the Sino-Portuguese Joint Declaration stipulates that, after the Chinese government resumes the exercise of sovereignty over Macao with effect from December 20, 1999, “The Macao Special Administrative Region will remain a free port and a separate customs territory in order to develop its economic activities…” “Using the name ‘Macao, China’, the Macao Special Administrative Region may on its own maintain and develop economic and cultural relations and in this context conclude agreements with States, regions and relevant international organizations”(Point Two[7]).[11] Similar wording can also be found in Article 112 of The Basic Law of the Macao Special Administrative Region of the People’s Republic of China (hereinafter as The Basic Law of Macao).[12]

Before China became a full Member of the WTO, the regulation on the trade between mainland China Hong Kong Macao was different from trade relations between China and other countries. In other words, Hong Kong and Macao received more preferential treatment than other countries under the Chinese domestic law. As China was poised to finalize its accession process to the WTO, some small and medium enterprises in Hong Kong and Macao feared that they would lose their competitive edge over foreign companies once China’s market fully opened up. They pressed the Chinese central government and the governments of Hong Kong, Macao for maintaining this special preferential treatment even after China entered the WTO.[13] After a series of high-level meetings over one year and half, the final results are these two documents of CEPA between mainland China and Hong Kong, Macao.


III. Legal Status of the CEPA

As a general rule, the World Trade Organization requires that “each Member shall ensure the conformity of its law, regulations and administrative procedures with its obligations as provided in the annexed Agreements”(Article XVI:4 of the WTO Agreement). WTO uses GATT Article I (General Most-Favored-Nation Treatment)[14] and Article III (National Treatment on Internal Taxation and Regulation)[15] as the cornerstone of the current world trade regime. However, the WTO rules are not the monolithic bloc which is impermeable to change. GATT Article XXIV provides exceptions for WTO Members to form customs unions and free trade areas in which the constituent members may derogate from the WTO rules by offering more preferential treatment to each other.

According to GATT Article XXIV:8, a customs union “shall be understood to mean the substitution of a single customs territory for two or more customs territories”, so that:

“(i)duties and other restrictive regulations of commerce(except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated with respect to substantially all the trade between the constituent territories of the union or at least with respect to substantially all the trade in products originating in such territories, and

(ii)subject to the provisions of paragraph 9, substantially the same duties and other regulations of commerce are applied by each of the members of the union to the trade of territories not included in the union.”[16]

A free trade area “shall be understood to mean a group of two or more customs territories in which the duties and other restrictive regulations of commerce (except, where necessary, those permitted under Articles XI, XII, XIII, XIV, XV and XX) are eliminated on substantially all the trade between the constituent territories in products originating in such territories”.[17] These provisions are the legal source for various economic co-operations, either bilaterally or regional.

The CEPA includes a main text, six annexes and one schedule. It covers three broad areas, namely trade in goods, trade in services, and trade and investment facilitation. Almost in the same order of Articles and in the same wording, the most substantial part of these two documents is that which states Hong Kong and Macao agreeing to bind their existing zero import tariff regime with respect to all goods from mainland China. In return, mainland China agreed to apply zero import tariff for imports from Hong Kong and Macao from January 1, 2004. The specific items receiving this treatment are annexed to these two documents. Mainland China also agreed to apply zero import tariff no later than January 1, 2006 upon the imports from Hong Kong and Macao, which are not annexed to the texts. According to Article 11 of the two texts and Annex 4 with each document, mainland China has promised to ease gradually and eliminate finally the restrictions on the services provided by Hong Kong and Macao businessmen. Both mainland China Hong Kong Macao have agreed to further promote their investment facilitation. Therefore, the two documents of CEPA are in nature free trade agreements rather than customs union agreements as they do not mandate mainland China, Hong Kong and Macao to apply uniform duties and other restrictive regulations to territories which do not join the CEPA.

The Chinese government expected, through the formation of CEPA, to assure the businessmen and entrepreneurs in Hong Kong and Macao that they would not lose the preferential treatment from mainland China even after China entered the WTO. Nevertheless, whether the way to make this expectation become true is in conformity with China’s obligations under the WTO is another issue which remains debating.                        


IV. Controversial Rules in the CEPA

Examined superficially, the CEPA contains no rules which are in conflict with the WTO rules. GATT Article XXIV permits, except those measures under Articles XI, XII, XIII, XIV, XV and XX, that a WTO Member may eliminate any restrictive measures to its constituent members in a customs union or free trade area. Therefore, Article 6 and Article 7 of the CEPA seem blameless in mandating that both mainland China and Hong Kong, Macao will not take anti-dumping and countervailing measures against the imports from each other. But the issue is not so simple. If we read GATT Article XXIV carefully, we may find that the constituent members in a free trade area are required not to levy higher duties and not to exercise more restrictive measures than those existing prior to the formation of the free trade area to those WTO Members not included therein. As the WTO Members have recognized, the purpose of a free trade area “should be to facilitate trade between the constituent territories and not raise barriers to the trade of other contracting parties with such territories”.[18]

Theoretically, two situations might arise after the formation of a free trade area.

First, the general tariffs might be increased and more restrictive measures exercised against the non-constituent members. We regard the tariffs in this situation as absolutely higher and the measures as absolutely more restrictive compared with those existing before the formation of the free trade area. This, however, has already been forbidden by the WTO rules.

A second situation might be one where the existing level of tariffs and the restrictive measures to the non-constituent members do not change, but the tariffs within the constituent members have been lowered significantly and the restrictive measures greatly eased. Consequently, the tariffs to those non-constituent members have been raised comparatively and the measures comparatively more restrictive. In the context of CEPA, to eliminate the anti-dumping and countervailing measures would mean that the exporters in the respective constituent members will not meet any restrictions including anti-dumping and countervailing measures no matter whether these measures are necessary in some unusual circumstances. This is unfair to many enterprises both inside and outside the constituent members as they have been deprived of the opportunity to sue these exporters for their unfair trade either as the complainant or third party.

Anti-dumping and countervailing measures are popular practices by which an importing country tries to protect its domestic industry from the dumping of foreign low-price products.[19] In order to avoid the abuse of these measures, GATT Article VI:6(a) mandates that “No contracting party shall levy any anti-dumping or countervailing duty on the importation of any product of the territory of another contracting party unless it determines that the effect of the dumping or subsidization, as the case may be, is such as to cause or threaten material injury to an established domestic industry, or is such as to retard materially the establishment of a domestic industry”(Emphasis added).[20] Therefore, WTO Members are admonished to use anti-dumping and countervailing measures only in some special circumstances.

CEPA Articles 6 and 7, however, have touched the other side of this issue: whether the total elimination of anti-dumping and countervailing measures (in free trade agreements) is commendable.  In the view of the author of this article, the abuse of anti-dumping and countervailing measures overlooks the comparative advantages existing in different countries and jeopardizes the normal international trade relations. The same result applies to the practice of eliminating the anti-dumping and countervailing measures. This is because dumping/subsidy practices in nature aim at dominating the market of the importing country and gaining the predatory profits. This is the legal base for the use of anti-dumping and countervailing measures.

In order to give an objective appraisal in a WTO anti-dumping or countervailing litigation, a panel or the Appellate Body is required to consider the statements not only of the disputing parties but also of any relevant third party. Article 6(1) of the Anti-Dumping Agreement states: “All interested parties in an anti-dumping investigation shall be given notice of the information which the authorities require and ample opportunity to present in writing all evidence which they consider relevant in respect of the investigation in question.” Article 6(2) further states: “Throughout the anti-dumping investigation all interested parties shall have a full opportunity for the defense of their interests.  To this end, the authorities shall, on request, provide opportunities for all interested parties to meet those parties with adverse interests, so that opposing views may be presented and rebuttal arguments offered…”(Emphasis added)[21]  Similar provisions can also be found in Article 12 of the Subsidies and Countervailing Agreement.[22] Neither the wording of the above provisions, nor the practice of the WTO Dispute Settlement Body (DSB), has indicated that the “interested parties” should be limited to the disputing parties. In other words, all relevant parties upon which the settlement of a dispute might have some effect can be regarded as the “interested parties”. They have the right to participate in a dispute settlement process and to defend their own interests. To eliminate the possibility to settle a dispute through litigation is, de facto, to take away such an opportunity.

The same reasoning can also be found in the Dispute Settlement Understanding (DSU). Article 10(1) of the DSU states: “The interests of the parties to a dispute and those of other Members under covered agreements at issue in the dispute shall be fully taken into account during the panel process.”(Emphasis added)  Article 10(2) of the DSU further states: “Any Member having a substantial interest in a matter before a panel and having notified its interest to the DSB (referred to in this Understanding as a ‘third party’) shall have an opportunity to be heard by the panel and to make written submissions to the panel. These submissions shall also be given to the parties to the dispute and shall be reflected in the panel report.”(Emphasis added)

Two points may be drawn from the above provisions: (a) Any WTO Member, if it deems necessary, has the right to participate in an on-going panel process. (b) In such a circumstance, the panel has the obligation to take the request of third parties into the panel examination. In some circumstances, a third country can request the authorities of the importing country, on behalf of it, to take anti-dumping action although the decision whether or not to proceed with a case shall rest with the importing country.[23] All these provisions indicate that the right and interest of a third party in a dispute settlement should not be ignored.

Another fact relating to the question in discussion is that private parties are not qualified to bring their complaints to the WTO Dispute Settlement Body. As a general way, if a domestic industry deems that its benefits have been impaired or impeded by the importing products, either at a lower-than-normal price or with some subsidization, the domestic industry can only refer this matter to the relevant authorities. If the situation is serious enough, the relevant authorities shall, on behalf of the injured industry, bring the complaint to the DSB. The fact that Article 6 and Article 7 of the CEPA mandate not to initiate any anti-dumping and countervailing litigation between mainland China and Hong Kong, Macao is equal to the reality that any industry in these three areas will lose its opportunity to refer its complaint to the relevant authorities even if this industry has been seriously injured by the dumped imports or imports with some subsidization from the exporting authorities.

Obviously, the CEPA has some loopholes. The Chinese government and the governments of Hong Kong and Macao may focus so much attention on the continuation of their closer relations after China’s accession to the WTO that they inadvertently deprive the interests of other WTO Members.  At the moment, there are two practicable ways to fill these loopholes. One is to amend Articles 6, 7 of the CEPA, making the anti-dumping and countervailing litigation available among mainland China, Hong Kong and Macao. The three areas may agree on more restrictive rules on the initiation of anti-dumping and countervailing measures. The other is to establish a uniform institution to deal with the complaints involving dumping and subsidy issues from both the constituent members of CEPA and other WTO Members.

The incident that the CEPA provisions are in conflict with the WTO practices has raised a further question: whether the current WTO rules, inter alia GATT Article VI and the Anti-dumping Agreement, should be amended so that the elimination of anti-dumping and countervailing measures will become a mandatory prohibition. The answer to this question, in the view of the author, should be affirmative. Nevertheless, in view of the complexity of the amendment process, a practicable way is to establish this proposition through the WTO dispute settlement practices. Only under this consideration, can the “proper balance between the rights and obligations of Members” be maintained.[24]

The provisions of CEPA have also reminded us of the over-debated issue: how to deal with the challenge of globalization versus regionalization in the context of WTO? This issue will be explored in the next section.                          


V. The Economic Analysis of a Regional Trade Arrangement

Early in the 1950s, shortly after the General Agreement on Tariffs and Trade was signed, some economists adopted a rather sceptical attitude towards the benefits of regional trading. Jacob Viner, in 1950, coined the distinction between trade creation (additional trade created through establishing a customs union) and trade diversion (trade being diverted from an efficient producer outside the union to a less efficient producer in a Member country). This theory about customs union found that the overall welfare benefit to Member countries depended on the degree of trade creation as opposed to trade diversion. As regional integration increased the efficiency of an external tariff, the competitive position of a customs union would improve at the expense of the rest of the world. Therefore, the overall impact of regional integration is at best ambivalent.[25] With the proliferation of free trade areas since 1960s, Viner’s scepticism about the likely welfare benefits of customs unions gradually gave way to a popular opinion among economists that regional trade blocs generally created rather than diverted trade.

Among the proponents of regional trading arrangements are some prominent figures including Gary Sampson, the former Development Division Director of the World Trade Organization. In his article Regional Trading Arrangements and the Multilateral Trading System, Sampson states:

"With the successful conclusion of the (Uruguay) Round, it is fair to speculate that the growth in regionalism---operating in accordance with GATT obligations---has at least the potential to strengthen the rules-based multilateral trading system. The surge of regionalism parallels and complements a rapid expansion in GATT’s membership as evidenced by the fact that 28 countries are now in the process of accession to GATT…In short, provided that regionalism remains open---and the rules and procedures of the GATT offer the only generally available means of ensuring that it does---there is no reason why regional trade agreements and multilateral system should not continue to be mutually supportive.”[26]               

In the view of the author of this article, what Sampson cherishes sounds plausible in theory, but unattainable in practice. When Article XXIV of GATT 1947 was drafted as the exemptions to the general principle of non-discrimination among GATT contracting parties, it was deemed that there should be some strict rules adhered to it. For example, Article XXIV:7(a) requires that “Any contracting party deciding to enter into a customs union or free trade area, or an interim agreement leading to the formation of such a union or area, shall promptly notify the CONTRACTING PARTIES and shall make available to them such information regarding the proposed union or area as will enable them to make such reports and recommendations to contracting parties as they may deem appropriate.”[27] But this provision is neither clear nor operable.

Different views may arise with respect to the point in time at which notification of a regional trade agreement should occur: whether at the conclusion of negotiations, when the agreement is signed, when it is ratified or when it enters into force. In most cases, an international agreement may enter into force only after it is signed by the governments of its participants, ratified by their legislative bodies, or even approved by a referendum. If the notification process occurs prior to entry into force, then the examination body of the WTO will review the agreements which might be rejected eventually by one or more of the participants involved. Alternatively, if agreements are examined only after a protracted and perhaps difficult process of domestic legislative approval, the prospect of amending an agreement to reflect the concerns of the WTO Members will present its own difficulties.               

Apart from those apparent procedural problems like the one mentioned above, there are also some more substantial issues which merit our concern. Regional trading arrangements are often regarded by some scholars as the quicker way to liberalize international trade as the trade tariffs are lowered further among the participants of these arrangements.[28] But the other fact overlooked by them is that the barriers of tariffs in these regional blocs have been raised comparatively for those non-participants. In the words of Jacob Viner, two opposite forces would result from the creation of a customs union: a trade-creating force generated by the elimination of protection of domestic producers against their counterparts in other countries in the union; and a trade-diverting force resulting from the preferential access granted to partner countries in the union vis-a-vis more efficient third country producers.[29] Therefore, regional trading arrangements in a customs union look like a double-edged sword: they embody both free trade and protection since they are inherently preferential and discriminatory.   

The situation for the free trade area is no better than that of the customs unions, particularly in the context of those free trade areas with preconditions for their membership. Taking the North American Free Trade Agreement (NAFTA) for example, Professor Jagdish Bhagwati, in his article The Agenda of the WTO, told us that the passage of the NAFTA was subject to Mexico’s acceptance of the supplemental agreements on environment and labor standards.[30] This is just a wrong way to go: free trade requires no preconditions, why should the regional trading agreements be so as in the case of the NAFTA? If it is correct to impose such prior conditions for some participants to join a free trade area, then we would have to revise all our textbooks of international economics which tell us that, no matter what other countries’ own policies, we shall generally profit from freeing trade in a non-discriminatory fashion. Therefore, the demands imposed on Mexico could have been successfully resisted, as they were in the GATT (and now as they are in the WTO).[31] However, in view of the overall interests, the Mexican administration had to accept these prior conditions as this was a superpower bargaining in a one-on-one format with a vastly inferior power. In turn, this has strengthened the environmental and labor lobbies into arguing that because the NAFTA did it, so must the WTO. In short, the NAFTA has made the negotiations in the WTO more complex, not less.

Patricia Clavin, in the article The Triumph of Regionalism over Globalism: Patterns of Trade in the Interwar Period, gives us another perspective to realize the potential threat of regional trade blocs to the world economy. During the Great Depression, the world’s leading capitalist countries---the United States, Britain and France---failed to cooperate in efforts to combat the Depression because their different analyses of the causes of the Depression, coupled with the priority of national politics, left little common ground between each other. Although viable internationalist-oriented initiatives to save the world economy were proposed, there was a lack of political will to make them work. Instead, countries like National Socialist Germany and Fascist Italy, governed by regimes who argued that conflicts in the political economy could be eliminated, came to pose the gravest threat to capitalist liberal democracy. In the build up to the Second World War, the failure of cooperation among the sterling and franc regions, and the troubled history of trade negotiations left the capitalist economies more vulnerable than axis opponents in preparations on the road to war.[32]

In the view of Clavin, the Peace Treatise of Versailles concluded in 1919 helped to underline the divisions between European powers which encouraged States to protect national interests through the adoption and promotion of regional ties. Despite the fact that the nineteenth-century “age of imperialism” appeared to have passed, the peace settlement worked to extend the territorial boundaries of the British and French empires, and while the White Dominions (Canada, New Zealand and Australia) secured self-government, the popularity of notions of imperial economic interdependence among right-wing political groups continued. Although the diminution of Germany’s status as a great power, coupled with the “cuts in its national flesh”, served to limit German influence and custom in eastern Europe during the early 1920s, by 1930s German economic penetration of eastern European had returned in an aggressive form. In fact, it was not only particular members of German society who looked on with envious eyes at the continued imperial ties enjoyed by Britain and France. The apparent economic and strategic benefits enjoyed by the “have” imperial powers encouraged the drive for similar advantages by those “have not” powers as diverse as Japan, the promoter of co-prosperity across South East Asia, and Italy where there was a drive to conquer the Mediterranean. Even the United States, aloof from these imperial pretensions, and disdainful of others’ resort to Empire in the 1930s, was, nevertheless, motivated to strengthen its ties within its own economic backdoor in the Americas, both to the North and to the South.[33]

Although the present fragmentation of regional trade blocs are not as threatening to the world economic structure as they were in the 1930s, no one can assure us that similar tragedies will not reoccur. Thus, in the preparations of the Uruguay Round of multilateral trade negotiations, many prominent scholars and others advocated to make GATT obligations relating to regional trading agreements stricter and more precise. According to the work of an eminent study group, many existing regional integration arrangements

“fall far short of the (GATT) requirements. The exceptions and ambiguities which have thus been permitted have seriously weakened the trade rules, and made it very difficult to resolve disputes (to which GATT obligations are relevant). They have set a dangerous precedent for further special deals, fragmentation of the trading system, and damage to the trade interests of non-participants…GATT rules on customs unions and free trade areas should be examined, redefined so as to avoid ambiguity, and more strictly applied”.[34]

Despite the long-standing recognition of the lack of GATT obligations and due procedures relating to regional trading arrangements, the effort of the Uruguay Round negotiators in improving matters in this area was modest at best. Therefore, a fundamental revision of WTO rules and procedures concerning regional trade arrangements should be well appreciated.


VI. Conclusion

      There has already been a lot of literature published, which deals with the regulation of anti-dumping and countervailing measures.[35] The CEPA has brought us a new perspective on this issue. Article 3(2) of the Dispute Settlement Understanding provides that “one of the functions of the WTO dispute settlement mechanism is to clarify the existing provisions of those multilateral agreements.” Following this vein, the WTO panels and the Appellate Body “are 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.”[36] Among these “obscure provisions” are those WTO rules on anti-dumping and countervailing measures. Hopefully, the view expressed in this article will be taken into account when a dispute involving the elimination of anti-dumping and countervailing measures arises.

本文刊登于Pace International Law ReviewVol. XVIII, No. II2006


* PhD(Edinburgh University, UK), Professor of Law School, Shanghai Jiao Tong University. No. 800, Dong Chuan Road, Min Hang District, Shanghai, P. R. China, 200240. I am deeply grateful to Professor Darren Rosenblum of Pace University for his helpful recommendation and the then editor-in-chief Nikki Feit of Pace International Law Review for her careful edition of this article. However, the responsibility for any possible errors is still mine.

[1] As there is no official English version of this document, the title of this document here is translated into English by the author of this article. For the relevant Chinese documents, see the following website: (last visit: April 7, 2006).

[2] China became a WTO member on December 11, 2001. Hong Kong and Macao acceded to the WTO as original Members in 1994 under Article XI of the WTO Agreement. See The Legal Texts: The Results of the Uruguay Round of Multilateral Trade Negotiations, Cambridge University Press(1999), p.11.

[3] Id, at 147-171.

[4] See supra note 2, at 231-274.

[5] See the Preamble of GATT 1947. See supra note 2, at 424. In the book The Creation of States in International Law, Oxford: Clarendon Press(1979), p.1, James Crawford made an estimate that shortly before the World War II, there were only about seventy-five States on the earth.

[6] In this way, Hong Kong and Macao became GATT separate territories under the sponsorship of United Kingdom and Portugal, their former suzerain States.

[7] For the relevant official documents, see the following website: (last visit: April 6, 2006).

[8] Id.

[9] See the following website: (last visit: April 6, 2006).

[10] See the following website: (last visit: April 6, 2006).

[11] Id.

[12] See following website: (last visit: April 6, 2006). 

[13] See Henry S. Gao: Legal Issues under WTO Rules on the Closer Economic Partnership Arrangement (CEPA) between China and Hong Kong(presentation given at the Annual Meeting of China International Economic Law Association on October 26-30, 2003, on file with the author).

[14] As a general rule, the first paragraph of Article I provides that “With respect to customs duties and charges of any kind imposed on or in connection with importation or exportation or imposed on the international transfer of payments for imports or exports, and with respect to the method of levying such duties and charges, and with respect to all rules and formalities in connection with importation and exportation, and with respect to all matters referred to in paragraphs 2 and 4 of Article III, any advantage, favor, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.”(original note omitted) See supra note 2, at 424.

[15] The core provision of this article is the first paragraph which provides that “The contracting parties recognize that internal taxes and other internal charges, and laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products, and internal quantitative regulations requiring the mixture, processing or use of products in specified amounts or proportions, should not be applied to imported or domestic products so as to afford protection to domestic production.”(original note omitted) See supra note 2, at 427.

[16] See supra note 2, at 459-460.

[17] See supra note 2, at 460.

[18] GATT Article XXIV:4. See supra note 2, at 458.(emphasis added)

[19] In the context of the World Trade Organization, the terms “country” or “countries” as used in the WTO Agreement and the Multilateral Trade Agreements are to be understood to include any separate customs territory Member. In the case of a separate customs territory Member of the WTO, where an expression in the WTO Agreement and the Multilateral Trade Agreements is qualified by the term “national”, such expression shall be read as pertaining to that customs territory, unless otherwise specified. See Explanatory Notes to the WTO Agreement. See supra note 2, at 14.

[20] See supra note 2, at 431.

[21] See supra note 2, at 155-156.

[22] See supra note 2, at 245-246.

[23] See Article 14 of the Anti-dumping Agreement (Anti-Dumping Action on Behalf of a Third Country). See supra note 2, at 166.

[24] See Article 3(3) of the Dispute Settlement Understanding. See supra note 2, at 355.

[25] Jacob Viner: The Customs Union Issue, New York: Carnegie Endowment for International Peace(1950).

[26] Sampson’s article is contained in the book Regional Trade Blocs, Multilateralism and the GATT, edited by Till Geiger and Dennis Kennedy, PINTER(1996), pp.17-18.

[27] See supra note 2, at 459.

[28] See Stephen Woolcock: Regional Integration and the Multilateral Trading System (contained in the book Regional Trade Blocs, Multilateralism and the GATT), see supra note 25, at 115-130.

[29] See supra note 25.

[30] Professor Bhagwati’s article is contained in the book Challenges to the New World Trade Organisation, edited by Pitou van Dijick and Gerrit Faber, Kluwer Law International(1996), p.54. 

[31] Although whether the result will really benefit the developing countries remains debating, the recently finished WTO Ministerial Conferences have showed that developing countries have begun to use their combined force in the WTO to argue on some significant issues with the developed countries.

[32] Clavin’s article is contained in the book Regional Trade Blocs, Multilateralism and the GATT, see supra note 26, at 33. 

[33] See supra note 26, at 39-40.

[34] See F. Leutwiler: Trade Policies for a Better Future, GATT, Geneva(1985), p.41.

[35] See Joost Pauwelyn: Evidence, Proof and Persuasion in the WTO Dispute Settlement, Journal of International Economic Law, No.1, 1998; A. W. Shoyer: The First Three Years of WTO Dispute Settlement: Obersvations and Suggestions, Journal of International Economic Law, No. 1 1998;  Aluisio de LIMA-CAMPOS: Nineteen Proposals to Curb Absue in Antidumping and Countervailing Duty Proceedings, Journal of World Trade, No.2, 2005.

[36] On interpreting the relationship of WTO rules with the general international law, see another article of the author, The Role of International Law in the Development of WTO Law, Journal of International Economic Law, Volume 7, Issue Number 1, 2004.

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