GATT/WTO Flashcards
Location
Geneva, Switzerland
Created by
Uruguay-Round
Memberships
Memberships 164 states on 29 July 2016, representing 95% of
world trade
Budget
197 million Swiss Francs
Members of WYO
States (with formal legal personality)
States and territories (with disputed formal legal personality)
Autonomous custom areas (e.g. Hong Kong, Macao)
Each member state has one vote
European Community (founding member of GATT 1994) and its
Members:
EU and members of EU are both members of the WTO
(see competence of the EU or those of its members)
Number of members of EU that are members of WTO
equals the voting rights of the EU (Art. IX, 1 3rd sentence
of the WTO-Agreement)
Ministerial Conference
- the topmost decision-making body
- usually meets every two years
- all members of the WTO participate
- can take decisions on all matters under any of the multilateral trade agreement.
General Council
- highest decision making body (in Geneva)
- having the duties of the Ministerial Conference in between its meetings
- Representatives of all members of the WTO participate
- can take decisions on all matters under any of the multilateral trade agreements
- also meets under different rules (policy review, dispute settlement)
Several Agreements are applicable - conflicting results between WTO - and other international contracts
Art. 30 of the Vienna Convention on the Law of Treaties
(Principle of “lex posterior” (the international agreement
concluded later takes precedence over the agreement
concluded previously, if both regulate the same thing)
Principle of Reciprocity
Positive: if a party concedes concession the party may expect concessions from the other parties Negative: trade restrictive measures by one state may be answered by trade restrictive measures by another state
Principles in a nutshel
Liberalisation of trade through the elimination of trade barriers. Equal treatment: - most favoured nation clause; - National treatment; Trade liberalisation: - reduction of duties - non-tariff trade barriers
Cases in dispute
1. Infringement • Most Favored Nation Clause, Art. I; 1 GATT • Schedules of concessions, Art. II GATT • National Treatment, Art. III GATT 1. Exception: • Purchase for governmental purposes, Art. III: 8 GATT • General exceptions, Art. XX GATT • Security Exceptions, Art. XXI GATT • Safeguard Measures, Art. XIX GATT 3. Chapeau General rules on proportionality
Several agreements are applicable
- No general rule for all agreements
- Applicability depends on the individual case/article
General approach: case-by-case-solution, different
agreements may be applicable at the same time
1) Explizite rule regarding the priority of one treaty; e.g.
Art XXI lit. c GATT 1994 (security exceptions/sanctions
of the UN):
Nothing in this Agreement shall be construed
(c) to prevent any contracting party from taking any action in
pursuance of its obligations under the United Nations Charter
for the maintenance of international peace and security.
2) Art. 30 of the Vienna Convention on the Law of
Treaties:
Principle of “lex posterior” (the international agreement
concluded later takes precedence over the agreement
concluded previously, if both regulate the same thing
Infringement
- Most Favored Nation Clause (MFN; Art. I: 1
GATT 1994) - National Treatment (Art III: 1, 2 GATT)
- National Treatment, Art. III: 4 GATT
Examples of like products
• Japan: Soshu is lower taxed than Gin, Whisky, Vodka, Rum
• Philippines: Spirits made with raw material sugar are lower taxed than
Whisky, Vodka etc.
• Clove cigarettes and cigarettes with menthol taste
• US: Cars with combustion engine and gaz
• Mexico: Soft drinks with cane sugar and other sweeters
Like Products Criteria
• Physical characteristics: the greater the physical identity of two products the more likely it is that they are interchangeable
• Functional likeness: the extent to which two products do in fact perform the
same function
• Tariff applications
• Consumer tastes and habits: minor differences in taste and habits would not
be enough to prevent a finding of likeness
• Substitutability: the extent to which consumers perceive two products as functionally equivalent, measured by the consumer’s willingness to substitute
one for the other
• Excluded criteria:
“Like” Process and Production Methods: A notable example is the Tuna- Dolphin GATT Case
Exception
- Art. III: 8 GATT
2. Art. XX GATT 1994
Public morals
standards of right and wrong conduct maintained by or on
behalf of a community or nation…concepts can vary on time
depending upon a range of factors, including prevailing social,
cultural, ethical and religious values. Members should be given
some scope to define and apply for themselves the concepts of
public morals… in their respective territories, according to their
own systems and scales of values“.
Chapeau
- Exceptions have to be interpreted in a narrow way
- Exceptions must be necessary to achieve the defined goal
- Goal is within the scope of the exception
- Measure is appropriate to reach the goal
- Measure is the mildest remedy to reach the goal
- Measure must be raisonable
- Exceptions must be based on good faith (bona fide)
Waiver procedures
- Request by contracting party
- Council decides to establish a working
party - Working party drafts report and waiver
decision - Council adopts report and waiver decision
and recommends the adoption - Vote of the contracting parties
Interpreting of international contracts
An international instrument has to be interpreted and
applied with the framework of the entire legal system
prevailing at the time of the interpretation
Two-step approach:
- whether the term is meant to be interpreted in a
static or a dynamic manner (intention of the parties)
- Meaning at the time of interpretation
- Development of linguistic usage
- Meaning of the notion in international law
- Other relevant circumstances known at that moment
Effet utile/ Unwritten Compensation
- Treaty provisions are to be interpreted so as to
give them their fullest weight and effect - Unwritten Compensation/vertical direct effect:
Allows individuals to invoke before national courts
provisions of the treaties, directives etc. if
sufficiently clear and unconditional against member
states - Horizontal direct effect: Individuals might invoke
these rights against other private parties
Arbitration
Confidentiality Language Know-how of arbitrators Speed (estimated three times faster than state courts in average) Flexible procedure possible Normally no expert opinion necessary Often no appeal possible (speed!) Level of settlement very high (estimated between 40% and 90%)
State courts
Arbitrator often needs to be nominated at the beginning (speed?)
Normally both parties need to pay a retainer before arbitration
starts
Normally no appeal in arbitration
Less predictability of legal decisions possible in arbitration
Better predictability of legal decisions due to existing
jurisprudence at state courts
Decisions can‘t be enforced by arbitrators, states courts are
needed for enforcement
Arbitral tribunals
International Chamber of Commerce in Paris (ICC)
London Court of Arbitration
Ad-hoc Arbritration Panels
State Arbitration (China and Cuba)
