GATT/WTO

Question 1

Location

Answer 1

Geneva, Switzerland

Question 2

Created by

Answer 2

Uruguay-Round

Question 3

Memberships

Answer 3

Memberships 164 states on 29 July 2016, representing 95% of

world trade

Question 4

Budget

Answer 4

197 million Swiss Francs

Question 5

Members of WYO

Answer 5

 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)

Question 6

Ministerial Conference

Answer 6

• 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.

Question 7

General Council

Answer 7

• 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)

Question 8

Several Agreements are applicable - conflicting results between WTO - and other international contracts

Answer 8

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)

Question 9

Principle of Reciprocity

Answer 9

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

Question 10

Principles in a nutshel

Answer 10

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

Question 11

Cases in dispute

Answer 11

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

Question 12

Several agreements are applicable

Answer 12

1. No general rule for all agreements
2. 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

Question 13

Infringement

Answer 13

1. Most Favored Nation Clause (MFN; Art. I: 1
   GATT 1994)
2. National Treatment (Art III: 1, 2 GATT)
3. National Treatment, Art. III: 4 GATT

Question 14

Examples of like products

Answer 14

• 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

Question 15

Like Products Criteria

Answer 15

• 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

Question 16

Exception

Answer 16

1. Art. III: 8 GATT

2. Art. XX GATT 1994

Question 17

Public morals

Answer 17

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“.

Question 18

Chapeau

Answer 18

• 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)

Question 19

Waiver procedures

Answer 19

1. Request by contracting party
2. Council decides to establish a working
   party
3. Working party drafts report and waiver
   decision
4. Council adopts report and waiver decision
   and recommends the adoption
5. Vote of the contracting parties

Question 20

Interpreting of international contracts

Answer 20

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

Question 21

Effet utile/ Unwritten Compensation

Answer 21

• 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

Question 22

Arbitration

Answer 22

 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%)

Question 23

State courts

Answer 23

 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

Question 24

Arbitral tribunals

Answer 24

 International Chamber of Commerce in Paris (ICC)
 London Court of Arbitration
 Ad-hoc Arbritration Panels
 State Arbitration (China and Cuba)

Question 25

Relevant bodies and panels

Answer 25

 Dispute Settlement Body (DSB)
 Panels
 Appellate Body
 Secretary of the WTO
 Secretary of the Appellate Body (and of course)
 The parties (members of WTO)

Question 26

Dispute settlement body

Answer 26

 DSB (Art. 2.1. DSU) is relevant player in the workflow of the
arbitration
 DSB has authority to establish Panels
 DSB adopts Panels- and Appellate Body- reports
 DSB is surveilling the implementation of rulings and
recommendations
 DSB authorizes suspension of concessions and other obligations
 Panels are reviewing cases and are giving their
recommendations/reports, they discuss and negotiate with
parties
 Appellate Body is only reviewing legal questions, no factual
topics