National Law in WTO Law: Effectiveness and Good Governance in the World Trading System

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Overview

This book examines how national law is treated in WTO law, both in the WTO treaty and dispute settlement cases. The WTO treaty contains a set of far-reaching obligations establishing a systemic and constitutional framework of interaction between WTO law and national law. WTO dispute settlement operates as an international layer of judicial review of national laws and administrative, judicial or quasi-judicial measures. Consequently, much of the WTO dispute settlement decisions and rulings relate in different ways to Members' national laws. Yet, up until the publication of this book, there was no systematic analysis of this vastly important subject. This book provides a thorough map of an increasingly complex field. In doing so, it extends the enquiry beyond well-known formulas and combines practical analysis with principled discussion of how the treatment of national law in international law can and should ensure effectiveness of international rules and promote good governance within nation-states.
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Product Details

Meet the Author

Advocate, Supreme Court of Bangladesh and Associate, Dr Kamal Hossain ans Associates.

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Table of Contents

1 Introduction 1

2 National law in international law 29

3 Systemic WTO obligations regarding national law 43

4 WTO dispute settlement procedures and national law 86

5 The problem of characterization 121

6 Standard of review 144

7 National law as a question of fact 207

8 Mandatory and discretionary legislation 244

9 Conclusion 270

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First Chapter


Cambridge University Press
9780521875318 - National Law in WTO Law - Effectiveness and Good Governance in the World Trading System - by Sharif Bhuiyan
Excerpt



1    Introduction




1    The WTO and its coverage

The coming into being of the World Trade Organization (WTO) on January 1, 1995 has been described as “a watershed moment for the institutions of world economic relations”1 and the international agreement that gave birth to this international organization has been viewed as “the most important event in recent world economic history.”2 The creation of the WTO lay in a trade negotiating round, namely the Uruguay Round of Multilateral Trade Negotiations (UR), that, in turn, has been described as “the largest and most complex negotiation concerning international economics in history” or even as “the largest and most complex negotiation ever.”3 None of these remarks may appear to be an overstatement if seen in the light of the WTO legal and institutional framework, which consists of about 30,000 pages of rules and concessions.4

   The Uruguay Round was launched in 1986 by the Contracting Parties of the General Agreement on Tariffs and Trade (GATT), the rather modest predecessor of the WTO, and,after eight years of negotiations by more than 120 nations, culminated in the signing of the Final Act embodying the results of the UR negotiations on April 15, 1994. The Final Act comprises the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) and various Ministerial Decisions and Declarations. Set out in the WTO Agreement are the purposes and objectives of the WTO and its institutional framework. Numerous other agreements and legal instruments, covering a very broad and diverse range of subject-matters and establishing a multifaceted normative framework – consisting of substantive, institutional and implementation aspects – are set out in three annexes to the WTO Agreement that form integral parts of the WTO Agreement and are binding on all Members.5 All of these entered into force when the WTO came into existence in 1995 with seventy-six Members, i.e. the countries that had ratified the WTO agreements by that time. The number of Members has rapidly increased since then and is 150 at present, with many other nations engaged in negotiations for accession.

   Much has happened in the world of international trade since the completion of the Uruguay Round and the coming into being of the WTO. In the third WTO Ministerial Conference6 held in Seattle in 1999 the international trade community witnessed the failure and breakdown of efforts to launch a new round of trade negotiations. However, a new round was launched at the next WTO Ministerial held in Doha in 2001. In terms of market access or new disciplines, the goals originally set for the Doha Round were no less, perhaps even more, ambitious than the Uruguay Round.7 In addition, for the first time in history, a trade negotiation round was expressly linked to development by designating the new round as the Doha Development Agenda. The Doha Round has seen many ups and downs in subsequent Ministerials at Cancún and Hong Kong, at the WTO headquarters in Geneva and in various capitals of the world. Most recently, in July 2006, the round was suspended because gaps between the key negotiating WTO Members have remained too wide even after five years of negotiations.

   At the time this book went to press, Doha negotiations were yet to be resumed.8 The cost of a failure of the Doha Round would certainly be huge, but it would not unravel the established multilateral trading system. The existing agreements under the umbrella of the WTO will remain well in place and so will the highly successful WTO dispute settlement mechanism. This book is devoted to an analysis of the state of the relationship between WTO law and national law. If eventually there is a successful outcome to the Doha negotiations, the analysis contained herein will be relevant in understanding the relation between national law and the new subjects, disciplines and market access commitments that the negotiations will bring under the WTO umbrella. In the unhappy event of a failure of the Doha Round, the analysis would continue to be relevant for the existing multilateral trading system.

   As some readers may not be familiar with the coverage of the WTO, it is worth pointing out the subject areas and matters dealt with under the current WTO agreements. The basic legal texts of the WTO (i.e. the WTO agreements exclusive of schedules of tariff, services trade and other concessions) alone take more than 500 pages;9 and the coverage is as extensive. While the predecessor, GATT, dealt only with trade in goods (that too with some significant exceptions, e.g. agricultural trade was de facto excluded from the scope of the GATT), through the WTO international discipline was extended for the first time to trade in services10 and to trade-related aspects of intellectual property rights.11 In addition, in the goods sector many new innovations and improvements were introduced.12 The principal agreement concerning trade in goods is the GATT 1994, which consists of the provisions in the GATT 1947 and a number of protocols, decisions and understandings that either entered into force under the GATT 1947 or were agreed upon during the UR.13 In addition, twelve new agreements were introduced dealing with two particular sectors of trade, namely agriculture14 and textiles,15 and addressing substantive subjects as diverse as sanitary and phytosanitary measures,16 technical standards,17 trade-related investment measures,18 customs valuation,19 preshipment inspection,20 rules of origin,21 import licensing,22 dumping,23 subsidies24 and safeguards.25 On the institutional and implementation side, in addition to the WTO Agreement, two more agreements were introduced: one of them provided for a new set of dispute settlement procedures26 and the other established a mechanism for periodic review of Members’ trade policies.27


2    Aims, objects and relevance of the study

The complexities of the WTO legal framework is such that Professor Jackson, a leading scholar in the field, on the basis of his interviews with WTO officials and Uruguay Round negotiators, has observed that: “the WTO Agreement, including all its elaborate Annexes, is probably fully understood by no nation that has accepted it, including some of the richest and most powerful trading nations that are members.”28 Thus it is no wonder that since its inception the WTO has attracted a considerable amount of attention from all quarters: governments, academics and professionals (coming from a range of disciplines – legal, socio-political, economic and so on) and, of course, from the public at large. Commensurately with this increased attention, the scrutiny and analysis of the international trading system has also increased. For instance, two foremost academic publishing houses in England have commenced publication of two newly established journals devoted, largely, to WTO-related legal issues.29 Leading legal periodicals published from Europe, North America and elsewhere have already devoted thousands of pages to research and analysis concerning the WTO system. The number of books on WTO and international trade topics that have been published since the completion of the Uruguay Round is equally remarkable.30 So far as legal scholarship is concerned, many conceivable aspects and implications of the WTO – covering constitutional and substantive issues, dispute settlement, implications of the WTO for “non-WTO subjects” such as environment, labor, competition, investment and so on – have been subjected to extensive and rigorous research and analysis.

   Nonetheless, given the complex and multifaceted labyrinth of the WTO legal framework it is unconvincing to argue, as former Director-General of the WTO Mike Moore has put it, “that there is ever enough research and analysis.”31 The aim of this book is to attempt to bring into proper focus an aspect of the WTO legal order that as yet remains relatively less explored.

   One of the many topics that the establishment of the WTO has generated interest in is the relationship between WTO law and national law.32 There are two different aspects of this relationship, namely, (i) the relation in a domestic context, and (ii) the relation in WTO law. There already exists an enormous amount of scholarly research and vibrant analysis devoted to many important issues that arise in the former context.33 Thus much has been written – to note just a few selected issues – on various matters concerning implementation of WTO obligations in the domestic laws of Member countries (including the contentious question of giving or denying self-executing or direct effect to WTO norms), the procedures under national law to enable private businesses to take advantage of the international trade discipline or the lack of such procedures, the question of interpretation of WTO agreements by national courts, the doctrine of consistent interpretation (i.e. construing national law in accordance with WTO obligations), etc. In marked contrast, the question of how national law is treated in WTO law, important as it is, has not received the necessary critical attention.34 Although recently one or two discrete issues that can be viewed as specific facets of this question have started to gain prominence,35 as yet no study has been undertaken that looks at the matter in a more comprehensive manner. The purpose of this book is to begin this wider analysis by drawing together and underscoring the significance of the vital issues concerning national law that exist or arise at the WTO level.

   However, apart from the above, there are other important systemic and policy reasons for undertaking a project such as the present one. Compared to any other contemporary international treaty, the WTO agreements make it much more common for international and national legal norms to have endless points of contact between them. There are a number of reasons for this. First, the WTO treaty establishes rules and discipline for the conduct of international trade, which as a subject-matter is more heavily legislated by national legislatures than most other subjects. In addition, WTO rules and discipline cover, and either regulate or hinge on, a very wide array of matters relating to trade (some of which have already been referred to36), ranging from customs, tax and fiscal matters to dumping and subsidies, product standards, environment, health, national security and so on (perhaps almost anything under the sun that can affect and hamper movement of goods or services or the protection of intellectual property rights). Thus it is only natural for every WTO Member to have an enormous amount of laws, regulations and other instruments that address the same subject-matters as the WTO agreements. As a result, there are innumerable points of contact between WTO norms and national laws. Second, such contacts become all the more frequent because of the level of detail at which the massive WTO treaty, in its more than 500 pages of legal texts, seeks to regulate various conducts and relations.

   One should also be mindful of the value of the economic activities covered by the WTO treaty,37 which surpasses, by far, the economic value represented by most other international treaties. The enormity of economic interest at stake makes it all the more common to have conflicts of interest or disputes between WTO Members.38 Such disputes are almost inevitably animated by the disputing parties’ perception of the relevant WTO norms and the national trade and “trade-related” laws and policies that may be in question. Thus disputes play a vital role in making the interaction between WTO law and national law more explicit.

   Accordingly, the process that makes the interaction highly prominent at the WTO level – not to mention much more prominent than under any other international treaty or before any other international forum – is the WTO’s unique dispute settlement system. While some of the aspects and threads of that system relevant for purposes of the present study are discussed later in Chapter 4, a few general but salient features may be mentioned here. Put succinctly, WTO dispute settlement is at once “compulsory,” “exclusive” and “automatic.” The first of these characteristics does not require much elaboration: it means that the jurisdiction of various dispute settlement organs of the WTO is compulsory39 and any Member can unilaterally trigger against another Member any of the various procedures set out in the WTO text on dispute settlement, namely, the Dispute Settlement Understanding (DSU). Because all of the 150 Members of the WTO are bound by the DSU, it is, as has been rightly noted, “the most extensive network of compulsory dispute settlement obligations in contemporary international law.”40 So much so that seasoned commentators have suspected that the WTO procedures are destined to “exert a gravitational pull, drawing into the WTO system disputes that could not easily find a forum elsewhere, and recasting them as ‘trade’ disputes.”41

   The system is “exclusive” in the sense that with regard to disputes concerning matters provided for in the WTO agreements Members are required to have recourse to the DSU procedures to the exclusion of any other procedure or system.42 The standard procedure under the DSU comprises ad hoc panels and a standing Appellate Body (hereinafter also AB). Thus, a dispute is referred in the first instance to an ad hoc panel and from its decision an appeal can be made to the standing Appellate Body. In addition, the DSU envisages arbitration for certain disputes concerning implementation of recommendations and rulings issued through the panel and appeal procedure.43 The only alternative to the standard panel process is “arbitration within the WTO” under Article 25 of the DSU.44 However, such arbitrations are subject to multilateral control in that any agreement to arbitrate must be notified to all Members and the award must be notified to the Dispute Settlement Body (which is a plenary organ representing all Members) as well as to any relevant council or committee where Members may raise any point relating to it.45 Thus the WTO, or, more specifically, various dispute settlement organs established under the DSU taken together, is the “exclusive forum” for the adjudication of all “trade-related” disputes among Members.

    The words “automatic” and “automaticity” have been coined to describe the binding nature and timeliness of the WTO dispute settlement system.46 Once the dispute settlement mechanism is set in motion by a complainant, various procedural steps envisaged in the DSU – for instance, establishment of a panel and its terms of reference, selection of panelists, circulation and adoption of panel and Appellate Body reports, taking retaliatory measures, etc. – are triggered “automatically” in accordance with a strict time-frame set out in the DSU. Thus the respondent government can neither block nor delay the proceedings at any stage.

   The above characteristics of the WTO dispute settlement system, coupled with the broad substantive coverage of the WTO agreements, have resulted in its extensive use.47 Beginning from its inception in 1995 until now, 363 cases have been initiated and 136 panel reports, 81 Appellate Body reports and 38 arbitration awards – in total more than 48,000 pages of reports and awards – have been issued.48 This huge body of jurisprudence has already been seen as reflecting the emergence of “a distinct WTO legal system.”49

   In terms of length, breadth of the substantive coverage, value of the economic interest represented and number of states parties, the treaty that, at least to an extent, can be compared to the WTO treaty is the United Nations Convention on the Law of the Sea of 1982 (UNCLOS).50 However, the dispute settlement mechanism provided in UNCLOS is neither as exclusive nor as compulsory as that of the DSU.51 More importantly, the states parties to UNCLOS are not finding it necessary to make an extensive use of that mechanism. Thus, for instance, until now a total of only thirteen cases have been brought before the International Tribunal for the Law of the Sea – the central dispute settlement forum established by UNCLOS.52

   It may also not be beside the point to say a few words about two other international (or more accurately “regional”) treaty regimes that have, in terms of both subject-matters and details, a substantive coverage similar – indeed even wider – to the WTO agreements. These are the European Communities or the European Union (EC/EU) and the North American Free Trade Agreement (NAFTA), both of which are trade liberalization regimes and, as such, in respect of many substantive matters share with the WTO “a common legal vocabulary.”53 There are also well-developed and compulsory dispute settlement systems established under the EC Treaty and the NAFTA. However, both the EC/EU and NAFTA have a very limited number of member states or states parties, respectively. The EU used to comprise fifteen developed countries of Western Europe until the recent enlargement that took place in May 2004, when ten other European nations joined the group. NAFTA has only three states parties – two developed countries (Canada and the United States) and a developing country (Mexico).

   Thus, WTO dispute settlement organs stand out for their nearly universal compulsory jurisdiction and for having such jurisdiction over a set of international obligations that is truly extensive. As discussed in greater detail in Chapter 4 below, the disputes before the WTO are about the WTO-compatibility of national measures, i.e. national laws and other governmental (administrative, judicial or quasi-judicial) acts. As a result, WTO adjudicative bodies confront issues of national law on a rather regular basis: obviously, they do so in cases where they are called upon to review the WTO-compatibility of national laws; but issues of national law can also be important in cases where the review concerns other national measures such as administrative or judicial decisions, because such decisions are often taken in pursuance of a law. Thus, much of the more than 48,000 pages of WTO jurisprudence relates in different ways to Members’ national laws.

   Another notable aspect of the WTO legal regime is that the WTO treaty imposes certain obligations on Members regarding their national laws that are not only far-reaching but are also “systemic” in character. As discussed in Chapter 3 below, broadly, there are four categories of such obligations: obligations to implement WTO commitments in domestic laws and to ensure conformity of such laws with the WTO agreements; obligations to ensure transparency in respect of national laws through their publication and notification to the WTO; obligations to administer national laws in a certain (e.g. in a uniform, impartial, reasonable, consistent, neutral, fair, equitable, objective) manner; and obligations to make available under national laws specified procedures and remedies (e.g. procedures for judicial review of administrative acts).




© Cambridge University Press
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