Treaty interpretation and the WTO appellate body report in US - Gambling: A critique

Journal of International Economic Law

Volumn 9, Issue 1, 2006, Pages 117-148

  Ortino, Federico ^a,b  

^a Investment Treaty Forum   (United Kingdom)

^b UNIVERSITY OF TRENTO   (Italy)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33645307750     PISSN: 13693034     EISSN: 14643758     Source Type: Journal    
DOI: 10.1093/jiel/jgi052     Document Type: Review

References (134)

1. Panel Report, United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services ('US-Gambling'), WT/DS285/R, circulated on 10 November 2004. While the Panel rejected Antigua's claim with regard to Article VI GATS, it exercised judicial economy and did not examine Antigua's arguments with regard to Articles XI and XVII GATS.
2. Ibid, at paras 6.426, 6.437 and 6.442.
3. Article XVI GATS reads as follows: 1. With respect to market access through the modes of supply identified in Article I, each Member shall accord services and service suppliers of any other Member treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule, [footnote omitted] 2. In sectors where market-access commitments are undertaken, the measures which a Member shall not maintain or adopt either on the basis of a regional subdivision or on the basis of its entire territory, unless otherwise specified in its Schedule, are defined as: (a) limitations on the number of service suppliers whether in the form of numerical quotas, monopolies, exclusive service suppliers or the requirements of an economic needs test; (b) limitations on the total value of service transactions or assets in the form of numerical quotas or the requirement of an economic needs test; (c) limitations on the total number of service operations or on the total quantity of service output expressed in terms of designated numerical units in the form of quotas or the requirement of an economic needs test; [footnote omitted] (d) limitations on the total number of natural persons that may be employed in a particular service sector or that a service supplier may employ and who are necessary for, and directly related to, the supply of a specific service in the form of numerical quotas or the requirement of an economic needs test; (e) measures which restrict or require specific types of legal entity or joint venture through which a service supplier may supply a service; and (f) limitations on the participation of foreign capital in terms of maximum percentage limit on foreign shareholding or the total value of individual or aggregate foreign investment.
4. The Federal measures that were found to violate Article XVI GATS were as follows: the Wire Act; the Travel Act; and the Illegal Gambling Business Act (when read together with the relevant state laws). As to the State measures in violation of Article XVI GATS: Louisiana: § 14:90.3 of the La. Rev. Stat. Ann.; Massachusetts: § 17A of chapter 271 of Mass. Ann. Laws; South Dakota: § 22-25A-8 of the S.D. Codified Laws; and Utah: § 76-10-1102(b) of the Utah Code.
5. Panel Report, US - Gambling, above n 2, paras 7.2.
6. Appellate Body Report, US - Gambling, WT/DS285/AB/R, circulated on 7 April 2005, para 373.
7. Paragraph 1 of Article 31 reads as follows: 'A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.'
8. Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31: (a) leaves the meaning ambiguous or obscure; or (b) leads to a result which is manifestly absurd or unreasonable.'
9. Done at Vienna, 23 May 1969 in 8 International Legal Materials (1969) 679.
10. Appellate Body Report, United States - Standards Reformulated and Conventional Gasoline (US-Gasoline), WT/DS2/AB/R, at 17. It is worth emphasizing that this marks an important change from the looser approach to treaty interpretation in the GATT panel practice dominated by the search for 'general consensus among the trade policy elite - negotiators, academic specialists, practicing diplomats - concerning what the text is really about'.
11. Robert Howse, 'Adjudicative Legitimacy and Treaty Interpretation in International Trade Law: The Early Years of WTO Jurisprudence', in Joseph H. H. Weiler (ed), The EU, the WTO, and the NAFTA: Towards a Common Law of International Trade? (Oxford, OUP, 2000), at 57-58.
12. The Appellate Body confirmed a form of discrimination based on an authorization in the Interstate Horseracing Act permitting domestic, but not foreign, service suppliers to offer remote betting services in relation to certain horse races. Appellate Body Report, US - Gambling, above n 6, para 369.
13. Ibid, at paras 370-72.
14. In its commentary to Article 31, the International Law Commission (ILC) noted as follows: The Commission, by heading the article "General Rule of Interpretation" in the singular and by underlining the connection between paragraphs 1 and 2 and again between paragraph 3 and the two previous paragraphs, intended to indicate that the application of the means of interpretation in the article would be a single combined operation. All the various elements, as they were present in any given case, would be thrown into the crucible and their interaction would give the legally relevant interpretation. Thus [Article 31] is entitled "General rule of interpretation" in the singular, not "General rules" in the plural, because the Commission desired to emphasize that the process of interpretation is a unity and that the provisions of the article form a single, closely integrated rule.' [emphasis original] Yearbook of the International Law Commission, 1966, Vol II, at 219-20.
15. See also, Ian Sinclair, The Vienna Convention on the Law of Treaties (2nd edn, Manchester University Press, 1984), at 116.
16. Henrik Horn and Joseph Weiler, 'European Communities - Trade Description of Sardines: Textualism and its Discontent', in Henrik Horn and Petros C. Mavroidis (eds), The WTO Case Law of 2002 (Cambridge, CUP, 2005), at 253.
17. Such full market access commitment is evidenced by inserting the word 'none' in the relevant sector or sub-sector of the schedule of specific commitments.
18. Article I:2 GATS states that: 'For the purposes of this Agreement, trade in services is defined as the supply of a service: (a) from the territory of one Member into the territory of any other Member; (b) in the territory of one Member to the service consumer of any other Member; (c) by a service supplier of one Member, through commercial presence in the territory of any other Member; (d) by a service supplier of one Member, through presence of natural persons of a Member in the territory of any other Member.'
19. Article XX:1 GATS provides that 'Each Member shall set out in a schedule the specific commitments it undertakes under Part III of this Agreement. With respect to sectors where such commitments are undertaken, each Schedule shall specify: (a) terms, limitations and conditions on market access; [...] (d) where appropriate the time-frame for implementation of such commitments; and (e) the date of entry into force of such commitments.' Cf. Friedl Weiss, 'The General Agreement on Trade in Services 1994', 32 CMLR (1995) 1177 at 1203.
20. The United States of America - Schedule of Specific Commitments, GATS/SC/90, 15 April 1994.
21. Appellate Body Report, United States - Final Countervailing Duty Determination with Respect to Certain Softwood Lumber from Canada (US - Softwood Lumber IV), WT/DS257/AB/R circulated on 19 January 2004, para 59;
22. Appellate Body Report, Canada - Measures Affecting the Export of Civilian Aircraft (Canada - Aircraft), WT/DS70/AB/R, circulated on 2 August 1999, para 153;
23. and Appellate Body Report, European Communities - Measures Affecting Asbestos and Asbestos-Containing Products (EC - Asbestos), WT/DS135/AB/R, circulated on 12 March 2001, para 92.
24. Most recently, Horn and Weiler, above n 14, at 252 and William Davey, 'The WTO Dispute Settlement System: The First Ten Years', 8 JIEL (2005) 17, at 22.
25. See also Daniel Tarullo, The Hidden Costs of International Dispute Settlement: WTO Review of Domestic Anti-dumping Decisions', 34 Law & Policy of International Business (2002) 109, at 124.
26. Panel Report, US - Gambling, above n 2, para 6.110.
27. Panel Report, US - Gambling, above n 2, para 6.61.
28. Appellate Body Report, US - Gambling, above n 6, para 164 [original footnotes omitted; original emphasis].
29. Ibid, para 167.
30. [Emphasis added]. Reporting on the results of the Vienna Conference on treaty interpretation, Sinclair noted that 'the Commission had had no intention of suggesting that words had a 'dictionary' or intrinsic meaning in themselves. The ordinary meanings of terms emerged only in the context in which they were used, in the context of the treaty as a whole, and in the light of its object and purpose', Ian Sinclair, 'Vienna Convention on the Law of Treaties', 19 ICLQ (1970) 61, at 65.
31. Illustrative, in this regard, is the work carried out by the International Law Commission (ILC) on Unilateral Acts of States, where the issue of interpretation of unilateral acts has been addressed. See ILC Report on the work of its fifiy-fourth session (29 April-7 June and 22 July-16 August 2002) General Assembly Official Records Fifty-seventh Session Supplement No. 10 (A/57/10), paras 403-08
32. and ILC Report on the work of its fifty-third session (23 April-1 June and 2 July-10 August 2001) General Assembly Official Records Fifty-fifth Session Supplement No. 10 (A/56/10) paras 227ff. (a draft article prepared by the Special Rapporteur read in part as follows: 'A unilateral act shall be interpreted in good faith in accordance with the ordinary meaning given to the terms of the declaration in their context and in the light of the intention of the author State.').
33. Appellate Body Report, US - Gambling, above n 6, para 160.
34. Ibid, para 166.
35. See the statement of the Appellate Body Report on EC - Computer Equipment
36. (quoted by the Panel Report on US - Gambling):
37. '[w]hile each Schedule represents the tariff commitments made by one Member, they represent a common agreement among all Members.' Appellate Body Report, European Communities - Customs Classification of Certain Computer Equipment (EC-Computer Equipment), WT/DS67/AB/R circulated on 5 June 1998, para 109
38. (cited by the Panel Report on US - Gambling, above n 2, para 6.92).
39. Services Sectoral Classification List, Note by the Secretariat, MTN.GNS/W/120, 10 July 1991 (hereinafter the 'W/120'). Document W/120 followed the circulation of an informal note containing a draft services sectoral classification list in May 1991, as well as the circulation of an initial reference list of sectors (the 'W/50') in April 1989 (MTN.GNS/W/50, 13 April 1989). A short cover note to W/120 explains that the document reflects, to the extent possible, comments made by negotiating parties on the May draft, and that W/120 itself might be subject to future modification.
40. Provisional Central Product Classification, Statistical Papers, Series M No. 77, United Nations (1991). The United Nations Central Product Classification has been revised on several occasions. The latest version is the Central Product Classification, Version 1.1, Statistical Papers, Series M No. 77, United Nations (2004).
41. Scheduling of Initial Commitments in Trade in Services: Explanatory Note, MTN.GNS/W/164, 3 September 1993, at p 1.
42. For example, paragraphs 24 to 27 explain that: to indicate a full commitment, a Member should enter 'NONE'; to make no commitment, it should enter 'UNBOUND'; and to make a commitment with limitations, the Member should enter a concise description of each measure, 'indicating the elements which make it inconsistent with Articles XVI or XVII'.
43. It should be noted that on 23 March 2001 the Council for Trade in Services adopted 'Guidelines for the Scheduling of Specific Commitments under the General Agreement on Trade in Services (GATS)' following a revision exercise of the 1993 Guidelines carried out in the Committee on Specific Commitments. A note to the 2001 Guidelines states that: 'These guidelines shall be applicable as of the date of their adoption. It should be understood that schedules in force prior to the date of this document have been drafted according to [the 1993 Guidelines]'. See document S/L/92, circulated on 28 March 2001.
44. Panel Report, US - Gambling, above n 2, para 6.93
45. and Appellate Body Report, US - Gambling, above n 6, para 201.
46. Panel Report, US - Gambling, above n 2, para 6.87
47. and Appellate Body Report, US - Gambling, above n 6, para 203.
48. Appellate Body Report, US - Gambling, above n 6, para 204.
49. The distinction between the primary criteria for interpreting a treaty identified in Article 31 of the Vienna Convention (in particular, text, context, object and purpose, good faith) and the supplementary means of interpretation pursuant to Article 32 of the Vienna Convention (in particular, preparatory work) should be emphasized here. As explained in the ILC Commentary on the draft Vienna Convention, the aim of the distinction was to focus treaty interpretation on 'the elucidation of the meaning of the text rather than an investigation ab initio of the supposed intentions of the parties [...]. The word supplementary emphasizes that article [32] does not provide for alternative, autonomous, means of interpretation but only for means to aid an interpretation governed by the principles contained in article [31].' Yearbook of the International Law Commission, 1966, Vol II at 223.
50. Note on the Meeting of 27 May to 6 June 1991, MTN.GNS/42, para 19 (24 June 1991)
51. (quoted in Panel Report, US - Gambling, above n 2, para 3.41 and
52. footnote 117 thereto and in Appellate Body Report, US - Gambling, above n 6, para 176 and footnote 210 thereto). The paragraph of this Note is taken from the minutes from a meeting that was held after the Secretariat had circulated its first draft classification list, but before the final version of W/120 had been circulated.
53. This conclusion would not preclude the 1993 Scheduling Guidelines and document W/120 from also representing more broadly relevant preparatory work for purposes of Article 32 of the Vienna Convention. For a similar conclusion see Panel Report, European Communities - Conditions for the Granting of Tariff Preferences to Developing Countries (EC- Tariff Preferences), WT/DS246/R, circulated on 1 December 2003, para 7.88.
54. Francis Jacobs, 'Varieties of Approach to Treaty Interpretation: With Special Reference to the Draft Convention on the Law of Treaties before the Vienna Diplomatic Conference', 18 ICLQ 318 (1969), at 333.
55. The Appellate Body itself seem to refer to notions of shared (rather than individual) expectations. See Appellate Body Report, US - Gambling, above n 6, para 204 (as quoted in the text at footnote 32).
56. Sinclair noted that 'Recourse to the travaux préparatoires of a treaty must always be undertaken with caution and prudence'. Sinclair, above n 13, at 142ff.
57. Claus-Dieter Ehlermann, 'Six Years on the Bench of the "World Trade Court'", in Federico Ortino and Ernst-Ulrich Petersmann (eds), The WTO Dispute Settlement System 1995-2003 (The Hague/ London/New York, Kluwer Law International, 2004), at 509.
58. In Telmex case, the Panel did not decide whether the 1993 Scheduling Guidelines provide 'context' for purposes of Article 31 (2) or (3) or 'supplementary means' within the meaning of Article 32 of the Vienna Convention. The Panel, however, hinted that it would use the 1993 Guidelines in the latter sense only in order to confirm its understanding of the ordinary meaning of 'cross-border supply of services'. Panel Report, Mexico - Measures Affecting Telecommunications Services (Mexico - Telecoms or Telmex) WT/DS204/R, circulated on 2 April 2004, para 7.44.
59. On the doctrine of non liquet more generally in public international law and in WTO law, see Lorand Bartels, 'The Separation of Powers in the WTO: How to Avoid Judicial Activism', 53(4) ICLQ (2004) 861, at 873-76. It may be emphasized in this regard that, contrary to Article 31(1) of the Vienna Convention, Article 32 uses the verb 'may' (rather than 'shall'), thus supporting the view that recourse to supplementary means of interpretation is a discretionary step rather than a mandatory one.
60. 'The word "supplementary" emphasizes that article [32] does not provide for alternative, autonomous, means of interpretation but only for means to aid an interpretation governed by the principles contained in article [31]'. International Law Commission Commentary on the draft Vienna Convention, Yearbook of the International Law Commission, 1966, Vol. II at 222-23.
61. Michael Lennard, 'Navigating by the Stars: Interpreting the WTO Agreements', 5 JIEL (2002) 17, at 23.
62. See Panel Report, United States - Sections 301-310 of the Trade Act of 1974 (US - Section 301), WT/DS152/R, para 7.22, where the Panel stated that all of the elements of Article 31(1) of the Vienna Convention operate as 'one holistic rule'.
63. Appellate Body Report, US - Gambling, above n 6, paras 185-86. This squarely accords both with the other contextual element discussed above (i.e., the underlying agreement to use W/120 as the default model), which the Appellate Body, however, discarded as proper 'context'; and with an interpretation of the US schedule 'in good faith', taking into account the legitimate expectations of the broader membership.
64. Ibid, para 186.
65. In a similar manner, after having dismissed the relevance of the object and purpose of the GATS in order to determine where, in the US Schedule, 'gambling and betting' fall, the Appellate Body next sentence read as follows: 'Accordingly, it is necessary to continue our analysis by examining other elements to be taken into account in interpreting treaty provisions.' Ibid, para 189.
66. Ibid, paras 188-89,
67. citing the Panel Report, US - Gambling, above n 2, para 6.108.
68. 'Every text, however clear on its face, requires to be scrutinized in its context and in the light of the object and purpose which it is designed to serve. The conclusion which may be reached after such a scrutiny is, in most instances, that the clear meaning which originally presented itself is the correct one, but this should not be used to disguise the fact that what is involved is a process of interpretation.' Sinclair, above n 13, at 116.
69. Appellate Body Report, US - Gambling, above n 6, paras 239 and 252.
70. Panel Report, US - Gambling, above n 2, paras 6.338 and 6.355 [emphasis added].
71. The Appellate Body's analysis of subparagraph (c) of Article XVI:2 follows broadly the arguments and findings developed with regard to subparagraph (a). See Appellate Body Report, US - Gambling, above n 6, paras 246-52.
72. To a certain extent, the Panel did a better job in applying the various tenets of the general rule of interpretation set out in Article 31 of the Vienna Convention.
73. Appellate Body Report, US - Gambling, above n 6, para 226.
74. See footnote 266 of the Appellate Body Report, US - Gambling, above n 6.
75. If there was ever a time when the Appellate Body should have restrained itself in making use of dictionaries, this was certainly it. After more than fifty years since the GATT entered into operation, looking up the meaning of the term 'quota' was indeed a discouraging sign of weakness on the part of the Appellate Body.
76. Appellate Body Report, US - Gambling, above n 6, para 230.
77. Appellate Body Report, EC - Asbestos, above n 19, para 90.
78. Appellate Body Report, US - Gambling, above n 6, para 232.
79. Ibid, para 232.
80. Ibid, paras 233-34
81. quoting Panel Report, US - Gambling, above n 2, para 6.331.
82. Panel Report, US- Gambling, above n 2, para 6.287.
83. 'It seems clear from the 1993 Scheduling Guidelines that the list of limitations in paragraph 2 of Article XVI is an exhaustive list. Thus, the types of measures listed in the second paragraph exhaust the types of market access restrictions prohibited by Article XVI, in particular by the first paragraph of Article XVI.' Panel Report, US - Gambling, above n 2, paras 6.298-6.299.
84. See Philip Raworth, Trade in Services - Global Regulation and the Impact on Key Service Sectors (New York, Oceana Publications, 2005), at 36-37.
85. The Appellate Body does not review the issue of whether or not the list of Article XVI:2 is exhaustive since Antigua had appealed this finding conditional upon the Appellate Body's reversing the finding of the Panel that certain United States federal and state laws are contrary to Article XVI:1 and Article XVI:2 of the GATS (which the Appellate Body did not). Appellate Body Report, US - Gambling, above n 6, para 256.
86. However, there may be some indication that the Appellate Body would disagree with the Panel's finding on the exhaustive nature of Article XVI:2 list. The finding of the Appellate Body according to which both Article XVI:2(a) and Article XVI:2(c) apply to the US measures under review seems to support such view. If the list were really exhaustive in nature, the limitations listed in subparagraphs (a) to (f) would not apply cumulatively. See Joost Pauwelyn, 'Rien Ne Va Plus: Distinguishing Domestic Regulation from Market Access in GATT and GATS', in 4 World Trade Revew (2005) 131, at 163.
87. Cf. Federico Ortino, Basic Legal Instruments for the Liberalisation of Trade: A Comparative Analysis of EC and WTO Law (Oxford, Hart Publishing, 2004), at 32-33.
88. It should be emphasized that Article VI:5 applies (i) provisionally pending the entry into force of the disciplines developed pursuant to Article VI:4, (ii) in sectors in which a Member has undertaken specific commitments and (iii) conditional upon there being nullification or impairment of specific commitments which could not reasonably have been expected at the time those commitments were made.
89. A secondary function of the national treatment and reasonableness provisions is to invalidate any existing discriminatory or unreasonable national measure (this is, in strict terms, a negative function).
90. Compare, for example, a provision prohibiting any measure regulating the environment with a provision requiring that environmental measures be non-discriminatory or reasonable. The former provision is stricter because it simply prohibits a certain type of regulation, while the latter is less demanding since in principle it allows for environmental regulations as long as they conform to the non-discrimination or reasonableness principles. On the distinction between negative and positive integration see Ortino, above n 58, at 17-27.
91. Disciplines on Domestic Regulation in the Accountancy Sector, Decision of the GATS Council of 14 December 1998, S/L/64.
92. See Adityaa Mattoo and Pierre Sauvé, 'Domestic Regulation and Trade in Services: Addressing the GATS Article VI:4 Work Program - A Look at the Issues', in Adityaa Mattoo and Pierre Sauvé (eds), Domestic Regulation and Service Trade Liberalization (Washington, DC: OUP, 2003).
93. For a narrow interpretation of Article XVI see Pauwelyn, above n 67; Markus Krajewski, National Regulation and Trade Liberalization in Services: The Legal Impact of the General Agreement on Trade in Services (GATS) on National Regulatory Autonomy (The Hague/London/New York: Kluwer Law International, 2003), at 84;
94. John Jackson, William Davey, and Alan Sykes, Legal Problems of International Economic Relations (4th edn, 2002), at 890. One may actually go further and argue that in light of the 'normative content' of Article XVI (per se prohibition), it is the specific instrument used by a Member (whether a 'quota' or a 'monopoly') that is prohibited by Art. XVI rather than the 'effect' of a Member's measure. The European Community experience teaches us that even the famous Dassonville-Cassis de Dijon jurisprudence of the European Court of Justice transformed a discipline based on a per se prohibition (Article 28) into a discipline de facto based on reasonableness.
95. See Ortino, above n 68, at 389-402. Cf. Sofie M.F. Geeroms, 'Cross-Border Gambling on the Internet under the WTO/GATS and EC Rules Compared: A Justified Restriction on the Freedom to Provide Services?', in European Association for the Study of Gambling, Cross-Border Gambling on the Internet: Challenging National and International Law (Zürich, 2005) 145-80.
96. In particular, Panel Report, EC - Asbestos. WT/DS135/R circulated on 18 September 2000.
97. See Ortino, above n 68, at 55-92;
98. Pauwelyn, above n 67, at 133-35. Article II (together with Article XXVIII bis) GATT provides for the reduction/elimination of a specific type of trade restrictive measure (such as tariffs and other equivalent charges imposed on importation) conditional upon progressive multilateral negotiations. Article XI provides for the per se prohibition of non-tariff restriction on importation (such as quotas or import licences).
99. Obstacles to service (as well as investment) flows cannot be categorized according to whether they are imposed on the border or within the market as it has historically been done for the flows of goods. This depends on the intangible and personal nature of such flows. The attempt to devise a clear distinction between pre-entry (or pre-establishment) and post-entry (or post-establishment) measures affecting the flows of services (or investments) may become a quite problematic endeavour since it is difficult to distinguish in general terms between national measures which affect pre-entry (i.e., market access measures) and those that affect post-entry (i.e., market regulation measures). In the majority of cases, there is no easy way of determining which measures restrict market entry or simply regulate the market. However, the issue of definition becomes relevant if pre-entry measures are subject to a different legal discipline compared with post-entry measures. In this regard, the solution that appeared to have been adopted by the GATS is as follows: (1) to impose on all measures affecting trade in services the national treatment standard (subject to specific commitments) and (2) to require the elimination of an exhaustive number of specific measures which have a strong effect on market access (subject to specific commitments).In other words, Article XVII and XVI embody two different legal disciplines (non-discrimination versus per se prohibition) and two different ways to define the respective scopes of application ('all measures affecting' versus an exhaustive list). However, the Appellate Body seems to have rejected this division of labor and expanded the reach of the market access provision of Article XVI.
100. It has also been correctly argued that a broad interpretation of the per se prohibition of Article XVI would also prejudge the content of Article VI:4 disciplines as well as make their elaboration largely futile. Pauwelyn, above n 67, at 167.
101. Appellate Body Report, US - Gambling, above n 6, para 235,
102. footnote 271 quoting Panel Report, US- Gambling, above n 2, paras 6.107-6.109, and 6.314-6.317.
103. Appellate Body Report, US - Gambling, above n 6, para 235 [original footnote omitted].
104. Pauwelyn, above n 67, at 158-59 and 168.
105. For a discussion on the features of a 'rule versus exception' approach see Federico Ortino, 'From "Non-Discrimination" to "Reasonableness": A Paradigm Shift in International Economic Law?' Jean Monnet Working Papers 1/2005, at 53-57.
106. Krajewski has interestingly noted how the Appellate Body usually refers to object and purpose of specific provisions of WTO agreements more than to object and purpose of the relevant WTO agreement as a whole (citing in particular the Appellate Body Report on US - Shrimp). Krajewski, above n 73, at 55-56. Although the emphasis on the object and purpose of specific provisions may not appear to be entirely in conformity with the standards of the Vienna Convention (the reference to object and purpose in Article 31 (1) clearly relates to the entire treaty), it is believed that the object and purpose of specific provisions should be seen as constituting part of the object and purpose of the underlying Treaty, thus within the mandate of Article 31 of the Vienna Convention.
107. See Lennard, above n 47, at 28.
108. This presumption may also stem from the perception that quantitative restrictions have a discriminatory or protectionist tendency since, by limiting how many suppliers operate within a specific market, they are bound to constitute protection to existing domestic operators (sub-paragraph (f) of Article XVI:2 seems to confirm this view). However, this is not always true, especially with regard to new service fields or products and to developing countries. In these circumstances, Article XVI GATS could even be perceived as a pro-competitive instrument, in so far as it prohibits national governments to protect, not just domestic, but any incumbent service supplier.
109. As previously noted, (similar to tariffs) Article XVI market access limitations are not prohibited immediately because it would not be economically and thus politically feasible to do so. For example, protection of a specific infant service industry might be achieved through one of the quantitative measures listed in Article XVI. However, in the ideal world designed by the GATS these types of justification are only temporary and thus market access restrictions are subject to the progressive liberalization 'commitments' in Article XIX GATS.
110. The Panel had even concluded that any suggestion that the 'form' requirement must be strictly interpreted to refer only to limitations 'explicitly couched in numerical terms' leads to 'absurdity'. Panel Report, US - Gambling, above n 2, para 6.332.
111. Appellate Body Report, US - Gambling, above n 6, paras 236-38.
112. See 1993 Scheduling Guidelines, para 6.
113. Appellate Body Report, US - Gambling, above n 6, para 237. The Appellate Body reaches a similar conclusion with regard to Article XVI:2(c) by pointing at an example of the type of measure covered by subparagraph (c) in the 1993 Scheduling Guidelines as relevant preparatory work pursuant to Article 32(a) of the Vienna Convention. According to the Appellate Body, these Guidelines refer to '[Restrictions on broadcasting time available for foreign films'. Since the example does not mention numbers or units, the Appellate Body concludes that Article XVI:2(c) does not simply cover limitations that contain an express reference to numbered units (as advanced by the United States), but also a total ban as that at issue in the present case. I do not find totally persuasive the jump from rejecting the argument advanced by the United States (subparagraph (c) covers only limitations containing express reference to numbered units) and embracing the finding that a total ban is a 'quota' for purposes of Article XVI:2(c). Furthermore, the example referred to by the Appellate Body was not present in the 1993 Scheduling Guidelines but it was introduced only with the 2001 revision. Accordingly, that particular example does not represent relevant preparatory work. Compare paragraph 6 of the 1993 Scheduling Guidelines with paragraph 12 of the 2001 Scheduling Guidelines.
114. Compare the language in paragraph 236 referring to 'ambiguity' and 'absurdity' with the last sentence of paragraph 237 ('confirms the view that'). In any event, the Appellate Body appears more cautious (compared to its previous findings with regard to the US Schedule) to base its interpretation of Article XVI on Article 32(a) of the Vienna Convention.
115. Scheduling of Initial Commitments in Trade in Services: Explanatory Note - Addendum ('Addendum'), MTN_GNS/W/164/Add 1. See for example the third question/answer: 'With regard to market access limitations, such as numerical ceilings or economic needs tests, how detailed should the entries in schedules be? The entry should describe each measure concisely indicating the elements which make it inconsistent with Article XVI. Numerical ceilings should be expressed in defined quantities in either absolute numbers or percentages; regarding economic needs tests the entry should indicate the main criteria on which the test is based, e.g. if the authority to establish a facility is based on a population criterion, the criterion should be described concisely.' [Emphasis added]
116. 1993 Scheduling Guidelines, para 4 [emphasis added].
117. See also the Addendum to the 1993 Scheduling Guidelines: to the question whether it is 'necessary to schedule approval procedures or licensing requirements which have to be met in order to supply a service', the Addendum provides as follows: The requirement to obtain an approval or a licence is not in itself a trade restriction and therefore does not need to be scheduled. However, if the criteria for granting licenses or approval contain a market access restriction (e.g., economic needs test) or discriminatory treatment, the relevant measures would need to be scheduled if a Member wishes to maintain them as limitations under Article XVI or XVII.' [Emphasis added]
118. There is also empirical evidence that a measure, which has been found to violate a per se prohibition type of discipline (such as Articles II or Article XI GATT), has never been found to be justified on the basis of one of the legitimate public policy objectives listed in the general exception provision (Article XX GATT). The only case where Article XX GATT was successfully employed to justify a violation of Article XI was US - Shrimp 21.5. However, the measure at issue in that dispute was the border arm of an internal regulation and thus should have been reviewed on the basis of Article III rather than Article XI GATT. For a fuller discussion of the issue see Ortino, above n 68, at 220-21.
119. Ehlermann, above n 43, at 528-29.
120. Cf. Ortino, above n 80, at 54-55.
121. Sinclair, above n 13, at 114.
122. Horn and Weiler, above n 14, at 253.
123. The latter assert that the primary aim and goal of treaty interpretation is to ascertain the intention of the parties (this was the minority position at the Vienna Convention led by the United States and Italy). The former assert that the primary goal of treaty interpretation is to ascertain the meaning of the text of the treaty, which is the best expression of the intentions of the parties (this was the majority position lead by the United Kingdom and France). Sinclair, above n 25, at 60-64.
124. Ehlermann, above n 43, at 509; Jacobs, above n 40, at 339-40.
125. See Howse, above n 10, at 57.
126. Ehlermann, above n 43, at 509-10.
127. 'Interpretation in law is a rational process . . . that "extracts" the legal meaning of the text from its semantic meaning. [. . .] To interpret a text is to choose its legal meaning from among a number of semantic possibilities - to decide which of the text's semantic meanings constitutes its proper legal meaning.' Ahron Barak, Purposive Interpretation in Law (Princeton University Press, 2005), at 6-7.
128. For a very recent case where the Appellate Body has endorsed a holistic approach to interpretation see Appellate Body Report, European Communities - Customs Classification of Frozen Boneless Chicken Cuts (Chicken Cuts), WT/DS269/AB/R and WT/DS286/AB/R, circulated 12 September 2005, para 176 ('Interpretation pursuant to the customary rules codified in Article 31 of the Vienna Convention is ultimately a holistic exercise that should not be mechanically subdivided into rigid components.').
129. Cf also Appellate Body, United States - Countervailing Duty Investigation on Dynamic Random Access Memory Semiconductors (DRAMS) from Korea (US - DRAMS), WT/DS296/AB/R, circulated 27 June 2005, paras 106-16.
130. See Jacobs, above n 40, at 338;
131. Sinclair, above n 13, at 118;
132. Eduardo Jimenez de Arechaga, 'International Law in the Past Third of a Century', 159-1 Recueil des Cours (General Course in Public International Law, The Hague, 1978), at 43-44.
133. See Panel Report, US - Corrosion-Resistant Steel Sunset Review, at paras 7.43-7.44, where the Panel noted that 'Article 31 of the Vienna Convention requires that the text of the treaty be read in light of the object and purpose of the treaty, not that object and purpose alone override the text.'
134. Appellate Body Report, Japan - Taxes on Alcoholic Beverages (Japan - Alcohol II), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, circulated 4 October 1996, at 32.