Can authoritative interpretation under article IX:2 of the agreement establishing the WTO modify the rights and obligations of members?

International and Comparative Law Quarterly

Volumn 57, Issue 1, 2008, Pages 169-181

  Gazzini, Tarcisio ^a  

^a UNIVERSITY OF GLASGOW   (United Kingdom)

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EID: 42149154368     PISSN: 00205893     EISSN: 14716895     Source Type: Journal    
DOI: 10.1017/S0020589308000079     Document Type: Article

References (95)

1. C-D Ehlermann and L Ehring, 'The Authoritative Interpretation Under Article IX:2 of the Agreement establishing the World Trade Organization: Current Law, Practice and Possible Improvements' (2005) 8 JIEL 803, 812.
2. In Japan-Taxes on Alcoholic Beverages, AB Report (4 Oct 1996) WT/ DS11/AB/R [1996] 1 DSR, 107, the Appellate Body concluded that '[t]he fact that such an "exclusive authority" in interpreting the treaty has been established so specifically in the WTO Agreement is reason enough to conclude that such authority does not exists by implication or by inadvertence elsewhere.'
3. The French text, which employs the expression 'interprétation faisant autorité', is equally clear. In US-Tax Treatment for'Foreign Sale Corporations', AB Report, (24 Feb 2000) WT/ DS108/AB/R, para 112, the Appellate Body described authoritative interpretations as 'generally binding' where 'generally' means with regard to all Members.
4. See Ehlermann and Ehring (n 1) 807.
5. In the affirmative, see Ehlermann and Ehring (n 1) 808-12
6. J Pauwelyn, Conflict of Norms in Public International Law (CUP, Cambridge, 2003) 112. Contra, F Biermann, 'The Rising Tide of Green Unilateralism in World Trade Law' (2001) 35 J World Trade 421, 436
7. FA Abbott, 'The Doha Declaration on the TRIPS Agreement and Public Health: Lighting a Dark Corner at the WTO' (2002) 5 JIEL 469, 492-3
8. H Nottage and T Sebastian, 'Giving Legal Effect to the Results of WTO Trade Negotiations: An Analysis of the Methods of Changing WTO Law' (2006) 9 JIEL 989, 1003.
9. EC-Customs Classification of Frozen Boneless Chicken Cuts, AB Report (12 Sept 2005) WT/DS269/AB/R, para 176.
10. See also US-Section 301-310 of the Trade Act of 1974, Panel Report (22 Dec 1999) WT/DS152/R, para 7.22. According to I Sinclair, The Vienna Convention on the Law of Treaties (2nd edn, MUP, Manchester, 1984) 153, '[i]nterpretation is a process involving the deployment of analytical and other skills: It cannot be reduced to a few propositions capable of purely automatic application in all circumstances'.
11. See also M Fitzmaurice, 'Canons of Treaty Interpretation under the 1969 VCLT as Applied by the WTO and the NAFTA - Selected Case Studies' (2005) 10 Austrian Rev Intl Eur L 49 F Ortino, 'Treaty Interpretation and the WTO Appellate Body Report in US-Gambling: A Critique' (2006) 9 JIEL 117.
12. For example, Ehlermann and Ehring (n 1) 818, 'the non-use to date of the authoritative interpretation is to be deplored'.
13. Request of an Authoritative Interpretation pursuant to Article IX:2 of the Treaty Establishing the WTO (25 Jan 1999) WT/GC/W/133. The sequencing issue concerns the relationships between Arts 21.5 and 22.2 DSU, and in particular the question whether the Dispute Settlement Body (DSB) is empowered to authorize Member A to suspend concessions or other obligations with regard to Member B, in the absence of a decision by a panel or the Appellate Body on non-compliance by Member B with recommendations or rulings by the DSB.
14. Procedures for Amendment and Interpretation of the DSU (5 Feb 1999) WT/GC/W/144. See below text n 32.
15. See, in particular, the documents prepared by the EC and by a group of developing countries, respectively, Concept Paper Relating to Paragraph 6 of the Doha Declaration (4 Mar 2002) IP/C/W/339, and Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (24 June 2002) IP/C/W/355.
16. Proposals on Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: Thematic Compilation (11 July 2002) IP/C/W/363.
17. See below, Part III.
18. See, in particular, Japan-Alcoholic Beverages (n 2) 107
19. and US-Wool Shirts and Blouses, AB Report (WT/DS33/AB/R) [1997] 1 DSR, 340-41.
20. US-'FSC', AB Report (n 3) WT/DS108/R, footnote 127. The footnote reads: 'The distinction between an authoritative interpretation and an interpretation made in dispute settlement proceedings is made clear in the WTO Agreement. Under the WTO Agreement, an authoritative interpretation by the Members of the WTO, under Article IX:2 of that Agreement, is to be distinguished from the rulings and recommendations of the DSB, made on the basis of panel and Appellate Body Reports. In terms of Article 3.2 of the DSU, the rulings and recommendations of the DSB serve only 'to clarify the existing provisions of those agreements' and 'cannot add to or diminish the rights and obligations provided in the covered agreements'.
21. Ehlermann and Ehring (n 1) 808-12.
22. Above n 13, para 109. Through the 1981 Council Action, the Members involved in four cases concerning tax legislation eventually agreed on the adoption of the panel reports issued in 1976. At that time, any Member could prevent the adoption of a report. The Council Action was adopted under GATT 1947, subject to an understanding and accompanied by a statement from the Chairman of the Council.
23. US-'FSC', Panel Report (8 Oct 1999) WT/DS108/R, para 7.68.
24. In US-Standards for Reformulated and Conventional Gasoline, AB Report (10 Apr 1996) WT/DS4/AB/R, p 16, the Appellate Body held that Article 31 VCLT 'forms part of the "customary rules of interpretation of public international law" which the Appellate Body has been directed, by Article 3 (2) of the DSU, to apply...'.
25. See also, more recently, US-Measures Affecting the Cross-Border Supply of Gambling and Betting Services (7 April 2005) WT/DS285/AB/ R, para 159. As observed by Fitzmaurice (n 5) 92, '[i]n general, it must be said that the recent case law of the WTO (especially that of the Appellate Body), indicates that the rules on treaty interpretation as enshrined in the 1969 VCLT are fully acknowledged and adhered to.' The view that Art 31 VCLT re.ects customary law has constantly been held also by the ICJ. For a recent decision
26. see Sovereignty over Pulau Litigan and Pulau Sipadan (Merits) [2002] ICJ Rep, para 37.
27. A Aust, Modern Treaty Law and Practice (2nd edn, CUP, Cambridge, 2000) 234.
28. Competence of Assembly regarding Admission to the United Nations (Advisory Opinion) [1950] ICJ Rep 4, 8. More recently, in Sovereignty over Pulau (n 17), it confirmed that '[i]nterpretation must be based above all upon the text of the treaty.' The ILC, in turn, pointed out that 'the starting point of interpretation is the elucidation of the meaning of the text, not an investigation ab initio into the intention of the parties' (1966-II) 18 Yearbook ILC 221. In US- Import Prohibition of Certain Shrimp and Shrimp Products AB Report (12 Oct 1998) WT/DS58/AB/R, para 114, the Appellate Body observed that '[a] treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted'. In EC-Measures Concerning Meat and Meat Products (Hormones) (16 Jan 1998) WT/DS26/AB/R, para 181, it further noted that '[t]he fundamental rule of treaty interpretation requires a treaty interpreter to read and interpret the words actually used by the agreement under examination, not words the interpreter may feel should have been used.'
29. Harvard Law School, 'Draft Convention on the Law of Treaty, Comment to Article 19' (1935/Suppl) 29 AJIL 938.
30. See also R Jennings and A Watts, Oppenheim's International Law (9th edn, Longman, London, 1991) 1267.
31. As observed by T-C Yü, The Interpretation of Treaties (Columbia University Press, New York, 1927) 136, 'the essence of the principle of interpretation... is to ascertain through all sources of evidence what is the standard agreed upon, namely what is the sense which the contracting parties mutually attached to the terms of the agreement' (italics added).
32. See, for instance, US-Shrimp (n 19) para 129. In Japan-Alcoholic Beverages (n 2) 122, the Appellate Body held that WTO rules 'are not so rigid or so in.exible as not to leave room for reasoned judgements in confronting the endless and ever-changing ebb and flow of real facts in real cases in the real world'. As pointed out by RY Jennings, 'What is International Law and How do We Tell It when We see it' (1981) 37 Ann Suisse Droit Intl 59, 75, the interpreter may perceive that 'familiar, existing materials form a pattern, when looked at in a right or just novel, perspective, which has not hitherto been fully appreciated.'
33. A parallel may be drawn between an interpretative declaration and a reservation to a treaty, the former defined in the United Nations Office of Legal Affairs, Treaty Handbook (last accessed 30 June 2007) as 'a declaration by a State as to its understanding of some matter covered by a treaty or its interpretation of a particular provision. Unlike reservations, declarations merely clarify a State's position and do not purport to exclude or modify the legal effect of a treaty.'
34. India-Patent Protection for Pharmaceutical and Agricultural Chemical Products WT/DS50/AB/R, paras 45-6.
35. See also US-Shrimp (n 19) para 114.
36. Ehlermann and Ehring (n 1) 808.
37. 'North American Free Trade Agreement, 17 December 1992' (1993) 32 ILM 612. The significant differences between NAFTA and WTO notwithstanding, practice on Art 1131 of NAFTA may offer interesting indications as to the meaning and function of Art IX:2.
38. As, for instance, the preliminary rulings of the European Court of Justice under Art 234 of the Treaty Establishing the European Communities.
39. See below Part IV.
40. However, nothing prevents the Ministerial Conference and the General Council from adopting non-binding declarations on the interpretation of WTO provisions. See, for instance, Ministerial Conference, Declaration on the TRIPS Agreement and Public Health (Doha 14 Nov 2001) WT/MIN(01)/DEC/2.
41. In Conditions for Admission (n 19) 63, the ICJ made it clear that in order to 'warrant an interpretation other than which ensues from the natural meaning of the words, a decisive reason would be required'. The ILC, in turn, declared that 'the parties are to be presumed to have that intention which appears from the ordinary meaning of the terms used by them', (1966-II) 18 Yearbook ILC 221.
42. Although it does not appear in the text of Art IX:2, interpretations adopted under this provision are generally quali.ed as 'authoritative'. It is important to note that 'interpretations' are expressly qualified as 'authoritative' for the purpose of Art 3.9 of the DSU.
43. See the document above n 8, p 3.
44. Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions (31 2001) .
45. For sharp critique of the Commission interpretation see Second Opinion of Professor R. Jennings in Methanex Corporation v United States UNCITRAL (NAFTA), available at .
46. See the following documents submitted in relation to Methanex Corporation v United States: United States, First Submission re: FTC Statement on Article 1105 (26 Oct 2001) Second Submission re: FTC Statement on Article 1105 (17 Dec 2001)
47. Canada, Article 1128 Submission re: FTC Statement on Article 1105 (8 Feb 2002)
48. Mexico, Article 1128 Submission re: FTC Statement on Article 1105 (11 Feb 2002) (all documents available at ).
49. General Council, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (30 Aug 2003) WT/L/540.
50. General Council, Amendment of the TRIPS Agreement (8 Dec 2005) WT/ L/641. At the of September 2007, only 11 Members out of 151 have accepted the amendment.
51. The 'predominantly' requirement will be de.nitely removed if the amendment enters into force.
52. Above n 5.
53. According to Sinclair (n 5) 130, 'reference to the object and purpose of the treaty is, as it were, a secondary or ancillary process in the application of the general rule of interpretation. The initial search is for the "ordinary meaning" to be given to the terms of the treaty in their "context"; it is in the light of the object and purpose of the treaty that the initial and preliminary conclusion must be tested and either confirmed or modified.'
54. Such an exercise is necessary when it is impossible to interpret a provision on the basis of the ordinary meaning, see, for instance, EC-Customs Classification of Certain Computer Equipment (5 June 1998) WT/DS62/AB/R, para 88; or when more than one interpretation is acceptable
55. see EC-Conditions for the Granting of Tariffs Preferences to Developing Countries (7 April 2004) WT/DS246/AB/R, para 152.
56. It includes (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty and (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. In EC-Chicken (n 5) para 199, the Appellate Body considered the Harmonized System as context for the purpose of interpreting WTO agreements. In US-Gambling (n 17) para 175, it stressed that Art 31 (2) refers to agreement or acceptance of the parties.
57. Chile-Price Band System and Safeguard Measures Relating to Certain Agricultural Products WT/DS207/AB/R, para 255.
58. In the document referred to above n 8, p 5, the United States insisted that 'the drafters of the WTO Agreement's amendment provisions were particularly sensitive to the possibility that a future Member of the WTO might someday seek to subvert the intention of the agreement through interpretations of agreements or amendments which were not seen by all Members as being in their interests. For this reason, the drafters clearly specified in the final sentence of Article IX:2 that it cannot be used to undermine the amendment provisions of Article X. The drafters also made amendments of the DSU subject to a consensus rule.'
59. See Ehlermann and Ehring (n 1) 810-11.
60. See generally J Klabbers, 'Some Problems Regarding the Object and Purpose of Treaties' (1997) 8 Finn YIL 138.
61. For M Fitzmaurice, 'The Practical Working of the Law of Treaties' in M Evans (ed), International Law (OUP, Oxford, 2003) 189, the expression is 'vague and ill-defined, making it an unreliable tool for interpretation'.
62. See, in particular, EC-Equipment (n 40) paras 84 and 93 (italics as in original). More recently
63. see EC-Chicken (n 5) para 239
64. US-Gambling (n 17) para 159 and 250.
65. In EC-Chicken (n 5) para 238, the Appellate Body observed that it is not necessary 'to divorce a treaty's object and purpose from the object and purpose of specific treaty provisions, or vice versa. To the extent that one can speak of the "object and purpose of a treaty provision", it will be informed by, and will be in consonance with, the object and purpose of the entire treaty of which it is but a component.'
66. In EC-Conditions for the Granting of Tariff Preferences to Developing Countries WT/DS246/AB/R, para 152, for instance, the Appellate Body conceded that both interpretations of 'discriminate' for the purpose of n 3 to para 2 (a) of the so-called Enabling Clause provided by the EC and India could be considered as reflecting ordinary meanings of the term.
67. Ehlermann and Ehring (n 1) 812.
68. The view that authoritative interpretation may be adopted by consensus, as maintained by Ehlermann and Ehring (n 1) 806, can be shared provided that at least three-quarters of the Members attend the meeting.
69. It is worth noting that in Mondev International Limited v United States, ICSID Case ARB(AF)/99/2, Hearing Transcript (22 May 2002) 670, the United States described Art 1131 of NAFTA as 'a rule designed just so that the parties could assure that what they meant by NAFTA's terms could be made known whenever there were misinterpretations' (quoted also in the Award, 11 Oct 2002, para 103).
70. Above n 24, para 83.
71. Australia-Subsidies Provided to Producers and Exporters of Automotive Leather - Recourse to Art 21.5 (21 Jan 2000) WT/DS126/RW, para 6.39.
72. See Minutes of the DSB Meeting (11 Feb 2000) WT/DSB/M/75.
73. With regard to binding interpretation adopted by FTC, in ADF Group Inc v United States, ICSID Case ARB(AF)/00/1, Award (9 Jan 2003) para 177, the Tribunal noted that '[n]o more authentic and authoritative source of instruction on what the Parties intended to convey in a particular provision of NAFTA, is possible.'
74. See for instance the documents listed above n 34.
75. In the document referred to above n 8, p 4, the United States took a stricter position and pointed out that 'any "authoritative interpretation" of the WTO must apply only with respect to disputes initiated after the interpretation takes effects, that is, disputes for which a request for consultations is made on or after the adoption of that interpretation' (italic as in original).
76. According to WTO Secretariat, 'the validity of interpretation decisions that go so far as to amend provisions of WTO Agreements could be challenged on this basis', IP/C/W/363/Add.1 (23 July 2002) 2. The choice of 'authoritative' instead of 'authentic' interpretations may further support this view.
77. Ehlermann and Ehring (n 1) 811, admit that the adjudicating bodies may review an authoritative interpretation challenged by a party to a dispute. In their opinion, however, the review determines whether the interpretation amounts to more than a 'minor' amendment and therefore is inconsistent with Art IX:2. On the rather unconvincing argument that authoritative interpretations may amount to minor amendments, see below Part III above.
78. Second Opinion (n 33).
79. See also Methanex First Submission re: NAFTA FTC Statement on Art 1105 (18 Sept 2001) available at .
80. NAFTA Tribunals, however, have taken the opposite view, see, for instance, Mondev International Ltd v United States, ICSID Case ARB/99/2, Award (11 Oct 2002) para 103. It must nonetheless be stressed that Jennings argument is more compelling when interpretations are adopted by majority and with regard to a large multilateral treaty.
81. In Japan-Alcoholic Beverages (n 2) 106, the Appellate Body rightly disagreed with the Panel's finding that panel reports adopted by the DSB constitute 'subsequent practice' within thef meaning of Art 31 VCLT.
82. See Case Concerning Kasikili/Sedudu Island (Botswana/Namibia) (Judgment) [1999] ICJ Rep, and the case-law referred to in para 50 of the decision. As noted by the ILC, (1966-II) 18 Yearbook ILC 221, '[t]he importance of such subsequent practice in the application of the treaty, as an element of interpretation, is obvious; for it constitutes objective evidence of the understanding of the parties as to the meaning of the treaty. Recourse to it as a means of interpretation is well-established in the jurisprudence of international tribunals.'
83. Japan-Alcoholic Beverages (n 2) 106
84. Chile-Price Band System (n 42) para 214
85. EC- Computer Equipment (n 40) para 90
86. US-Gambling (n 17) para 190
87. EC-Chicken (n 5) para 272.
88. US-Gambling (n 17) para 190 and 194 (italic as in original). The expression 'common understanding' was also used by the ILC (1966-II) 18 Yearbook ILC 222.
89. The text of the article related to subsequent practice provisionally adopted by the ILC in 1964 contained the expression 'understanding of all the parties'. The word 'all' was subsequently abandoned to 'avoid any possible misconception that every party must individually have engaged in the practice where is suffices that it should have accepted the practice' (1966-II) 18 Yearbook ILC 222. As pointed out by RY Jennings, 'Treaties' in M Bedjaoui (ed), International Law: Achievements and Prospects (Nijhoff, Dordrecht, 1993) 145, what is needed for the purpose of Article 31 (3) (b) is agreement of 'the parties as a whole'.
90. EC-Chicken (n 5) para 272.
91. ibid, Panel Report, 7.253.
92. ibid, para 272.
93. See Part II
94. See above n 7.
95. See above n 8 and text n 32.