A theory of WTO law

Journal of International Economic Law

Volumn 11, Issue 3, 2008, Pages 527-557

  Carmody, Chios ^a  

^a UNIVERSITY OF WESTERN ONTARIO   (Canada)

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[No Author keywords available]

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EID: 50949126384     PISSN: 13693034     EISSN: 14643758     Source Type: Journal    
DOI: 10.1093/jiel/jgn017     Document Type: Review

References (202)

1. 33 I.L.M. 1125 (1994).
2. Michael J. Trebilcock and Robert Howse, The Regulation of International Trade, 3rd ed. (London: Routledge, 2005) 2-3, 37.
3. For an econometric approach, see Kyle Bagwell and Robert W. Staiger, 'An Economic Theory of GATT', NBER Working Paper No 6049 (May 1997).
4. Kant did not make the argument that democracies will not fight, only that they are not disposed to fight each other. Later theorists recognized the same tendency among countries that conduct trade with each other. See Padideh Ala'i et al. (eds), Trade as Guarantor of Peace, Liberty and Security? Critical, Historical and Empirical Perspectives (Washington: American Society of International Law, 2006) vii.
5. Law is defined as 'the aggregate of legislation, judicial precedents, and accepted legal principles', in Bryan Gardner (ed.), Black's Law Dictionary, 8th ed. (St Paul: Thomson/West, 2004) 900;
6. justice is defined as 'giving each their due', ibid, at 881.
7. Thomas Cottier et al., International Trade Regulation: Law and Policy in the WTO, the European Union and Switzerland (London: Cameron, May 2005) 33, 47. They observe additionally that 'Theoretical analysis of the exact contents and confines of the core legal principles governing the current multilateral trading system... are in full swing in dialogue with the case law and far from settled, despite the fact that these concepts have been in existence for a very long time. An academic body of legal theory of trade regulation is only beginning to be built, dealing with basic structures, institutions and regulatory approaches.' Work of other commentators is hardly more clear on the subject of an underlying theory. For instance, John Jackson has described the WTO Agreement as 'a very complex mix of economic and governmental policies, political constraints, and above all an intricate set of constraints imposed by a variety of "rules" or legal norms in a particular institutional setting.' John Jackson, The World Trading System, 2nd ed. (Cambridge: MIT Press, 1998) 339.
8. In more recent work, he has disclaimed the notion of a 'grand theory' and focused more directly on 'queries rather than theories': see John Jackson, Sovereignty, the WTO and Changing Fundamentals of International Law (Cambridge: Cambridge University Press, 2006) xi.
9. For further attempts at theoretical development of GATT/WTO law see Ernst-Ulrich Petersmann, 'International Economic Theory and International Economic Law: On the Tasks of a Legal Theory of International Economic Order', in R. St. J. Macdonald and D.M. Johnston (eds), The Structure and Process of International Law (The Hague: Martinus Nijhoff, 1983) 227;
10. Andrew Caplin and Karla Krishna, 'Tariffs and the Most-Favoured Nation Clause: A Game Theoretical Approach', 1 Seoul Journal of Economics (1988), at 267;
11. Carolyn Rhodes, Reciprocity, U.S. Trade Policy and the GATT Regime (Ithaca: Cornell University Press, 1993);
12. Warren F. Schwartz and Alan O. Sykes, 'Towards a Positive Theory of the Most Favoured Nation Obligation and Its Exceptions in the WTO/GATT System', 16 International Review of Law and Economics (1996), at 27;
13. Petros Mavroidis, '"Like Products": Some Thoughts at the Positive and Normative Levels', in Thomas Cottier and Petros Mavroidis (eds), Regulatory Barriers and the Principle of Non-Discrimination in World Trade Law (Ann Arbor: University of Michigan Press, 2000) 125;
14. Meinhardt Hilf, 'Power, Rules and Principles: Which Orientation for WTO/GATT Law?', 4 Journal of International Economic Law 111 at 114 (2001);
15. Kyle Bagwell and Robert W. Staiger, 'The Theory of Trade Agreements', in The Economics of the World Trading System (Cambridge; MIT Press, 2002);
16. Darrel Moellendorf, 'The World Trade Organization and Egalitarian Justice', in Christian Barry et al. (eds), Global Institutions and Responsibilities: Achieving Global Justice (Oxford: Blackwell, 2005). Book-length treatments are also available: see Frank J. Garcia, Trade, Inequality and Justice: Towards a Liberal Theory of Just Trade (Ardsley: Transnational Publishers, 2003);
17. Raj Bhala, Trade, Development and Social Justice (Durham: North Carolina Academic Press, 2003).
18. Chios Carmody, 'WTO Obligations as Collective', 17 European Journal of International Law 419 at 422 (2006).
19. For a sampling see Fabian Delcros, 'Le statut juridique de l'agriculture à l'OMC', 36 Journal of World Trade (2002), at 353;
20. Kym Anderson and Tim Josling (eds), The WTO andAgriculture: Vol. 1 (Cheltenham: Edward Elgar, 2004);
21. Emily Rome, 'The Background, Requirements and Future of the GATT/WTO Preshipment Inspection Agreement', 7 Minnesota Journal of Global Trade (1998),at 469;
22. Anuwarul Hoda, Tariff Negotiations and Renegotiations under the GATT and the WTO (Cambridge: Cambridge University Press, 2001);
23. Moshe Hirsch, 'International Trade Law, Political Economy and Rules of Origin', 36 Journal of World Trade (2002), at 171;
24. Kyle Bagwell et al. 'It's a Question of Market Access', 96 American Journal of International Law (2002), at 56;
25. Paul Beynon, 'Community Mutual Recognition Agreements, Technical Barriers to Trade and the WTO's Most Favoured Nation Principle', 28 Environmental Law Review (2003), at 231;
26. Stefano Inama, 'Trade Preferences and the World Trade Organization's Negotiations on Market Access', 37 Journal of World Trade (2003), at 959;
27. Joel Trachtman, 'The Domain of WTO Dispute Resolution', 40 Harvard Journal of International Law (1999), at 333;
28. Robert Hudec, 'The New WTO Dispute Settlement Procedure', 8 Minnesota Journal of Global Trade (1999), at 1;
29. Georg C. Umbricht, 'An 'Amicus Curiae Brief' on Amicus Curiae Briefs at the WTO', 4 Journal of International Economic Law 773 (2001);
30. Edwin Vermulst, 'WTO Dispute Settlement with Respect to Trade Contingency Measures', 35 Journal of World Trade (2001), at 209;
31. Joost Pauwelyn, 'The Use of Experts in WTO Dispute Settlement', 51 International& Comparative Law Quarterly (2002), at 325;
32. Hunter R. Clark, 'The WTO Banana Dispute and Its Implications for Trade Relations between the United States and the European Union', 35 Cornell Journal of International Law (2002), at 291;
33. Richard Cunningham, 'Dispute Settlement Through the Lens of "Free Flow of Trade'", 6 Journal of International Economic Law (2003), at 155;
34. Matthias Oesch, Standards of Review in WTO Dispute Resolution (Oxford: Oxford University Press, 2003);
35. John Jackson, 'International Law Status of WTO Dispute Settlement Reports', 98 American Journal of International Law (2004), at 109;
36. Federico Ortino and Ernst-Ulrich Petersmann (eds), The WTO Dispute Settlement System 1995-2003 (The Hague: Kluwer Law International, 2004);
37. Hans Mahncke, 'U.S. Steel Tariffs and the WTO Dispute Resolution Mechanism', 17 Leiden Journal of International Law (2004), at 615;
38. Petros Mavroidis and Alan Sykes (eds), The WTO and International Trade Law/Dispute Settlement (Cheltenham: Edward Elgar 2005);
39. Nicholas Perdikis and Robert Read (eds), The WTO and the Regulation of International Trade Law (Cheltenham: Edward Elgar 2005).
40. See Robert Howse and Makau Mutua, Protecting Human Rights in a Global Economy (Montreal: International Centre for Human Rights and Democratic Development, 2000);
41. P.K. Rao, The World Trade Organization and the Environment (New York: St Martin's Press, 2000);
42. Claude E. Barfield, Free Trade, Sovereignty, Democracy: the future of the World Trade Organization (Washington: American Enterprise Institute Press, 2001);
43. Steven Shrybman, The World Trade Organization: A Citizen's Guide (Halifax: James Lormier, 2001);
44. Gary P. Sampson (ed.), The Role of the World Trade Organization in Global Governance (Tokyo: UNU Press, 2001);
45. Thomas Hockin, The American Nightmare: Politics and the fragile World Trade Organization (Lanham: Lexington Books, 2003);
46. Lori Wallach and Patrick Woodall, Whose Trade Organization?: A Comprehensive Guide to the WTO (New York: The New Press, 2004);
47. Deborah Z. Cass, The Constitutionalization of the World Trade Organization: Legitimacy, Democracy, Community (Oxford: Oxford University Press, 2005);
48. Bradly J. Condon, Environmental Sovereignty and the WTO: trade sanctions and international law (Ardsley: Transnational Publishers, 2006);
49. John Barton et al., The Evolution of the Trade Regime: Politics, Law and Economics of the GATT and the WTO (Princeton: Princeton University Press, 2006);
50. Rorden Wilkinson, The WTO: Crisis and the Governance of Global Trade (London: Routledge, 2006);
51. Roman Grynberg (ed.), WTO at the Margins: Small States and the Multilateral Trading System (Cambridge: Cambridge University Press, 2007);
52. Math Noortman, Enforcing International Law: from Self-Help to Self-Contained Regimes (London: Ashgate Publishing, 2005).
53. The correspondence of rights and obligations as a hallmark of international law has been recognized in many instances. It is implicit in the International Law Commission's Draft Declaration on the Rights and Duties of States, which the U.N. General Assembly 'commended to the continuing attention of [U.N.] Member States', GA Res 375 (IV) (6 December 1949). It has also been pivotal in a number of disputes before the International Court of Justice: see Case Concerning Maritime Delimitation and Territorial Questions (Qatar v Bahrain) (Jurisdiction and Admissibility) [1994] ICJ Rep 12 (discussing the fact that a document between the parties 'was not a simple record of a meeting' but something which 'enumerat[ed] the commitments to which the Parties have consented. They thus create rights and obligations in international law for the Parties.' (emphasis added)).
54. For a case where the absence of rights and obligations precluded the creation of an international agreement see Anglo-Iranian Oil Co Case (UK v Iran) [1952] ICJ Rep 93.
55. See for instance United States - Restrictions on Imports of Cotton and Man-made Fibre Underwear, WT/DS24/AB/R, adopted 10 February 1997, p 15 where the Appellate Body described the WTO Agreement on Textiles and Clothing as composed of 'carefully negotiated language' reflecting 'a carefully drawn balance of rights and obligations of Members.';
56. see also Brazil - Export Financing Programme for Aircraft, WT/DS46/AB/R, adopted 2 August 1999, para 139. A sign of the difficulty of assessing what the term means is the Appellate Body's admission in Chile - Taxes on Alcoholic Beverages, WT/DS87/AB/R, adopted 13 December 1999, para 87 that 'in these circumstances, we do not consider that the Panel has added to the rights or obligations of any Member of the WTO. Moreover, we have difficulty in envisaging circumstances in which a panel could add to the rights and obligations of a Member ... if its conclusions reflected a correct interpretation and application of provisions ...'.
57. Jutta Brunnée and Stephen Toope, 'International Law and Constructivism: Elements of an Interactional Theory of International Law', 39 Columbia Journal of Transnational Law 19 at 31 (2000).
58. The idea of a correspondence between rights and obligations was recognized by early philosophers but developed most insightfully by Wesley Hohfeld, who postulated that the term 'right' may involve either a claim, privilege, power or an immunity. In Hohfeld's view, the same rights are offset by correlative duties, which may involve either a requirement, a constraint, a liability or a disability. See Wesley Hohfeld, Fundamental Legal Conceptions, As Applied in Judicial Reasoning and Other Essays (New Haven: Yale University Press, 1919).
59. Also William A. Edmundson, An Introduction to Rights 43 (2004) (discussing Edmund Burke's contribution to the idea of right-obligation correspondence).
60. For further discussion of the right-obligation correlation, see Philip Allott, Eunomia: New Order for a New World (Oxford: Oxford University Press, 1990) 160ff [hereinafter Allott, Eunomia].
61. The classification of treaty obligations in international law generally follows the scheme proposed by Gerald Fitzmaurice in the 1950s. Fitzmaurice identified treaties as either bilateral or multilateral, and further divided multilateral treaties into reciprocal, interdependent or integral categories depending on the consequences arising from their breach. Bilateral treaties can be suspended or terminated by either party since they involve a simple exchange of obligations. Subsequent inconsistent treaties are valid. The same generally holds for multilateral treaties of a bilateral type, which are said to be 'reciprocal'. By comparison, multilateral interdependent treaties can be suspended or terminated by any party because they involve 'a mutual interchange of benefits between the parties, with rights and obligations for each.' Subsequent inconsistent treaties are void. Finally, multilateral treaties of an integral type cannot be suspended or terminated since 'the force of the obligation is self-existent, absolute and inherent for each party'. Subsequent inconsistent treaties are also void. See, in particular, Gerald Fitzmaurice, 'Third Report on the Law of Treaties', U.N. Doc. A/CN.4/115, Yearbook of the International Law Commission, Vol. II, pp 20, 27 and 28 (1958).
62. 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: Kluwer International, 2004) 499, 522-23.
63. See DSU Art. 19.1: 'Where a panel or the Appellate Body concludes that a measure is inconsistent with a covered agreement, it shall recommend that the Member concerned bring the measure into conformity with that agreement.'
64. 'If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance ... such Member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation.' As of mid-2008 compensation had only been negotiated in one case under the WTO DSU, United States - Section 110(5) of the US Copyright Act,WT/DS160/R, adopted 15 June 2000.
65. For commentary see Bernard O'Connor and Margareta Djordjevic, 'Practical Aspects of Monetary Compensation: The U.S. Copyright Case' 8 (1) Journal of International Economic Law 127 at 131 (2005).
66. See also Art. 7.8 of the WTO Subsidies Agreement ('the Member granting or maintaining such subsidy shall take appropriate steps to remove the adverse effects or shall withdraw the subsidy.'). This provision was at issue in Australia - Subsidies provided to Producers and Exporters of Automotive Leather (21.5), WT/DS126/RW, adopted 21 January 2000.
67. 'Transformative justice must be driven by the needs of participants. Decisions on how to resolve the conflict ought to be based on a consensus. By consensus, we mean an agreement on how to move forward that is acceptable to all parties. A consensus cannot be imposed. Nor is a consensus just a middle ground position. The goal will be to find common ground on which a mutually acceptable resolution can be established. This is the power of transformative justice: the possibility of using the substance of a conflict as a means of exploring options and establishing responses that are not only acceptable to all parties but develop and strengthen relationships among those involved.' Law Commission of Canada, From Restorative Justice to Transformative Justice: Discussion Paper, Law Commission of Canada Catalogue No JL2-6/ 1999 (1999).
68. Philip Allott speaks of international economic law and administration as 'socially transformatory law': Philip Allott, The Health of Nations (Cambridge: Cambridge University Press, 2002) 36, 99 [hereinafter Allott, Health].
69. Andrew Robinson and Simon Tormey, '"Horizontals", "Verticals" and the Conflicting Logics of Transformative Politics', in Philip Hayden and Chamsy el-Ojeili (eds), Confronting Globalization: Humanity, Justice and the Renewal of Politics (Houndmills, Basingstoke: Palgrave Macmillan, 2005) 208.
70. Some idea of the successive articulation of GATT/WTO law in dispute settlement and then negotiation (and potentially back again) is given by John M. Weekes, 'The External Dynamics of the Dispute Settlement Understanding: Its Impact on Trade Relations and Trade Negotiations - An Initial Analysis (2004 on file with author).
71. See also generally Gene Grossman and Elhanan Helpman, 'Trade Wars and Trade Talks', 103 (4) Journal of Political Economics (1995), at 675;
72. Steven Woolcock (ed.), Multilateralism in Neutral: The Interaction between Levels of Rulemaking in International Trade and Investment (Tokyo: UNU Press, 2006).
73. In 1996, the United States and Canada challenged a ban by the EC on imports of hormone-treated meat and meat products. The challenge centered on the alleged failure of the EC to conduct a risk assessment prior to instituting the ban. The US and Canadian positions were accepted by a WTO panel and the Appellate Body, and in July 1999 both the United States and Canada were authorized to retaliate against the ban. Since the imposition of retaliation the EC has continued to keep its market closed to imports of hormone-treated meat, but has allegedly removed the fact of WTO-inconsistency by implementing new measures and invoking a precautionary approach to regulation. This resulted in a challenge by the EC in November 2004 to the continuing US and Canadian retaliation. A panel examining the matter agreed with the EC position, but a parallel decision rendered at the same time found that EC restrictions on hormone-treated meat are illegal in WTO law. In late May 2008 the EC appealed the decisions concerning its regulatory scheme and the continuing suspensions.
74. See 'EU Appeals WTO Hormone Ban Decision, Seeks Clarity on Retaliation', Inside U.S. Trade (30 May 2008).
75. A WTO press release noted that the EC maintained a ban on sulphur dioxide in cinnamon, even though it allowed minimal levels in other spices. 'The issue arose partly because Codex Alimentarius, the WHO-FAO body where countries negotiate standards for food safety, did not have a standard for SO2 residues in cinnamon. In July [2006], Codex approved a new standard ... and Sri Lanka praised the EU for "excellent cooperation" in finding a solution, partly through administrative means. In February [2006] the EU offered to help Sri Lanka apply for approval for a standard and to seek support from the European Parliament and the [EU] member states.'
76. See Sri Lankan cinnamon's future brightens, SPS Committee told (11-12 October 2006), available at www.wto.org; see also Sulphur Dioxide in Cinnamon, G/SPS/GEN/716 (25 July 2006).
77. See WTO Declaration on TRIPS and Public Health, WT/MIN(01)/DEC/2, adopted on 20 November 2001 and also Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, WT/L/540, 2 September 2003.
78. For a comprehensive account of the development of these documents see Haochen Sun, 'The Road to Doha and Beyond: Some Reflections on the TRIPS Agreement and Public Health', 15 European Journal of International Law 123 (February 2004).
79. United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 12 October 1998, para 159 [hereinafter Shrimp].
80. See Allott, Health, above n 17, at 47.
81. '....[a]bductive logic seeks the best explanation ... in response to novel or interesting data that doesn't fit an extant model. Deductive or inductive logic might prove such a model true or untrue over time, but in the interim, abductive logic generates the best explanation of the data.' Roger Martin, The Opposable Mind (Cambridge: Harvard University Press, 2007) 146.
82. This observation is consistent with Philip Allott's insistence on the ability of international legal arrangements to transform the way people think. 'The history of human societies contains many examples of revolutionary change not only in real constitutions of societies but also in their ideal self-constituting, revolutions of the mind.' Allott, Health, above n 17, at 81 (emphasis added).
83. Jutta Brunnée and Stephen Toope, 'International Law and Constructivism: Elements of an Interactional Theory of International Law', Columbia Journal of Transnational Law 19 (2000) at 30.
84. Ibid.
85. 'Theory' The New Shorter Oxford Dictionary 4th edn (Oxford: Oxford University Press, 1993) 3274.
86. Ian McLeod, Legal Theory (3rd ed.) (Basingstoke: Palgrave Macmillan, 2005) 2.
87. See also Allott, Health, above n 17, at 24.
88. For example, the WTO is described as 'a "medieval institution" more akin to the Roman Catholic Church in the Middle Ages than a modern legal institution. Decisions remain largely within the control of a small number of powerful Western states, and ... only states with access to the informal talks ... have a strong influence on outcomes.' Deborah Cass, The Constitutionalization of the World Trade Organization: Legitimacy, Democracy and Community (Oxford: Oxford University Press 2005) 14;
89. 'Good international rules do not create automatic benefits for human development, but they can facilitate policies that are good for the poor. Conversely, bad rules can outlaw such policies. Many of the rules enshrined in the WTO fall into the latter category. They threaten to marginalize developing countries and the world's poorest people within an already unequal global trading system.' Oxfam, Rigged Rules and Double Standards: Trade, Globalization, and the Fight against Poverty (2002) 207.
90. DSU Art. 3(8) states that '[i]n cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment.' The presumption has never been successfully rebutted. At the same time other provisions, like Safeguards Agreement Art. 6 (provisional safeguard possible 'in critical circumstances' and pursuant to a preliminary determination based on 'clear evidence'), Subsidies Agreement Art. 17.1(b) (provisional measures possible where preliminary affirmative determination that 'subsidy exists and that there is injury to a domestic industry') and Anti-Dumping Agreement Art. 7.1(ii) (provisional measures possible where preliminary affirmative determination of 'dumping and consequent injury to a domestic industry') appear to require proof.
91. See also the standard for threatened injury: SAF Art. 4.2(a), SCM Arts. 15.7-8;
92. AD Art. 3.7. The level of evidence required was discussed in United States - Safeguard Measures on Imports of Fresh, Chilled or Frozen Lamb Meat from New Zealand and Australia, WT/DS177, 178/AB/R, adopted 1 May 2001, para 125 (where in interpreting the phrase 'threat of serious injury' the Appellate Body emphasized the phrase 'clearly imminent' which it considered to mean 'that there must be a high degree of likelihood that the anticipated serious injury will materialize in the very near future.').
93. For some WTO dispute settlement reports referring to the protection of expectations see India - Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/R, adopted5 September 1997, para 45;
94. EC - Customs Classification of Certain Computer Equipment, WT/DS62/AB/R, adopted 5 June 1998, paras 82-84;
95. Korea - Taxes on Alcoholic Beverages, WT/DS75/AB/R, adopted 18 January 1999;
96. Korea - Measures Affecting Government Procurement, WT/DS163/R, adopted 1 May 2000, para 7.75;
97. United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/R, adopted 10 November 2004, para 6.93;
98. EC - Customs Classification on Frozen Boneless Chicken Cuts, WT/DS269, 286/AB/R, adopted 12 September 2005, para 250.
99. As noted below, the idea of a system of law based in the first place on unknowable expectations is fundamentally prospective in perspective. It implicitly looks to the future. Because it is prospective, it is also dynamic and ever-changing. See for instance the discussion of the term 'directly competitive and substitutable' in Korea - Taxes on Alcoholic Beverages, ibid, at 114 where the Appellate Body declined 'to take a static view of the term'. At the same time, there is a secondary order of law at work in the WTO Agreement. This is primarily retrospective and is composed of attempts to re-create the past at one point in time, and is hence static.
100. See for instance United States - Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS184/AB/R, adopted 24 July 2001, para 192 where the Appellate Body discussed the term 'positive evidence' in ADA Art. 3.1 and observed that '[t]he word "positive" means, to us, that the evidence must be of an affirmative, objective and verifiable character, and that it must be credible' (emphasis added).
101. The theory put forward here also means to challenge the dominant optic on WTO law. As mentioned, the WTO Agreement was concluded in April 1994 and shortly thereafter its automatic system of dispute settlement began issuing decisions. Suddenly we had something that looked familiar and court-like, and it was probably inevitable that we would come to understand the WTO Agreement as a body of law primarily in terms of adjudication. Consequently, much time and intellectual energy have been spent on the outcome of this or that case, on the trend in a series of cases, the burden of proof and so forth. The great bulk of this effort has undoubtedly been worthwhile. It has helped us to appreciate the treaty, and in some sense, to make it our own. At the same time, the fragmented way in which individual cases deal with the law has tended to obscure critical questions that come to mind only when looking at the law as a whole. The most important of these is why WTO law looks as it does? What accounts for both dispute settlement and negotiation? How can they be understood together? In other words, the dominant view has tended to stress the adversarial and corrective aspects of the treaty at the expense of constructive and facilitative ones which, I will suggest, is a more accurate conception of what is happening.
102. Japan - Taxes on Alcoholic Beverages, WT/DS8/AB/R, adopted 1 November 1996, at p 14.
103. Ibid. (emphasis added).
104. See statement by Brazil in WT/DS69/AB/R, para 15 (describing the WTO Agreement as 'an international treaty laying down contractual obligations and not erga omnes obligations.');
105. Argentina in WT/DSB/M/42, p 14 (referring to SPS obligations as 'contractual international obligations').
106. The contractual optic was also evident in 'The Future of the WTO: Addressing Institutional Challenges in the New Millenium' (2004).
107. See for instance, 'contractual requirements of membership' (para 3), 'the contractual detail of the WTO' (para 200), 'an institution founded on negotiated contractual commitments among governments' (para 206), 'countries should have contractual entitlement to capacity building support' (para 306), 'the WTO, in future, should contain provisions for a contractual right' (para 311).
108. For commentators supportive of this view see Joost Pauwelyn, 'A Typology of Multilateral Treaty Obligations: Are WTO Obligations Bilateral or Collective in Nature?', 14 European Journal of International Law 907 (2003), at 938 ('Put differently, the values, aspirations and priorities of close to 150 WTO Members remain far too diverse for WTO norms to be streamlined into constitutional-type obligations ...'). Similarly, Petros Mavroidis has referred to the WTO Agreement as an 'incomplete contract'.
109. See Petros Mavroidis, The General Agreement on Tariffs and Trade: A Commentary (Oxford: Oxford University Press, 2005).
110. The compensatory orientation of contract law has been extended by the notion of 'efficient breach'. For an application of this idea in the trade context see Warren F. Schwartz and Alan O. Sykes, 'The Economic Structure of Renegotiation and Dispute Resolution in the World Trade Organization', 31 Journal of Legal Studies S179 at S180 (2002) (arguing that the concept of efficient breach is a 'central feature' of WTO dispute settlement).
111. See John Jackson, The World Trade Organization: Constitution and Jurisprudence (London: Royal Institute for International Affairs, 1998);
112. Gail Evans, Lawmaking under the Trade Constitution (Boston: Kluwer Law International, 2000) 44;
113. Deborah Cass, The Constitutionalization of the World Trade Organization: Legitimacy, Democracy and Community (2005).
114. Also Peter Gerhart, 'Two Constitutional Visions of the World Trade Organization', 24 University of Pennsylvania Journal of International Economic Law (2003), at 1.
115. For a critical appraisal of the constitutional view see Jeffrey Dunoff, 'Constitutional Conceits: The WTO's Constitution and the Discipline of International Law', 17 (3) European Journal of International Law (2006), at 647.
116. Robert Howse and Kalypso Nicolaidis have asserted that while it is possible to articulate 'the challenge of global economic governance in constitutional terms' the real challenge is that 'the legitimacy of the multilateral trading order requires greater democratic contestability.'
117. See Robert Howse and Kalypso Nicolaidis, 'Enhancing WTO Legitimacy: Constitutionalization or Global Subsidiarity?' in Marco Verweij and Tim Josling (eds), 16 Governance 73 (2003).
118. This is the understanding of the WTO Agreement by several GATT Contracting Parties. See Xu Yu-Chong and Patrick Weller, The Governance of World Trade: International Civil Servants and the GATT/WTO (Cheltenham: Edward Elgar, 2004) 67-68.
119. The term has also been used in international environmental law: Catherine Redgwell, 'Multilateral Environmental Treaty-Making' in Vera Gowland-Debbas (ed), Multilateral Treaty Making: The Current Status of Challenges and Reforms Needed in the International Legislative Process (The Hague: Martinus Nijhoff 2000) 81 at 91.
120. This point was originally made by Edmund Burke, who recognized that rights and their jural correlatives, obligations, must be appreciated in the greater context of the legal and social environment in which they operate: William A. Edmundson, An Introduction to Rights (Cambridge: Cambridge University Press, 2004) 43.
121. See also Allott, Eunomia, above n 12, at 158ff.
122. 'It may, thus, be convenient in the GATT/WTO legal order to speak not of the principle of direct effect but of the principle of indirect effect.' United States - Sections 301-310 of the Trade Act of 1974, WT/DS152/R, adopted 22 December 1999, para 7.78.
123. Alexander Keck and Alexander Raubold, 'Forecasting Trade', WTO Working Paper ERSD-2006-05 (May 2006).
124. 'The purpose of many [GATT/WTO] disciplines, indeed one of the primary objects of the GATT/WTO as a whole, is to produce certain market conditions which would allow this individual activity to flourish.' United States - Sections 301-310 of the Trade Act of 1974, WT/ DS152/R, adopted 22 December 1999, para 7.73.
125. Ibid.
126. 'Accordingly, we find these statements by the U.S. express the unambiguous and official position of the U.S. representing, in a manner that can be relied upon by all Members, an undertaking that the discretion of the USTR has been limited so as to prevent a determination of inconsistency before exhaustion of DSU proceedings.' Ibid, at 7.125.
127. The preamble of the U.N. Charter states 'We the peoples of the United Nations determined ... to promote social progress and better standards of life in larger freedom...' (emphasis added).
128. 'The greater our knowledge, the more obscure the overall scheme.' Claude Lévi-Strauss, The Savage Mind (Chicago: University of Chicago Press 1962) 89.
129. Warrick Smith and Mary Hallward-Driemeier, 'Understanding the Investment Climate', Finance & Development (March 2005), at 40.
130. '... most tariff concessions are negotiated bilaterally, but the results of the negotiations are extended on a multilateral basis.' EC - Measures Affecting the Importation of Certain Poultry Products, WT/DS69/AB/R, adopted 13 July 1998, para 94.
131. WT/DS50/R, adopted 5 September 1997.
132. Ibid., para 45.
133. EC - Customs Classification of Certain Computer Equipment, WT/DS62/AB/R, adopted 5 June 1998, para 109; for application in the context of GATS see United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 7 April 2005, paras 159-160.
134. Dharma is difficult to define, but it has always been closely associated with the idea of duty. In traditional Hindu society individuals possess a dharma, or duty, and are charged with upholding it for the greater good of society. All of life is thus suffused with obligation: to one's kin, to one's associates, and to the wider forces of the cosmos.
135. See H. Patrick Glenn, Legal Traditions of the World (Oxford: Oxford University Press, 2000) 262ff.
136. The idea is that it would be too difficult to disaggregate protective or
137. See also Robert Hudec, The GATT Legal System and World Trade Diplomacy 30 (Salem: Butterworths Legal Publishers, 1990) (discussing the evolution of GATT dispute settlement from 'techniques of the diplomat's jurisprudence').
138. The nature of justice was considered two millennia ago by Aristotle, who identified two types of justice: corrective and distributive. Corrective justice applies to private interests and plays a rectificatory role in transactions. Thus, when a person is wrongly deprived of their property they are entitled to have it returned or to be compensated. Distributive justice, by comparison, applies to the distribution of public interests such as 'honour or money or other things that have to be shared among members of the political community.' It presupposes some socially agreed means of allotment.
139. See Aristotle, Nichomachean Ethics (R. Crisp ed) (Cambridge: Cambridge University Press, 2000) 85.
140. See also Nicholas Rescher, Fairness: The Theory and Practice of Distributive Justice (New Brunswick: Transaction Publishers, 2002).
141. This is undoubtedly behind the stated preference in DSU Art. 3.7 for 'a solution that is mutually acceptable to the parties ... and consistent with the covered agreements.' It is further reinforced by the statement in Art. 3.7 that 'the aim of the dispute settlement mechanism is to secure a positive solution to a dispute.' What 'positive' means in the context is unclear, but its traditional connotation as something affirmative suggests that the outcome is not only 'mutually acceptable to the parties' in the manner of a win-win solution, but also that it 'develop[s] and strengthen[s] relationships among those involved.' Note also the wording of DSU Art. 3.5, which specifies that all solutions to matters raised in dispute settlement are not to 'nullify or impair benefits accruing to any Member', thereby emphasizing the idea that solutions must be broadly acceptable and beneficial to the entire WTO membership.
142. Turkey - Restrictions on Imports of Textiles and Clothing Products, WT/DS34/R, adopted 31 May 1999, para 9.184 (emphasis added).
143. This tension was at the heart of EC - Conditions for the Granting of Tariff Preferences to Developing Countries, WT/DS246/AB/R, adopted 7 April 2004, where the Appellate Body had to distinguish between treatment of developing countries as a group and their treatment as members of sub-groups or individually. The Appellate Body observed at para 169 that: '[W]e are of the view that the objective of improving developing countries' "share in the growth in international trade", and their "trade and export earnings", can be fulfilled by promoting preferential policies aimed at those interests that developing countries have in common, as well as those interests shared by sub-categories of developing countries based on their particular needs.' (emphasis in original).
144. Argentina - Safeguard Measures on Imports of Footwear, WT/DS121/AB/R, adopted 14 December 1999.
145. Ibid, at para 95 (emphasis in original).
146. See for example Korea - Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/ DS161/AB/R, adopted 10 January 2001, paras 162-164 ('determination of whether a measure determination of whether a measure, which is not "indispensable", may nevertheless be "necessary" within the contemplation of Article XX(d), involves in every case a process of weighing and balancing a series of factors which prominently include the contribution made by the compliance measure to the enforcement of the law or regulation at issue, the importance of the common interests or values protected by that law or regulation, and the accompanying impact of the law or regulation on imports or exports.'). Evidentiary obligations can also be found in ADA, Arts. 3.4 ('impact examination to include an evaluation of all relevant economic factors and indices'), 3.5 (causal relationship determination 'shall be based on an examination of all relevant evidence before the authority'), Annex II (determinations permissible on the basis of facts available), 5.3, 5.8 and 6 (accuracy and adequacy of evidence, and opportunity to present), 10.7 (sufficiency of evidence) and 11.2 (evidence required for revocation).
147. For various instances of application see United States-Anti-Dumping Duty on Dynamic Random Access Memory Semiconductors (DRAM) of One Megabit or Above from Korea, WT/DS99/R, adopted 29 January 1999, para 6.43;
148. Mexico-Anti-Dumping Investigation on Imports of High Fructose Corn Syrup (HFCS) from the United States, WT/DS132/R, adopted 28 January 2000, para 7.97;
149. Guatemala-Anti-Dumping Investigation Regarding Portland Cement from Mexico, WT/DS60/R, adopted 19 June 1998, para 7.77;
150. United States-Anti-Dumping Measures on Certain Hot-Rolled Steel Products from Japan, WT/DS 184/R, adopted 28 February 2001, para 7.153;
151. see also application of SCM Arts. 4.2, 11 and 12;
152. CVA Art. 8.3 and Annex 1;
153. SPS Art. 3.3 (scientific justification) and EC - Measures Concerning Meat and Meat Products (Hormones), WT/DS26,48/AB/R, adopted 16 January 1998, para 184;
154. PSA Art. 2.2 (evidentiary standards for price verifications);
155. DSU Art. 26.1 (detailed justification in support of non-violation claims).
156. See DSU Art. 3.8 ('In cases where there is an infringement of the obligations assumed under a covered agreement, the action is considered prima facie to constitute a case of nullification or impairment.')
157. See for example Safeguards Agreement Art. 6 (provisional safeguard possible 'in critical circumstances' and pursuant to a preliminary determination based on 'clear evidence'), Subsidies Agreement Art. 17.1(b) (provisional measures possible where preliminary affirmative determination that 'subsidy exists and that there is injury to a domestic industry') and Anti-Dumping Agreement Art. 7.1(ii) (provisional measures possible where preliminary affirmative determination of 'dumping and consequent injury to a domestic industry').
158. See also the standard for threatened injury: SAF Art. 4.2(a), SCM Arts. 15.7-8;
159. AD Art. 3.7. In this respect see also U.S. - Safeguard Measures on Imports of Fresh, Chilled and Frozen Lamb Meat from New Zealand and Australia, WT/DS177,178/AB/R, adopted 1 May 2001, para 125 (where in interpreting the phrase 'threat of serious injury' the Appellate Body emphasized the phrase 'clearly imminent' which it considered to mean 'that there must be a high degree of likelihood that the anticipated serious injury will materialize in the very near future.').
160. This has led to concern about fact-finding ability in WTO dispute settlement. See Claus-Dieter Ehlermann and Lothar Ehring, 'WTO Dispute Settlement and Competition Law: Views from the Perspective of the Appellate Body's Experience', 26 Fordham International Law Journal 1505 (2003), at 1542 (observing that '[d]espite the extensive right to seek information of every panel, it is generally believed that the investigation of facts is among the weakest spots of the panel procedure.');
161. Petros Mavroidis, 'Essay: Dispute Settlement Procedures and Mechanisms', 16 Arizona Journal of International & Comparative Law 225 (1999), at 258 ('The WTO has been criticized ... for its fact-finding defects ...').
162. 'If the Member concerned fails to bring the measure found to be inconsistent with a covered agreement into compliance ... such Member shall, if so requested, and no later than the expiry of the reasonable period of time, enter into negotiations with any party having invoked the dispute settlement procedures, with a view to developing mutually acceptable compensation.'
163. The possibility that GATT and WTO dispute settlement might offer less than the harm done was adverted to in United States-Anti-Dumping Duties on Gray Portland Cement and Cement Clinker from Mexico, ADP/82, adopted 9 July 1992 unadopted, para 5.43 where the panel suggested that there could be situations where a corrective remedy would be onerous due to the passage of time and the difficulty of calculating reimbursement. It has also been implicit in several other instances of authorized retaliation under the WTO. In those cases recovery was permitted only to the extent determinable or where recovery would not impair the trading system. These recall outcomes experienced in Anglo-American contract law where the plaintiff is not entitled to recover the full value of their loss due to the greater social cost in making the plaintiff whole: Peevyhouse v Garland Coal & Mining Co., 382 P.2d 109 (Okla. 1962);
164. Ruxley Electronics and Construction Limited v Forsyth, [1996] AC 344 (HL). Consequently, fairness is a variable standard tailored to the circumstances.
165. Reference to the doctrine can be found in United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 12 October 1998, para 152.
166. It is traditionally a doctrine of the civil law. Its application in international law is discussed in Ian Brownlie, System of the Law of Nations: State Responsibility - Part I 52 (1983).
167. US-Shrimp, ibid.
168. The preamble to GATT Art. XX provides that 'Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between countries where the same conditions prevail, or a disguised restriction on international trade, nothing in this Agreement shall be construed to prevent the adoption or enforcement by any contracting party of measures:...'.
169. United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/AB/R, adopted 12 October 1998, para 156 (emphasis in original).
170. United States - Definitive Safeguard Measures on Imports of Circular Welded Carbon Quality Line Pipe from Korea, WT/DS202/AB/R, adopted 15 February 2002, para 83 (emphasis in original).
171. Instead, it is often transliterated directly as a 'special law' to distinguish it from the more usual consequences of state responsibility. See Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law, A/CN.4/L.682 34 (13 April 2006).
172. 'It will depend on the special rule to establish the extent to which the more general rules on State responsibility ... are displaced ...'. James Crawford, The International Law Commission's Articles on State Responsibility: Introduction, Text and Commentaries 307 (2002) [hereinafter Crawford].
173. Crawford, ibid, at 254.
174. '... a [WTO] Member's legal interest in compliance by other Members does not, in our view, automatically imply that it is entitled to obtain authorization to suspend concessions under Article 22 of the DSU.' EC - Regime for the Importation, Sale and Distribution of Bananas (Recourse to Arbitration under Art. 22.6), WT/DS27/ARB, adopted 9 April 1999, para 6.10.
175. Chi Carmody, 'Of Substantial Interest: Third Parties under GATT', 18 Michigan Journal of International Law 615 (1997).
176. EC - Malleable Cast Iron Tube or Pipe Fittings from Brazil, WT/DS219/R, adopted 7 March 2003, para 7.125;
177. United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/R, adopted 15 May 1998, para 7.55.
178. Donald McRae has written: '... international trade highlights the concept of interdependence. In fact, when we talk of international trade law and of international law we are dealing with two regimes, with two systems that in quite a fundamental way are talking about different things.' Donald M. McRae, The Contribution of International Trade Law to the Development of International Law 260 Recueil des Cours 99 (1996), at 117 (emphasis added).
179. This observation is consistent with Philip Allott's insistence on the ability of international legal arrangements to transform the way people think. 'The history of human societies contains many examples of revolutionary change not only in real constitutions of societies but also in their ideal self-constituting, revolutions of the mind.' Allott, Health, above n 17, at 81 (emphasis added).
180. Haochen Sun, 'The Road to Doha and Beyond: Some Reflections on the TRIPS Agreement and Public Health', 15 European Journal of International Law (2004), at 123 [hereinafter Sun].
181. India - Patent Protection for Pharmaceutical and Agricultural Chemical Products, WT/DS50/AB/R, adopted 19 December 1997.
182. Sun, above n 79, at 127-32.
183. Ibid, at 132-133.
184. Ibid, at 133-134.
185. WTO Declaration on TRIPS and Public Health, WT/MIN(01)/DEC/2, adopted on 20 November 2001.
186. Decision on the Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health, above n 20.
187. The Decision also waives TRIPS Art. 31(h) which provides that in securing a compulsory licence for a patented product 'the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization.'
188. The Decision was supplemented in December 2005 by a move to permanently incorporate the operative provisions of the Decision into the TRIPS in the form of a projected TRIPS 'Art. 31bis'. The amendment requires ratification by two-thirds of the WTO membership, or approximately 100 countries. As of the deadline for doing so in December 2007 only 13 countries had ratified. In December 2007 the ratification deadline was postponed until 31 December 2009.
189. See WT/L/711 (21 December 2007).
190. See Law Commission of Canada, above n 17.
191. Above n 85, at Art. 7.
192. In July 2007 Rwanda made the first notification under the Paragraph 6 system when it notified the WTO about the importation of 260,000 doses of TriAvir, a combination anti-retroviral, from Canada. See IP/N/RWA/1 (19 July 2007).
193. Moiety, The Oxford English Dictionary, 5th ed. (Oxford: Oxford University Press, 2002) 1809.
194. See for instance Robert Hudec, The GATT Legal System and World Trade Diplomacy (London: Praeger, 1975)
195. and Robert Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System (Salem: Butterworths, 1993);
196. John Jackson, World Trade and the Law of GATT (Indianapolis: Bobbs-Merrill, 1969);
197. Kenneth Dam, The GATT; Law and International Economic Organization (Chicago: The University of Chicago Press, 1970).
198. Robert Skidelsky, John Maynard Keynes: The Economist as Saviour 1920-1937 (New York: Penguin, 1992) 585.
199. It may be that this thinking takes us to the edge of myth. Much work has been done by anthropologists on the role of myths in societies, and in particular, on the way in which they served to shape a collective consciousness. Karen Armstrong, A Short History of Myth (Toronto: Knopf, 2005).
200. For a recent view of economics as a 'faith' see Duncan K. Foley, Adam's Fallacy: A Guide to Economic Theology (Cambridge: Harvard University Press, 2006).
201. 'Nor can you rely on any embedded notion of equality to escape the role which the tradition accords you. If no one can create the tradition, no one can escape its teaching and the roles it defines, except by departure (and there may be no place to go). This represents a classic problem that no one, anywhere, has solved. How can a communal form of organization avoid disequilibrium, and inequality, of social role?' H. Patrick Glenn, Legal Traditions of the World (Oxford: Oxford University Press, 2000) 67-68.
202. Claude Lévi-Strauss, The Savage Mind, supra note 46 at 89.