The challenge of interpreting 'WTO-PLUS' provisions

Journal of World Trade

Volumn 44, Issue 1, 2010, Pages 127-172

  Qin, Julia Ya ^a  

^a WAYNE STATE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

HOLISTIC APPROACH; REGIONAL TRADE; TRADE POLICY; WORLD TRADE ORGANIZATION;

CHINA;

EID: 77955684521     PISSN: 10116702     EISSN: None     Source Type: Journal    
DOI: 10.54648/trad2010004     Document Type: Article

References (211)

1. See generally, Julia Ya Qin, 'WTO-Plus' Obligations and their Implications for the WTO Legal System - an Appraisal of the China Accession Protocol', Journal of World Trade 37, no. 3 (2003): 483-522.
2. For a general categorization of 'WTO-plus' and 'WTO-minus' obligations and a survey of such obligations within the WTO system, see Steve Charnovitz, 'Mapping the Law of WTO Accession', in The WTO: Governance, Dispute Settlement & Developing Countries, ed. Merit E. Janow, Victoria Donaldson, & Alan Yanovich (Juris Publishing, 2008), Ch. 46, available at:
3. The Protocol on the Accession of the People's Republic of China, WT/L/432 (10 Nov. 2001), available at:
4. China's market access commitments were extraordinarily extensive in comparison with other WTO members. For a comparative perspective on the scope and depth of China's market access commitments, see Nicholas R. Lardy, Integrating China into the Global Economy (Washington, DC: Brookings Institution Press, 2002), 79-80.
5. The only other major exception is Vietnam, which acceded to the WTO in 2007. Following China's precedent, Vietnam's accession protocol contains a set of special rules that apply solely to Vietnam. These rules are found in the 70 paragraphs of the Report of the Working Party on the Accession of Vietnam that are incorporated into the accession pro- tocol. See WT/ACC/VNM/48 (27 Oct. 2006), para. 527. While special rule obligations do exist in other accessions, they are relatively few in number. For a comprehensive study of issues arising from special obligations imposed on acceding Members, see Charnovitz, supra n. 2.
6. For a summary of the WTO-minus provisions, see Julia Ya Qin, 'China, India, and the Law of the World Trade Organization', Asian Journal of Comparative Law 3, no. 1 (2008): 215, 222-227.
7. For detailed discussion, see Marcia Don Harpaz, 'China and the WTO - New Kid in the Developing Bloc?', Hebrew U. of Jerusalem Law Faculty, Research Paper 2-7 (February 2007), Part II, available at: . See also, Julia Ya Qin, 'WTO Regulation of Subsidies to State-Owned Enterprises (SOEs): A Critical Appraisal of the China Accession Protocol', Journal of International Economic Law 7, no. 4 (2004): 863, 907-909.
8. Charnovitz divided such obligations into more groups according to the subject matter, such as industrial policy, trade policy, transparency and due process. Charnovitz, supra n. 2, 29-33.
9. For example, Cuba, despite its nonmarket economy, is an original Member of the WTO. In the prior accessions of transition economies (former centrally planned economies undergoing transformation to market economies), the acceding countries were typically required to confirm the status of their economic reforms, but none was obligated to undertake substantive obligations to practice market economy. See Qin, supra n. 1, 504.
10. See Protocol, s. 9.
11. See Protocol, s. 5.1.
12. See Qin, supra n. 1, 491-499, for more detailed discussion.
13. Protocol, s. 2(C)(2). Exceptions are given to laws and regulations involving national security or publication of which would impede law enforcement.
14. WPR, para. 334, which was incorporated into the Protocol.
15. See Agreement on Trade-Related Investment Measures (TRIMS) and GATS schedule mode 3 (commercial presnce).
16. Protocol, s. 7(3).
17. Protocol, s. 3.
18. GATT, Art. XI.
19. Protocol, s. 11(3); Annex 6.
20. WPR paras 206-207, which were incorporated into the Protocol.
21. WPR para. 93, which commitment was the subject matter of a WTO complaint. See infra Part 2.2.1.
22. For domestic legal implications of these commitments, see Julia Ya Qin, 'The Impact of WTO Accession on China's Legal System: Trade, Investment and Beyond', Wayne State U. Law School Legal Studies Research Paper Series, no 7-15, 8-10 (May 2007),
23. WTO Agreement, Art. XII:1. This provision follows similar language contained in the accession provision of GATT Art. XXXIII.
24. See Qin, supra n. 1, 487-489; Charnovitz, supra n. 2, 6-10.
25. The rules governing agreements between a State and an international organization are set out in the Vienna Convention on the Law of Treaties between States and International Organizations or between International Organizations (21 Mar. 1986) (VCLTIO) (not yet in force). The VCLTIO was developed by the International Law Commission and opened for signature in 1986. U.N. Doc. A/CONF.129/15.
26. WTO Agreement, Art. XII:2.
27. Pursuant to Art. XIII (Non-Application) of the WTO Agreement, an existing Member has the right not to con- sent to the application of the WTO Agreement between it and an acceding member; and the acceding member also has the right to invoke nonapplication to an existing member. El Salvador invoked Art. XIII in the accession of China. See WTO Analytical Index: Marrakesh Agreement Establishing the World Trade Organization, Art. XIII, available at: .
28. Protocol, s. I.2.
29. Charnovitz questions the competence of the WTO Ministerial Conference to conclude a protocol with a State and thereby make the protocol part of the WTO Agreement. He suggests, correctly in my view, that the proper way to integrate the terms of accession into the WTO Agreement should be for the WTO Agreement to so state. See Charnovitz, supra n. 2, 42-46.
30. The Protocol is registered with the United Nations in accordance with Art. 102 of the UN Charter. 2183 UNTS 138 (2004). In the UN Treaty Series, all WTO protocols of accession are registered as 'Multilateral' under the same registration number (A-31874), which follows the registration number for the WTO Agreement (I-31874). Registration of an instrument with the United Nations, however, does not confer any legal status the instrument does not already have. Anthony Aust, Handbook of International Law (Cambridge: Cambridge University Press, 2005), 112.
31. See GATT Art. XXVIII (Modification of Schedules); GATS Art. XXI (Modification of Schedules).
32. See infra Part 2.2.4 (China - Exportation of Raw Materials).
33. WTO Agreement, Art. X:3.
34. To date, the only formal amendment to an annex of the WTO Agreement that has been adopted by the General Council is the 2005 amendment to the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Amendment of TRIPS Agreement, WT/L/641 (8 Dec. 2005). The amendment has not taken effect since it has not received acceptance by two thirds of the Members. As of May 2009, only 21 Members (counting the EC as one) have accepted the amendment.
35. See VCLTIO, supra n. 25, Art. 39(2) (stating that the consent of an international organization to the agreement to amend a treaty 'shall be governed by the rules of that organization').
36. Article IX. It should be noted that in practice the WTO resorts to consensus in most of its decision-making processes. For discussion, see Claus-Dieter Ehlermann & Lothar Ehring, 'Decision-Making in the World Trade Organization: Is the Consensus Practice of the World Trade Organization Adequate for Making, Revising and Implementing Rules on International Trade?', Journal International Economic Law 8, no. 1 (2005): 51-75.
37. See VCLTIO, supra n. 25, Art. 39(1) (General Rule Regarding the Amendment of Treaties) (stating that '[a] treaty may be amended by agreement between the parties').
38. Furthermore, theoretically, applying Art. X to the amendment of the Protocol could also lead to a strange result: an amendment could take effect without China's acceptance, so long as it is accepted by two thirds of the Members.
39. DSU Art. 1 and Appendix 1.
40. It should be made clear that the integration clause is only necessary to confer WTO jurisdiction over disputes arising from the Protocol provisions. For disputes against China arising from the WTO multilateral agreements, the DSU automatically applies by virtue of China's accession. If the Protocol had not been made part of a 'covered agreement', individual Members would have to rely on non-violation complaints under GATT and GATS to enforce China's commit- ments in the Protocol. The scope of such complaints, however, is limited. See GATT Art. XXIII:1(b), GATS Art. XXIII:3, DSU Art. 26.
41. The DSU applies to disputes between WTO Members only. DSU Art. 1.
42. Done at Vienna on 23 May 1969; entered into force on 27 Jan. 1980. 1155 UNTS 331.
43. VCLT, Art. 1.
44. The VCLTIO, supra n. 25, contains identical provisions on treaty interpretation as the VCLT. Other than provisions pertaining to the legal capacity of international organization, the substantive rules of the VCLTIO are essentially the same as the VCLT.
45. Appellate Body Report, United States - Standards for Reformulated and Conventional Gasoline, WT/DS2/AB/R, adopted 20 May 1996, 17.
46. According to Art. 3(2) the VCLT, the fact that the Convention does not apply to agreements concluded between States and other subjects of international law does not affect the application to them of the rules set out in the Convention to which they would otherwise be subject under international law.
47. Article 31(2) and (3) of the VCLT states:
48. It might be argued that the 'parties' to the Protocol should be construed as de facto encompassing all Members of the WTO in their individual capacity; but such a construction does not seem consistent with the literal interpretation of the provisions in Art. 31 of the VCLT.
49. This understanding is also consistent with para. 2 of Art. 30 (Application of successive treaties relating to the same subject matter) of the VCLT, and the same provision of the VCLTIO, which states: 'When a treaty specifies that it is subject to, or that it is not to be considered as incompatible with, an earlier or later treaty, the provisions of that other treaty prevail.' Insofar as the relationship between China and other Members is concerned, the Protocol and the WTO Agreement (together with its annexes) can be deemed as 'successive treaties relating to the same subject matter'. And Art. XII of the WTO Agreement can be understood as specifying that its application is subject to the terms of accession.
50. For further interpretive implications of the bilateral status of the Protocol, see text at infra n. 193.
51. See generally, Claus-Dieter Ehlermann & Lothar Ehring, 'The Authoritative Interpretation under Art. IX:2 of the Agreement Establishing the World Trade Organization: Current Law, Practice and Possible Improvements', Journal of International Economic Law 8, no. 4 (2005): 803-824.
52. Because interpretations adopted under Art. IX:2 are binding on all Members, they may have similar effect as amendment. Note that Art. IX:2 states that its provision 'shall not be used in a manner that would undermine the amendment provisions in Article X'.
53. Without China's consent, an authoritative interpretation of the Protocol adopted under Art. IX:2 would not qualify as 'subsequent agreement' within the meaning of Art. 31(3) of the VCLT.
54. 'The Shorter Oxford Dictionary is perhaps the most quoted title in the Appellate Body reports, in any case, more than any covered agreement'. George Abi-Saab, 'The Appellate Body and Treaty Interpretation', in The WTO at Ten, The Contribution of the Dispute Settlement System, ed. Giorgio Sacerdoti, Alan Yanovich, & Jan Bohanes (Cambridge: Cambridge University Press, 2006), 453, 461. It appears that the Appellate Body has moved away from the obsessive reli- ance on dictionary definitions. See, e.g., Appellate Body Report, European Communities - Customs Classification of Frozen Boneless Chicken Cuts, WT/DS269, 286/AB/R, adopted 27 Sep. 2005, ('EC - Chicken Cuts'), para. 175 (stating that while dictionaries are 'useful starting point' for the analysis of ordinary meaning of a treaty term, they are not necessarily dispositive).
55. Abi-Saab, id.
56. Appellate Body Report, EC - Chicken Cuts, para. 176.
57. The format of this provision is highly unusual for a national treatment clause. First, this commitment does not place any limit on the scope of the 'same treatment'. Second, it uses the term 'same treatment', rather than the commonly used phrase 'treatment no less favourable than', as in GATT Art. III:4 and GATS Art. XVII. The 'same treatment' requirement raises the question of whether China can grant foreign persons more favourable treatment than that to its domestic persons, such as providing special incentives to foreign investors.
58. In fact, para. 17 of the Working Party Report noted that 'any commitment to provide non-discriminatory treatment to Chinese enterprises, including foreign-funded enterprises, and foreign enterprises and individuals in China, would be subject to other provisions of the Draft Protocol and, in particular, would not prejudice China's rights under the GATS, China's Schedule of Specific Commitments or commitments undertaken in relation to trade related investment measures'. Curiously, though, this statement is not binding since para. 17 was not incorporated into the Protocol.
59. See Appellate Body Report, Korea - Defi nitive Safeguard Measure on Imports of Certain Dairy Products,WT/DS98/AB/R, adopted 12 Jan. 2000, para. 81.
60. Abi-Saab, supra n. 54, 462.
61. Abi-Saab, id. Apparently, the discussion of object and purpose 'does not sit well with strict constructionism' since it leads to teleological interpretation. Id.
62. For domestic political reasons, China might not agree to disclose such records.
63. For detailed discussion, see Qin, supra n. 1.
64. See Part 2.2 infra.
65. See Appellate Body Report, United States - Measures Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R, adopted 20 Apr. 2005. At issue was the US ban on Internet gambling, which was found by the WTO adjudicatory body to be inconsistent with the GATS. Instead of changing its domestic regulation, the United States has withdrawn its relevant concessions from the GATS schedule, and accepted the sanction by the complainant (Antigua and Barbuda) in the form of suspension of TRIPS obligations at the level of USD 21 million per year.
66. See Appellate Body Report, European Communities - Measures Concerning Meat and Meat Products (Hormones), WT/DS26/AB/R; WT/DS48/AB/R, adopted 13 Feb. 1998. At issue was the EC ban on hormone-treated meat, which was found by the Appellate Body to be inconsistent with the SPS Agreement. The ban has enjoyed a wide support in the EU public. Because the EC has not withdrawn the ban, the complainants (the Unite States and Canada) have been imposing sanctions on EC products since 1999. The EC, however, challenged such sanctions by bringing its own complaints in 2004. See Appellate Body Report, Canada/United States - Continued Suspension of Obligations in the EC-Hormones Dispute, WT/DS320/AB/R, WT/DS321/AB/R, adopted 14 Nov. 2008. The case has developed into an intractable dispute.
67. See, e.g., Joost Pauwelyn, 'Rien ne Va Plus? Distinguishing Domestic Regulation from Market Access in GATT and GATS', World Trade Review 4, no. 2 (2005): 131-170; Petros C. Mavroidis, 'Highway XIV Revisited: The Road of Nondiscrimination to Market Access in GATS', World Trade Review 6, no. 1 (2007): 1-23; Federico Ortino, 'Treaty Interpretation and the WTO Appellate Body Report in US - Gambling: A Critique', Journal of International Economic Law 9, no. 1 (2006): 117-148; Alan O. Sykes, 'Domestic Regulation, Sovereignty and Scientific Evidence Requirements', in Trade and Human Health and Safety, ed. George A. Bermann & Petros C. Mavroidis (Cambridge: Cambridge University Press, 2006), 257; Caroline E. Foster, 'Public Opinion and the Interpretation of the World Trade Organization's Agreement on Sanitary and Phytosanitary Measures', Journal of International Economic Law 11, no. 2 (2008): 427-458.
68. Supra n. 61.
69. Douglas A. Irwin & Joseph Weiler, 'Measures Affecting the Cross-Border Supply of Gambling and Betting Services (DS 285)', World Trade Review 7, no. 1 (2008): 71, 89-95.
70. For discussion of the various 'issue-avoidance' techniques that may be used by the WTO adjudicator, see William Davey, 'Has the WTO Dispute Settlement System Exceeded Its Authority?' Journal of International Economic Law 4 (2001): 79, 96-110.
71. See Lorand Bartels, 'The Separation of Powers in the WTO: How to Avoid Judicial Activism', International & Comparative Law Quarterly 53 (2004): 861, 873-877 (discussing the possibility and appropriateness of declaring non liquet under WTO law).
72. Such 'legislative' interpretation should be made by agreement between China and the WTO, or possibly by the Ministerial Conference or the General Council pursuant to Art. IX:2 of the WTO Agreement. See supra discussion surrounding nn. 50-53.
73. China - Measures Affecting Imports of Automobile Parts, WT/DS339, 340, 342.
74. The first WTO complaint against China was China - Value Added Tax on Integrated Circuits (WT/DS/309), which was brought by the United States in March 2004. The case was settled through consultations. See WT/DS309/8 (6 Oct. 2005).
75. The EU did not make a claim regarding para. 93 of the Working Party Report.
76. Panel Reports, China - Measures Affecting Imports of Automobile Parts, WT/DS339, 340, 342/R (18 Jul. 2008). The Panel exercised judicial economy on claims under TRIMS and the SCM Agreement.
77. Appellate Body Report, China - Measures Affecting Imports of Automobile Parts, WT/DS339, 340, 342/AB/R, adopted 12 Jan. 2009.
78. Panel Report, paras 7.740-7.741. A note to para. 7.740 states additionally: 'China considers it appropriate for dispute settlement panels to take into account the context of a commitment made in a working party report, and to exercise special care in interpreting these commitments.' Id., n. 1104.
79. The Appellate Body quoted the Panel's statement in full and noted that 'neither of these propositions has been disputed at any point in these proceedings, including in this appeal'. Appellate Body Report, para. 214.
80. For example, the Panel followed this formula strictly in its analysis of whether China's treatment of CKD/SKD kits is consistent with GATT Art. II:1(b). See Panel Report, paras 7.658-7.735.
81. In defining the term 'tariff lines', the Panel simply referred to the HS Convention. See id., para. 7.749.
82. Panel Report, para. 7.750.
83. Id., para. 7.755.
84. Id., paras 7.757-7.758.
85. Id., para. 7.756.
86. Appellate Body Report, paras 41-44. The United States and Canada disputed this factual claim. Id., paras 76, 97. For facts established in this regard, see infra n. 89.
87. According to the Appellate Body, since the Panel had (correctly) characterized the charge imposed by the Chinese measure as 'internal charges' falling under GATT Art. III, it could not logically characterize such charge also as 'an ordinary customs duty' in violation of China's commitment under para. 93. Appellate Body Report, paras 230-245.
88. Id., para. 252. The effect of the Appellate Body's decision is to allow China to continue charging 25% tariffs for CDK/SKD kits.
89. The facts established by the Panel are as follows: China maintained separate tariff lines for CDK/SDK kits under the tariff headings for motor vehicles from 1991 to 1995. Thereafter, China prohibited the imports of CDK/SDK kits officially, but continued such imports in practice. From 1996 to 2001 (the time of accession), the separate tariff lines for such kits ceased to exist in China's tariff schedule. The parties however disputed as to how China treated such kits during this period. The complainants submitted that China applied tariff rates on such kits based on the negotiations it reached with individual auto manufacturers at substantially lower levels than the rates for complete vehicles. China, on the other hand, insisted that it always applied the same tariff rates to CDK and SDK kits as those to complete vehicles. In the end, the Panel accepted that China had classified the kits as complete vehicles prior to its accession. See Panel Report, paras 7.731-7.735.
90. 'China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products', Request for the Establishment of a Panel by the United States, WT/DS363/5 (11 Oct. 2007); Request for Consultation by the United States, WT/DS363/1(16 Apr. 2007); Addendum, WT/DS363/1/Add.1 (16 Jul. 2007).
91. See WPR, para. 80.
92. Section 5 of the Protocol. The trading rights commitment is further elaborated in paras 83 and 84 of the Working Party Report.
93. GATT Art. XVII.
94. Foreign Trade Law of the People's Republic of China, as amended, effective 1 Jul. 2004.
95. Documents required for registration are mostly for identification purposes. The Ministry of Commerce must complete the registration within five days of receipt of the required documents. Foreign Trade Law, Arts 8 and 9.
96. Annex 2A of the Protocol contains a list of 84 products in seven categories (grain, vegetable oil, sugar, tobacco, processed oil, chemical fertilizer, and cotton), the import of which can only be conducted by specific SOEs; and a list of 134 agricultural products and commodities (such as tea, grains, metals, coal, oil, silk and cotton), the export of which can only be conducted by specific SOEs.
97. By contrast, exports of Chinese cultural products are not subject to state trading.
98. See Catalogue for Guidance of Foreign Investment Industries, Order [2004] no. 24, State Development and Reform Commission, the Ministry of Commerce (30 Nov. 2004) (The Industry Catalogue); The Several Opinions of the Ministry of Culture, State Administration of radio, Film and Television, General Administration of Press and Publication, national Development and Reform Commission and the Ministry of Commerce on Introducing Foreign Investment into the Cultural Sector, Order [2005] no. 19 of the Ministry of Culture (6 Jul. 2005).
99. See State Council, Decision Concerning the Entry of Non-State Capital into Cultural Industries (20 Apr. 2005). Despite the restriction, however, an increasing number of private companies have entered the publishing business unofficially and are operating in a grey area.
100. The Industry Catalogue was first promulgated in 1995 and has been revised four times in 1997, 2002, 2004 and 2007, respectively. While the import of foreign cultural products has been prohibited, there has been some limited liberalization following the WTO accession, notably in the distribution of printed matters and audiovisual products. See China's Services Schedule 2D, 4A-4E.
101. Except for a few media outlets directly controlled by the Party, Chinese media enterprises must finance themselves mostly through subscriptions and advertisement. See Sigrun Abels, 'State vs. Market: Media in Transition', International Institute for Asian Studies News Letter, no. 37 (2005).
102. The publishers are subject to the editorial responsibility system. See State Council, Regulation on the Admin- istration of Publishing Industry (Order 343, 25 Dec. 2001), Art. 25; State Council, Regulation on the Administration of Audiovisual Products (Order 341, 25 Dec. 2001), Art. 16. In addition, with respect to audiovisual products, the import- ers must submit all planned imports to the Ministry of Culture for advance content review. Id., art. 11. See also, Carin Zissis & Preeti Bhattacharji, Media Censorship in China, 18 Mar. 2008, Council on Foreign Relations, .
103. The criteria are tightened and loosened from time to time to balance the need for control and the need to allow freer flow of information in the society. See Zissis & Bhattacharji, id.; Abels, supra n. 101.
104. See China's Goods Sch. CLII, Annex 8 of the Protocol.
105. Such price markup by state import monopolies is prohibited by GATT Art. II:4.
106. There is no mention of this matter in the Protocol or the Working Party Report. In the WTO dispute proceed- ings, the United States did not indicate that there was any understanding on the issue during the accession negotiation.
107. See China - Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (WT/DS363), Second Submission of the United States of America, 29 Aug. 2008, para. 39, available at:
108. Id., para. 40. The United States also pointed out that para. 84(b) of the Working Party Report contains the following qualification for the trading rights commitment: '[f]oreign enterprises and individuals with trading rights had to comply with all WTO-consistent requirements related to importing and exporting, such as those concerning import licensing, TBT and SPS'.
109. China - Measures affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (WT/DS363), Answers of the United States of America to the First Set of Questions by the Panel to the Parties (11 Aug. 2008), para. 60, available at:
110. Id., para. 61 (citing United States - Measures Relating to Shrimp from Thailand (DS343), United States - Customs Bond Directive for Merchandise Subject to Antidumping/Countervailing Duties (DS345), WT/DS343/AB/R, WT/DS345/AB/R, adopted 1 Aug. 2008, paras 304-319).
111. The exception of GATS XIV(a) is broader in scope than GATT XX(a) as it exempts measures 'necessary to protect public morals or to maintain public order'. China did not invoke GATS XIV since s. 5.1 defines the right to trade as 'the right to import and export goods'.
112. The term 'public morals' was defined as denoting 'standards of right and wrong of conduct maintained by or on behalf of a community or nation'. Panel Report, US-Gambling, para. 6.465. Some have suggested that accepting the censorship policy of the Chinese government as meeting the WTO standard of public morals would be more damaging to the reputation of WTO panels than the accusations that they kill turtles and dolphins or legitimize gambling. See Henry Gao, 'The Mighty Pen, the Almighty Dollar, and the Holly Hammer and Sickle: An Examination of the Conflict between Trade Liberalization and Domestic Cultural Policy with Special Regard to the Recent Dispute between the United States and China on Restrictions of Certain Cultural Products', Asian Journal of WTO and International Health Law and Policy 2, no. 2 (2007):313-344.
113. Appellate Body Report, Korea - Measures Affecting Imports of Fresh, Chilled and Frozen Beef, WT/DS161, 169/ AB/R, adopted 10 Jan. 2001, paras 162-166; Appellate Body Report, US-Gambling, paras 305-308.
114. Answers to Panel questions, supra n. 109, para. 62.
115. An alternative is not considered 'reasonably available' if it is merely theoretical in nature or imposes an undue burden on the responding Member, such as prohibitive costs and substantial technical difficulties. And such an alternative must be capable of achieving the level of protection desired by the responding Member. Appellate Body Report, 'US-Gambling', para. 308.
116. The United States also claimed that China's measures are inconsistent with s. 5.2 of the Protocol which provides: 'Except as otherwise provided for in this Protocol, all foreign individuals and enterprises, including those not invested or registered in China, shall be accorded treatment no less favourable than that accorded to enterprises in China with respect to the right to trade.' If China is found to have violated s. 5.2, the question will still arise as to whether such violation can be excused by Art. XX.
117. What constitutes 'the same conditions prevail' under the chapeau is not well developed in WTO jurisprudence. See Julia Ya Qin, 'Defining Non-Discrimination under the Law of the World Trade Organization', Boston University International Law Journal 23, no. 2 (2005): 215-297.
118. See supra n. 65. Unlike in US-Gambling, however, China would not be able to withdraw or amend its trading rights commitment easily. See supra Part I.B.2.
119. China-Measures Affecting Financial Information Services and Foreign Financial Information Suppliers, WT/DS372, WT/ DS373, WT/DS378.
120. See Memorandum of Understanding regarding Measures Affecting Foreign Suppliers of Financial Information Services (MOU) reached between China and the EC, the United States, and Canada, respectively, WT/DS372/4, WT/ DS373/4, WT/DS378/4 (9 Dec. 2008).
121. Xinhua serves as the largest information centre in China. It has more than 100 bureaus worldwide, owns and publishes more than 20 newspapers and journals, and prints in six foreign languages. See Brief Introduction to the Xinhua News Agency,
122. State Council, Decision on Establishing Administrative Permission for the Administrative Examination and Approval of Items that must be Retained (Order no. 412, 29 Jun. 2004).
123. See State Council's Notice Authorizing Xinhua News Agency to Implement Centralized Administration over the Release of Economic Information in the People's Republic of China by Foreign News Agencies and their Subsidiary Information Institutions (31 Dec. 1995, issued as Circular no.1 of 1996).
124. 'Measures for Administering the Release of News and Information in China by Foreign News Agencies', Xinhua News Agency, 10 Sep. 2006.
125. See 'China's Media Curbs Aim to Bolster Xinhua: Beijing Hopes to Create a Global News Competitor; Plan Draws Criticism from U.S., EU', Wall Street Journal, 13 Sep. 2006, A8.
126. Xinhua launched a comprehensive fi nancial information services system, available at: .
127. GATS Art. VI:1.
128. Similarly, GATS requires each Member to provide judicial or administrative reviews of administrative decisions affecting services, but stops short of requiring such review procedures to be formally independent of the agency rendering the administrative decisions. Instead, it provides that '[w]here such procedures are not independent of the agency entrusted with the administrative decision concerned, the Member shall ensure that the procedures in fact provide for an objective and impartial review'. And this provision 'shall not be construed to require a Member to institute such tribunals or proce- dures where this would be inconsistent with its constitutional structure or the nature of its legal system'. GATS Article VI:2. The soft requirement of GATS contrasts with the corresponding provision of GATT Article X:3, which states unequivo- cally that the judicial or administrative review tribunals or procedures 'shall be independent of the agencies entrusted with administrative enforcement...'.
129. Regarding this item, under both 'market access' and 'national treatment', the Schedule shows no limitation for modes 1, 2 and 3, and 'unbound except as indicated in horizontal commitments' for Mode 4. The column of 'market access' contains a note on mode 3: 'Criteria for authorization to deal in China's financial services sector are solely prudential (i.e., contain no economic needs test or quantitative limits on licenses). Branches of foreign institutions are permitted'.
130. The Industry Catalogue has consistently listed the news industry in the 'Prohibited' category for foreign direct investment. See text at supra n. 100.
131. Although China's Schedule was negotiated in the accession context, rather than during the multilateral GATS negotiations, the interpretive approach would not be different given that China's Schedule has become one of the annexes to GATS. See Part II, para. 1, of the Protocol.
132. A footnote to paragraph (a) states: 'The public order exception may be invoked only where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society.'
133. The Appellate Body has said that 'omission must have some meaning'. Appellate Body Report, Japan - Taxes on Alcohol Beverages, WT/DS8, 10, 11/AB/R (4 Oct. 1996), 18.
134. See MOU, supra n. 120, para. 5 (stating that '[F]inancial information services are distinct from "news agency services" as defined in UN Provisional Central Product Classification (1991) group 962.') It is interesting to contemplate whether the MOU would constitute 'subsequent agreement' regarding the interpretation of the Protocol under Art. 31(3)(a) of the VCLT, although the MOU declares that it is without prejudice to the rights and obligations of the parties under the WTO Agreement.
135. See State Council Information Office, Ministry of Commerce and the State Administration of Industry & Com- merce, The Rules on the Administration of Provision of Financial Information Services by Foreign Institutions in China (30 Apr. 2009), Art. 19.
136. China - Measures Related to the Exportation of Various Raw Materials, WT/DS394/1 (25 Jun. 2009) (US); WT/ DS395/1 (25 Jun. 2009) (EC).
137. The alleged violations are that of GATT Arts VIII, X and XI, paras 5.1, 5.2, 8.2 and 11.3 of the Protocol, and paras 83, 84, 162 and 165 of the Working Party Report. Id.
138. Although the GATT contracting parties recognized that export tariffs could constitute serious obstacles to trade and contemplated negotiations to reduce export tariffs, see GATT Art. XXVIII bis, no such negotiation was conducted. The existing GATT rules on export tariffs are limited to the MFN requirement of Art. I and to the requirements on customs fees and formalities under Art. VIII.
139. The lack of effective GATT disciplines on exports can be partially explained by the historical context in which the major industrial countries 'could reasonably assume that no impediment would ever be placed to their free access to other people's resources'. Statement of the Representative of Canada on 22 Feb. 1977, GATT Doc. MTN/FR/W/6 (10 Mar. 1977), 1. Credit is due to Lorand Bartels for pointing to this source. For a general discussion on the lack of effec- tive GATT disciplines on exports and its historical context, see Melaku Geboye Desta, 'The Organization of Petroleum Exporting Countries, the World Trade Organization, and Regional Trade Agreements', Journal of World Trade 37, no. 3 (2003): 523-551.
140. 'WTO Trade Policy Review on China', Report by the Secretariat, WT/TPR/S199/Rev.1 (12 Aug. 2008), para. 112.
141. In 2008, China also levied 100% export taxes on 32 products in April, and 150% export taxes on fertilizers in September. See infra n. 142, 'Questions from Japan to China', G/C/W/606; 'Questions from the United States to China', G/C/W/603.
142. See WTO Transitional Review Mechanism Pursuant to para. 18 of the Protocol on the Accession of the People's Republic of China, 'Questions from the United States to China', G/C/W/589 (16 Nov. 2007) and G/C/W/603 (24 Oct. 2008); 'Questions from the European Communities to China', G/C/W/605 (4 Nov. 2008); 'Questions from Japan to China', G/C/W/568 (2 Nov. 2007) and G/C/W/606 (10 Nov. 2008).
143. See WTO Trade Policy Review Body, Minutes of Meeting 21 and 23 May 2008, 'Trade Policy Review on China', WT/TPR/M/199/Add.1 (28 Aug. 2008), China's answer to Japan Question 11, 216; China's answer to EC Ques- tions 63-64, 331.
144. GATT Art. VIII:1.
145. See Part 1.2.2.
146. DSU Art. 3.2.
147. See Richard Gardiner, Treaty Interpretation (New York/Oxford: Oxford University Press, 2008), 5, 7 (expressing the view that interpretation is 'an art', and that the Vienna rules 'are not a set of simple precepts that can be applied to produce a scientifically verifiable result. More guidance is needed to set the ground for a "correct result", or at least one which has been correctly ascertained').
148. Id., 6. Furthermore, Gardiner observed that the Vienna rules 'are not an exclusive compilation of guidance on treaty interpretation, other skills and principles that are used to achieve a reasoned interpretation remaining admissible to the extent not in conflict with the Vienna rules'. Id.
149. The concept of 'baseline' for defining WTO-plus and minus rules was introduced by Charnovitz, supra n. 2, 15-16 (defining a baseline as 'the body of obligations that would otherwise automatically devolve upon any applicant when it joins the WTO').
150. Appellate Body Report, Korea - Dairy Safeguard, supra n. 59, para. 81 (quoting its own report in Argentina - Safeuard Measures on Imports of Footwear) (emphasis original).
151. For example, the general MFN obligation under GATT Art. I:1 is subject to the exceptions contained in Arts XX, XXI, XXIV and XXV, and the Enabling Clause.
152. The case for making the exceptions of the WTO agreements generally available to the Protocol can also be made from a reserve perspective: although the Protocol is generally silent about whether China must implement its Protocol obligations on an MFN basis, few would doubt the applicability of the MFN principle to all such obligations.
153. In addition, GATT Art. I:1 (MFN) applies to export tariffs and all rules and formalities affecting exports.
154. GATT Art. XVII:3.
155. GATT Arts XVII:1(a) and (b).
156. See Panel Report, Canada - Measures Relating to Exports of Wheat and Treatment of Imported Grain, WT/DS276/R, paras 6.39, 6.89 and n. 133; Appellate Body Report, WT/DS276/AB/R, adopted 27 Sep. 2004, para. 85 (stating GATT Article XVII:1(a) is an 'anti-circumvention' provision).
157. GATT Art. II:4 also requires disclosure of information regarding the import mark-up by import monopolies on products that are not the subject of a tariff binding.
158. For assessment of WTO disciplines on state trading activities, see generally, Thomas Cottier & Petros C. Mavroidis (eds), State Trading in the Twenty-First Century (Ann Arbor: University of Michigan Press, 1998).
159. Trading rights is not a sector of services classified by GATS schedules. Unlike GATT, GATS does not contain provisions on state trading. Instead, it focuses on the effect of monopolistic powers of service suppliers, regardless of whether they are owned or authorized by the State. See GATS Art. VIII, Monopolies and Exclusive Service Suppliers.
160. Domestic laws and regulations not inconsistent with other provisions of the GATT should remain available as defense under Art. XX(d) for violations of the trading rights obligation. For instance, China could argue that maintaining state import monopolies in cultural products is 'necessary to secure compliance' with the Constitution, which sets broad political standards for speech and press.
161. See the Industry Catalogue, supra text at n. 100.
162. GATT Art. XXI(b)(ii).
163. The concept of appropriate levels of scrutiny is often used interchangeably with the concept of standards of review, which in the WTO context refers to the degree of deference the WTO adjudicatory body should give to the national authority's factual and legal determinations. For a comprehensive treatment of the subject, see Matthias Oesch, Standards of Review in WTO Dispute Resolution (Oxford: Oxford University Press, 2003). See also, Stefan Zleptnig, 'The Standard of Review in WTO Law: An Analysis of Law, Legitimacy and the Distribution of Legal and Political Authority', European Integration online Papers (EIoP) 6, no. 17 (2002),
164. The only exception is the transparency requirement of GATT Art. X.
165. Some considered this a paradigm shift in international trade law. See Henrik Horn & J.H.H. Weiler, 'European Communities - Trade Description of Sardines, Textualism and its Discontent', in The ALI Reporters' Studies on WTO Case Law, ed. Henrik Horn & Petros Mavroidis (Cambridge: Cambridge University Press, 2002), 552.
166. The standard of review effectively allocates powers between the WTO and its Members. As the Appellate Body observed, the appropriate standard of review must reflect the balance established in the relevant agreement 'between the jurisdictional competence conceded by the Members to the WTO and the jurisdictional competences retained by the Members for themselves'. Appellate Body Report, EC - Hormones, supra n. 66, para. 115.
167. Appellate Body Report, 'Argentina-Safeguard Measures on Imports of Footwear', WT/DS121/AB/R, adopted 12 Jan. 2000, para. 118.
168. Appellate Body Report, EC - Hormones, supra n. 66, para. 117.
169. See Claus-Dieter Ehlermann and Nicolas Lockhart, 'Standard of Review in WTO Law', Journal International Economic Law 7 (2004): 491 (recognizing the need for developing appropriate standards of review for different subject matters under WTO law); Matthias Oesch, 'Standards of Review in WTO Dispute Resolution', Journal of International Economic Law 6 (2003): 635 (concluding that panels and the Appellate Body had generally paid little deference to Members' interpretation of the WTO agreements).
170. See Horn & Weiler, supra n. 165.
171. See Horn & Weiler, supra n. 165.
172. For example, the Appellate Body has articulated a clearer standard of review under Art. 5.1 of SPS, which requires Members' SPS measures to be based on a risk assessment. See 'Canada/United States - Continued Suspension of Obligations in the EC - Hormones Dispute', WT/DS320/AB/R, WT/DS321/AB/R, adopted 14 Nov. 2008, para. 590 (stating that the review power of a panel under Art. 5.1 is not to determine whether the risk assessment undertaken by a WTO Member is correct but rather to determine whether that risk assessment is supported by 'coherent reasoning and respectable scientific evidence' and 'is, in this sense, objectively justifiable'.)
173. See Jeffrey Dunoff, 'Lotus Eaters: Reflection on the Varietals Dispute, the SPS Agreement and WTO Dispute Resolution', in Trade and Human Health and Safety, ed. George A. Bermann & Petros C. Mavroidis (Cambridge: Cambridge University Press, 2006), 153, 173 (questioning whether the WTO is being transformed into a re-maker of internal regulatory systems of its Members).
174. See Arie Reich, 'The Threat of Politicization of the World Trade Organization', Bar-Ilan University Faculty of Law Working Paper No. 7-05, May 2005, available at:
175. See supra text at nn. 111-115.
176. See Appellate Body Report, United States - Import Prohibition of Certain Shrimp and Shrimp Products, WT/DS58/ AB/R, adopted 6 Nov. 1998, para. 159 (stating that the task of interpreting and applying the chapeau is 'essentially the delicate one of locating and marking out a line of equilibrium' between the right of a Member to invoke an exception under Art. XX and the rights of other Members under varying substantive provisions of GATT.)
177. Cf. Alan Sykes observed that in WTO practice the least trade restrictive means or the necessity test under Art. XX is merely 'a crude form of cost-benefit analysis', rather than a method to detect protectionism. Alan O. Sykes, 'The Least Restrictive Means', University Chicago Law Review 70 (2003): 403. Commentators have expressed different understand- ings of the WTO 'necessity' jurisprudence. See, e.g., Jan Neumann & Elisabeth Turk, 'Necessity Revisited: Proportionality in World Trade Organization Law after Korea-Beef, EC - Asbestos and EC - Sardines', Journal of World Trade 37 (2003): 199-233; Donald H. Regan, 'The Meaning of "Necessary" in GATT Article XX and GATS Article XIV: The Myth of Cost-Benefit Balancing', World Trade Review 6, no. 3 (2007): 347-369; Chad P. Brown & Joel P. Trachtman, 'Brazil - Mea- sures Affecting Imports of Retreaded Tyres: A Balancing Act', World Trade Review 8, no. 1 (2009): 85-135; Benn McGrady, 'Necessity Exceptions in WTO Law: Retreaded Tyres, Regulatory Purpose and Cumulative Regulatory Measures', Journal of International Economic Law 12, no. 1 (2009): 153-173.
178. See Part 2.2.2(a).
179. 'U.S. Request for Consultations', WT/DS363/1, supra n. 90.
180. See supra text at nn. 134-135.
181. Appellate Body Report, European Communities - Customs Classification of Certain Computer Equipment, WT/DS62, 67, 68/AB/R, adopted 22 Jun. 1998, para. 109.
182. Id., para. 84; Appellate Body Report, US-Gambling, para. 160.
183. Appellate Body Report, EC - Computer Equipment, para. 84.
184. Ortino, supra n. 67, 123-124.
185. Isabelle Van Damme, 'The Interpretation of Schedules of Commitments', Journal World Trade 41, no. 1(2007): 1, 19.
186. Ortino, supra n. 67, 124.
187. Van Damme, supra n. 185, 52.
188. Id., 48 (observing that the Appellate Body seemed to accept, in part, deference to 'WTO Member-specific' means of interpretation for schedules, which it would otherwise reject as interpretive means for the interpretation of other WTO covered agreements).
189. Appellate Body Report, EC - Computer Equipment, para. 109.
190. See Charnovitz, supra n. 2, 55-56 (quoting critical views of the accession process from Roman Grynberg & Roy Michey Joy, 'The Accession of Vanuatu to the WTO', Journal of World Trade 34, no. 6 (2000): 159; Maxim Medvedkov, 'WTO Accession: The Russian Perspective', in UNCTAD, WTO Accessions and Development Policies, UNCTAD, CITC/ TNCD/11 (2001): 47).
191. See 'To Brink and Back: In Historic Pact, US Opens Way for China to Finally Join WTO', Wall Street Journal, 16 Nov. 1999, A1; 'Roller-Coaster Ride' to an Off-Again, On-Again Trade Pact', The Washington Post, 16 Nov. 1999, A26; 'The Fist Lady of Trade: Woman in the News Charlene Barshefsky: The US trade representative was praised after China's accession to the WTO', Financial Times (London), 27 Nov. 1999, 11.
192. GATT Art. XXVIII; GATS Art. XXI.
193. This understanding reflects the bilateral nature of the Protocol.
194. Interestingly, the reverse may not be true in light of the unilateral character of the Protocol obligations. It is at least theoretically possible that objective evidence will show that China actually intended to undertake a broader obligation than expected by other WTO Members under a particular Protocol provision.
195. Guiding Principle 7, Guiding Principles applicable to unilateral declarations of State capable of creating legal obligations, with commentaries thereto, adopted by the International Law Commission of the United Nations in its 58th session in 2006, ILC Report, A/61/10 (2006).
196. Id., Commentary (2) and (3) (citing Nuclear Tests (Australia v. France; New Zealand v. France), ICJ Report 1974; Armed Activities on the Territory of the Congo (New Application: 2002) (Democratic Republic of the Congo v. Rwanda), Jurisdiction and Admissibility; Frontier Dispute (Burkina Faso v. Republic of Mali), ICJ Report 1986; Fisheries Jurisdiction (Spain v. Canada), Merits, Judgment of 4 Dec. 1998, ICJ Report 1998; Land and Maritime Boundary between Cameroon and Nigeria (Cameroon v Nigeria), Preliminary Objections, Judgment of 11 Jun. 1998, ICJ Reports 1998).
197. Id., Commentary (3) (citing Fisheries Jurisdiction (Spain v. Canada), 453, para. 46; Frontier Dispute (Burkina Faso v. Republic of Mali), 574, para. 40).
198. For detailed discussion of the principle, see Gardiner, supra n. 147, 60-61, and 349.
199. Appellate Body Report, EC - Chicken Cuts, para. 175 (quoting Lord McNair, The Law of Treaties (Oxford: Oxford Clarendon Press, 1961) 365).
200. Appellate Body Report, EC - Computer Equipment, para. 86.
201. Id., paras 92-93 and 95 (stating that consistent prior classification practice of one party is often significant, whereas inconsistent practice is not relevant).
202. Appellate Body Report, EC - Chicken Cuts, para. 289.
203. Id., para. 305 (stating that it is possible that documents published, events occurring and practice followed subsequent to the conclusion of the treaty may give an indication of what were or were not the common intentions of the parties at the time of the conclusion).
204. Id., paras 308-309.
205. Appellate Body Report, EC - Hormones, n. 154.
206. Id. (quoting from Robert Jennings &Arthur Watts, Oppenheim's International Law, 9th edn (London: Longmans, 1992), I, 1278).
207. Appellate Body Report, EC - Hormones, para. 165 (criticizing the Panel for interpreting Art. 3.1 of the SPS as containing binding norms rather than expressing a goal to be realized in the future).
208. See Gardiner, supra n. 147, 60-61 (discussing Hersch Lauterpacht's view in 'Restrictive Interpretation and the Principle of Effectiveness in the Interpretation of Treaties' (1949) XXVI BYBIL 48); John H. Jackson, Sovereignty, the WTO, and Changing Fundamentals of International Law (Cambridge: Cambridge University Press, 2006), 262 (suggesting that the concept of in dubio mitius represents 'extreme positivism' and is 'absurd and destructive of purposes of institutions like the GATT and WTO').
209. Article 32 provides: '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.'
210. See, e.g., Appellate Body Report, Canada - Measures Affecting the Importation of Milk and the Exportation of Dairy Products, WT/DS103/AB/R, WT/DS113/AB/R, adopted 27 Oct. 1999, para. 138 (because the language is not clear on its face, it is 'appropriate' and 'indeed necessary' to turn to supplementary means pursuant to Art. 32); Appellate Body Report, United States - Subsidies on Upland Cotton, WT/DS267/AB/R, adopted 21 Mar. 2005, para. 623 (agreeing with the Panel that the meaning of the text is clear and therefore recourse to negotiating history is 'not necessary', but did take into account of the negotiating history); Appellate Body Report, United States - Countervailing Duties on Certain CorrosionResistant Carbon Steel Flat Products from Germany, WT/DS213/AB/R, adopted 19 Dec. 2002, paras 89-90 (since the interpretation does not lead to 'irrational or absurd results', it is not 'strictly necessary' to have recourse to supplementary means identified in Art. 32, but considered negotiating history any way).
211. When the interpreter uses supplementary means to 'confirm' a clear meaning, the process also carries with it the possibility that the meaning cannot be so confirmed, which may lead to adjustment to the assumption that the meaning was clear. See Gardiner, supra n. 147, 307-310.