This page intentionally left blank The Law and Policy of the World Trade Organization This is primarily a textbook for graduate and upper-level undergraduate students of law; however, practising lawyers and policy-makers who are looking for an introduction to WTO law will also find it invaluable The book covers both the institutional and substantive law of the WTO While the treatment of the law is quite detailed, the main aim of this textbook is to make clear the basic principles and underlying logic of WTO law and the world trading system Each section contains questions and assignments, to allow students to assess their understanding and develop useful practical skills At the end of each chapter, there is a helpful summary as well as an exercise on specific, true-to-life international trade problems P E T E R V A N D E N B O S S C H E is Professor of International Economic Law, Head of the Department of International and European Law and Director of Studies of the Magister Iuris Communis programme at Maastricht University, The Netherlands He studied law at the University of Antwerp (Lic jur.), the University of Michigan (LLM) and the European University Institute, Florence (Dr jur.) From 1997 to 2001, Peter Van den Bossche was Counsellor to the Appellate Body of the WTO, Geneva In 2001 he served as Acting Director of the Appellate Body Secretariat The Law and Policy of the World Trade Organization Text, Cases and Materials Peter Van den Bossche Maastricht University cambridge university press Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge cb2 2ru, UK Published in the United States of America by Cambridge University Press, New York www.cambridge.org Information on this title: www.cambridge.org/9780521822909 © Peter Van den Bossche 2005 This publication is in copyright Subject to statutory exception and to the provision of relevant collective licensing agreements, no reproduction of any part may take place without the written permission of Cambridge University Press First published in print format 2005 isbn-13 isbn-10 978-0-511-12520-1 eBook (EBL) 0-511-12520-8 eBook (EBL) isbn-13 isbn-10 978-0-521-82290-9 hardback 0-521-82290-4 hardback isbn-13 isbn-10 978-0-521-52981-5 paperback 0-521-52981-6 paperback Cambridge University Press has no responsibility for the persistence or accuracy of urls for external or third-party internet websites referred to in this publication, and does not guarantee that any content on such websites is, or will remain, accurate or appropriate Contents List of figures x List of tables xii Preface and acknowledgments xiii Table of cases xvi Table of agreements and decisions xxvii ECONOMIC GLOBALISATION AND THE LAW OF THE WTO 1.1 Introduction 1.2 Economic globalisation and international trade 1.2.1 1.2.2 1.2.3 1.2.4 The emergence of the global economy Economic globalisation: a blessing or a curse? 11 Trade liberalisation versus protectionism 19 Globalisation and trade to the benefit of all? 29 1.3 International trade and the law of the WTO 1.3.1 1.3.2 35 International rules for international trade 35 Basic rules and principles of WTO law 39 1.4 Sources of WTO law 44 1.4.1 1.4.2 The Marrakesh Agreement Establishing the World Trade Organization 45 Other sources of WTO law 55 1.5 WTO law in context 60 1.5.1 1.5.2 WTO law and international law 60 WTO law and national law 65 1.6 Summary 72 1.7 Exercise: Globaphiles versus globaphobes 74 THE WORLD TRADE ORGANIZATION 76 2.1 Introduction 77 2.2 The origins of the WTO 78 2.2.1 2.2.2 The General Agreement on Tariffs and Trade 1947 78 Uruguay Round of Multilateral Trade Negotiations 83 2.3 Mandate of the WTO 86 v vi Contents 2.3.1 2.3.2 Objectives of the WTO 86 Functions of the WTO 88 2.4 Membership of the WTO 103 2.4.1 2.4.2 2.4.3 2.4.4 Current membership 103 Accession 109 Obligations of membership 115 Withdrawal and expulsion 119 2.5 Institutional structure of the WTO 119 2.5.1 2.5.2 2.5.3 2.5.4 2.5.5 2.5.6 2.5.7 2.5.8 Basic structure 120 Ministerial Conference 122 General Council, DSB and TPRB 124 Specialised councils, committees and working parties Trade Negotiations Committee 130 Political bodies lacking in the WTO structure 131 Quasi-judicial and other non-political bodies 133 WTO Secretariat 135 2.6 Decision-making in the WTO 2.6.1 2.6.2 2.6.3 2.6.4 2.6.5 2.6.6 141 Normal procedure 141 Special procedures 144 WTO decision-making in practice 148 Participation of developing-country Members 151 Involvement of NGOs 154 Form and legal basis of WTO decisions 162 2.7 Other issues 2.7.1 2.7.2 127 164 Status of the WTO 164 The WTO budget 164 2.8 Summary 166 2.9 Exercise: To join or not to join? 170 WTO DISPUTE SETTLEMENT 172 3.1 Introduction 173 3.2 The origins of the WTO dispute settlement system 174 3.2.1 3.2.2 3.2.3 Settlement of disputes between States 175 Dispute settlement under the GATT 1947 176 Uruguay Round negotiations and the Dispute Settlement Understanding 180 3.3 Principles of WTO dispute settlement 182 3.3.1 3.3.2 3.3.3 3.3.4 3.3.5 3.3.6 3.3.7 3.3.8 3.3.9 Object and purpose of the WTO dispute settlement system 182 Methods of WTO dispute settlement 186 Jurisdiction of the WTO dispute settlement system 187 Access to the WTO dispute settlement system 190 The WTO dispute settlement process 203 Rules of interpretation and burden of proof 206 Confidentiality and Rules of Conduct 212 Remedies for breach of WTO law 217 Special rules and assistance for developing-country Members 225 Contents 3.4 Institutions of WTO dispute settlement 228 3.4.1 3.4.2 3.4.3 3.4.4 The Dispute Settlement Body 228 WTO dispute settlement panels 231 The Appellate Body 244 Other bodies and persons involved in WTO dispute settlement 3.5 WTO dispute settlement proceedings 3.5.1 3.5.2 3.5.3 3.5.4 Consultations 255 Panel proceedings 259 Appellate review 270 Implementation and enforcement 255 255 278 3.6 WTO dispute settlement practice to date 284 3.6.1 3.6.2 Disputes 284 Reports and awards 287 3.7 Challenges and proposals for reform 289 3.7.1 3.7.2 3.7.3 From DSU review to DSU negotiations 289 Proposals for DSU reform 292 Main challenge to the WTO dispute settlement system 298 3.8 Summary 299 3.9 Exercise: Newland seeks justice 304 PRINCIPLES OF NON-DISCRIMINATION 307 4.1 Introduction 308 4.2 Most-favoured-nation treatment under the GATT 1994 309 4.2.1 4.2.2 Nature of the MFN treatment obligation of Article I:1 of the GATT 1994 310 Consistency with Article I:1 of the GATT 1994 312 4.3 Most-favoured-nation treatment under the GATS 4.3.1 4.3.2 4.3.3 318 Nature of the MFN treatment obligation of Article II:1 of the GATS 318 Consistency with Article II:1 of the GATS 320 Exemptions from the MFN treatment obligation under Article II:1 of the GATS 325 4.4 National treatment under the GATT 1994 326 4.4.1 4.4.2 4.4.3 4.4.4 Nature of the national treatment obligation of Article III of the GATT 1994 327 Consistency with Article III:2, first sentence, of the GATT 1994 331 Consistency with Article III:2, second sentence, of the GATT 1994 340 Consistency with the national treatment obligation of Article III:4 of the GATT 1994 349 4.5 National treatment under the GATS 365 4.5.1 4.5.2 Nature of the national treatment obligation of Article XVII of the GATS 365 Consistency with Article XVII of the GATS 367 4.6 Summary 369 4.7 Exercise: Beer in Newland 372 vii viii Contents RULES ON MARKET ACCESS 5.1 Introduction 376 5.2 Tariff barriers to trade in goods 5.2.1 5.2.2 5.2.3 5.2.4 5.2.5 5.2.6 5.2.7 375 377 Customs duties or tariffs 377 Negotiations on tariff reductions 389 Tariff concessions and Schedules of Concessions Protection of tariff concessions 419 Modification or withdrawal of tariff concessions 423 Imposition of customs duties 425 Other duties and charges 436 398 5.3 Non-tariff barriers to trade in goods 441 5.3.1 5.3.2 5.3.3 5.3.4 Quantitative restrictions 441 Rules on quantitative restrictions 444 Administration of quantitative restrictions Other non-tariff barriers 457 450 5.4 Barriers to trade in services 480 5.4.1 5.4.2 Market access barriers to trade in services Other barriers to trade in services 495 5.5 Summary 502 5.6 Exercise: Carlie1 goes to Europe 482 510 RULES ON UNFAIR TRADE 512 6.1 Introduction 512 6.2 Dumping and anti-dumping measures 513 6.2.1 6.2.2 6.2.3 6.2.4 6.2.5 6.2.6 6.2.7 Basic elements of WTO law on dumping 514 Determination of dumping 518 Determination of injury 526 Demonstration of a causal link 533 Anti-dumping investigation 536 Anti-dumping measures 541 Special and differential treatment for developing-country Members 549 6.3 Subsidies and countervailing measures 6.3.1 6.3.2 6.3.3 6.3.4 6.3.5 6.3.6 6.3.7 551 Basic elements of WTO law on subsidies and subsidised trade 552 Determination of subsidisation 555 Prohibited subsidies 561 Actionable subsidies 567 Countervailing measures 574 Agricultural subsidies 583 Special and differential treatment for developing-country Members 586 6.4 Summary 588 6.5 Exercise: Dirty play, but by whom? 594 Index International Trade Organization 78–81, 155 International Tribunal for the Law of the Sea (ITLOS) 287 Internet 6, 16 internship programme 140 interpretation of WTO agreements burden of proof 211–12 competence 128, 144–5, 185 conflicts See conflicts of agreements context 207 customary law 206 definition of terms 208 and domestic laws 67 effectiveness principle 58, 208 flexibility 209 GATT exceptions 599–600 good faith 207 holistic approach 207–9 intention of parties 208 judicial activism 185 legitimate expectations 208 negotiating history 44, 60 preparatory works 207, 209 rules of interpretation 206–9, 301 singularia non sunt extendenda 599 supplementary means 206–9 through adjudication 184–5 investment Doha Ministerial Declaration 703–4 national treatment 351 ‘Singapore issue’ 92 TRIMS 48 and WTO 702–3, 705 Iran 108 Iraq 108 Ireland 478 Israel 10, 37, 39, 116, 388, 478 Italy 478 Jackson, John 35, 37, 38, 68, 69, 79–80, 82, 142, 148, 164, 179 Jamaica 16, 294 Janow, Merit 245 Japan anti-dumping negotiations 515 contributions to WTO budget 166, 310 customs duties 392 diamond trade 116 DSU reform 290, 296 government procurement 478 historical perspective market access commitments 494 ‘Quad’ member 108 trade policy reviews 95 WTO disputes 286 and WTO law, direct effect 70–2 WTO role 290 JITAP 101, 700, 701 joint ventures 482 Jonquie`res, Guy de 77 Jordan 113, 291, 294, 295 Jordan, Bill 14, 34 judicial activism 185 judicial economy 58, 240–1, 253 judicial knowledge 211 judicial review administration of rules of origin 435 administration of trade measures objectivity and impartiality 474 trade in services 496 anti-dumping duties 549 countervailing measures 583 import licensing 456 jura novit curia 211 jurisdiction appellate review 252–4 compulsory jurisdiction 189 contentious jurisdiction 190 dispute settlement system 187–90 exclusive jurisdiction 189–90 integrated WTO system 188 Trade Policy Review Mechanism 188 Kamal, Youssel Hussain 142 Kantor, Mickey 202 Kasuri, Kursheed 24 Kennedy Round 396, 515, 533 Kenya 149, 291, 705 Keohane, Robert 151 Kindner, Karl 202 Kodak 202 Korea See North Korea; South Korea Kostecki, Michel 8, 131–2, 135, 142 Krugman, Paul 27 Kuijper, Pieter-Jan 62, 123, 162–3 Kyoto Convention 39 Kyrgyz Republic 118, 478 labour markets integration agreements 666–7 labour rights 10, 13, 37, 92, 597, 680, 681 Lacarte-Muro´, Julio 245, 245, 246, 248 Lacordaire, Abbe´ Jean-Baptiste 37 Lamy, Pascal 31, 112, 113, 148, 706 languages Appellate Body reports 276 dispute settlement panel reports 243, 269 professional services 481 trade in services 483 WTO working languages 140 Laos 107, 382 723 724 Index Latin America 33, 399 Latvia 478 law enforcement, GATT exceptions 598 least-developed countries disputes 226 Enabling Clause 394 Integrated Framework 700, 701 LDC Group DSU reform 291, 294, 295–6 reform proposals 698 ‘Singapore issues’ 705 preferential tariffs 681 representatives 30 WTO recognition 107 leather 392, 397, 426 Leebron, David 71 Legal Affairs Division 162, 244 legal personality, WTO 164 legal representation conflicts of interests 216 customary law 57 WTO panel proceedings 214, 214–16 legal responsibility, concept 212 legal services 481, 500 legitimacy international organisations 151 legitimacy chain 155 and NGOs 156, 157 WTO issue 77–8, 148 legitimate expectations 208, 401 Lesotho 107 licensing imports Agreement 49, 455–7 automatic import licensing 445, 455, 456 corruption 443 fees 439 form of quantitative restriction 441 national treatment 351 non-automatic licensing 456–7 procedures publication 455–6 rules 455–7 time limits 456 type of quantitative restriction 455–7 licensing services 482, 483, 497–500 Liechtenstein 388, 478 like products actionable subsidies 568–9 determination of dumping 520, 526 MFN treatment 314–16 national treatment 334–8, 342, 354–60 safeguard measures 646 List, Friedrich 26 Lithuania 113 lobbying 202–3 local content requirements 327, 564 Lockhart, John 245 Lott, Trent 202 Luxembourg 478 Macedonia 113 MacLaren, Roy 136 Madagascar 107 malaria 32 Malawi 96, 107 Malaysia 107, 109, 166, 294, 705 Maldives 95, 107 Mali 107 Marceau, Gabrielle 63, 64 market access concessions, as remedy 221 customs duties See customs duties division 139 key WTO objective 376 Negotiating Group 397–8 non-agricultural products 91 non-tariff barriers See non-tariff barriers quotas See quantitative restrictions tariff barriers See tariff barriers trade in services 50, 51 agreements 90, 494–5 sectoral commitments 495 trade barriers 482–95, 508–9 WTO rules 39, 41–2 marketisation marking requirements 310, 351 Marrakesh Agreement generally 44–54 jurisdiction 188 Ministerial Decisions and Declarations 54 origins 85 Protocol 48 status 46 Marrakesh Conference 156 Martens, Doc Martens shoes 10 Matsushita, Mitsuo 245 Mauritania 107 Mavroidis, Petros 56 McRae, Donald 61–2 mediation, WTO disputes 186–7 medicines, developing countries 91, 149–50 membership accession dates 103–5 accession procedure 109–12 decisions 111, 123, 145 negotiations 110, 111, 111–12 working parties 130 contributions to WTO budget 166 current Member States 103–5 Index customs territories 105 developing countries 106–7 European Communities 105–6 expulsion 119 generally 103–18, 167–8 groups and alliances 107–8 least-developed countries 30 numbers 103 obligations of Members generally 115–18 non-application clauses 118 reservations 115 waivers 115–17, 123, 145–6, 325 observers 108–9 original membership 110 past and future accessions 112–15 representation in Geneva 30, 109 withdrawal 119 memoranda of understanding 98 MERCOSUR 39, 107, 650, 651, 661 metals 426 Mexico 8, 84, 152, 166, 284, 295, 494, 666 Middle East 22 Mill, John Stuart 26 mineral products 426 minimum wages 15 Ministerial Conference decisions 123 generally 121–3 interpretations of WTO agreements 128, 145 powers 123 reform 289 status 120 Ministerial Decisions and Declarations 54 Mkapa, Benjamin 33 Mohamed, Amina 230 Moldova 113, 118 money laundering 32 Mongolia 118, 650 monopolies 444, 499, 521, 608, 702 Montreal Ministerial Mid-Term Review Conference 83, 479 Montreal protests 11 Moore, Mike 23, 135, 136, 136–7, 148, 151, 161, 165, 227 most-favoured-nation treatment countervailing measures 314, 580 customs duties 378, 432 negotiating principle 393, 394 rules of origin 434 exceptions 310 freedom of transit 480 GATS 50 de facto discrimination 319 exceptions 325–6, 626–7 generally 318–26 like services or suppliers 323–4 measures by non-governmental bodies 320 nature of obligation 318–19 no less favourable treatment 324 scope 320–3 tests 320–4 GATT 1994 47 advantage test 312–14 de facto discrimination 311 generally 309–18 immediacy and unconditionality 317–18 interpretation 312–18 like products test 314–16 nature of obligation 310–11 generally 369–70 government procurement 478 intellectual property rights 52 meaning 308 non-WTO Members 378 principles 40 quantitative restrictions 450 recognition of foreign qualifications 499 safeguard measures 638 technical barriers to trade 459 Mozambique 25, 107 Multifiber Agreement 446, 448 multilateral trade agreements conflict of agreements 49 examples 39 goods 46, 48–9 status 45 WTO meaning 45 Muslim States 24 mutual funds mutual recognition agreements, diplomas 499 Myanmar 107 NAFTA 17, 39, 107, 650, 666 national law and customary law 57 and national treatment requirement 350–3 private requirements 352–3 trade See trade measures and regulations and WTO law 65–72 challenges of national law 194–6 direct effect doctrine 68–72 national law in WTO law 65–7 treaty-consistent interpretation 67 WTO law in national law 67–72 725 726 Index national tariffs 379 national treasures 43, 598, 615 national treatment GATS 50 exceptions 626 generally 365–9 interpretation 367–9 like services or suppliers 368 measures affecting trade in services 367 nature of obligation 365–6 no less favourable treatment 368–9 Schedules of Specific Commitments 365–6, 492 GATT 1994 47 directly competitive products 342–5 excess taxation 331, 338–40 generally 326–64 internal measures v border measures 329–30 internal taxation 332–4, 342 like products 331, 334–8, 342, 354–60 minimal tax differentials 338–9, 346 nature of obligation 327–30 no less favourable treatment 361–4 objectives 327–8 protection of domestic production 347–8 similar regulation 349–64 meaning of regulation 350–3 private requirements 352–3 similar taxation 331 tax differentials 346 substitute products 342–5 tax computation 339–40 generally 370–2 government procurement 54, 478 intellectual property rights 52 investment rules 48 local content requirements 327 meaning 308 principle 40–1 rules of origin 434 technical barriers to trade 459 nationality Appellate Body Members 247 discrimination freedom of transit 309 MFN See most-favoured-nation treatment national treatment See national treatment prohibition 308 dispute settlement panels 235 natural resources, GATT exceptions 598, 610–14 negotiating history, and interpretation 44, 60 Nepal 105, 107, 113 Netherlands 101, 478 Network for Consumer Protection 149 New Zealand 107, 136, 290, 487, 494, 650, 666, 694 NGOs and developing countries 157, 200 external transparency debate 159–62 and globalisation 13 legitimacy 157 NGO Room 159 relations with WTO 99, 133 workshops 161 WTO involvement 154–62 1996 Guidelines 157–9 pros and cons 156–7 trend 159 WTO rules 155–6 WTO symposia for 159, 161 Nicaragua 285, 681 Niger 95, 107 Nigeria 705 Nike 10, 16 non-discrimination anti-dumping duties 543 balance-of-payments exceptions 671 broadcasting, foreign material 483 colonial preferences 310 countervailing duties 580 exceptions 309 freedom of transit 309, 310 GATT exceptions 598, 602, 613–14, 615–23 general obligation 309 government procurement 478 import licensing 456 key concept 308–9 marking requirements 310 MFN See most-favoured-nation treatment national treatment See national treatment preshipment inspections 477 quantitative restrictions 310, 450–1 recognition of foreign qualifications 499 regional integration exceptions 664–5 safeguard measures 638–9 SPS measures 463 trade in services 484 unfair and arbitrary application of trade measures 471–4 WTO principle 39, 40–1, 87 Index non-governmental organisations See NGOs non-market economies 521 non-retroactivity 58, 435, 566, 580 non-tariff barriers categories 376, 457 customs formalities 474–6 elimination 693 generally 41, 457, 504–9 inquiry points 467, 470–1 miscellaneous measures 476–80 notification 467, 469–70 preshipment inspections 476–7 procurement See government procurement publication 467–9 quantitative restrictions See quantitative restrictions SPS See sanitary and phytosanitary measures technical regulations See technical barriers to trade trade in goods 441–81 transparency See transparency unfair and arbitrary application 471–4 North America North Korea 6, 382 Norway 159, 290, 388, 478, 487, 494, 694 nuclear materials 629 Nye, Joseph 77, 151 observers 108–9 OECD 58, 103, 108, 700 Oman 113 One World Trust 161 optical instruments 426 orderly marketing arrangements 635 origin determination, customs duties 432–5 change in tariff classification 433 value added principle 433 marks of Agreement 49 GATT 1994 47 reduction 477 Working Party 351 rules of origin Agreement 433–5 harmonisation 434–5 non-preferential rules 433, 434, 435 preferential rules 433–4, 435 transition period 434–5 Oshima, Shorato 124 Oxfam 22–3, 30, 30–1 Paemen, Hugo 299 Pakistan 24, 96, 228, 285, 294, 681 Palestine 388 Palmeter, David 56 Panama 113, 478, 681 Panitchpakdi, Supachai 9, 21, 98, 100, 113, 133, 135, 136–7, 137–8, 705 paper 426 Paraguay 107, 650, 651 participation developing countries 151–4 NGOs 154–62 poor people 32 patents 52, 608 Pauwelyn, Joost 57, 59, 63–4 payments, services 50 Peel, Quentin 202 pension funds Pe´rez del Castillo, Carlos 149 perishable goods 269 Permanent Court of International Justice, jurisprudence 66 Perot, Ross 17 Peru 228, 290, 681 Petersmann, Ernst-Ulrich 36, 68, 178–9 Philippines 107, 113, 116, 149, 187, 285 plastics 426 plurilateral trade agreements generally 53–4 status 45, 46 WTO meaning 45 Poland, economic level 284 politics, and protectionism 25 Portugal 478 postal services 489 Pou Chen 10 poverty and free trade 22, 22–3, 32, 33 and globalisation 15 Third World 16–17 UN concern 1–2 practice, State practice 44, 59, 66 Prague protests 11 precious metals 397, 426 preshipment inspections 49, 476–7 pressure groups 202–3 price export price, dumping 522–3 fixing 513, 703 and quantitative restrictions 442–3 undertakings 542 price control minimum pricing, quantitative restriction 442, 444 national treatment 327, 350, 364 prison labour 598, 615 privacy, and GATS exceptions 625, 626 727 728 Index privatisation programmes 587 privileges and immunities, WTO representatives 164 procedures See decision-making procedures process or production methods, like products 316, 360 procurement See government procurement professional services classification 488 languages 481, 483 market access 494 non-recognition of foreign qualifications 498–9 Working Party 129, 499 proportionality 58 protectionism 1930s 308 case against 19–24 infant-industry protection 26, 677–8 internal taxation 347–8 and market distortions 26 national security argument 28 optimal tariff argument 26–7 and politics 25 protection of social values 28–9 reasons for 24–9 revenue generation 28 self-sufficiency argument 28 strategic trade policy 27 public health See health public morals GATS exceptions 625 GATT exceptions 598, 615 protectionism 28–9 WTO rules 43 public order, GATS exceptions 625, 626 publishing, EU MFN exemption 326 Puma 10 Punta del Este Declaration 83, 180, 553 Putin, Vladimir 112 ‘Quad’ group 108, 131, 132 quantitative restrictions administration 450–7 allocation examples 453–5 rules 451–3 balance-of-payments exceptions 669 categories 441 bans 441 quotas 441 and corruption 443 definition 441 example 442 fees 439 GATT 1994 48 generally 441–57 internal regulations 310 investment rules 48 licensing See licensing multilateral environmental agreements 63 non-discrimination 310, 450–1 notification requirements 442 prohibition 41, 444–6 balance-of-payments exceptions 668, 669 de facto restrictions 445–6 exceptions 446 quotas, meaning 441 rules agriculture 446–8 general prohibition 444–6 generally 444–50 specific products 446–9 textiles and clothing 448–9 voluntary export restraints 449–50 safeguard measures 636, 639 tariff quotas 443, 447, 450, 452–3 trade in services 483 v customs duties 442–3 WTO database 442 quarantine, fees 439 quorums 143 quotas See quantitative restrictions race to the bottom 12 Rana, Kipkorir Aly Azad 139 real estate services 488 Reebok 10 reform consultation process 291, 294 dispute settlement 289–99 extension of WTO 702–5 integration of developing countries 694–702 ‘Singapore issues’ See ‘Singapore issues’ regional integration exceptions GATS 662–7 barriers to trade 665 developing countries 665–6 labour markets integration agreements 666–7 procedures 666 substantial elimination of discrimination 664–5 substantial sectoral coverage 663–4 GATT 1994 48, 652–60 customs unions 653–7 developing countries 660–1, 662 Index dispute settlement 662 free trade areas 658–9 interim agreements 660 procedures 661–2 generally 650–67, 688 services 50 regional trade agreements characteristics 650–1 clarification 693 Committee on Regional Trade Agreements 129, 661–2, 666 customs unions 653–7, 660 developing countries 660–1, 662 examples 39, 650 free trade areas 658–9, 660 interim agreements 660 notification 661 reports 662 and WTO negotiations 91, 651 remedies categories 217 compensation See compensation generally 217–25, 301–2 international law 224 miscellaneous remedies 223–5 promptness of compliance 217–20 repayments 224–5 restitution in kind 224 retaliation See retaliation temporary remedies 220 withdrawal of WTO-inconsistent measures 217–20 rental services 489 rent-seeking 36 reparation compensation See compensation dispute settlement 220–1, 223–5 repayments 224–5 restitution in kind 224 types 224 research and development 488, 574 restaurants 481 restitution in kind 224 retaliation arbitration on 283 authorisation remedy for subsidies 566 timetable 280–1 carousel issue 223, 290 cases 222–3 collective retaliation 296 effect 223 increase in customs duties 221 numbers 287 periodic changes of measures 223 reform 290, 292, 296 remedy 221–3 suspension of obligations 222–3 withdrawal of concessions 221–2 Ricardo, David 19–20 Ricupero, Rubens 153 right to development Rio Declaration 621 Rodrik, Dani 6, 17–18, 34 Romania 118, 285 rubber 426 Ruggiero, Renato 52, 83, 136 rule of law 35 Rules Division 244 Russia 112, 514 Rwanda 107 Sacerdoti, Giorgio 245, 247 safeguard measures Agreement 49, 635–6 conflict of agreements 635–6 characteristics 636–41 Committee on Safeguards, functions 89 compensation 640 customs duties 636 and customs unions 655 developing countries 638 duration 637–8 forms 636–7 GATS 634 GATT 1947 635 GATT 1994 48, 635–6 conflict of agreements 635–6 most-favoured-nation treatment 313–14 non-discrimination 638–9 procedures 649 provisional measures 640–1 purpose 633–4, 636 quantitative restrictions 636, 639 requirements for use 641–9 causation 648–9 increased imports 642–5 serious injury 645–7 services 50 special measures 634 summary 687–8 transitional 634 sales taxes 332, 333 Samoa 107 sampling, technical barriers to trade 458 Sampson, Gary 85, 157 Samuelson, Paul 20–1 sanitary and phytosanitary measures control 466 Decision on Equivalence 56 disguised trade restraint 463 dispute settlement 466 729 730 Index sanitary and phytosanitary measures (cont.) equivalence of measures 466 generally 462–6 import fees 439 inquiry points 467, 470–1 meaning 462 minimum restriction principle 465 non-discrimination 463, 465 notification 466, 467, 469–70 publication requirement 467–9 regional conditions 466 risk assessment and management 464–5 scientific basis 463, 465–6 SPS Agreement application 459 conflict of agreements 462–3 generally 48, 457, 462–6 motives 463 principles 463 scope 462 SPS Committee functions 89 meetings 466 membership 466 observers 108 standards 463–4 technical assistance to developing countries 466 transparency 466, 467–71 WTO rules 41 Saudi Arabia 112, 113 Schedules of Specific Commitments customs duties concessions 41, 48, 399 Services Schedules 483–4, 487–92 Brazil 491 commitment with limitations 491 European Communities 490 full commitment 490 horizontal commitments 488 India 491 modification and withdrawal 493 national treatment 365–6, 492 no commitment 492 no commitment technically feasible 492 past agreements 494–5 sectoral commitments 488–92, 495 United States 490 Schefer, Krista 66–7, 68–9 scholarly writings 44, 60 science and GATT exceptions 607 and SPS measures 463, 465–6 Seattle protests 11, 13 Seattle Session 91, 106, 123, 132, 151, 152, 154, 159–62, 290, 695 security exceptions 43, 48, 686–7 GATS exceptions 50, 632–3 emergencies 632 international security 632 military uses 632 notification 633 nuclear uses 272, 632 GATT exceptions 628–32 arms 629 Decision 630–1 emergencies 629 international security 631–2 justiciability 629–30, 632 military use materials 629 national security 629–31 nuclear materials 629 trade sanctions 629 withholding of information 629 and international trade 28, 597 stockpiling 28 self-sufficiency 28 Senegal 107 September 11 attacks 23 services classification 323, 368 contracts, and GATS exceptions 625 division 139 exceptions See GATS exceptions exercise of government authority 321 GATS See GATS like services or suppliers 323–4, 368 market access, agreements 90 meaning 321, 323 MFN See most-favoured-nation treatment recognition 50 service suppliers, meaning 323 trade in See trade in services ships 426 Sierra Leone 107, 116 silver 598 Singapore 107, 166, 478 ‘Singapore issues’ Doha Ministerial Declaration 703–4 Doha Round 93, 142 future negotiations 704–5 government procurement 479 meaning 92–3 Singapore Session 123, 158, 396, 475, 479 singularia non sunt extendenda 599 Slovakia, economic level 284 Smith, Adam 19, 20 social welfare 17, 32 Index societal values exceptions GATS exceptions 624–8 GATT exceptions 602–15 generally 597–8 non-specific values 623–4 and international trade 597 protectionism 28–9 and quantitative restrictions 446 WTO rules 39, 43 Solomon Islands 107 South Africa 107, 152, 388, 399, 494, 551 South Asia South Korea 24, 116, 166, 286, 290, 478, 494, 514, 515 Soviet Union (former) 22 Spain 478 special interests 156–7, 202–3 SPS See sanitary and phytosanitary measures SPS Committee 89, 108, 466 Sri Lanka 294, 378 standards See technical barriers to trade standing appellate review 249, 275 customary law 57 dispute settlement panel proceedings 263–4 dispute settlement system 190–203, 301 third party rights, reform 290, 291, 295 State monopolies 521 State practice 44, 59, 66 State responsibility 57, 224 State sovereignty 13, 15, 61, 85 State trading enterprises 48, 442, 444 statistical services, fees 439 statistical taxes 437, 440 statistics foreign direct investment 9–11 world trade 7–9 steel industry 28 Stern, Robert 26–7 Stevens, Philip 13 Stiglitz, Joseph 3, 16–17, 25, 34 stockpiling 28 stones and gems 397, 426 Sub-Saharan Africa 2, 8, 16, 22 subsidies actionable subsidies 567–74 causing injury 567–72 causing nullification or impairment 572 causing serious prejudice 572–95 developing countries 587 injury to domestic industry 569–70 like products 568–9 multilateral remedies 573–4 threat of material injury 570–1 thresholds 571 withdrawal 573–4 adverse effects 551, 554, 567 agricultural subsidies domestic support 585–6 export subsidies 584–5 generally 583–6 peace clause 586 categories 554, 561 countermeasures See countervailing measures developing countries 586–7 dispute settlement 565–6 domestic producers, and national treatment obligation 327 economic development 48 environmental subsidies 574 evidence 555–61, 576–7 benefit 555, 557–9 de facto subsidies 560 financial contributions by government 555, 555–7 income or price support 555 specificity 559–60 export subsidies 42 GATT 1947 552 Illustrative List 562 prohibition 551, 562–4 future 693 GATS 50 GATT 1994 48 generally 42, 551–87, 554 injurious subsidies, response 554 local content subsidies 564 meaning 553–4 multilateral remedies, or countervailing measures 574 negotiations 91 non-actionable subsidies 574 notification 561 Permanent Group of Independent Experts 134, 565 prohibited subsidies 561–6 export subsidies 562–4 import substitution subsidies 564 multilateral remedies 565–6 repayment 224–5 regional subsidies 574 research and development 574 SCM Agreement 49, 590–4 disputes 287 summary 590–4 Tokyo Round Subsidies Code 552–3 transparency 561 731 732 Index subsidies (cont.) use 551 WTO history 552–3 Sudan 107 Suddens, David 10 sustainable development 86, 87, 611 Sutherland, Peter 33, 35, 39, 133, 135, 151, 165, 298 Sweden 478, 666 Switzerland 164, 290, 378, 392, 478, 487, 494, 495, 694 Sykes, Allan 28 Syria 108 Taiwan See Chinese Taipei Tanigushi, Yasuhei 245, 245 Tanzania 33, 107, 294, 705 TARIC database 388 tariff barriers categories 376 customs duties See customs duties notification 467, 469–70 ‘other duties’ anti-dumping duties See anti-dumping duties categories 436–7 countervailing duties See countervailing measures customs fees 437, 439–40 exceptions to rules 438–40 generally 436–40 import surcharges 436 rules 437–40 security deposits 437 statistical taxes 437, 440 publication 467–9 summary 502–5 trade in goods 376, 377–441 trade in services 376 unfair and arbitrary application 471–4 tariff bindings See tariff concessions tariff classification 335–6, 433 tariff concessions generally 398–422 Harmonised Commodity Description and Coding System 400, 416–19 interpretation 400–19 lower duties applied 421 meaning 398–400 modification and withdrawal 423–4 developing countries 678 protection 419–22 schedules of concessions 399 examples 400 parts 399 suspension as retaliation 221–2 authorisation 283 numbers 287 remedy for subsidies 566 tariff escalation 392 tariff quotas administration 450, 452–3 agriculture 447 meaning 443 taxation border tax adjustments 333, 335, 356, 357, 358 cascade taxes 333 computation 339–40 double taxation 625, 626 and GATS exceptions 625, 626, 626–7 internal taxation 332–4, 342 minimal tax differentials 338–9, 346 national treatment 332–4, 338–40 similar taxation 346 teachings, and WTO law 44, 60 Technical Assistance Management Committee 139 technical assistance to developing countries budget 165, 701 database 103 future 700–2 Geneva Week 102 Institute for Training and Technical Cooperation 702 Integrated Framework 101, 700, 701 JITAP 101, 700, 701 legal assistance 227–8 Memoranda of Understanding 98 Reference Centres 103 SPS measures 466 technical missions 102 training courses 102 WTO function 88, 100–3, 676 technical barriers to trade categories 457 Code of Good Practice 459 developing countries 461 failure to act 457 harmonisation 460–1 inquiry points 467, 470–1 notification 467, 469–70 central registry 470 Indicative List 469–70 publication 467–9 services 497–500 SPS See sanitary and phytosanitary measures standards generally 458–61 Index international standards 460–1 meaning 458 TBT Agreement application 459 disputes 461 generally 48, 458–61 principles 459–60 scope 458 technical regulations generally 458–61 meaning 458 transparency 467–71 WTO rules 41 technology democratisation and economic globalisation 4–5 information technology 6, 90, 396–7 telecommunications 90, 489, 494 terrorism 24, 32 testing, technical barriers to trade 458 Textile Monitoring Body 133–4 textiles and clothing Agreement 48 customs duties 392 disputes 134 Multifiber Agreement 446, 448 protectionism and self-sufficiency 28 quantitative restrictions 446, 448–9 safeguard measures 634 textile products 426 Thailand 107, 137, 547 anti-dumping measures 514 customs duties 378 diamond trade 116 DSU reform 293, 294 market access commitments 494 tariff concessions 399 tuna dispute 187 Thompson-Floˆres, Francisco 139 Timberland 10 tobacco advertising 351, 364 Togo 107 Tokyo Round 82, 178, 180, 390, 393, 394, 396, 515, 521, 552–3 Torquay Round 82, 390 tourism 494 trade barriers and international trade law 36 non-tariff See non-tariff barriers protection of national interests 37 reduction 32 and regional trade agreements 665 services See trade in services tariffs See tariff barriers unfair and arbitrary application 471–4 World Bank figures WTO objectives 87 trade facilitation 92, 476, 704–5 trade in goods conflicts of agreements 51 Council for Trade In Goods 127–8, 442, 704, 705 customs duties See customs duties exceptions See GATT 1994; GATT general exceptions multilateral agreements 46, 48–9 jurisdiction 188 non-discrimination See non-discrimination non-tariff barriers See non-tariff barriers short supply 598 tariff barriers See tariff barriers trade in services administration, fair and non-arbitrary 497 arbitration, modification of commitments 493 classification 488–9 commercial presence mode 322, 488, 489 conflicts of agreements 51 consumption abroad mode 322, 489 commitments 495 Council for Trade in Services 127–8, 486, 499 cross-border mode 322, 489 definition 50, 321 domestic regulations 481 and developing countries 496 examples 497 generally 497–500 impartial administration 495 information 496 inquiry points 496 judicial review 496 notifications 496 publication 495, 496 transparency 496–7 exceptions See GATS exceptions foreign qualifications, recognition 498–9 GATS See GATS globalisation 10–11 government procurement 501 importance 480–1 like services or suppliers 323–4, 368 market access barriers categories 482–4 foreign equity limitations 483 generally 482–95, 508–9 joint venture obligations 482 733 734 Index trade in services (cont.) legal entity limitations 483 licensing 482 negotiations 484–7 quantitative restrictions 41, 483 measures affecting 367 MFN See most-favoured-nation treatment modes of supply 488 national treatment generally 365–6 measures affecting 367 Schedules of Commitment 365–6, 492 negotiations 91 non-discrimination See non-discrimination presence of natural persons mode 488, 489, 322 commitments 495 Schedules of Specific Commitments commitment with limitations 491 full commitment 490 generally 50, 483–4, 487–92 horizontal commitments 488 modification and withdrawal 493 national treatment 365–6, 492 no commitment 492 no commitment technically feasible 492 past agreements 494–5 sectoral commitments 488–92, 495 WTO database 487 service sectors 488–9 technical barriers 497–500 trade barriers business practices 501 generally 480–502 international payments 501 market access 482–95 miscellaneous barriers 495–501 monopolies 500 tariff barriers 376 Uruguay Round 83 trade liberalisation case for 19–24 factors against 24–9 further liberalisation 692–3 and globalisation WTO anchor trade measures and regulations administration 47 fair and non-arbitrary 471–4, 497 impartiality 471, 473 objective and impartial review 474, 496 reasonableness 471, 473 trade in services 495 uniformity 471, 472, 473 inquiry points trade in goods 467, 470–1 trade in services 496 notification 467 Indicative List 469–70 publication 47 trade in goods 467–9 trade in services 495, 496 trade in services developing countries 496, 50 generally 497–500 information 496 transparency 496–7 transparency 467–71, 496–7 Trade Negotiations Committee chair 131, 137 functions 92 generally 130, 130–1 Trade Policy Review Body generally 126 meetings 160, 161 reports 95 status 120 Trade Policy Review Mechanism annual overviews 97 generally 53, 94–7 jurisdiction 188 origin 83 periodic reviews 95 practice 95–6, 96–7 purpose 95, 96 WTO function 88, 94–7 trade regulations See trade measures and regulations trade sanctions GATT exception 629, 631–2 unilateral sanctions 181, 183 trade secrets 52 trade unions 10, 13, 14, 17, 34, 200 trademarks 51, 608 transit, freedom of generally 480 non-discrimination 309, 310 transnational corporations 12, 13, 14–15, 30 transparency anti-dumping duties 548 countervailing measures, investigations 576 customs duties 378 customs duties v quotas 442 decision-making procedures external transparency 154–6, 159–62 internal transparency 152–4 Index dispute settlement system 296 Doha Round 92 dumping investigations 540 General Council 126 government procurement 479, 703 lack of WTO transparency 77 non-tariff barriers 376 preshipment inspections 477 rules of origin 434 SCM Agreement 561 services 50 SPS measures 466 trade measures trade in goods 467–71 trade in services 496–7 trade policy review mechanism 95 WTO rules 41, 41–2 transport costs and technology 4–5 developing countries 32 EU waterways 326 maritime transport 494 MFN exemptions 325 national treatment 364 treaties treaty making process 69 WTO See WTO agreements and WTO law 44, 58–9 conflicts 63–4 Truman, Harry 79, 80 trust funds 166 Tumlir, Jan 68 Turkey 285, 422, 494, 513 Uganda 23, 107, 705 Ukraine 112 Ulam, Stanislaw 20 UNCTAD 84 cooperation with WTO 98, 700 developing countries 702 Integrated Framework 101, 700, 701 JITAP 101, 700, 701 observer status 108 UNCTAD X 148 unfair trade dumping See dumping generally 512–13 subsidies See subsidies WTO rules 39, 42–3 United Arab Emirates 116 United Kingdom 4, 478, 514, 631 United Nations Central Product Classification (CPC) 489 dispute resolution 175–6 international security 631–2 Millennium Declaration 1, 29, 706–7 observer status 108 and WTO history 79, 81 United States 19th century protectionism 26, 34, 677 agriculture 93 amicus curiae briefs 199 anti-dumping measures 513 anti-dumping negotiations 515 bilateral trade agreements 39 Bush Administration 24 Clinton Administration 25, 85 contributions to WTO budget 166 countervailing measures 551 customs duties 392 customs valuations 432 diamond trade 116 DSU reform 291, 295, 296 engineering services 490 and globalisation 10, 12, 17 government procurement 478 and Iraq 108 market access commitments 494 and Muslim States 24 opt-out clauses 118 pressure groups behind WTO claims 202 protectionism 93, 107 public submissions in disputes 213 ‘Quad’ member 108 representation in Geneva 109 retaliatory measures 223 and Saudi Arabia 113 steel industry 25 tariff concessions 391, 399, 413 tariffs cocoa 383, 391, 413 vehicles 384 textiles and clothing 448 Trade and Competitiveness Act 181, 479 trade legislation 203 trade policy reviews 95 trade sanctions 181, 183 transparency debate 160, 160–1 TRIPS and medicines 149 unilateralism 62, 183 WTO disputes 285–6 and WTO history 78–9, 80–1, 82, 84, 84–5 and WTO law, direct effect 70–2 Uruguay 107, 290, 650, 651 Uruguay Round 1990 Brussels Draft Final Act 84 agricultural subsidies 583 anti-dumping 515, 535 customs duties 433 developing countries 394–5 negotiations 396 735 736 Index Uruguay Round (cont.) Declaration on Coherence 97 Dispute Settlement Understanding (DSU) 180–2 Dunkel Draft 84 generally 47, 52, 54, 82, 83–5 Montreal Ministerial Mid-Term Review Conference 83, 479 negotiations, records 209 Punta del Este Declaration 83, 180, 553 quantitative restrictions, specific sectors 447 subsidies 553 tariff negotiations 390, 399, 400, 401, 413, 423 and Thailand 137 trade in services 484 WTO negotiations 83–5 valuation, customs duties 429–32 value added tax 332, 333 Vanuatu 107 vegetable products 426 vehicles Brazilian tariffs 387 classification 426 EU tariffs 381 Indian tariffs 386 tariffs 392 negotiations 397 US tariffs 384 Venezuela 290, 681, 705 Vietnam 23, 107 voluntary restraint arrangements 635 Wagstyl, Stefan 112 waivers 115–17, 123, 145–6, 325 war, and international trade 23–4 war on terrorism 24, 32 War on Want 14–15, 141 Washington protests 11 waterways transport 326 Western Europe Williams, Frances 113, 136 WIPO 98, 108 Wolf, Martin 40 Wolfensohn, James 31–3 wood 426 working parties accessions 130 border tax adjustments 333, 335, 356 marks of origin 351 professional services 129, 499 WTO structure 128–9 works of art 426 World Bank cooperation with WTO 88, 97–8, 700 and free trade 22, 31–3 and global governance 34 Integrated Framework 101, 700, 701 lack of accountability 77 observer status 108 origins 79 and trade barriers undemocratic institution 141 and WTO history 83 World Customs Organization 387, 419 world trade See international trade World Trade Organization See WTO World War II 308 World Wildlife Fund 165 written submissions appellate review 273–4 third parties 275 arbitration 278 panel proceedings 261–2 third parties 263–4, 295 WTO agent of imperialism 15 agreements See WTO agreements coinage 83, 85 controversial organisation 77–8 lack of transparency 77 non-accountability 77 functions See WTO functions and global governance 34 governance 30 headquarters 164 history See history of WTO hostility to 17 institutions See WTO institutions law See WTO law legal personality 164 mandate 86–102 Members See membership objectives 86–7, 167, 376 procedures See decision-making procedures scope, extension 702–5 Secretariat See WTO Secretariat status 164 website 160 WTO agreements amendments 146–7 authoritative interpretations 144–5 implementation 88, 89–90 developing countries 695–7 interpretation See interpretation of WTO agreements jurisdiction 188 Marrakesh Agreement 44–54 Index negotiation of new agreements 90 structure 44 and WTO disputes 286–7 WTO functions administration of DSU 88, 94 cooperation 88, 97–9 forum for negotiations 88, 90 generally 88–103, 167 implementation of agreements 88, 89–90 technical assistance to developing countries 88, 100–3 trade policy review mechanism 88, 94–7 WTO institutions acts, status 56 committees 128–30 decision making See decision-making procedures DSB See Dispute Settlement Body General Council See General Council meetings 120–1 Ministerial Conference See Ministerial Conference non-political bodies 133–4 quasi-judicial bodies 133–4 rules 44 Secretariat See WTO Secretariat specialised councils 127–8 standing bodies 120, 130 structure 120, 168 lack of consultative bodies 132–3 lack of executive body 131–2 working parties 128–30 WTO law Advisory Centre on WTO Law 227–8, 298 agreements See WTO agreements basic principles 39–44, 73 customs duties See customs duties developing countries See developing countries market access See market access non-discrimination See non-discrimination societal values See societal values unfair trade See unfair trade clarification through adjudication 184–5 conflict of agreements 49 context 60–72 direct effect 68–72 disputes See dispute settlement elements 44–60, 73 and international law 60–4, 224 multilateral trading system 39–40, 87 and national law 65–72 WTO Secretariat assistance to developing countries 226, 227 Deputy Directors-General 139 Director-General See Director-General dispute settlement role 243 divisions 139 generally 135–9 impartiality 227 Institute for Training and Technical Cooperation (ICTC) 702 internship programme 140 languages 140 role 120, 137–8 staff 139–40 structure 139–40 Xin Zhang 72 Yemen 107 Yerxa, Rufus 139, 187 Yu Youhun 24 Yugoslavia 110, 131 Zambia 107, 705 Zimbabwe 294, 399, 705 Zoellick, Robert 23 Zurich protests 11 737 ... the future of the WTO, namely, the integration of developing countries in the multilateral trading system and the further expansion of the scope of WTO law While the treatment of the law is often... the Appellate Body of the WTO, Geneva In 2001 he served as Acting Director of the Appellate Body Secretariat The Law and Policy of the World Trade Organization Text, Cases and Materials Peter Van... left blank The Law and Policy of the World Trade Organization This is primarily a textbook for graduate and upper-level undergraduate students of law; however, practising lawyers and policy- makers