Faculteit Rechtsgeleerdheid
Academiejaar 2009-2010
THE PROBLEM OF GATT/WTO LAW IN THE EUROPEAN
UNION LEGAL ORDER
Promotor: Prof. Dr. M. Maresceau
Commissaris: Prof. Dr. P. Van Elsuwege
Master in de Rechten
Marieke Van Hoecke
20052327
2 Word of gratitude
Word of gratitude
Thanks to my father who has always encouraged, inspired, challenged and supported me.
Thanks to my friends and especially to Arno for taking my mind of this thesis when I needed
it the most. Thanks to professor Maresceau for passing on his passion for European law.
Ghent, May 2010.
3 <Table of Contents
Table of Contents
Word of gratitude ...................................................................................................................... 2
Table of Contents ...................................................................................................................... 3
Introduction ............................................................................................................................... 6
A.
GATT/WTO ...................................................................................................................... 7
I. A brief history: from international agreement to fully fletched international
organisation .......................................................................................................................... 7
II.
Two institutional aspects with specific relevance to the ECJ’s case law ...................... 8
§1.
Dispute Settlement................................................................................................ 8
i.
Evolution ............................................................................................................... 8
ii.
Headlines and procedure of today’s dispute settlement system ......................... 10
ii.
ii.a.
Procedure in the framework of the Dispute Settlement Body ..................... 11
ii.b.
Implementation of the recommendation or ruling ....................................... 12
ii.c.
The Banana Dispute: a striking example ..................................................... 14
Possible future reforms of the dispute settlement system: Doha ......................... 18
ii.a.
Weaknesses of the current system and proposals for improvement ............ 18
ii.a.a.
Implementation ...................................................................................... 19
ii.a.b.
Flexibility and member control ............................................................. 21
ii.b.
§2.
Agreement on establishing the World Trade Organization: art. IX and XVI ...... 23
i.
Article IX WTO: Decision making .................................................................... 24
ii.
Article XVI WTO: National law ........................................................................ 25
§3.
B.
Negotiating the DSU: a never-ending story ................................................ 22
Conclusion ........................................................................................................... 27
GATT/WTO law in the European Union’s legal order: a lack of direct effect ............... 28
I.
The invocability of international agreements .............................................................. 28
II.
The basics: from International Fruit Company to Van Parys ..................................... 30
§1.
The GATT 1947 and the ECJ: .......................................................................... 30
i.
Preliminary remark .............................................................................................. 30
ii.
International Fruit Company ............................................................................... 31
iii. Fediol and Nakajima............................................................................................ 34
iii.a.
Fediol .......................................................................................................... 34
iii.b.
Nakajima .................................................................................................... 35
iv. Germany v. Council............................................................................................. 37
§2.
The WTO Agreement in the EU’s legal order .................................................... 38
4 <Table of Contents
i.
Hermès and T-Port .............................................................................................. 39
ii.
Portugal v. Council .............................................................................................. 40
iii. Biret ..................................................................................................................... 43
iv. Van Parys ............................................................................................................ 45
v.
§3.
III.
C.
FIAMM and Fedon .............................................................................................. 47
v.a.
Judgments of the General Court ................................................................ 48
v.b.
Judgment of the ECJ .................................................................................. 51
Conclusion ........................................................................................................... 54
The interpretation of WTO law despite lack of direct effect.................................... 55
The ECJ and its GATT/WTO rulings: subject of towering discussions .......................... 57
I.
An insiders point of view: the Advocates General ...................................................... 57
§1.
The ECJ, the Advocates General and the GATT 1947: kindred spirits.............. 58
i.
Advocate General Mayras: ahead of the ECJ in denying the GATT direct effect. .
............................................................................................................................. 58
ii. Advocate General Van Gerven on limited invocability in the absence of direct
effect ............................................................................................................................ 59
iii. Advocate General Gulmann as advocate for a very restrictive approach ............ 62
§2.
The WTO era: differences in opinion ................................................................. 64
i.
Advocate General Cosmas: no new insights... yet .............................................. 64
ii.
Advocate General Tesauro paved the way ......................................................... 65
iii. Advocate General Saggio in Portugal v Council: a stronghold under fire .......... 68
iv. Advocate General Alber in Omega and Biret ...................................................... 71
v.
iv.a.
Omega: changing the terms of debate ........................................................ 71
iv.b.
Alber on the effect of DSB recommendations and rulings in Biret ............ 72
Advocate General Tizzano Van Parys ................................................................. 75
vi. Advocate General Maduro: firm but fair ............................................................. 77
§3.
II.
vi.a.
No direct effect of WTO law ...................................................................... 77
vi.b.
Maduro on the principle of no-fault liability of the EU ............................. 78
Conclusion .......................................................................................................... 81
Divergent perceptions and interpretations in legal doctrine ...................................... 82
§1.
The relationship between GATT/WTO law and the EU legal order: an
international law perspective ........................................................................................... 83
§2.
The ECJ’s conservative approach: criticism and support ................................... 86
i.
The ECJ’s reasoning: judicial self-restraint......................................................... 86
5 <Table of Contents
ii.
i.a.
The reciprocity argument ........................................................................... 86
i.b.
The flexibility argument ............................................................................. 88
Appreciation of the ECJ’s conclusion despite heavy criticism on its reasoning 91
ii.a.
Direct actions by Member States ................................................................. 91
ii.b. The status of DSB decisions in an action for annulment pursuant to article
263 TFEU ................................................................................................................ 93
iii. Disagreement with both reasoning and conclusion ............................................. 95
iii.a. The status of DSB decisions in an action for damages pursuant to article
340 TFEU ................................................................................................................ 95
iii.b.
No-fault Union liability: FIAMM ............................................................... 97
§3.
Alternatives – indirect effect ............................................................................. 100
i.
Nakajima en Fediol............................................................................................ 101
ii.
Consistent interpretation.................................................................................... 103
iii. Muted dialogue .................................................................................................. 104
Conclusion ............................................................................................................................. 105
Abstract in Dutch................................................................................................................... 107
Bibliography .......................................................................................................................... 108
6 Introduction
The problem of GATT/WTO law in the European
Union’s legal order
Introduction
“ A recommendation or a ruling of the DSB finding that the substantive rules contained in the
WTO agreements have not been complied with is, whatever the precise legal effect attaching
to such a recommendation or ruling, no more capable than those rules of conferring upon
individuals a right to rely thereon before the Community [Union] courts for the purpose of
having the legality of the conduct of the Community [Union] institutions reviewed.” 1
“In the light of all the foregoing considerations, it must be concluded that, as Community
[Union] law currently stands, no liability regime exists under which the Community [Union]
can incur liability for conduct falling within the sphere of its legislative competence in a
situation where any failure of such conduct to comply with the WTO agreements cannot be
relied upon before the Community [Union] courts.” 2
1.
Until further notice this is the ECJ finishing point on the question whether GATT/WTO
law has direct effect in the European Union’s legal order. This is however a question that
rises above pure legal relevance, it is the reflection of an area of tension that grows stronger
as the integration of the EC continues: the interface between protecting and regulating the
European internal market and living up to international free trade standards. Only bearing in
mind this broader context, one can fully understand the legal issues that result from it.
2.
The purpose of this dissertation is to provide a complete survey of the current situation
regarding the direct effect – or should one say the lack of direct effect – of WTO/GATT law
in the European Union. This will include an extensive review of the European Courts’ case
law, linked to a discerning analysis from the point of view of both doctrine and the advocates
general. This should allow us to place the issue in a broader context, and to formulate some
own thoughts on how to deal with the problem in the future.
1
ECJ joined cases C-120/06 and 121/06, Fabbrica italiana accumulatori motocarri Montecchio SpA
(FIAMM) and others v Council and Commission, ECR 2008 I -0000, § 129.
2
Ibid. at § 176.
7 GATT/WTO
A.
GATT/WTO
I.
A brief history: from international agreement to fully fletched international
organisation
3.
When looking at the early years of regulation of world trade, one cannot ignore the
difference in intention. The General Agreement on Tariffs and Trade 1947 (GATT 1947) was
merely meant to establish a legal mechanism for tariff negotiations and to create rules
preventing protectionist market behaviour by the Contracting Parties.3
Although this
initiative was without precedent, the ideas that lie at its fundaments can hardly be called
pioneering. The Most Favoured Nation principle had been used very widely on a bilateral
basis long before the GATT 1947 was drafted: movements liberalising trade had emerged in
Europe decades earlier.4 The value of this global start of institutionalisation lay in its inclusive
character: the US and many others participated, giving world trade a boost. The attempt to
establish an International Trade Organisation was at that moment a bridge too far.5 However,
through practice and several negotiation rounds, the GATT 1947 acquired ever more political
and legal power. One can easily refer to this expansion as stealthy institution-building. By the
end of the century, the GATT 1947 seemed to operate as an international organisation.
4.
This evolution was formalised in the creation of the World Trade Organisation in 1994.
Yet, the merits of the Uruguay Negotiation Round reach way beyond this formalisation.
When negotiations started in 1986, world trade suffered from many diseases: the second oil
shock from 1979, inflation, recession and protectionism. Not to mention a rising concern over
globalisation and a ideological change towards the free market that would only come to full
vigour after 1989 and the fall of communism. These circumstances were the impetus for the
largest trade negotiations ever. It took seven and a half years, almost twice the original
3
Preface, General Agreement on Tariffs and Trade, Geneva, July 1986 (www.wto.org), G. Winham,
“The evolution of the world trading system – the economic an policy context”, in D. BETHLEHEM, D.
MCRAE, R. NEUFELD, I. VAN DAMME, (eds.), The Oxford Handbook of International Trade Law, New
York, Oxford University Press, 2009, 14.
4
Ibid., eg. Cobden – Chevalier Treaty, January 1860. The Most Favoured Nation principle obliges a
State, when it grants a trade advantage to another State, to grant equal trade advantages to all other
States which towards it has a MFN obligation.
5
Pieter Jan Kuijper even refers to the non-establishment of the ITO as a ‘historical accident’, the only
reason that the organization was not set up was a change in composition and mood in the United States’
Congress. P. J. Kuijper, “WTO Institutional Aspects” in BETHLEHEM, MCRAE, NEUFELD, VAN DAMME,
(eds.), cited supra note 3, 81-82.
8 GATT/WTO
schedule. But the outcome was a remarkable achievement in every sense: bringing down
protectionist agricultural walls, creating rules for boosting trade in services and intellectual
property, etc....6 In sum, the WTO Agreements reshaped multilateral trade relationships. The
effect of globalisation on the negotiations cannot be underestimated: it pressed governments
to adopt more liberal trade policies and it redefined the world’s perception of international
trade. As one observer captured it: “The reality is that global companies competing in global
markets ultimately require global rules.”7
5.
II.
Two institutional aspects with specific relevance to the ECJ’s case law
§1.
Dispute Settlement
The GATT Dispute Settlement System and also the system under the WTO have been
the main obstacles in obtaining direct effect in the European Union’s legal order.8 This
chapter will give a brief overview of the evolution of the dispute settlement system and its
current characteristics.
i.
6.
Evolution
Articles XXII and XXIII GATT 1947 give very little information about the procedures
that had to be applied in dispute settlement:
“The Contracting Parties shall promptly investigate any matter so referred to them and
shall make appropriate recommendations to the contracting parties which they consider to
be concerned, or give a ruling on the matter, as appropriate (...). If the Contracting Parties
consider that the circumstances are serious enough to justify such action, they may
authorize a contracting party or parties to suspend the application to any other contracting
6
Agreement Establishing the World Trade Organization, Marrakesh, 15 April 1994 (www.wto.org)
[WTO Agreement], Agreement on Trade related aspects of intellectual property rights, annex 1 C to
the Agreement Establishing the World Trade Organization, Marrakesh, 15 April 1994 (www.wto.org)
[TRIPS], General Agreement on Trade in Services 1994, annex 1 A to the Agreement Establishing the
World Trade Organization, Marrakesh, 15 April 1994 (www.wto.org). [GATS].
7
G. FEKETEKUTY, The New Trade Agenda, Paris 1992, OECD, 29 cited in WINHAM, cited supra note
3, 23.
8
See infra §§ 55 - 103.
9 GATT/WTO
party or parties of such concessions or other obligations under this Agreement as they
determine to be appropriate in the circumstances.”.9
7.
In practice, these provisions were the basis for the following, at times far-reaching,
developments. At the beginning, in the late 40’s, disputes were generally solved through
diplomatic procedures. More specifically at semi-annual meetings of the Contracting Parties.
Later on this task would be delegated to a ‘working party’, in which each of the Contracting
Parties was represented.10 In 1955 this approach was fundamentally changed through the
creation of ‘panels’ of experts. This meant a shift in emphasis from diplomacy to a more
juridical procedure as disputes would be referred to three or five experts. This adjustment
survived and was formalised in1979 in an Understanding of the Tokyo Round: until today
almost all disputes are firstly referred to a panel.11 Through the years the procedure was
refined by GATT case law and subsequent negotiation rounds. The Tokyo round is a perfect
example, providing for a detailed description of the procedure.12
8.
Another development originates in the dispute settlement practice itself; in order for a
panel report to be binding, the Council had to approve it by consensus. The obvious problem
here being consensus, which allowed the losing Contracting Party to block the consequences
of the panel report. Although the use of panels had considerably decreased the importance of
diplomacy, this consensus in the Council was the reason why - even until the late 1980’s –
dispute settlement under the GATT remained a diplomatic affair.13
9.
Furthermore a variety of procedures in side agreements led to disputes about which
procedure to use. A Contracting Party could prevent the establishment of a panel. The
wordings of the Understanding were not detailed enough with respect to goals or procedures
and some Contracting Parties had tried to influence the decision by putting pressure on some
9
Art. XXIII General Agreement on Tariffs and Trade, Geneva, July 1986 (www.wto.org)
J. JACKSON, “The evolution of the World trading system – the Legal and institutional context” in
BETHLEHEM, MCRAE, NEUFELD, VAN DAMME (eds.), cited supra note 3, 46.
11
Understanding Regarding Notification, Consultation, Dispute Settlement and Surveillance adopted
on 28 November 1979 (BISD 26S/210), especially at §§ 10 -21. However, the Group Framework
Committee, entrusted with this task, did not obtain its original goal – improve and modernise the
dispute settlement system - due to strong opposition of the EC.
12
J. JACKSON, “Dispute Settlement and the WTO – Emerging Problems”, Journal of International
Economic Law 1998, 334.
13
V. HUGHES, “Settlement of Disputes – The Institutional Dimension” in D. BETHLEHEM, D. MCRAE,
R. NEUFELD, I. VAN DAMME, (eds.), cited supra note 3, 270.
10
10 GATT/WTO
of the panellists.14 Consequently the dispute settlement system was referred to as ‘more
responsive to the interests of the strong than the interests of the weak’.15
10.
Clearly, a lot could be improved at the outset of the Uruguay Round. A first step
towards change was made during the Uruguay Round’s midterm session in 1989.16 However,
the major improvements in the dispute settlement system are the result of the Understanding
on Rules and Procedures Governing the Settlement of Disputes in World Trade Organization
(hereinafter DSU).17 The DSU was adopted as a part of the WTO Agreements and is still
operative. The merit of the DSU lies in the elimination of the possibility to block a procedure
and a degree of ‘automaticity’ created by several measures. If anything, the DSU must be
considered as the next step towards ‘judicialization’ of the GATT/WTO dispute settlement
procedure.18
ii.
11.
Headlines and procedure of today’s dispute settlement system
The current provisions on dispute settlement contrast sharply with the scarcity of the
GATT 1947. The DSU provides a comprehensive scenario of how a dispute must be settled.
It provides both structure and detail. Starting with the objectives as put forward by Article 3.2
DSU, namely ‘to provide security and predictability to the multilateral trading system’. In
order to do so, it lies within the power of the panels and the Appellate Body ‘to preserve the
rights and obligations of Members under the covered agreements’ and ‘to clarify the existing
provisions in those agreements’.19
14
JACKSON, cited supra note 10, 48.
R HUDEC, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System,
Salem, N.H., Butterworths, 1993, 353.
16
Improvements to the GATT Dispute Settlement Rules and procedures, L/6489 (12 April 1989),
BISD 36S/61.
17
Understanding on Rules and Procedures Governing the Settlement of Disputes in World Trade
Organization, annex 2 to the Agreement Establishing the World Trade Organization, Marrakesh, 15
April 1994 (www.wto.org) [DSU].
18
A. YANOVICH and W. ZDOUC, “Procedural and Evidentiary Issues” in BETHLEHEM, MCRAE,
NEUFELD, VAN DAMME, (eds.), cited supra note 3, 347.
19
Article 3.2 DSU.
15
11 GATT/WTO
ii.a.
12.
Procedure in the framework of the Dispute Settlement Body
Article 4 DSU et seq provide for the actual procedure, which is formally initiated by
the request for consultations. This consultation phase is intended to achieve a mutually
agreeable settlement. More particularly, it is through consultations that parties ‘exchange
information, assess the strengths and weaknesses of their respective cases, narrow the scope
of the differences between them and, in many cases reach a mutually agreeable solution’.20
Article 4 puts forward several formal requirements, e.g. the request must be made in writing.
This phase has proven to be very successful in the past: approximately half of the requests for
consultations are solved in this stage and do not need any further litigation.21
13.
Nevertheless, if consultations are unsuccessful, the complaining party may request the
establishment of a panel.22 This request must be submitted to the Dispute Settlement Body
(DSB) and distributed to all WTO Members. The DSB can only by consensus decide not to
establish the panel, as opposed to the practice under GATT 47, which required a consensus to
establish the panel.23 Subsequently, the panel is composed at the suggestion of the WTO
Secretariat. The parties can only object for compelling reasons.24 After a panel is composed, it
must adopt working procedures. The DSU does not impose a compulsory and uniform panel
procedure. A model working procedure is provided in Annex 3 to the DSU, however each
panel may choose to adopt a different procedure after consulting the parties.25 When the
parties have filed written submissions and possibly rebuttal submissions, respectively
followed by a first and second meeting with the panel, the latter deliberates and drafts a
report. It is, however, quite noticeable that the parties can offer comments to the panel with
20
Article 4 DSU, Mexico – Corn Syrup (Article 21.5 – US), WT/DS132/AB/RW of 22 October
2001, § 54.
21
W. DAVEY, “Evaluating WTO dispute settlement: what results have been achieved through
consultations and implementation of panel reports?” in Y. TANIGUCHI, A YANOVICH and J. BOHANES,
(eds.), The WTO in the Twenty-first Century Dispute Settlement, Negotiations, and Regionalism in
Asia, Cambridge, Cambridge University press, 2007, 98.
22
Article 6 DSU, again this article provides formal requirements. Panellists are subject to Rules of
Conduct, adopted by the DSB. This code seeks to maintain integrity, impartiality and confidentiality of
proceedings, Rules of Conduct for the Understanding on Rules and Procedures Governing the
Settlement of Disputes, as adopted by the DSB on 3 December 1996, WT/DSB/RC/1 (11 December
1996).
23
Article 6.1 DSU.
24
Article 8.4 and 8.6 DSU.
25
Article 12.1 DSU.
12 GATT/WTO
respect to both the descriptive and the decisive parts of the report.26 In an appeal procedure
there is no such opportunity for the Member States.
14.
Following this draft stage, the panel issues its final report. This report includes a
recommendation for the respondent Member to bring its measure into conformity with the
relevant WTO Agreement, when WTO-inconsistency has been established.27 Even though
the DSU only uses the word ‘recommendation’, this is a downright obligation to comply. The
panel may give suggestions as to how a Member should comply. These suggestions do not
bind the respondent Member, which can still freely choose its way of compliance. The panel
usually refrains from doing so, in order not to meddle in what Member States consider a
national affair.28 The report must be adopted by the DSB within 60 days after it has been
circulated to all WTO Members. As opposed to the practice under the GATT 1947, the final
report is adopted through reverse consensus, leading to a firmer degree of automaticity: the
DSB can only by consensus decide not to adopt the report, in the past a consensus was
necessary to adopt the report.
ii.b.
15.
Implementation of the recommendation or ruling
Unless one of the parties initiates an appeal, the respondent member has to ensure
‘prompt compliance with the ruling’.29 If immediate compliance is impossible, a reasonable
period of time is given to the Member concerned. The respondent Member then has to comply
within 20 days after the expiry of the implementation period.30 As to the determination of the
duration of this period, the DSU offers various possibilities.31 This flexibility is highly
characterising for this stage of implementation: Member States preserve a certain procedural
‘scope of manoeuvre’ to choose the most appropriate solution to a dispute.32 The same
procedure should be followed after the AB report has been adopted in a case on appeal.
26
Article 15 DSU.
Article 19 DSU.
28
A. ROSAS, “Implementation and Enforcement of WTO Dispute Settlement Findings: An EU
Perspective”, Journal of International Economic Law 2001, 134.
29
Article 21.1 DSU.
30
Article 21.2 DSU.
31
Article 21.3 DSU.
32
A. STEINBACH, “EC Liability for Non-compliance with Decisions of the WTO DSB: The Lack of
Judicial Protection Persists”, Journal of World Trade 2009, 1055.
27
13 GATT/WTO
16.
When a dispute arises about whether measures taken to comply suffice, the
complaining Member may take recourse to the DSB, preferably to the original panel. This
panel then examines whether the respondent Member’s measures are consistent with both the
DSB recommendation and the covered agreements.33
17.
If the respondent Member has not taken sufficient action to fully comply with the
recommendations and rulings in the original proceedings, and if no agreement on
compensation has been reached, then the complaining Member may request authorization
from the DSB to adopt countermeasures pursuant to article 22.2 DSU.34 It should be
emphasised that this article also allows WTO Members in a dispute settlement procedure to
start negotiations when the respondent Member has failed to implement the recommendations
within the reasonable period of time. The parties should thus no later than the expiry of the
implementation period re-enter into negotiations to reach a mutually acceptable agreement on
compensation, before the complaining Member may enforce the recommendation by
imposing countermeasures.35 These countermeasures usually take form as suspension of
concession.
18.
Article 22.3 and 22.4 DSU put forward the conditions to apply countermeasures: they
have to be applied in the same trade sector and they have to be equivalent to the level of
inconsistency by the other party. If it is not practicable to suspend concessions in the same
trade sector, the complaining may opt for cross-retaliatory measures: it
may suspend
concessions in other sectors under the same WTO agreement. If this would not be effective
either, concessions may also be suspended under another WTO agreement. However, when
the respondent Member disagrees with the countermeasures, it can request an arbitration.36
19.
Clearly, the possibilities for Member States to take recourse to
negotiations are
numerous and spread throughout the dispute scenario, even at this final stage of
implementation the respondent Member can have resort to arbitration. This is in accordance
with the objectives of the dispute settlement system: a solution mutually acceptable to the
33
Article 21.5 DSU.
Article 22.2 DSU.
35
Only when the complaining Member States request negotiations, which is usually the case.
36
Article 22.6 DSU.
34
14 GATT/WTO
parties in the dispute should be preferred.37 The DSU thus creates multiple opportunities for
the parties to take recourse to diplomatic means, even after the expiry of the implementation
period. However, the respondent Member ultimately has to implement the DSB decision. This
multitude of options is thus only a temporary luxury.
ii.c.
20.
The Banana Dispute: a striking example
The Banana Dispute is a classis example of this flexibility towards negotiations. The
dispute originates in the adoption of the Lomé Agreement of 1989 and the creation of the
European single market in bananas in 1993.
38
The EC extended its preferential regime
towards bananas coming from African, Caribbean and Pacific (ACP) states. This regime
inevitably affected other states in an adverse way, more specifically Latin American states
producing ‘dollar bananas’.39 Already in 1992, these States filed an action under the GATT
1947. In 1994 the panel report found the EC to be in breach of several GATT provisions,
amongst others the Most Favoured Nation principle. However, the system of reverse
consensus was not yet in place. This allowed the EC to block the adoption of the report.
21.
Following the adoption of the WTO Agreement and the establishment of the DSB,
Ecuador, Guatemala, Honduras, Mexico and the United States requested consultations in
1995. In 1996, the complaining Members requested the establishment of a panel. The panel
report was issued in May 1997 and quickly followed by an Appellate Body Report in
September. The Appellate Body confirmed that the EC’s banana regime was in breach of
several WTO provisions. Consequently the EC and the complaining parties started
negotiations to determine ‘a reasonable period of time’ pursuant to Article 21.3 of the DSU.
By November 1997, the complaining parties requested an arbitrator to be appointed, as the
parties had failed to reach an agreement.40 The arbitrator granted the EC’s request of 15
months and 1 week.
37
Article 3.7 DSU.
Fourth ACP-EEC Convention signed at Lomé, 15 December 1989, O.J. L 229/3 of 17 August 1991,
Council Regulation (EEC) 404/93 of 13 February 1993 on the common organization of the market in
bananas, O.J. 1993, L 47/1.
39
Colombia, Costa Rica, Guatemala, Nicaragua and Venezuela.
40
EC – Regime for the Importation, Sale and Distribution of Bananas, Arbitration, Award of the
Arbitrator, Said El-Naggar, WT/DS27/15 of 7 January 1998.
38
15 GATT/WTO
22.
The EC adopted new measures in order to bring its banana regime into compliance
with its WTO obligations.41 The US, however, was not persuaded by the European efforts to
comply. At the end of the implementation period the US filed a request for the suspension of
concessions pursuant to article 22.2 of the DSU. The EC contended that no concessions could
be suspended as long as a panel had not assessed the conformity of its revised regime under
article 21.5 DSU [compliance], and certainly not as long as the matter had not been submitted
to arbitration pursuant to article 22.6 DSU [equivalence]. This uncertainty as regards the
exact order of succession of judicial steps to take is referred to as the sequencing problem,
which was discovered here in the Banana dispute. Eventually, the DSB granted part of the
EC’s request and referred the issue to arbitration in order to assess whether the US’ crossretaliatory measures were compliant to article 22.3 DSU and to determine whether these
measures were equivalent to the damage suffered by the United States pursuant to article 22.4
DSU [equivalence]. On 9 April 1999, the arbitration report was issued. The revised EC
regime was still considered to be of discriminatory nature.42 The arbitrators deemed the level
of suspension sought by the United States disproportionate ($520 million). In stead, they set
the level of nullification or impairment suffered by the United States at $191,4 million.43
Consequently, the United States requested the suspension of concessions in accordance with
the arbitration report.44 On 19 April 1999 the DSB granted the latter authorisation for the
requested suspension.
23.
At the same time, the EC – as well as Ecuador – started proceedings pursuant to article
21.5 DSU to determine whether the revised banana regime was compliant with WTO
obligations [compliance]. Both panel reports were adopted on 12 April 1999.45 Following
these reports, Ecuador requested authorisation to suspend concessions up to $540 million by
virtue of article 22.2 DSU. Once again the EC requested arbitration concerning the level of
suspension [equivalence] under article 22.6 DSU. The latter’s request was granted. Ecuador’s
request was suspended until conclusion of the arbitration. The arbitrator’s report was issued in
41
Council Regulation (EC) 1637/98 of 20 July 1998 amending Regulation 404/93 on the common
organization of the market in bananas, O.J. 1992, L 210/98.
42
EC – Regime for the Importation, Sale and Distribution of Bananas, Arbitration, Recourse to Article
22.6, WTO/DS27/ARB/RW of 9 April 1999 at §5.80.
43
Ibid. at §7.8.
44
Article 22.7 DSU.
45
EC – Regime for the Importation, Sale and Distribution of Bananas, Recourse to Article 21.5,
WT/DS27/RWEEC (7-1433) of 12 April 1999 and EC – Regime for the Importation, Sale and
Distribution of Bananas, Recourse to Article 21.5, WT/DS27/RW/ECU of 12 April 1999.
16 GATT/WTO
March 2000, the arbitrators estimated the level of nullification or impairment suffered by
Ecuador to be $201.6 million.46 Consequently, the DSB granted Ecuador’s request for
authorisation to suspend concessions.
24.
The EC yet again faced a revision of its banana regime. By March 2001 the EC
reported to the DSB that the Council of the European Union had adopted Regulation (EC) No
216/2001 amending Regulation (EEC) No 404/93 on the common organisation of the market
in bananas. The regulation resolved to introduce a tariff only regime for imports of bananas
no later than 1 January 2006.47 As a transitional measure, the regulation put forward a regime
of three tariff quotas open to all imports irrespective of their origin. Imports from ACP-states,
however, could still enter duty free. Following these European legislative efforts, both the US
and Ecuador entered into negotiations with the EC. By June 2001 the parties reached an
agreement.48
25.
However, it did not take long for the first cracks to appear in this brittle compromise.
The US nor Ecuador recognised this Understanding as a mutually satisfactory solution.49 By
the end of September, Ecuador had already formally voiced its displeasure regarding the
European Commission’s proposal for reforms in order to implement the agreements with the
United States and Ecuador.
26.
Upon expiry of the January 2006 deadline, Ecuador requested consultations in
November 2006 and afterwards filed a request for the establishment of a panel in February
2007. Also the United States requested the establishment of a panel in order to assess the
compliance of the new European banana regime with the earlier DSB recommendations. In
2008 two panel reports were circulated to all WTO Members: the EU had failed to implement
46
EC – Regime for the Importation, Sale and Distribution of Bananas, Arbitration, Recourse to Article
22.6, WTO/DS27/ARB/RW of 24 March 2000.
47
Article 16 (1) of Council Regulation (EEC) 404/93 of 13 February 1993 on the common
organization of the market in bananas, O.J. 1993, L 47/1 as amended by Council Regulation (EC)
216/2001 of 29 January 2001 amending Regulation 404/93 on the common organization of the market
in bananas, O.J. 2001, L 31/2.
48
Understanding on Bananas between the EC and the US of 11 April 2001, and Understanding on
Bananas between the EC and Ecuador of 30 April 2001, WT/DS27/58.
49
Article 3.5 DSU.
17 GATT/WTO
the recommendations.50 The EC lodged an appeal, however once again without success: on 26
November 2008 the Appellate Body Report was circulated to all WTO Members.51 The AB
confirmed, albeit for different reasons, the WTO inconsistency of the European regime for
instance the duty free tariff quota for ACP States.52 These reports were adopted by the DSB in
December 2008. Only recently, in December 2009, the EU managed to settle its bananadisputes with both the United States and the Latin American States through means of a
mutually agreed solution. Pursuant to this solution the EU will cut its import tariff on bananas
in eight stages, making the biggest cut first. In return, Latin American countries will not
demand further cuts in the framework of the Doha Round and they will also settle the legal
disputes pending against the EU at the WTO.53 As a consequence, the EU has also reached an
agreement with the US in which the US acknowledges the EU’s commitments to Latin
American suppliers and consequently agrees to definitively settle its dispute over bananas
with the EU.
27.
This case shows the potential for ineffectiveness that lies within the WTO dispute
settlement system. It took 12 GATT and WTO Panel reports, Appellate Body reports,
arbitration and 2 understandings to settle this dispute. Despite almost twenty years of
litigation in the womb of the DSB, finally a mutually satisfactory solution was achieved
through negotiations and diplomatic means. It should be noted that in the end, their solution
entails what the AB had recommended all along. This shows that ultimately a Member cannot
decline to implement a DSB decision. Many may consider the European choice to face
retaliation rather than bring its legislation into compliance a reason to question the dispute
settlement system. However, in those years of dispute, a flourishing trade in bananas could
still develop by the grace of this system: it provided a framework of alternative measures,
such as retaliation and cross-retaliation, and by doing so prevented a trade impasse.54 It must
50
EC - Regime for the Importation, Sale and Distribution of Bananas - Second Recourse to Article
21.5 , WT/DS27/RW2/ECU of 7 April 2008 and EC - Regime for the Importation, Sale and
Distribution of Bananas - Second Recourse to Article 21.5, WT/DS27/RW/USA of 19 May 2008.
51
EC - Regime for the Importation, Sale and Distribution of Bananas - Second Recourse to Article
21.5, WT/DS27/AB/RW/USA and WT/DS27/AB/RW2/ECU of 28 November 2008.
52
Ibid. at § 478.
53
General Council – Geneva Agreement on Trade in Bananas - Communication from Brazil,Colombia,
Costa Rica, Ecuador, European Union, Guatemala, Honduras, Mexico, Nicaragua, Panama, Peru and
the Bolivarian Republic of Venezuela, WT/L/784 of 15 December 2009, Brussels, 15 December
2009The EU-Latin America Bananas Agreement Questions and Answers
54
It should be noted that this banana trade impasse was prevented at the cost of other economic sectors
which suffered from the retaliatory measures.
18 GATT/WTO
be emphasised that only a very small minority of all contentious cases reach this level of
litigation. So far only seven WTO cases have seen a request for authorisation to suspend
concessions.55
ii.
28.
Possible future reforms of the dispute settlement system: Doha
Despite its potential for ineffectiveness, the dispute settlement system is considered to
be the most successful feature of the WTO. Its accomplishments are numerous.56 When the
power-based negotiations hit rock bottom, the rule-oriented panels and Appellate Body often
hand a – temporary – solution. One could easily refer to the DSU as the jewel in the WTOcrown.57 Then why change this winning team?
ii.a.
29.
Weaknesses of the current system and proposals for improvement
Despite all songs of praise, the DSU contends with some difficulties. The Banana
dispute revealed different problems with respect to implementation: the sequencing problem,
which has a serious impact on legal certainty and also with respect to countermeasures and
sanctions a lot of questions have arisen in the past. The DSU provides the respondent
Member
with plenty opportunities to delay implementation. One could also seriously
question the effectiveness of countermeasures, especially the suspension of concessions,
which has a trade restrictive – rather than an enhancing - nature and comes at the dispense of
private companies. Other problems relate to the accessibility of the system, especially by
developing countries, the functioning of the panels and Appellate Body and various technical
clarifications. However, this paper will focus on implementation, as changes in this area could
55
The Banana dispute: both the US and Ecuador filed a request; EC – Measures Concerning Meat
and Meat Products (Hormones), WT/DS26/ARB and WT/DS48/ARB of 16 January 1998: both
Canada and the US filed a request; Brazil – Export Financing Programme for Aircraft, WT/DS46/ARB
of 28 August 2000: request by Canada; US - Laws, regulations and methodology for calculating
dumping margins (“zeroing”), WT/DS294/35 of 2 February 2010, request by EU; European
Communities — Measures affecting the approval and marketing of biotech products, WT/DS291/39 of
21 January 2008 request by US; US — Continued Dumping and Subsidy Offset Act of 2000 (Byrd
Amendment Case) , WT/DS217/38-43 and WTO/DS234/31-32 of 11 November 2004, request by the
EC, Brazil, India, Japan, Korea, Canada, Mexico and Chile; US — Subsidies on Upland Cotton:
authorization to impose countermeasures, WT/DS267/42 of 9 November 2009, request by Brazil.
56
JACKSON, cited supra note 10, 51; ROSAS, cited supra note 28, 132; W. WEISS, “Reforming the
Dispute Settlement Understanding” in H. HOHMAN, (ed.), Agreeing and Implementing the Doha Round
of the WTO, Cambridge, Cambridge University Press, 2008, 270.
57
A. TANCREDI, “EC Practice in the WTO: How Wide is the ‘Scope for Manoeuvre’?”, European
Journal of International Law 2004, 939.
19 GATT/WTO
have strong repercussions on the stance of the European Court of Justice.58 But this chapter
would be incomplete without touching upon on the question of flexibility and member control
over specific disputes.
ii.a.a.
30.
Implementation
With respect to implementation, the question at hand is the following: could future
reforms alter the DSU in such a way that the current flexibility towards implementation is
reduced? In order to answer that question, the proposals, currently on the negotiating table,
should be briefly examined.
31.
Firstly, despite strict time tables, the overall duration of a contentious case can take
years. As the Banana dispute illustrates, the DSU is a flexible instrument in the hands of the
respondent Member searching for delay. In the meanwhile, the damage suffered by the
complaining Member mounts up. For instance, the average loss suffered by Ecuador during
the Banana dispute probably amounted to 832 million dollars.59 It is held against the current
system that it offers Members in breach of WTO obligations a ‘free ride’ to continue trade
restricting practices.60 WTO Members have proposed little structural reform to resolve this
problem. The EU proposed to shorten several time periods during the procedure.61 Mexico
suggested the application of provisional measures if the dispute was causing of threatening to
cause damage which would be difficult to repair.62 Despite their lack of vision, it should be
doubted whether these rather shallow proposals will find enough support throughout the
international community. A more fundamental change towards retroactive implementation
lies far beyond the reach of consensus: the WTO is still considered to be about trade and to
58
See infra §§ 72 - 86.
i.e. between the request for consultations and the expiry of the reasonable period of time, see E.
Pérez Motta and M. Diego-Fernández, “If the DSU is “Working Reasonably Well”, Why does
Everybody want to Change it?” in GEORGIEV, D. and VAN DER BORGHT, K. (eds.), Reform and
development of the WTO dispute settlement system, London, Cameron May, 2006, 300 – 301.
60
S. HARBINSON, “Will State Emergency Measures trigger WTO disputes? What Prospects Exist for
Reforming the Dispute Settlement System of the WTO – Professional Panellists, Retroactive,
Remedies, Monetary Compensation?”, Journal of World Investment and Trade 2009, 779.
61
Dispute Settlement Body – Special Session - Contribution from the EC and its Member States to the
improvement of the DSU, 13 March 2002, TN/DS/W/1, 9.
62
Dispute Settlement Body – Special Session – Amendments to the DSU proposed text by Mexico, 27
January 2003, TN/DS/W/40, 2-3.
59
20 GATT/WTO
create market opportunities rather than to deal with liabilities and damages.63 Although the
prospect of withdrawal ex tunc, implying the payment of considerable amounts of financial
compensation, would certainly have a dissuasive effect on non-complying Members.
32.
Secondly, with respect to the effectiveness of countermeasures, the unfavourable
features of the current system have been widely discussed. The remedies provided in the DSU
are not sufficient to induce compliance, especially when the respondent WTO Member is a
large, developed country and the complaining WTO Member is not. In that case the
respondent Member can easily buy off its violation.64 Whenever the Members concerned are
well matched, it becomes almost impossible to reach an agreement on the level of
compensation.65 On average retaliation by suspending concessions gets better results when it
comes to compliance. However, both the respondent and the complaining Member suffer
from the measures taken. On top of that, compensation nor retaliation is of any service to
developing countries, which often hold the weakest position in the dispute, given the small
size of their domestic market.
33.
The most widely supported proposals build on the existing WTO system. For instance
the possibility of transferring an authorisation to retaliate to other WTO members. By doing
so, the flexibility towards implementation would only increase as the right to suspend
concessions would become negotiable.66 The benefits of financial compensation, as a
supplement to trade retaliation and trade compensation, have been widely recognised amongst
scholars, the most prominent feature of this system being its capability to provide equitable
reparation. Again, fundamental modifications which would render the system less negotiable
seem to be unattainable. Rosas rightly observes that “moving away from the
intergovernmental nature of the WTO ... is simply not feasible at the present stage of the
63
United States – Import Measures on Certain Products from the European Communities,
WT/DS/165/R of 19 April 2000at §6.83 and 6.106.
64
J.BOURGEOIS, “Sanctions and Countermeasures: Do the Remedies Make Sense?”, in D. GEORGIEV
and K. VAN DER BORGHT, (eds.), Reform and development of the WTO dispute settlement system,
London, Cameron May, 2006; for a more elaborate review see M. BRONCKERS AND N. VAN DEN
BROECK, “Financial Compensation in the WTO: Improving Remedies in WTO Dispute Settlement” in
ibid.
65
For instance the US and the EU, resulting in long lasting trade disputes such as the Hormones and
Bananas dispute.
66
Dispute Settlement Body – Special Session – Amendments to the DSU proposed text by Mexico, 27
January 2003, TN/DS/W/40 at 1, amending article 3.7 DSU.
21 GATT/WTO
world trade system”.67 It is very unlikely that a solution that features a stronger panel report,
not only suggesting but imposing actual measures and fixing an amount for financial
compensation will ever be proposed, let alone adopted.
34.
However, it should be noted that WTO law can also have effects without a formal
ruling or even without a case being brought before a WTO panel. Resorting to dispute
settlement is often very effectively used as a threat.68 Moreover, compliance with WTO law is
less likely in cases that involve a formal ruling than in cases that do not.69 This is not only due
to the success of the threat, but also because cases that involve a formal ruling mostly concern
highly sensitive trade issues, in which threats are not likely to have a successful effect.
ii.a.b.
35.
Flexibility and member control
Heavyweights such as the European Union and the United States have filed proposals
to increase flexibility and member control of the dispute settlement.70 The EU wants more
time and flexibility in the determination of the reasonable period of time pursuant to article
21.3 DSU and an opportunity for the complaining Member to withdraw its request for
consultations or for the establishment of a panel at any point in time before the circulation of
the final report. The US and Chile literally express their need to counter the quasi-automatic
adoption op panel reports, in their mutual proposal both States spell out the conditions for
Members to reject specific aspects of a panel report which they consider to go beyond what is
necessary to resolve the dispute or what might even be counter-productive.
67
A. ROSAS, “Implementation and Enforcement of WTO Dispute Settlement Findings: An EU
Perspective”, Journal of International Economic Law 2001, 143.
68
S. PRINCEN, “EC Compliance with WTO Law: The Interplay of Law and Politics”, European
Journal of International Law 2004, 557 and 572.
69
Study of M. L. BUSCH and E. REINHARDT, “Bargaining in the Shadow of the Law: Early Settlements
in GATT/WTO Disputes”, Fordham International Law Journal 2000, 159. For instance with respect to
the European Leghold Trap Regulation, the US successfully threatened the EU with a WTO case to
induce the EU to change the import ban on fur.
70
Dispute Settlement Body – Special Session - Contribution from the EC and its Member States to the
improvement of the DSU, 13 March 2002, TN/DS/W/1; Dispute Settlement Body – Special Session –
Contribution from the EC and its Member States to the improvement and clarification of the WTO
DSU, 23 January 2003, TN/DS/W/38, §11-14 and §23, Dispute Settlement Body – Special Session –
Negotiations on Improvements and Clarifications of the DSU, Further Contribution of the US on
Improving Flexibility and Member Control in WTO Dispute Settlement, 24 October 2005,
TN/DS/W/82 and Dispute Settlement Body – Special Session – Flexibility and Member Control,
Revised textual proposal by Chile and the US, 31 May 2007, TN/DS/W/89, introduction.
22 GATT/WTO
ii.b.
36.
Negotiating the DSU: a never-ending story
The DSU has been subject to review from the very beginning in 1995. This is a result
of the fact that in 1994 the DSU was only provisionally adopted. The idea of binding and
compulsory dispute settlement nourished a distrust of the DSU, which led the Contracting
Parties to adopt a decision on the review of the DSU.71 This implied that the WTO Members
were to decide to continue, modify or terminate the DSU within 4 years after the entry into
force of the WTO Agreements. At the Seattle Ministerial Conference in 1999 the WTO
Members failed to reach an agreement on any improvements of the DSU. They did, however,
agree on not terminating the system. The mandate to terminate the DSU then expired and the
WTO Members decided to continue negotiations on improvements.72 These negotiations take
place during special sessions of the DSB. 73
37.
As mentioned above, there are several proposals on the negotiating table. However,
after 10 years of negotiations a consensus is still out of reach. In 2004 the Members even
decided to continue negotiations without deadline.74 Several reasons have been put forward
for this deadlock. First, there is little enthusiasm for reform amongst the Members. This partly
mirrors an ‘if it ain’t broke, don’t fix it’ attitude. However, one should not forget that a
majority of the Members do not use the dispute settlement system at all. This creates a margin
and a fear for trade-offs; reforming the DSU could lead to undesirable requests of other
Members, especially developing countries: these are reluctant to use the DSU as they are
often the weakest party in the dispute and as a consequence they perceive a resort to dispute
settlement as a hostile act and a lack of capacity, since as discussed above the DSU still
favours the heavyweights.75
71
Ministerial Decision on the Application and Review of the Understanding on Rules and Procedures
Governing the Settlement of Disputes, Trade Negotiations Committee, Marrakesh, 14 April 1994
(www.wto.org).
72
These negotiations are referred to as DSU reform, in order to distinguish them from the expired
mandate to review and terminate the DSU.
73
For a brief outline of the negotiations one can consult following reports and their annexes, which set
a very clear example of the negotiation process: Dispute Settlement Body - Special Session - Report by
the Chairman, Ambassador Péter Balás, to the Trade Negotiations Committee, 6 June 2003, TN/DS/9,
Dispute Settlement Body – Special Session – Report by the Chairman, Ambassador David Spencer to
the Trade Negotiations Committee, 25 November 2005, TN/DS/14 and Dispute Settlement Body –
Special Session – Report by the Chairman, Ambassador Ronald Saborío Soto to the Trade Negotiations
Committee, 22 March 2010, TN/DS/24.
74
Doha Work Programme, Decision Adopted by the General Council, 1 August 2004, WT/L/579.
75
E. WHITE, “Reforming the Dispute Settlement System through Practice” in HOHMAN, cited supra
note 56, 265.
23 GATT/WTO
38.
Secondly, one cannot underestimate the importance of the progress made in
negotiations about the further development of substantive WTO law, which is currently next
to none. This has indisputable repercussions on the DSU reform negotiations. The panels and
Appellate Body often interpret substantive WTO law when a provision needs clarification,
thus filling the gap left by the political negotiated decision-making processes in the WTO.
Amongst WTO Members a fear exists that too many gaps might be filled by an improved and
more efficient dispute settlement system, gaps which they would rather fill through decisionmaking in order to stay in control.76
39.
Thirdly, DSU reform is not the most pressing issue on the Doha-agenda given the
successful nature of the current system. Moreover, the negotiations on the DSU reform are
not even formally part of the single package of negotiations known as the Doha Development
Agenda. But this could just as well be an advantage given the lack of progress in the Doha
agenda.
§2.
Agreement on establishing the World Trade Organization: art. IX and
XVI
40.
Before elaborating on article IX and XVI (4), it is useful to briefly take a closer look at
the circumstances which led to the adoption of these provisions: at the start of the Uruguay
negotiations the institutional shortcomings of the GATT were well known. The weak decision
making structure being one of them.77 As Kuijper describes well the United States blocked a
fundamental change of the institutional structure of the GATT despite efforts of the EC and
Canada.78 Thus, the decision making structures of the WTO still cope with the heritage of the
GATT 1947.
76
WEISS, cited supra note 56, 271.
For a lucid overview of the GATT at that time see J. JACKSON, Restructuring the GATT System,
New York, Council on Foreign Relations Press, 1990, 121 p. Review: P. D. EHRENHAFT in American
Journal of International Law 1992, 230-233: Jackson argued for the establishment of a World Trade
Organizaton.
78
P. J. KUIJPER, “WTO Institutional Aspects” in BETHLEHEM, MCRAE, NEUFELD, VAN DAMME (eds.),
cited supra note 3, 83-84; G. PATTERSON and E. PATTERSON, “The Road from GATT to MTO” in
77
24 GATT/WTO
i.
41.
Article IX WTO: Decision making
Even though article XXV (4) GATT 1947 puts forward voting as a primary rule, the
practice has proven otherwise since the late fifties: most decisions were taken on the basis of
consensus.79 This practice was formalised in Article IX of the WTO Agreement. Only when it
is impracticable to take a decision by consensus, the Members can take recourse to voting.
Apparently, Member States strongly prefer consensus, as only one decision has been made by
voting in the last 15 years: the accession of Ecuador in 1996.80 For interpretations and
waivers, however, the WTO Agreement explicitly provides for qualified majority voting as a
primary rule. Practice has shown again that Members prefer to adopt decisions by consensus:
since 1995, the General Council has taken decisions concerning waivers and interpretations
by consensus.81 Nevertheless, an important nuance should be made; for consensus decisions
the quorum is established when a simple majority of the Members is present.82 Thus the
conditions for consensus might sometimes be less difficult to fulfil, given that at key meetings
often a quarter of the WTO Membership is not present – making it impossible to take
decisions by qualified majority.83
42.
So despite plenty occasions to decide by voting as provided for by article IX of the
WTO Agreement, the WTO Members incline to make as much decisions as possible through
consensus. This is in accordance with the strong practice that grew under the GATT 1947 and
the overall fear of creating an organisation too intrusive on sovereignty during the Uruguay
negotiations.84 This finding should be taken into account when assessing future developments
in the Doha negotiation round: if the WTO Members would ever formally renounce
consensus as primary rule, practice has proven to be a fabulous consensus safety net. This is,
however, highly unlikely. By the end of 2004, the Director-General of the WTO, Supachai
Minnesota Journal of Global Trade 1994, 53, for a comprehensive outline of the negotiations see T.
STEWART, (ed.), The GATT Uruguay Round: a Negotiating history (1986-1994) – volume 4, Deventer,
Kluwer, 1999, 935 p.
79
GATT Analytical Index: Guide to GATT Law and Practice (6th edition), Geneva 1995, 1097 and
1108.
80
General Council - Accession of Ecuador, WT/ACC/ECU/5 of 22 August 1996.
81
D. STEGER, “The Future of the WTO: The Case for Institutional Reform”, Journal of International
Economic Law 2009, 810.
82
Rule 16 of the Rules of procedures for sessions of the ministerial conference and meetings of the
general council, WT/L/161 of 25 July 1996.
83
J. JACKSON, “Dispute Settlement and the WTO – Emerging Problems”, Journal of International
Economic Law 1998, 346; see blocking by US, supra § 40.
84
Ibid. at 345-346.
25 GATT/WTO
Panitchpakdi at that time, issued a report assessing the institutional challenges faced by the
WTO.85 The conclusion with respect to the consensus system was not to switch to a voting
system. It did suggest to restrict veto power whenever a measure has very broad consensus
support. Also Jackson leans to this approach; in case a measure is supported by a critical mass
of countries, other opposing Members should refrain from blocking consensus.86 If such a
proposal were to come true, it would of course result in a higher degree of automaticity.
ii.
43.
Article XVI WTO: National law
With respect to national law article XVI (4) WTO puts forward:
“Each Member shall ensure the conformity of its laws, regulations and administrative
procedures with its obligations as provided in the annexed Agreements.” This provision
extends to all agreements and legal instruments in Annexes 1, 2 and 3 of the WTO
Agreement.87 Even though to some observers article XVI(4) WTO seems to be formulated
quite weak, WTO law usually has a strong impact on the legislative and regulatory conduct of
its Members. Two kinds of obligations can be distinguished with respect to the implications
on national law: substantive and systemic obligations. On the one hand, substantive
obligations set out a standards of treatment that must be accorded to goods, services or
intellectual property rights coming from another WTO Member. Systemic obligations, on the
other hand, deal with the relationship between national and WTO law. There are 4 categories
of systemic obligations, of which the most important one covers the obligation to implement
WTO commitments in the national legal order.
44.
It is not clear how exactly Members must ensure conformity with both substantive as
systemic obligations. Bourgeois is even of the opinion that “from an international law point of
view this clause is superfluous”.88 Indeed, one might wonder what the added value of this
85
Report of the Consultative Board to the Director-General Supachai Panitchpakdi on the Future of
the WTO: Addressing Institutional Challenges in the New Millenium, WTO, Geneva 2005 at §288-289.
[Sutherland Report]
86
J. JACKSON, “The WTO ‘Constitution’ and Proposed Reforms: Seven ‘Mantras’ Revisited”, Journal
of International Economic Law 2001, 74.
87
S. BHUIYAN, National Law in WTO Law – Effectiveness and Good Governance in the World Trading
System, Cambridge, Cambridge University Press, 2007, 55.
88
J. BOURGEOIS, “The Uruguay Round of GATT: Some General Comments from an AC Standpoint” in
N. EMILIOU and D. O’KEEFFE, (eds.), The European Union and World Trade Law After the GATT
Uruguay Round, New York, Wiley, 1996, 84.
26 GATT/WTO
provision is. However, when taking a step back, one can clearly see the value of this
provision. Under general public international law state parties to a treaty must not have
conforming laws. Article 26 of the Vienna Convention on the Law of Treaties merely
provides for the obligation to perform their treaty obligations in good faith and “a party may
not invoke the provisions of its internal law as justification for its failure to perform a
treaty”.89 Article VI (4) WTO arguably puts forward ‘more rigorous discipline’.90
45.
But this article does not enable courts to review national laws on their consistency with
the WTO Agreements, as WTO Members have rarely accepted an obligation for domestic
courts to apply WTO rules at the request of private parties.91 Both the United States and the
European Union have expressed their reluctance towards granting WTO law direct effect in
their legal order.92 During the Uruguay Round negotiations Switzerland had proposed that
WTO should have direct effect, but this proposal was rejected by other WTO Members.93
This approach was also confirmed by a WTO panel, which explicitly stated its preference for
indirect effect of WTO law over direct effect.94 The general perception is that the WTO
Agreements create intergovernmental commitments dealing with market access, not rights
invokable by private individuals before domestic courts.95 Only a handful scholars take a
different stance: by (sometimes) giving private individuals the right to call upon WTO law,
WTO rules could be protected and enforced at national level by specific performance and
international disputes would – in their view - often be prevented.96
89
Article 26 and 27 Vienna Convention on the Law of Treaties, Vienna, 23 May 1969. [VCLT]
BHUIYAN, cited supra note 87, 58.
91
This issue can be just as well approached from a national/constitutional point of view, see infra §§
176 - 181.
92
Recital 11 of the preamble of Council Decision (EC) 94/800 of 22 December 1994 concerning the
conclusion on behalf of the European Community, as regards matters within its competence, of the
agreements reached in the Uruguay Round multilateral negotiations (1986-1994), O.J. 1994, L 336/1
and Sec. 102 of the US Uruguay Rounds Agreement Act of 25 January 1995: “No State law, or the
application of such a State law, may be declared invalid as to any person or circumstance on the ground
that the provision or application is inconsistent with any of the Uruguay Round Agreements.”
93
F. SNYDER, “The Gatekeepers: the European courts and WTO law”, Common Market Law Review
2003, 335.
94
United States – Sections 301–310 of the Trade Act of 1974, WT/DS152/R of 22 December 1999 at §
7.79.
95
Sutherland report at § 269, E.U. PETERSMANN, “Multilevel Judicial Governance of International
Trade requires a common conception of rule of law and justice”, Journal of International Economic
Law 2007, 536.
96
J. JACKSON, “The legal meaning of a GATT Dispute Settlement report: Some reflections” in J.
JACKSON, The Jurisprudence of GATT and the WTO: Insights into Treaty Law and Economic
Relations, Cambridge, Cambridge University Press, 2000, 118 – 132 and E.U. PETERSMANN,
90
27 GATT/WTO
46.
These findings yet once again tally with the general perception that the WTO Members
hold on to a member driven dynamic – where all power to make decisions lies with
governments and their representatives in stead of with domestic courts - in order not to create
an organization too intrusive on their sovereignty.
§3.
47.
Conclusion
The current WTO system has been a success. It has reshaped multilateral trade
relations in providing a framework that stimulates its Members to open up their markets.
However, the WTO does not aim at creating a global market. This would imply a too serious
intrusion on the sovereignty of the Members, for example there would have been much
stricter obligations as regards national law. Instead, the WTO is characterised by a system that
heavily leans on negotiations, politics and power. The DSU is widely recognised as being the
adjudicative and rule-oriented counterpart of the otherwise political and power-based WTO
system, more particularly the decision making. However, when assessing the WTO Dispute
Settlement System, it is hard not to see the traces of the ‘uneasy deficient relationship’
between politics and law. 97 The Uruguay negotiators settled for a compromise which featured
both diplomatic as judicial characteristics. The diplomatic and consensus procedures provided
for by the GATT were preserved in the consultations phase and in article 3.7, which sets forth
the aim of the dispute settlement mechanism: “... is to secure a positive solution to a dispute.
A solution mutually acceptable to the parties to a dispute and consistent with the covered
agreements is clearly to be preferred.”98 Conversely, the DSU also created a fully-fledged
two-tiered adjudicative phase. But the possibilities for Member States to take recourse to
negotiations still are numerous and spread throughout the dispute scenario. On top of that
panel reports still must be adopted by the DSB, a political body. Notwithstanding the progress
made concerning the reverse consensus, these characteristics call for a quasi-judicial
qualification of the DSU.99 When looking ahead, one certainly might expect some changes to
'Prevention and Settlement of Transatlantic Economic Disputes', in E.U. PETERSMANN and M.
POLLACK (eds.), Transatlantic Economic Disputes: The EC, the US and the WTO (2003), 55.
97
A. VON BOGDANDY, “Law and Politics in the WTO – Strategies to Cope with a Deficient
Relationship”, Max Planck Yearbook of United Nations Law 2001, 609.
98
Article 22 and 23 GATT 1947.
99
Yet some observers consider the DSU system to be a non-judicial system, only from a formal point
of view: given the need for adoption by the DSB. Adoption, so they claim, has become a mere
28 GATT/WTO law in the European Union’s legal order: a lack of direct effect
the DSU. It is rather doubtful when the reform will come through and if the DSU will be
further ‘judicialised’. After assessing the current negotiations, that seems highly unlikely.
WTO Members incline to propose small and technical modifications, rather than systemic and
fundamental change. What is more, proposals strengthening flexibility and Member control
are being pushed on the negotiating agenda. This tendency strengthens the impression that the
tension between politics and law is inherent to the system and that its tracks will not be
covered up anytime soon.
B. GATT/WTO law in the European Union’s legal order: a lack of direct effect
I.
48.
The invocability of international agreements
In dealing with the question of direct effect of GATT/WTO law in the European
Union’s legal order, it is necessary to give a brief outline of how the ECJ handles the
invocability of international agreements in general.
49.
Pursuant to article 216 §2 TFEU (ex article 300 §7 TEC) agreements concluded by the
EU are binding upon the institutions of the EU and upon its Member States. This led the ECJ
to conclude that an international agreement forms an integral part of the Union’s legal order,
once it has entered into force, because these agreements must then be considered Union
acts.100 Whether an individual can invoke such an international agreement before a national
court to question the validity of Union law depends on whether the agreement in question has
direct effect.101 In the Kupferberg judgment the Court very clearly examines the direct effect
of a provision of the Free Trade Agreement concluded between the European Economic
Community and Portugal.102 In that case a German importer from Port wine invoked a
provision of the above mentioned agreement to challenge a German decision imposing
customs duties on the import of Port wine. The Court first established its jurisdiction to rule
formality: the law prevails under the new regime. R. LEAL-ARCAS, “The EU institutions and their
modus operandi in the World trading system,” Columbia Journal of European Law 2006, 164-165.
100
ECJ case 181/73, Haegeman, ECR 1974, 449, § 5, ECJ case 104/81, Hauptzollamt
Mainz/Kupferberg, ECR 1982, 3641, §11-14, ECJ case 270/80, Polydor/Harlequin, ECR 1982, 329,
ECJ case 12/86, Demirel, ECR 1987, 3719, §7.
101
ECJ cases 21 to 24/72, International Fruit Company, ECR 1972, 1219, §8.
102
Kupferberg, cited supra note 100.
29 GATT/WTO law in the European Union’s legal order: a lack of direct effect
on this matter: according to the Court it had jurisdiction to do so only if the effect of the
agreement in the internal legal order of the parties is not settled in the agreement itself.103 The
Court then examined the intention of the Parties to the Free Trade Agreement and concluded
that they had not intended to preclude the agreement from having direct effect. In doing so, it
expressly referred to the lack of reciprocity in implementation, which did not oppose to their
conclusion regarding intention and direct effect.104
50.
The Court proceeded to what is now known as its classical two-tier approach: it first
examined whether the invoked provision was unconditional and sufficiently precise to have
direct effect, i.e. whether the provision contained an obligation which does not require the
adoption of subsequent measures in order to implement it or give it effect. Secondly, the
Court analysed the wording, purpose and nature of the agreement itself in order to determine
whether the overall agreement contradicted the findings on the direct effect of the specific
provisions.105 The Court concluded that the provision had direct effect. It should be noted that
in Kupferberg no Union measure was challenged, quite the reverse, by granting direct effect
to the Free Trade Agreement the scope of Union law was indeed expanded at the cost of trade
restrictive domestic legislation. This rendered the Court more lenient towards granting direct
effect.106
51.
In Demirel the Court clarified the conditions for direct effect as put forward by the
Kupferberg judgment by stating that “a provision in an agreement concluded by the
Community [Union] with non-member countries must be regarded as being directly
applicable when, regard being had to its wording and the purpose and nature of the agreement
itself, the provision contains a clear and precise obligation which is not subject, in its
implementation or effects, to the adoption of any subsequent measure.”107
103
Ibid. at § 17.
Ibid. at § 18-22.
105
M. MARESCEAU, Bilateral agreements concluded by the European community, Martinus Nijhoff
Publishers, Leiden/Boston, 2006, 248.
106
G. BEBR, “Agreements concluded by the Community and Their Possible Direct Effect: From
International Fruit Company to Kupferberg”, Common Market Law Review 1983, 35.
107
Demirel, cited supra note 100, §14.
104
30 GATT/WTO law in the European Union’s legal order: a lack of direct effect
II.
52.
The basics: from International Fruit Company to Van Parys
This chapter will focus on giving a full reflection of the leading cases in this area of
European law, without, albeit at first, putting forward an opinion. It is meant to provide the
reader with a comprehensive outline of the European case law on this matter.
§1.
i.
53.
The GATT 1947 and the ECJ:
Preliminary remark
Before analysing the case law specifically relating to the direct effect of GATT 1947,
it is worth the effort to briefly discuss another landmark case in the European Union’s history.
For applying it to international agreements in Kupferberg and Demirel, the European Court of
Justice (ECJ) developed the concept of direct effect with respect to EEC Treaty provisions in
Van Gend & Loos.108 The ECJ established its competence to examine the direct effect of those
provisions given that such examination falls within the scope of ‘interpretation’.109 The Court
continued by first assessing the spirit and the general scheme of the EEC Treaty. Secondly it
examined whether the wordings of the specific provision were clear and unconditional, not
requiring any further implementation or other national legislative intervention. Later, the
Court has reversed the order of this two-tier approach by starting with the examination of the
specific provision.110 The ECJ finally concluded that ‘according to the spirit, the general
scheme and the wording of the Treaty, article 12 must be interpreted as producing direct
effects and creating individual rights which national courts must protect.’
54.
As Eeckhout rightly observes, one should thus keep in mind that the concept of direct
effect was developed with respect to ‘internal’ Union law. Moreover, the concept has been
further developed by the ECJ as an instrument of judicial protection to protect the rights of
individuals.111 When dealing with international agreements, i.e. ‘external’ law, the analysis
starts from a different premises. In stead of describing the relationship between Union law
108
ECJ case 26/62, Van Gend en Loos/Nederlandse administratie der belastingen, ECR 1963, 1.
Ibid.
110
See supra §50.
111
ECJ Joined cases C-46/93 and C-48/93, Brasserie du Pêcheur, ECR 1996, I-1029, §20, J. WOUTERS
and D. VAN EECKHOUTTE, “Giving Effect to Customary International Law Through European
Community Law” in J.M. PRINSSEN and A. SCHRAUWEN, (eds.) Direct effect: rethinking a classic of
EC legal Doctrine, Groningen, Europa Law Publishing, 2002, 219.
109
31 GATT/WTO law in the European Union’s legal order: a lack of direct effect
and national law, the ECJ assesses how international law relates to Union law.112 This
difference in background might justify why the ECJ is unfavourable towards establishing that
the GATT/WTO Agreement has direct effect: granting direct effect to an international
agreement with a wide substantive scope of application undeniably has strong repercussions
on the effect of agreements in both the European and the Member States’ legal order.
Therefore, the direct effect of these agreements cannot be assessed in isolation from the
substance of the case.113
ii.
55.
International Fruit Company
The International Fruit Company judgment of 14 December 1972 is the starting point
for this abundantly discussed episode in the European Court’s case law.114 The case offers a
good image of how exactly the Court’s approach of GATT/WTO law was formed. As quoted
by Maresceau this is the mother of all later rulings by the Court on the direct effect of
international agreements, and therefore cannot be left out.115 The case concerned a
preliminary ruling referred to the European Court of Justice by a Dutch court, the College van
beroep voor het bedrijfsleven, questioning the validity of EEC regulations restricting the
import of apples in the light of article XI GATT 1947.116 If the ECJ would have declared the
regulations invalid, International Fruit Company and many other importers of fruits and
vegetables would have benefited from the right to free importation under the then applicable
Union law.
56.
The ECJ first addressed the question whether the validity of a regulation also referred
to their validity under international law, or in other words, whether the validity of the
112
P. EECKHOUT, External Relations of the European Union, Legal and Constitutional Foundations,
Oxford, Oxford University Press, 2005, 280.
113
MARESCEAU, cited supra note 105 at 248.
114
International Fruit Company, cited supra note 101.
115
MARESCEAU, cited supra note 105 at 247.
116
Règlement (CEE) n° 459/70 de la Commission, du 11 mars 1970, arrêtant les mesures de sauvegarde
applicables à l'importation des pommes de table, O.J. 1970, L57/20, Règlement (CEE) n° 565/70 de la
Commission, du 25 mars 1970, relatif à la gestion du système de titres d'importation des pommes de
table et modifiant le règlement (CEE) n° 459/70, O.J. 1970, L69/33, Règlement (CEE) n° 686/70 de la
Commission, du 15 avril 1970, portant troisième modification du règlement (CEE) n 565/70 relatif à la
gestion du système de titre d'importation des pommes de table et modifiant le règlement (CEE) n°
459/70, O.J. 1970, L84/21.
32 GATT/WTO law in the European Union’s legal order: a lack of direct effect
regulations in casu could be assessed in the light of article XI GATT 1947, which provided
for a general prohibition on quantitative trade restrictions.117
57.
In order to answer this question the ECJ first confirmed its jurisdiction with respect to
assessing the validity of Union acts even when the grounds on which this would be done were
rules of international law, as the jurisdiction of the Court cannot be limited by the grounds on
which the validity of those measures may be contested.118 The ECJ thus implicitly affirmed its
power to interpret international agreements. A particular rule of international law could serve
as a ground for validity control, only if the Union was bound by that particular provision of
international law. But the EC was not a party to the GATT 1947 at that time. Nevertheless,
the ECJ considered there were enough elements present to conclude that it was bound by the
GATT 1947: the Union had already assumed the functions inherent in the tariff and trade
policy, the Union had conducted tariff negotiations and the Member States had formally
conferred those powers on the Union through the setting up of the common external tariff. By
doing so, the Member States had expressed their wish to bind the Union by the GATT
1947.119 The ECJ did not state that the GATT 1947 was “an integral part of Community
[Union] law”, as opposed to later developments in its case law with respect to international
agreements.120
58.
By stating that “before invalidity can be relied upon before a national court, that
provision of international law must also be capable of conferring rights on citizens of the
Community [Union] which they can invoke before the courts”, the ECJ then created a
preconditional link between the possibility of validity review in the light of international law
and the fact that the concerning provision of international law has direct effect.121 By doing so
the ECJ established a threshold, being direct effect, in order to protect the validity of Union
measures, as Bebr correctly indicates.122
117
International Fruit Company, cited supra note 101, §2, article XI GATT 1947, cited supra note 3.
Ibid. at §5.
119
Ibid. at §10-18.
120
Cf. supra, §49.
121
International Fruit Company, cited supra note 101, §8.
122
The other contracting parties were acting in practice as if the EC had formally succeeded its Member
State to the GATT, the EC was treated as a contracting party. G. BEBR, “Agreements concluded by the
Community and Their Possible Direct Effect: From International Fruit Company to Kupferberg”,
Common Market Law Review 1983, 46 cited in G. ZONNEKEYN, “The direct effect of GATT in
community law: from International Fruit Company to the Banana cases”, International Trade Law and
118
33 GATT/WTO law in the European Union’s legal order: a lack of direct effect
59.
The Court then continued by examining whether article XI GATT 1947 was capable of
conferring rights, invokable before national courts, upon Union citizens. In accordance with
its reasoning in Van Gend & Loos, the Court started by assessing the spirit, the general
scheme and the terms of the GATT 1947 in general. According to the Court, the agreement
was “based on the principle of negotiations undertaken on the basis of ‘reciprocal and
mutually advantageous arrangements”.123 Emphasis was put on the high degree of flexibility
provided in the agreement, more particularly with respect to dispute settlement, emergency
actions and possibility for derogation.124 The ECJ concluded that the GATT as such was not
capable of conferring rights on citizens which they can invoke before the Courts. The Court
exclusively relied on the general character of the GATT 1947 in its assessment and came to
this conclusion without even examining the specific article XI GATT 1947. However, one
should not ignore the fact that in this judgment the ECJ also established the GATT 1947 to be
legally binding upon the European Union.
60.
In a subsequent line of case law, the ECJ confirmed the International Fruit Company
judgment and persisted in denying the GATT 1947 direct effect.125 The reasoning of the Court
has been severely criticised both by advocate-generals as other observers as being incoherent
with its normal approach of international agreements in view of determining direct effect,
developed in Kupferberg and Demirel.126
Regulation 1996, 65. The other contracting parties were acting in practice as if the EC had formally
succeeded its Member State to the GATT, the EC was treated as a contracting party.
123
International Fruit Company, cited supra note 114, §§ 21 – 26.
124
See supra §§6-10, Article XIX, XXII and XXIII GATT 1947, cited supra note 3.
125
ECJ Case 9/73, Carl Schluter v. Hauptzollamt Lorrach, ECR 1973, 1135, ECJ Case 126/78,
Douaneagent der NV Nederlandse Spoorwegen v. Inspecteur der invoerrechten en accijnzen, ECR
1975, 1439, ECJ Case 266/81, Societa Italiana per l'Oleodotto Transalpino (SIOT) v. Ministero delle
Finanze and others, ECR 1983, 731, ECJ joined cases 267-269/81, Amministrazione delle Finanze
dello Stato v. Societa Petrolifera Italiane SpA (SPI) and SpA Michelin Italiana (SAMI) ECR 1983, 801.
126
See infra §§134 - 163; Opinion AG Tesauro in ECJ case C-53/96, Hermès International, ECR
1998, I-3603, Opinion AG Saggio in ECJ case C-149/96, Portugal v Council, ECR 1999, I-8395,
KUILWIJK, K., J., The European Court of Justice and the GATT dilemma: public interest versus
individual rights?, Ten Brink, Meppel, 1996, E.U. PETERSMANN, “Application of GATT by the Court
of Justice of the European Communities”, Common Market Law Review 1983, 397-437, G.
ZONNEKEYN, cited supra note 122; Contra: Kuijper argues that Kupferberg is outdated and therefore it
is not an appropriate point of reference anymore; see infra note 166.
34 GATT/WTO law in the European Union’s legal order: a lack of direct effect
iii.
iii.a.
61.
Fediol and Nakajima
Fediol
The criticism resulting from International Fruit Company and its successors called for
a revision of the strict approach by the Court of Justice. Indeed, the Fediol case offered an
opportunity to slightly nuance the International Fruit Company ruling as the case at hand
rather diverged from International Fruit Company.127 The Fédération de l'industrie de
l'huilerie de la CEE / EEC Seed Crushers' and Oil Processors' Federation (Fediol) brought a
direct action before the Court pursuant to article 263 TFEU (ex article 230 TEC). Fediol
challenged the validity of a Commission decision which rejected its complaint and request to
open an investigation for “illicit commercial practices”, in the light of the New Commercial
Policy Instrument Regulation.128 According to the latter, “illicit commercial practices” means
any international trade practice attributable to third countries which is incompatible with
international law or with the generally accepted rules.129 The references made to
“international law” and “generally accepted rules” undoubtedly alluded to the GATT 1947.130
62.
The Court’s judgment reads as follows:
“It should be recalled that the Court has certainly held, on several occasions, that various
GATT provisions were not capable of conferring on citizens of the Community [Union]
rights which they can invoke before the courts. Nevertheless, it cannot be inferred from
those judgments that citizens may not, in proceedings before the Court, rely on the
provisions of GATT in order to obtain a ruling on whether conduct criticized in a
complaint lodged under Article 3 of Regulation No 2641/84 constitutes an illicit
commercial practice within the meaning of that regulation. The GATT provisions form part
of the rules of international law to which Article 2(1 ) of that regulation refers, as is borne
out by the second and fourth recitals in its preamble, read together .
It is also appropriate to note that the Court did indeed hold in the abovementioned
judgments of 12 December 1972 International Fruit Company, 24 October 1973 Schlueter
127
ECJ case 70/87, Fediol v. Commissie, ECR 1989, 1781.
Council Regulation (EEC) 2641/84 of 17 September 1984 on the strengthening of the common
commercial policy with regard in particular to protection against illicit commercial practices, O.J.
1984, L 252; this is the predecessor of the current trade barriers regulation.
129
Ibid. article 2(1).
130
M. MARESCEAU, Bilateral agreements concluded by the European community, Leiden/Boston,
Martinus Nijhoff publishers, 2006, 251.
128
35 GATT/WTO law in the European Union’s legal order: a lack of direct effect
and 16 March 1983 SPI and SAMI, that a particular feature of GATT is the broad
flexibility of its provisions, especially those concerning deviations from general rules,
measures which may be taken in cases of exceptional difficulty, and the settling of
differences between the contracting parties . That view does not, however, prevent the
Court from interpreting and applying the rules of GATT with reference to a given case, in
order to establish whether certain specific commercial practices should be considered
incompatible with those rules . The GATT provisions have an independent meaning which,
for the purposes of their application in specific cases, is to be determined by way of
interpretation .
Lastly, the fact that Article XXIII of GATT provides a special procedure for the
settlement of disputes between contracting parties is not such as to preclude its
interpretation by the Court . As the Court held in the judgment of 26 October 1982 in Case
104/81 Kupferberg (( 1982 )) ECR 3641, in the context of the joint committees which are
set up by free-trade agreements and given responsibility for the administration and proper
implementation of those agreements, the mere fact that the contracting parties have
established a special institutional framework for consultations and negotiations inter se in
relation to the implementation of the agreement is not in itself sufficient to exclude all
judicial application of that agreement.” 131
63.
The Court thus accepts that reference to the GATT 1947 can be made in order to
challenge the legality of a Commission’s decision to the extent that a specific Union act refers
to international law, implicitly referring to the GATT 1947.
iii.b.
64.
Nakajima
The Fediol case is usually bracketed together with the Nakajima case.132 This is not
surprising as both cases show similar characteristics. Nakajima, a Japanese manufacturer of
typewriters and printers contested a Union act, more particularly the applicability of the
Union anti-dumping Regulation and requested that the specific regulation imposing a
definitive anti-dumping duty on imports of serial-impact dot-matrix printers originating in
131
132
Fediol, cited supra note 127, §§ 19 – 21.
ECJ case C-69/89, Nakajima v Council, ECR 1991, I-2069.
36 GATT/WTO law in the European Union’s legal order: a lack of direct effect
Japan would be declared void because of its alleged incompatibility with the GATT AntiDumping Code.133
65.
The Court smoothly avoided the controversial issue of direct effect by rephrasing
Nakajima’s claim. According to the Court, Nakajima was not relying on the direct effect of
the provisions of the GATT Anti Dumping Code.
“In making this plea in law, the applicant is in fact questioning, in an incidental manner
under Article 184 of the Treaty, the applicability of the new basic regulation by invoking
one of the grounds for review of legality referred to in Article 173 of the Treaty, namely
that of infringement of the Treaty or of any rule of law relating to its application.”134
“According to the second and third recitals in the preamble to the new basic regulation, it
was adopted in accordance with existing international obligations, in particular those
arising from Article VI of the General Agreement and from the Anti-Dumping Code. It
follows that the new basic regulation, which the applicant has called in question, was
adopted in order to comply with the international obligations of the Community [Union],
which, as the Court has consistently held, is therefore under an obligation to ensure
compliance with the General Agreement and its implementing measures (see the
judgments in Case 104/81 Hauptzollamt Mainz v Kupferberg [1982] ECR 3641, at
paragraph 11, and in Case 266/81 SIOT v Ministero delle Finanze and Others [1983] ECR
731, at paragraph 28). In those circumstances, it is necessary to examine whether the
Council went beyond the legal framework thus laid down, as Nakajima claims, and
whether, by adopting the disputed provision, it acted in breach of Article 2(4) and (6) of
the Anti-Dumping Code.135
The fact that the Union anti-dumping Regulation expressly referred to the GATT 1947 and
the Anti-Dumping Code allowed the Court to review the legality of this Union act to the
extent that this act referred to the GATT 1947. In this case the Union regulation was not in
breach of its international obligation under the GATT Anti-Dumping Code. The ECJ repeated
133
Council Regulation (EEC) 2423/88 of 11 July 1988 on protection against dumped or subsidized
imports from countries not members of the European Economic Community, O.J. 1988, L 209/1,
Council Regulation (EEC) 3651/88 of 23 November 1988 imposing a definitive anti-dumping duty on
imports of serial-impact dot-matrix printers originating in Japan, O.J. 1988, L 317/33,
134
Nakajima, cited supra note 132, § 28.
135
Ibid. at § 30 – 32.
37 GATT/WTO law in the European Union’s legal order: a lack of direct effect
this exercise in for instance the Matsushita case and the Goldstar case.136 Both these cases
concerned the same Union anti-dumping regulation.137 However, the Court did not make any
reference no more to the issue of direct effect.
iv.
66.
Germany v. Council
After Fediol and Nakajima, questions arose whether the Court had created an opening
in its otherwise very strict rulings concerning the GATT 1947, more particularly in case of a
direct action before the Court. Moreover, the ruling of the Court was awaited for by many,
because of the possible implications of a combination of the Fediol and Nakajima rulings on
the lack of direct effect of GATT law. However, it did not take long for the Court to give a
strong signal that it would not change its International Fruit Company approach. In Germany
v. Council the Court confirmed its strict position regarding the requirement of direct effect
even with respect to direct actions for annulment introduced by Member States.138
67.
In this particular episode in the Banana series of judgments, Germany, pursuant to
article 263 TFEU (ex article 230 TEC) directly challenged the validity of several provisions
of Council Regulation (EEC) No 404/93 of 13 February 1993 on the common organization of
the market in bananas in light of GATT 1947. Germany contended that Union acts should
comply with GATT rules in order to be valid, regardless of any question as to the direct effect
of GATT.139 The Court was not convinced and made no distinction as to whether a Member
State directly challenged the validity of a Union act or an individual challenged it before a
national court.140 In this respect a nuance must be made. In the case Netherlands v.
Parliament and Council , also known as the Biotechnology case, the Court partly renounced
its former case law regarding the requirement of direct effect for international agreements.141
With respect to the Rio de Janeiro Convention on Biological Diversity, the Court did not
require the Convention to have direct effect in order to allow a “review by the [European]
courts of compliance with the obligations incumbent on the Community [Union]as a party to
136
ECJ case C-105/90, Goldstar, ECR 1992, I-723, ECJ case C-175/87, Matsushita, ECR 1992, I-1478.
Cited supra note 133.
138
ECJ case C-280/93, Germany v Council, ECR. 1994, I-4973.
139
Ibid. at § 103.
140
Ibid. at § 109.
141
ECJ case C-373/98, Netherlands v Parliament en Council, ECR 2001, I – 7079
137
38 GATT/WTO law in the European Union’s legal order: a lack of direct effect
that agreement”.142 In that same judgment the Court declined to extend its reasoning to the
WTO agreement.143
68.
In Germany v. Council the Court then continued by reiterating its well established case
144
law.
And immediately clarified how the Fediol and Nakajima cases related to International
Fruit Company:
“The special features noted above show that the GATT rules are not unconditional and that
an obligation to recognize them as rules of international law which are directly applicable
in the domestic legal systems of the contracting parties cannot be based on the spirit,
general scheme or terms of GATT. In the absence of such an obligation following from
GATT itself, it is only if the Community [Union] intended to implement a particular
obligation entered into within the framework of GATT, or if the Community [Union] act
expressly refers to specific provisions of GATT, that the Court can review the lawfulness
of the Community [Union] act in question from the point of view of the GATT rules (see
Case 70/87 Fediol v Commission [1989] ECR 1781 and Case C-69/89 Nakajima v Council
[1991] ECR I-2069).”145
§2.
69.
The WTO Agreement in the EU’s legal order
A few months before the ruling of the Court in Germany v. Council, the EC and its
trade partners agreed on concluding the Uruguay Negotiation Round and signed the WTO
Agreement, which would come into effect
that same year. The WTO Agreement was
believed to alter several features of the former GATT 1947 which had led the ECJ to deny the
General Agreement direct effect. Through several measures, the system had become more
rule-oriented, more institutionalized and the dispute settlement had changed fundamentally,
this was definitely considered as a major step forwards.146 Certainly with respect to the
dispute settlement the changes were striking: the DSU clamped down on the high degree of
flexibility which in the past gave leeway to negotiations and diplomatic solutions. Naturally,
142
Ibid. at §§ 52 - 54.
Infra
144
Ibid. at §§ 106 - 110.
145
Ibid. at §§ 110 – 111.
146
See supra §§ 4 - 19.
143
39 GATT/WTO law in the European Union’s legal order: a lack of direct effect
the Court’s assessment of the new agreement was awaited with suspense, a new ruling of the
ECJ was long-anticipated by many. However, in December 1995, the Court delivered its
judgment in the Chiquita Italia case, in which it recalled both International Fruit Company as
Germany v Council.147 The Court did not in any way take notice of those recent developments
in its assessment of the direct effect of GATT 1947.
i.
70.
Hermès and T-Port
Both in the Hermès case as in T-Port the Court carefully by-passed the issue of direct
effect.148 The T-Port case concerned a preliminary ruling pursuant to article 267 TFEU (ex
article 234 TEC) on the validity of Commission Regulation (EC) No 478/95 of 1 March 1995
and on the direct effect of the provisions of the General Agreement on Tariffs and Trade.149
More particularly the case dealt with post-clearance recovery of customs duties payable on
bananas imported from Ecuador in 1995. However, Ecuador was not a contracting party to the
GATT 1947 and was not yet a Member of the WTO at that time. Therefore the Court
concluded:
“It follows that neither GATT 1947, concluded before the entry into force of the Treaty,
nor GATT 1994 can be effectively relied on, in circumstances such as those of the present
cases, to preclude the application, under the first paragraph of Article 234 of the Treaty, of
provisions of Regulations Nos 404/93 and 478/95. The answer to the first question and
the second part of the second question must therefore be that the first paragraph of Article
234 of the Treaty must be interpreted as not applying to cases involving imports of
bananas from a third country which is not a party to an international agreement concluded
by Member States before the entry into force of the Treaty.”150
71.
Likewise, in Hermès the Court circumvented the issue of direct effect. It was asked to
rule on a Dutch interim measure and more particularly whether that measure constituted a
147
ECJ case C-469/93, Chiquita Italia, ECR 1995, I-4533.
ECJ case C-53/96, Hermès International, ECR 1998, I-3603 and ECJ cases C-364/95 and C-365/95,
T-Port GmbH & Co. v Hauptzollamt Hamburg-Jonas, ECR. 1998, I - 1023.
149
Commission Regulation (EC) 478/95 of 1 March 1995 on additional rules for the application of
Council Regulation 404/93 as regards the tariff quota arrangement for imports of bananas into the
Community and amending Regulation 1442/93, O.J. 1993, L 49/13 and General Agreement on Tariffs
and Trade, annex 1A to the Agreement Establishing the World Trade Organization, Marrakesh, 15
April 1994 (www.wto.org). [GATT 1994]
150
T-Port, cited supra note, §§ 64 - 65.
148
40 GATT/WTO law in the European Union’s legal order: a lack of direct effect
provisional measure in the sense of article 50 TRIPS Agreement.151 The Court interpreted the
article in question without first assessing whether the TRIPS Agreement had direct effect, for
which it gave the following explanation152:
“It should be stressed at the outset that, although the issue of the direct effect of Article 50
of the TRIPs Agreement has been argued, the Court is not required to give a ruling on that
question, but only to answer the question of interpretation submitted to it by the national
court so as to enable that court to interpret Netherlands procedural rules in the light of that
article.”153
ii.
72.
Portugal v. Council
After T-Port and Hermès pressure was built on the Court to finally decide on this
matter and to reassess in the light of the new agreement the arguments it had put forward in
denying direct effect to the GATT 1947.
Eventually, on 23 November 1999, the ECJ
154
delivered its judgment in Portugal v. Council.
Portugal had filed an application pursuant to
article 263 TFEU (ex article 230 TEC) for annulment of Council Decision (EC) 96/386 of 26
February 1996 concerning the conclusion of Memoranda of Understanding between the
European Community and the Islamic Republic of Pakistan and between the European
Community and the Republic of India on arrangements in the area of market access for textile
products.155 The Council decision was challenged by Portugal on the basis of the Agreement
on Textiles and Clothing (`the ATC') and the Agreement on Import Licensing Procedures,
both agreements are part of Annex 1A to the Agreement establishing the WTO. Portugal
recalled the reasoning of the Court in Germany v Council, according to which the GATT
1947 rules can have direct effect when the adoption of the measures implementing obligations
assumed within the context of the GATT is in issue or where a Union measure refers
151
The Hermès case was also the first case where the ECJ interpreted a mixed agreement other than an
association agreement,which was slightly controversial seeing the shared nature of the competence
covering this area of law, Hermés, cited supra note 148, §§ 24 & 32. The Court confirmed its approach
in ECJ case C-300/98 and C-392/98, Dior et al, ECR 2000, I – 11307 and ECJ case C-89/99,
Schieving-Nijstad vof and Others v. Robert Groeneveld, ECR 2001, I-5851, For the interpretation of
WTO law by the ECJ see infra §104.
152
Agreement on Trade related aspects of intellectual property rights, annex 1 C to the Agreement
Establishing the World Trade Organization, Marrakesh, 15 April 1994 (www.wto.org).
153
Hermès, cited supra note 148, § 35.
154
ECJ case C-149/96, Portugal v Council, ECR 1999, I-8395.
155
Council Decision (EC) 96/386 of 26 February 1996 concerning the conclusion of
Memoranda of Understanding between the European Community and the Islamic Republic of
Pakistan and between the European Community and the Republic of India on arrangements in
the area of market access for textile products, O.J. 1996, L 153/47.
41 GATT/WTO law in the European Union’s legal order: a lack of direct effect
expressly to specific provisions of the general agreement. Which, Portugal argued, was the
case:
“that is precisely the position in this case, which concerns the adoption of a measure - the
contested decision - approving the Memoranda of Understanding negotiated with India
and Pakistan following the conclusion of the Uruguay Round for the specific purpose of
applying the rules in GATT 1994 and the ATC.”156
Portugal argued that the WTO Agreements were significantly different from the GATT 1947,
in particular with regards to the radical changes made to the dispute settlement procedure.
Portugal also contended that the case did not raise the problem of direct effect: it concerned
the circumstances in which a Member State may rely on the WTO agreements before the
Court for the purpose of reviewing the legality of a Council measure. 157 This left the Court
not much space to by-pass this pressing issue once again, it had become almost impossible to
avoid the question of the effect of the new WTO Agreements.
73.
The Court started by confirming its jurisdiction to rule on this matter, it reiterated its
previous Kupferberg reasoning: according to the Court it had jurisdiction to do so only if the
effect of the agreement in the internal legal order of the parties is not settled in the agreement
itself.158 Subsequently, the Court stated the following with respect to the WTO Agreements:
“While it is true that the WTO agreements, as the Portuguese Government observes, differ
significantly from the provisions of GATT 1947, in particular by reason of the
strengthening of the system of safeguards and the mechanism for resolving disputes, the
system resulting from those agreements nevertheless accords considerable importance to
negotiation between the parties.”159
For this purpose the Court referred to article 22.1 and 22.2 of the DSU. These articles allow
WTO Members in a dispute settlement procedure to start negotiations when the respondent
Member has failed to implement the recommendations within the reasonable period of
time.160 According to the Court the Member States’ executive and legislative organs would
have been deprived of their possibility to negotiate once a judicial organ would have refrained
156
Portugal v Council, cited supra note 154, § 28.
Ibid. at § 31 and § 32.
158
Ibid. at § 34, Kupferberg see supra §49.
159
Ibid. at § 36.
160
Ibid. at § 38 – 39.
157
42 GATT/WTO law in the European Union’s legal order: a lack of direct effect
from applying the rules of domestic law which are inconsistent with the WTO Agreements.161
The Court thereby concluded that
“the WTO agreements, interpreted in the light of their subject-matter and purpose, do not
determine the appropriate legal means of ensuring that they are applied in good faith in the
legal order of the contracting parties.”162
The Court continued by emphasising the specific nature of the WTO Agreements, namely the
fact that the agreements are based upon negotiations in order to enter into reciprocal and
mutually advantageous arrangements. According to the Court this characteristic distinguishes
the WTO from the agreements concluded between the – then still – Community and nonmember countries which introduce a certain asymmetry of obligations, or create special
relations of integration with the Union.163 In this respect the Court referred to other
Contracting Parties, which were and still are amongst the most important trade partners of the
Union. These Contracting Parties did not grant the WTO Agreements direct effect in their
internal legal order. However, according to the Court, the fact that the courts of one of the
parties consider that some of the provisions of the agreement concluded by the Union are of
direct application whereas the courts of the other party do not, is not in itself sufficient to
constitute a lack of reciprocity in the implementation of the agreement.
“However, the lack of reciprocity in that regard on the part of the Community's [Union]
trading partners, in relation to the WTO agreements which are based on `reciprocal and
mutually advantageous arrangements' and which must ipso facto be distinguished from
agreements concluded by the Community [Union], referred to in paragraph 42 of the
present judgment, may lead to disuniform application of the WTO rules.”164
74.
The Court once more stated that it would deprive the executive and legislative organs
of the Union of their scope for manoeuvre in trade negotiations if it would decide that the
Union judicature needs to ensure that Union law complies with those WTO rules.165 Here, the
161
Ibid. at § 40.
Ibid. at § 41.
163
Ibid. at § 42.
164
Ibid. at § 44 – 45. This mentioning of the risk of ‘disuniform application of the WTO rules’ is in
Von Bogdandy’s opinion the ECJ’s main concern. In his view the reciprocity argument is to be
interconnected with the “principle of legal equality” and not with trade policy, see infra § 184; in detail
see A VON BOGDANDY, “Legal equality, Legal Certainty, and Subsidiarity in Transnational Economic
Law” in A. VON BOGDANDY, P. MAVROIDIS, Y. MÉNY (eds.), European Integration and International
Co-ordination – Studies in Transnational Economic Law in Honour of Claus-Dieter Ehlermann,
Nederland, Kluwer Law International, 2002, 30 et seq.
165
Ibid. at § 46.
162
43 GATT/WTO law in the European Union’s legal order: a lack of direct effect
Court puts a somewhat neutral gloss on this politically loaded argument: especially powerful
WTO members (such as the EU and the US) can disregard a DSB decision or force a political
solution that is not in conformity with the WTO rules either, in granting direct effect, the
Court would seriously restrict the EU’s scope for manoeuvre.166
75.
And so the Court concluded that, having regard to their nature and structure, the WTO
Agreements were not in principle among the rules in the light of which the Court is to review
the legality of Community/Union measures.167 To that end the Court also referred to Decision
94/800 according to which `by its nature, the Agreement establishing the World Trade
Organisation, including the Annexes thereto, is not susceptible to being directly invoked in
Community or Member State courts'.168
76.
The Court then examined whether this case could be dealt with under the
Fediol/Nakajima case law. According to the Court, the contested decision was not designed
to ensure the implementation in the Union legal order of a particular obligation assumed in
the context of the WTO, nor did it make express reference to any specific provisions of the
WTO agreements.
77.
In Portugal v Council the ECJ confirmed its former case law denying direct effect of
WTO law, despite the opinion of AG Saggio which had strongly argued the opposite.169 In
doing so the Court repeatedly pointed at the room for negotiation in dispute settlement. Also
the argument of reciprocity was confirmed.
iii.
78.
Biret
After Portugal v Council the ECJ stood by its ruling in many other cases that were
brought before the Court.170 Although in some of those cases a new opportunity lent itself to
make a distinction and leave the door open for a new approach. In this context one cannot
166
See supra § 32 and P-J KUIJPER and M. BRONCKERS, “WTO law in the European Court of Justice”,
Common Market Law Review 2005, 1351.
167
Ibid. at § 46 – 47.
168
Ibid. at § 48, Council Decision (EC) 94/800 of 22 December 1994 concerning the conclusion on
behalf of the European Community, as regards matters within its competence, of the agreements
reached in the Uruguay Round multilateral negotiations (1986-1994), O.J. 1994, L 336/1.
169
ECJ case C-149/96, Portugal v Council, Opinion Advocate General Saggio of 25 February 1999.
For a commentary on the stance of the advocates general in this issue, see infra §§ 144 - 149.
170
See for example ECJ case C-307/99, OCT Fruchthandelsgesellschaft, ECR 2001, I – 3159.
44 GATT/WTO law in the European Union’s legal order: a lack of direct effect
ignore the Biret case.171 This case concerned an action for damages under article 268 TFEU
(ex article 235 TEC) and article 340 TFEU (ex article 288 of the EC) for compensation for
damage which Biret had allegedly suffered as a result of the prohibition on the importation
into the Union of beef and veal from farm animals to which certain substances with hormonal
action had been administered. Biret submitted that the retaining of Directives 81/602, 88/146
and 96/22 relating to the prohibition of the use of hormones in stockfarming were in breach
of the SPS Agreement, especially given the existence of a DSB decision recommending a
change in the EU’s hormones approach.172
79.
In Biret the ECJ recognised that the argument pertaining to the effect of DSB decisions
is autonomous from that relating to the effect of WTO law.173 The ECJ left the door open in
respect of non contractual liability of the Union and the Courts’ legality review when the
DSB had already identified a breach of WTO law and the implementation period had
passed.174 The Court recalled the conditions for the Union to incur non-contractual liability
pursuant to article 340, §2 TFEU (ex article 288) namely the illegality of the Union
institutions’ conduct, actual damage and the existence of a causal link. 175
80.
In order to assess whether these conditions were fulfilled, the ECJ had to establish the
possible impact of the application of WTO Dispute Settlement rulings adopted by the DSB.
More particularly whether a DSB ruling could be relied upon to determine the illegal
character of the Union institutions. This question was brought forward by Biret, but the Court
171
ECJ cases C-93/02 and C-94/02 P, Biret Internationa/Établissements Biret v Council, ECR 2003, I 10497.
172
EC Council Directive 96/22 of 29 April 1996 concerning the prohibition on the use in stockfarming
of certain substances having a hormonal or thyrostatic action and of ß-agonists, and repealing
Directives 81/602/EEC, 88/146/EEC and 88/299/EEC, Agreement on the Application of Sanitary and
Phytosanitary Measures, annex 1 A to the Agreement Establishing the World Trade Organization,
Marrakesh, 15 April 1994 (www.wto.org). [SPS]
173
Biret, cited supra note 171 at §§ 55 – 58.
174
The judgment of the ECJ was also in legal doctrine perceived as having left the door “half open”,
see A. VON BOGDANDY, “Legal Effects of World Trade Organization Decisions within European
Union Law; A Contribution to the Theory of the Legal Acts of International Organizations and the
Action for Damages Under Art. 288 (2) EC”, Journal of World Trade 2005, 45-66, G. ZONNEKEYN,
“EC liability for the Non-Implementation of WTO Dispute Settlement Decisions – Advocate General
Albers proposes a Copernican Revolution in the Case Law of the ECJ”, Journal of International
Economic Law 2003, 761-769, EC liability for non-implementation of WTO dispute settlement
decisions – are the dice cast?”, Journal of International Economic Law 2004, 483-490.
175
Biret, cited supra note 171 at §§ 51 – 53 and §§ 54 – 55 resp.
45 GATT/WTO law in the European Union’s legal order: a lack of direct effect
smoothly circumvented the issue stating that it could not rule on alleged damages suffered
before the expiry of the implementation period176:
“In that regard, the dispute settlement procedure which culminated in the DSB decision of
13 February 1998 was instigated in 1996. Since the Community [Union] had stated that it
intended to comply with its WTO obligations but that it needed a reasonable time to do so,
under Article 21(3) of the Understanding it was granted a period of 15 months for that
purpose, which expired on 13 May 1999.
Accordingly, for the period prior to 13 May 1999, the Community [Union] Courts cannot,
in any event, carry out a review of the legality of the Community [Union] measures in
question, particularly not in the context of an action for damages under Article 178 of the
Treaty, without rendering ineffective the grant of a reasonable period for compliance with
the DSB recommendations or rulings, as provided for in the dispute settlement system put
in place by the WTO agreements.”177
iv.
81.
Van Parys
Although the Court had skilfully avoided the question of DSB decisions in Biret, it
could no longer do so in the Van Parys case.178 The case concerned a preliminary ruling
referred by the Belgian “Raad van State” on the interpretation of Council Regulation (EEC)
No 404/93 of 13 February 1993 on the common organization of the market in bananas as
amended by Council Regulation (EC) 1637/98 of 20 July 1998 in the light of article I and
XIII of the GATT 1994.179 The main proceedings concerned the refusal by the BIRB to issue
Van Parys import licenses for the quantities of bananas originating in Ecuador and Panama it
had applied for.180 Van Parys contended that the regulations, on the basis of which the BIRB
had taken its decision, were unlawful in the light of the WTO rules.181
82.
This case is thus situated in the heart of the Banana dispute. The European Union’s
revised banana regime had only just been found in breach of several WTO provisions by the
176
Biret was put into liquidation in 1995, which made it impossible for the company to have suffered
any damage after 1May 1999.
177
Ibid. at § 64 – 65.
178
ECJ case C-377/02, Van Parys, ECR 2005, I – 1465.
179
Cited supra note 38 and 41, the preliminary referral concerned the validity of other regulations as
well, see Van Parys, cited supra note 178 at § 1.
180
Belgisch Interventie- en Restitutiebureau / Belgian Intervention and Refund Board.
181
Van Parys, cited supra note 178 at § 35.
46 GATT/WTO law in the European Union’s legal order: a lack of direct effect
WTO Appellate Body, the US had been granted authorisation to suspend concessions and also
in the proceedings with Ecuador a similar outcome was to be expected.182
83.
In its assessment, the Court started by extensively quoting provisions from the WTO
Agreement, the GATT 1994 and the DSU.183 The Court then recalled its previous case law
relating to the WTO.184 Consequently, the Court established that the undertaking to comply
with the WTO rules, as a consequence of the DSB decision, did not constitute an exception
falling under the Fediol / Nakajima case law:
“ the Community [Union] did not intend to assume a particular obligation in the context of
the WTO, capable of justifying an exception to the impossibility of relying on the WTO
rules before the Community [Union] Courts and enabling the Community [Union] Courts
to exercise judicial review of the relevant Community [Union] provisions in the light of
those rules.”185
For this purpose the Court extensively referred to the fact that
“ the WTO dispute settlement system nevertheless accords considerable importance to
negotiation between the parties, even where there is a decision of the DSB holding that the
measures adopted by a member are incompatible with the WTO rules.”186
84.
Among other reasons, the Court again referred to article 22.2 DSU, which allows WTO
Members in a dispute settlement procedure to start negotiations when the respondent Member
has failed to implement the recommendations within the reasonable period of time with a
view to agreeing compensation.187 For these reasons, according to the Court, it was clear that
it would deprive the executive and legislative organs of the Union of their scope for
manoeuvre if it would decide that the Union judicature needed to ensure that Union law
complies with those WTO rules.188 Even after the expiry of the implementation period, such a
review in the light of the WTO rules would have an ‘undermining’ effect on the Union’s
attempt to reach a mutually acceptable solution.189
182
For a more elaborate review of the Banana dispute, see supra §§ 20 - 27.
Van Parys, cited supra note 178 at §§ 3 – 9.
184
Ibid. at §§ 39 – 40.
185
Ibid. at § 41.
186
Ibid. at § 42.
187
Ibid. at § 45, see also Portugal v Council, cited supra note 154 at §§ 38 – 39.
188
Ibid. at § 48.
189
Ibid. at § 51.
183
47 GATT/WTO law in the European Union’s legal order: a lack of direct effect
85.
Although the Court had left the door open in the Biret judgment with respect to the
expiry of the implementation period, in the Van Parys judgment the ECJ seemed to have
closed that door once again. In the Court’s opinion, the expiry of the time-limit does not
imply that the Union had exhausted the possibilities under the DSU of finding a solution to
the dispute.190
86.
Furthermore, the Court reiterated its reciprocity argument, stressing the fact that the
most important commercial partners of the Union had concluded that the WTO Agreements
were not among the rules that have been granted direct effect.191 The Court thus declined to
adopt the claim of the applicant in stating that the existence of DSB reports does not change
the rule as it stands even until today.
v.
87.
FIAMM and Fedon
Recently, in FIAMM the ECJ has locked the door it had previously closed in Van
Parys.192 More particularly, the case concerned a claim for compensation pursuant to article
268 TFEU and the second paragraph of article 340 TFEU (ex article 288 TEC). The
complainants, exporters of industrial batteries (FIAMM) and spectacle cases and associated
accessories (Fedon) claimed to have suffered of the increased customs duty levied by the US
on imports of their products.193 FIAMM claimed to have suffered EUR 10.8 million and
Fedon EUR 2.3 million. The suspension of these tariff concessions was authorised by the
DSB, which had previously found the Union regime governing the import of bananas
incompatible with WTO law.
190
Ibid.
Ibid. at § 53.
192
ECJ joined cases C-120/06 and 121/06, Fabbrica italiana accumulatori motocarri Montecchio SpA
(FIAMM), Fedon & Figli and others v Council and Commission, ECR 2008, I -0000. In fact, six
different cases were brought before the General Court, which delivered six judgments on 14 December
2005. The FIAMM and Fedon judgments lend themselves best to use as reference in this examination:
all six judgments are worded in a similar way, except for the alleged damage which was the highest for
FIAMM and the fact that the ECJ has judged in FIAMM and Fedon on appeal. For the other judgments
see CFI cases T-151/00, Le Laboratoire du Bain v Council and Commission, ECR 2005, II-00023,T301/00, Groupe Fremaux SA and Palais Royal Inc. v Council and Commission, ECR 2005, II-00025,
T-320/00, CD Cartondruck AD v Council and Commission, ECR 2005, II-00027.
193
By decision of 19 April 1999, the DSB authorised the US to levy customs duty amounting up to
USD 191.4 million per year, cited supra note 42. Consequently, the US imposed ad valorem import
duty at a rate 100 per cent on various products (for instance bath preparations, handbags, wallets,
paperboard boxes, bed linen, batteries, coffee makers), see Notice of the USTR of April 19, 1999, 64
Fed. Reg. 19, 209 (1999).
191
48 GATT/WTO law in the European Union’s legal order: a lack of direct effect
v.a.
88.
Judgments of the General Court
Before the General Court, both FIAMM and Fedon argued that the failure of the
Council and the Commission to adopt amendments to the Union banana regime in order to
bring it into conformity with the WTO Agreements within the time-limit fixed by the DSB
constituted a breach of the principle of pacta sunt servanda, of the principles of the protection
of legitimate expectations and of legal certainty, of their rights to property and pursuit of an
economic activity and of the principle of proper administration and therefore the Union had
incurred non-contractual liability by reason of the unlawful conduct of its institutions. In the
alternative, FIAMM and Fedon claimed, that the Union had incurred non-contractual liability
even in the absence of unlawful conduct of its institutions.194 The complainants had thus
supported their claims by various legal arguments, not exclusively on the infringement of
WTO law.
89.
The General Court (GC) dismissed their claims in so far as they were founded on the
regime governing non-contractual liability for unlawful conduct.195 Such liability can only be
established when the following conditions are satisfied: the institutions’ conduct must be
unlawful, actual damage must have been suffered and there must have been a causal link
between the conduct and the damage.196 To this end the Court first examined to what extent it
could rely on WTO rules in assessing the legality of the Union’s conduct. Firstly, the Court
rejected the applicants’ reasoning that the principle pacta sunt servanda would compel the
Court to find the Union’s conduct illegal in view of its WTO obligations, since the WTO
Agreements are not in principle, given their nature and structure, among the rules in the light
of which the Union Courts review the legality of action by Union institutions.197 The General
Court then continued by reiterating the classic arguments developed by the ECJ in denying
WTO law direct effect: reciprocity, the importance of negotiations and the possibility of
deprival of the legislative and executive organs of their scope of manoeuvre in negotiations.198
194
GC case T-69/00, FIAMM and FIAMM Technologies v Council and Commission , ECR 2005, II05393, §§ 69, 92 – 95 and CFI case T-135/01, Giorgio Fedon & Figli S.p.A., Fedon S.r.l. and Fedon
America USA Inc. V Council and Commission, ECR 2005, II-00029, §§ 63, 85 – 88.
195
Ibid. at §§ 84 – 150 (FIAMM) and §§ 77 – 143 (Fedon).
196
ECJ Case 26/81 Oleifici Mediterranei v EEC, ECR 1982, I-3057, §16, GC Case T-175/94
International Procurement Services v Commission, ECR 1996, II-729, § 44, CFI Case T-336/94 Efisol
v Commission, ECR 1996, II-1343, § 30.
197
Ibid. at §§ 109 – 110 and §§ 102 – 103 resp.
198
Ibid. at §§ 111 – 113 and §§ 104 – 106 resp.
49 GATT/WTO law in the European Union’s legal order: a lack of direct effect
Therefore, the GC concluded that the Union could not incur non-contractual liability by
reason of any infringement of the WTO rules.
90.
Secondly, the GC examined whether the Fediol or Nakajima exceptions were
applicable in this case. The GC found that there was no intention to implement a specific
obligation assumed within the WTO. For this purpose the GC, clearly inspired by the Van
Parys judgment, extensively referred to the variety of implementation methods, and
particularly to the considerable importance that is still accorded to negotiation, even after the
expiry of the implementation period.199
91.
Subsequently the GC addressed the other arguments put forward by the complainants
based on the principles of the protection of legitimate expectations and of legal certainty, on
infringement of the right to property and to pursuit of an economic activity and, finally, on
failure to observe the principle of proper administration. The GC concluded that all of these
arguments rested on the premise that the conduct of which the Council and Commission were
accused was contrary to WTO law.200
92.
So, after having ruled out the possibility of unlawful conduct and by that also the
Union’s liability for such conduct, the GC was willing to look into the option of noncontractual liability even in the absence of unlawful conduct. The GC briefly recalled case
law relating to such liability:
“Where as in the present case, it has not been established that conduct attributed to the
Community [Union] institutions is unlawful, that does not mean that undertakings which,
as a category of economic operators, are required to bear a disproportionate part of the
burden resulting from a restriction of access to export markets can in no circumstances
obtain compensation by virtue of the Community’s non-contractual liability.”201
“When damage is caused by conduct of the Community [Union] institution not shown to
be unlawful, the Community [Union] can incur non-contractual liability if the conditions
as to sustaining actual damage, to the causal link between that damage and the conduct of
199
Ibid. at §§ 121 – 132 and §§ 114 – 125 resp.
Ibid. at §146 and § 139 resp.
201
Ibid. at §157 and § 150 resp. To this effect the GC referred to the De Boer Buizen judgment, ECJ
Case 81/86, De Boer Buizen v Council and Commission, ECR 1987, I-3677, §17.
200
50 GATT/WTO law in the European Union’s legal order: a lack of direct effect
the Community [Union] institution and to the unusual and special nature of the damage in
question are all met.”202
To support its reasoning, the GC also referred to the existence of non-contractual liability in
the absence of unlawful action in national laws.203
93.
Clearly inspired by the Dorsch case, the GC set out to examine whether FIAMM had
suffered actual damage, whether there was a causal link between damage and the conduct of
the Union institutions and whether the damage was of a unusual and special nature. Due to
the trade retaliation measures, FIAMM had been forced to relocate production units. By doing
so, the company had been able to reduce to a minimum the damage caused by the increased
import duty. FIAMM had only suffered monetary losses, given the relocation. However it had
not suffered loss of US market share: no sales volumes were lost.204 The GC concluded that
FIAMM had indeed suffered actual damage.
94.
With respect to the causal link, the GC’s judgment was equally positive. According to
established case law this requires ‘a sufficiently direct causal nexus’ , which in the Court’s
view, was present between the damage and the conduct of the Union institutions. Even taken
into account the unilateral decision of the US to increase customs duty on the import of those
specific products and not to re-enter into negotiations.205
95.
The GC, however, did not recognise the damage as being unusual of nature. In order to
meet this requirement, the damage would have had to exceed the limits of the economic risks
inherent to operating in the sector concerned.206 In this view, the GC did not consider the
damage to exceed the economic risks:
“Nevertheless, the possibility, which has come about in the present case, of tariff
concessions being suspended as provided for by the WTO agreements is among the
vicissitudes inherent in the current system of international trade. Accordingly, the risk of
202
Ibid. at § 160 and § 153 resp., to this effect the GC referred to ECJ Case C-237/89 P, Dorsch
Consult v Council, ECR 2000, I-4549, §19.
203
Ibid. at § 159 and § 152 resp.
204
THIES, A., “ Cases T-69/00, FIAMM and FIAMM Technologies, T-151/00, Le Laboratoire du Bain,
T-301/00, Remaux, T-320/00, CD Cartondruck AG, T-383/00, Beamblow Ltd and T-135/01, Giorgio
Fedon & Figli S.p.A., Fedon S.r.l. and Fedon America USA Inc., Judgments of 14 December 2005,
Grand Chamber of the Court of First Instance, nyr.”, Common Market Law Review 2006, 1153.
205
FIAMM, cited supra note 194, §177 – 191. The GC referred to ECJ Joined Cases 64/76, 113/76,
167/78, 239/78, 27/79, 28/79 and 45/79 Dumortier and Others v Council, ECR 1979, I-3091.
206
Ibid. at § 202, Dorsch cited supra note 202.
51 GATT/WTO law in the European Union’s legal order: a lack of direct effect
this vicissitude has to be borne by every operator who decides to sell his products on the
market of one of the WTO members.”207
“In addition, it is clear from Article 22(3)(b) and (c) of the DSU, an international
instrument which was publicised appropriately so as to ensure that Community [Union]
operators were aware of it, that the complaining member of the WTO may seek to suspend
concessions or other obligations in sectors other than that in which the panel or Appellate
Body has found a violation by the member concerned, whether under the same agreement
or another WTO agreement.”208
96.
The Court did not examine whether the damage was of a special nature, as such an
examination had become unnecessary considering it had already established that the damage
was not unusual. Subsequently the GC concluded that there was no non-contractual liability
even in the absence of unlawful conduct of the Union’s institutions.
v.b.
97.
Judgment of the ECJ
The ECJ confirmed the judgment of the CFI, in so far as it denied FIAMM and Fedon
the right to compensation. The ECJ dismissed the claims that the judgment under appeal
would have lacked reasoning, would have been unfounded and would have been
insufficiently explained.209 The ECJ also confirmed that with respect to non-contractual
liability for unlawful conduct of Union institutions the GC had not erred in law. It reiterated
its reciprocity and flexibility arguments. Moreover, the Court did not agree with FIAMM and
Fedon that a distinction should be made between the direct effect of the WTO rules and the
direct effect of a decision of the DSB.
“A DSB decision (...) cannot in principle be fundamentally distinguished from the
substantive rules which convey such obligations an by reference to which such a review is
carried out, at least when it is a question of determining whether or not an infringement of
those rules or that decision can be relied upon before the Community [Union] courts for
the purpose of reviewing the legality of the conduct of the Community [Union]
institutions. A recommendation or ruling of the DSB (...) is no more capable than the
substantive rules contained in the WTO Agreements of conferring upon individuals a right
207
Ibid. at § 205.
Ibid. at § 207.
209
FIAMM, cited supra note 192, § 104.
208
52 GATT/WTO law in the European Union’s legal order: a lack of direct effect
to rely thereon before the Community [Union] courts for the purpose of having the
legality of the conduct of the Community [Union] institutions reviewed.”210
98.
More importantly, the ECJ judged that the GC did err in law with respect to the
question of non-contractual liability in the absence of unlawful conduct. According to the ECJ
the GC could not deduce from prior case law relating to non-contractual liability that the ECJ
had established a regime of non-contractual liability in the absence of unlawful conduct.
Indeed, the ECJ had established the conditions for such a no-fault liability. However, the
Court emphasised that it had done so only in a hypothetical way. 211 The Court then examined
whether such a liability could be derived from the second paragraph of article 340 TFEU (ex
article 288 TEC). Accordingly, the latter is only an expression of the general principle
familiar to the legal systems of the Member States that an unlawful act or omission gives rise
to an obligation to make good the damage that was caused.212 With respect to liability for
legislative activity, the Court ruled, principles differ from one Member State to another.
However, legislative activity in the field of economic policy usually has a special status
requiring
exceptional circumstances in order for that Member State to incur liability.
Therefore, the Court concluded that the Union
“cannot incur liability on account of a legislative measure which involves choices of
economic policy unless a sufficiently serious breach of a superior rule of law for the
protection of the individual has occurred.”213
The idea behind this reasoning is not to hinder the legislative function by the prospect of
actions for damages and the fact that this function enjoys a wide discretion, which creates a
very high, if not impossible, threshold for liability: the Union can incur liability only when
the institutions concerned have manifestly and gravely disregarded the limits on the exercise
of their powers.214 The Court concluded that
“as Community [Union] law currently stands, no liability regime exists under which the
Community [Union] can incur liability for conduct falling within the sphere of its
legislative competence in a situation where any failure of such conduct to comply with the
WTO agreements cannot be relied upon before the Community [Union] courts. In the case
210
Ibid. at § 128 – 129.
Ibid. at § 168 – 169.
212
Ibid. at § 170, to this end the ECJ referred to ECJ Joined cases C-46/93 and C-48/93, Brasserie du
Pêcheur, ECR 1996, I-1029, § 28 – 29.
213
Ibid. at § 172.
214
Ibid. at § 174.
211
53 GATT/WTO law in the European Union’s legal order: a lack of direct effect
in point, the conduct which the appellants allege to have caused them damage comes
within the context of establishment of a common organisation of the market and clearly
falls within the sphere of legislative activity of the Community [Union] legislature.”215
99.
The ECJ was not requested to assess the question of a right to compensation due to
breach of individual general principles of EU law, since that issue did not make part of the
appellants’ submissions. However, the ECJ briefly clarified its position on the right to
property and the freedom to pursue a trade or profession, being fundamental rights that form
an integral part of the general principles of law in what is called an obiter dictum.216
According to the Court these rights do not constitute absolute prerogatives and may be
restricted, particularly in the context of the common market on the condition that those
restrictions in fact correspond to objectives of a general interest pursued by the Union and
that they do not amount to a disproportionate and intolerable interference which would
infringe upon the very substance of the rights guaranteed.217 The Court found that such an
interference could give rise to non-contractual Union liability.218 However, with respect to
this case, the Court emphasised that an economic operator, such as FIAMM, cannot claim a
right to property in a market share which he held at a given time. A market share is a
momentary economic position in the Court’s view, therefore it is constantly exposed to
changing circumstances and the risks that come with those changes. One of these risks is that
a certain State can suspend concessions in the framework of the settling of a trade dispute
within the WTO.219
100. Where the GC had still recognised the existence of a general non – contractual liability
regime in the absence of unlawful conduct, establishing FIAMM’s actual damage and a causal
link with the European Union’s banana regime, the ECJ once more made clear it had no
intention in giving WTO law any effect within the Union. However, one should not look at
this judgment from that single point of view. The findings of the ECJ in its obiter dictum with
respect to general principles imply a potential right to compensation where no provision has
been made for compensation of disproportionate and intolerable infringements of such
215
Ibid. at § 176 – 177.
As put forward by the complainants in the proceedings at first instance, see supra § 91.
217
FIAMM, cited supra note 192, § 183.
218
Ibid. at § 184.
219
Ibid. at § 185 – 186.
216
54 GATT/WTO law in the European Union’s legal order: a lack of direct effect
fundamental rights.220 Still, the question arises whether the FIAMM judgment is a missed
opportunity or rather a tricky situation the ECJ managed well.221
§3. Conclusion
101. The ECJ has set out the limits to WTO law from the very beginning. In International
Fruit Company, the Court laid the foundations for decades of highly restrictive case law,
reciprocity and flexibility being the keywords in denying direct effect to both the GATT 1947
and the WTO. The Court has developed its stance towards GATT/WTO law in three distinct
but overlapping phases222: first, with respect to the effect of GATT/WTO on the EU legal
order, second, the relationship between WTO law and the individual and third, the role of
WTO law in the relationship between the EU and its Member States.
102. In good tradition, the ECJ also developed exceptions to its principle. In that same
tradition, the ECJ gave a very restrictive interpretation to both Fediol and Nakajima, as
opposed to its interpretation of the principle which reaches very far. In its latest ruling on
WTO law, FIAMM, the ECJ decided that no liability could be incurred due to nonimplementation of a DSB decision, not even liability in the absence of unlawful conduct. The
future will tell whether FIAMM is only a provisional finishing point.
103. It can be concluded that, even though the questions relating to direct effect of
GATT/WTO law have gradually shifted in substance, the Court has not adapted to that
shift.223 On the contrary, it has continuously fallen back on the arguments developed in its
early GATT cases. Clearly, there are other interests, political and economic, that the Court
has taken into account. It has been confronted with the reality of the global market, which
unfortunately is not a legal reality. This discrepancy is very well reflected in the case law, the
Court has found a way of coping with the political implications of its legal rulings: it has
demonstrated a great sense of judicial deference to both Council and Commission. Unlike the
legal context, these political and economic considerations might not have changed that much
in the past decades, which explains the conservative tone of the Court.
220
A. THIES, “The impact of general principles of EC law on its liability regime towards retaliation
victims after FIAMM”, European Law Review 2009, 900.
221
See infra §§ 205 - 217.
222
SNYDER, cited supra note 93, 362.
223
By shifts one should understand the changes from GATT 1947 to WTO 1994, from direct effect of a
GATT provision to direct effect of a DSB ruling, from a validity issue to a liability issue.
55 GATT/WTO law in the European Union’s legal order: a lack of direct effect
III.
The interpretation of WTO law despite lack of direct effect
104. Although the ECJ has consistently refused to grant the GATT 1947 and the WTO
Agreement direct effect, it has from time to time given a substantive interpretation on certain
provisions. Given the fact that such interpretation often takes place in a grey zone between
direct effect and non-invocability and that such an interpretation can result in de facto direct
effect of the GATT 1947 or WTO Agreement, this chapter aims at addressing the Court’s
interpretation practice. But since this paper deals with the issue of direct effect, it will do so
only briefly.224
105. In International Fruit Company the ECJ had already confirmed its jurisdiction with
respect to interpreting the GATT 1947 and later also with respect to the WTO Agreement.225
Both the ECJ and the GC have interpreted provisions of the WTO Agreement.226 In Italy v
Council the ECJ interpreted article XXIV(6) GATT 1994. 227 But it should be stressed that the
Court did so in order to decline an Italian claim to annul a Council Regulation, in other words
the Court did so in favour of Union law.
106. Also in the Hermès case, the ECJ interpreted substantive WTO law, more particularly
article 50 of the TRIPS Agreement. Since intellectual property is a shared competence, the
Court first established its jurisdiction to interpret that specific provision based on the
observation that the WTO Agreement was concluded by the Union and ratified by the
Member States without any allocation between them of their respective obligations towards
the other contracting parties.228 The Court continued by stating
224
On this issue, see the Opinion of Advocate General Van Gerven in Fediol: “since provisions of
foreign law - which are introduced in a limited way into a particular legal order by a rule of private
international law and are declared to be applicable - are amenable to interpretation by the courts of that
legal order, how much more must this apply to international provisions, such as the GATT provisions,
which are binding on the Community and hence directly form part of and are applied within one' s own
legal order?”; see infra §§ 117 - 121.
225
See infra § 57.
226
Cases in which the GC has interpreted WTO law, more particularly the Anti-Dumping Agreement:
Case T-213/97, Eurocoton and others v Council, ECR 1997, II-1609 and Case T-48/96, Acme Industry
Co. Ltd. v Council, ECR 1999, II-3089.
227
ECJ case C-352/96, Italy v Council, ECR 1998, I-6937.
228
In Opinion 1/94 the ECJ held that the Union and its Member States are jointly competent to
conclude TRIPS, ECJ Opinion 1/94 on the Competence of the Community to conclude international
agreements concerning services and the protection of intellectual property, ECR 1994, I – 5276.
56 GATT/WTO law in the European Union’s legal order: a lack of direct effect
“in order to forestall future differences of interpretation, the provision should be
interpreted uniformly, whatever the circumstances in which it is to apply”.229
107. The Court concluded in that case that a measure whose purpose is to put an end to
alleged infringements of a trade-mark right and which is adopted in the course of a procedure
distinguished by certain features should be considered as a ‘provisional measure’ within the
meaning of Article 50 of the TRIPS Agreement. The Court came to this conclusion after
extensively examining article 50 of the TRIPS Agreement.230 Although this case had little to
none direct impact on the validity of Union law, the Court interpreted that particular provision
in such a way that an obligation was created for Hermès on the basis of the TRIPS
Agreement.231
108. The Court repeated its approach in Dior and Groeneveld.232 Unlike the Hermès case,
Dior concerned a matter in which the Union had not legislated yet. The Court interpreted the
concept of “intellectual property right” as put forward in the TRIPS Agreement. However, the
Court first explicitly denied the TRIPS Agreement direct effect in the EU’s legal order.
Except for matters that fall within the competence of the Member States, who are free to
make their own choice on granting direct effect. In Groeneveld, the Court applied its Hermès
ruling with respect to the same issue relating to trademarks and article 50 (6) of the TRIPS
Agreement.
109. In several other cases the ECJ and the GC have used WTO law as aid in interpreting
Union law. Especially in cases that concern antidumping.233 By some, this particular line of
case law is used as an argument to support legality control of Union law in the light of WTO
law. However, an analysis of these cases would exceed the subject of this paper.
229
Hermès, cited supra note 148 at § 32.
Ibid. at §§ 34 – 43.
231
Ibid. at § 19 in conjunction with § 45.
232
Cited supra note 151.
233
See ECJ case C-150/95 Portugal v Commission, ECR 1997, I-5863; ECJ case C-296/00, Prefetto
Provincia die Cuneo v Silvano Carbone, ECR 2002, I – 4657;CFI joined cases T-33 and 34/98,
Petrotub SA and Republica SA v Council, ECR 1999, II-3837; ECJ case C-76/00, Petrotub SA and
Republica SA v Council, ECR 2003, I-79; ECJ case C-245/02, Anheuser-Busch v Budvar, ECR 2004,
I-1089; for a clarifying overview see F. SNYDER, cited supra note 93, 320 – 325 and A. ROSAS, “The
European Court of Justice in Context: Forms and Patterns of Judicial Dialogue”, European Journal of
Legal Studies 2007, www.ejls.eu.
230
57 The ECJ and its GATT/WTO rulings: subject of towering discussions
C. The ECJ and its GATT/WTO rulings: subject of towering discussions
110.
The above mentioned case law has been widely discussed in legal doctrine. This
chapter will aim at creating structure and a clear overview of how this case law is perceived,
in order to fully understand it. When assessing the ECJ’s approach in this issue, one should
first define the questions in view of which one is to assess. Is the argumentation of the ECJ –
in denying direct effect – tenable? More specifically given the changes in the system of WTO
dispute settlement? Should the ECJ search for alternative arguments? Taken into account the
fact that the DSU is probably at the end of its judicialization process. Is there a possibility to
look for a firmer legal foundation of the political/economic motives of the ECJ’s case law?
What about the two ‘exceptions’ on the lack of direct effect? Are they really exceptions? Is it
realistic to think they can be applied without any problem? What are the legal effects of WTO
DSB decisions within EU law? Was the FIAMM judgment a missed opportunity or rather a
tricky situation the ECJ managed well? In this context: would it even be possible to grant
compensations to victims of retaliatory measures taken by the EU trade partners as a
consequence of a DSB ruling?234
111.
Secondly, one should also determine one’s position before taking up such an
examination. More particularly, this paper will first re-asses the Courts approach from an
insider’s point of view: through the eyes of the advocates general. However, an analysis from
a doctrine point of view cannot be lacking and will therefore immediately follow the first part.
I.
112.
An insiders point of view: the Advocates General
The Advocates General have always been a driving force behind the changes in the
ECJ’s case law and the Court has for its part always been a driving force behind further
integration of the European Union. Moreover, while the Court generally (but not always)
restricts its judgments to the bare minimum, Advocates General predominantly make an
elaborate analysis of the case-law in order to ensure consistency and clarity.235 Therefore it is
indispensable to look at the issue of direct effect of GATT/WTO law from this angle.
234
These questions clearly relate to what can be called a sensu stricto approach of the ECJ’s case law,
the starting point of the analysing exercise still being the same one as the Court uses. See infra §§ 210 229 for a reflection on alternative approaches.
235
C. RITTER, “A New Look at the Role and Impact of Advocates General – Collectively and
Individually”, Columbia Journal of European Law 2006, 759.
58 The ECJ and its GATT/WTO rulings: subject of towering discussions
113.
Given the fact that the previous chapter discussed the relevant cases in a chronologic
order and given the conclusions made from that analysis, the chronological approach also
seems to be the most adequate point to start from when analysing the Advocates’ General
stance with respect to direct effect of GATT/WTO law. Furthermore, in reviewing the
opinions one can clearly distinguish two periods: the first period runs up to the mid 1990’s
and is characterised by a high degree of resemblance between the Advocates General’s
approach and the approach of the Court. The second period on the other hand is characterised
by increasing differences in opinion between the Court and the Advocates General and
amongst the Advocates General themselves.
§1.
i.
The ECJ, the Advocates General and the GATT 1947: kindred spirits
Advocate General Mayras: ahead of the ECJ in denying the GATT direct
effect.
114. No better judgment to start from than International Fruit Company.236 In this case, the
ECJ had meticulously followed the reasoning of Advocate General Mayras.237 Reference can
be made to the reasoning of the Court in chapter ii. International Fruit Company.238 The
Court, however, declined to explicitly use the concept of direct effect, while AG Mayras did
not. The AG referred to direct effect as being the same as conferring rights.239 Moreover, AG
Mayras elaborated on the concept by distinguishing direct effect of international agreements
from direct effect of Union law. It should, however, be mentioned that AG Mayras also
formulated a hypothesis with respect to a direct action: if article XI of the GATT 1947 had
been of direct effect in the Union’s legal order, Member States would have had the
opportunity to question the regulation concerned in the light of article XI of the GATT 1947.
It remains unclear what AG Mayras intended. It could have been a subtle hint at the Court,
expressing the idea of giving GATT law effect in a direct procedure. It could have been a
simple extension to direct actions of his reasoning with respect to preliminary rulings:
236
International Fruit Company, cited supra note 101.
Opinion of Advocate General Mayras in International Fruit Company in M. MARESCEAU,
“Advocaten-general over inroepbaarheid van de GATT/WTO en de zienswijze van het Hof van Justitie
van de Europese Gemeenschappen” in H. COUSY, E. DIRIX, S. STIJNS, J. STUYCK, and D. VAN GERVEN,
(eds.), Liber Amicorum Van Gerven, Mechelen, Kluwer, 2000, 282.
238
See supra §§ 55 - 60.
239
Opinion of Advocate General Mayras in International Fruit Company, cited supra note 101, 1235.
237
59 The ECJ and its GATT/WTO rulings: subject of towering discussions
expressing the condition of direct effect for GATT law to be a standard of review.240 Or it
could have been another argument supporting his position that the GATT 1947 did not have
direct effect. Because if it had, the Dutch government could have filed an action pursuant to
article 263 TFEU (ex article 230 TEC).
115. When AG Trabucchi had to give his opinion in the Bresciani case only a few years
later, he made some clear observations on the use of international law in the Union. 241 More
particularly with respect to the International Fruit Company ruling, AG Trabucchi supported
the ECJ. In his view, the ECJ had been right to refuse to automatically extend the direct effect
concept to international law. Because this concept had been developed with respect to the
relationship between internal Union law and national law.242
ii.
Advocate General Van Gerven on limited invocability in the absence of
direct effect
116. Next in line was the Fediol case, which differed from International Fruit Company on
many levels and for that reason created an opportunity for the Court and the Advocates
General to re-adjust their stance in this discussion. Fediol challenged a Commission decision
in the light of a Union regulation which made reference to international law and generally
accepted rules. These references undoubtedly alluded to the GATT 1947.243 Advocate
General Van Gerven delivered his opinion on 7 March 1989.244
117. AG Van Gerven does not find it necessary to consider the question whether the GATT
1947 has direct effect in the Union’s legal order. However, he does devote an impressing
footnote on the issue, starting from a basic distinction between applicability and direct effect
of international provisions.245 In his view, a provision of international law can be directly or
indirectly applicable in the European Union’s legal order without having direct effect. A
provision is directly applicable where it forms a part of the domestic legal order directly
without the need for transposition. A provision is indirectly applicable where it must be
240
MARESCEAU, cited supra note 237, 285.
ECJ case 87/75, Conceria Daniele Bresciani v Amministrazione Italiana delle Finanze, ECR 1976,
00129.
242
Opinion of Advocate General Trabucchi in Bresciani, cited supra note 241 at § 5.
243
see supra §§ 61 - 65.
244
Opinion of Advocate General Van Gerven in Fediol, cited supra note 127.
245
Ibid. at footnote 8.
241
60 The ECJ and its GATT/WTO rulings: subject of towering discussions
declared to be applicable by means of a provision of one' s own legal order. Direct effect, on
the other hand, means that individuals can derive from a provision subjective rights. Whether
an international provision has direct effect is dependent primarily on the type and purpose of
the relevant provision itself, not solely on whether it needs transposition. Of course this can
be an element in assessing the type and purpose of the relevant provision, with respect to the
GATT 1947 this meant assessing its spirit, general scheme and terms. This led to the
conclusion that it had no direct effect. However, the Court found that the GATT 1947 does
bind the Union and forms an integral part of the Union legal order. So, in AG Van Gerven’s
opinion, the GATT 1947 is directly applicable. A provision which does not have direct effect
per se may, in Van Gerven’s view,
“none the less be transformed within a particular legal order, by a rule of that legal order,
into a rule having direct effect, a rule which can be invoked by individuals. For instance,
GATT provisions which are taken over in a Community [Union] regulation or to which a
Community [Union] regulation refers and from which individuals may therefore to a
greater or lesser extent derive rights pursuant to and within the limits of that regulation.”246
118. All this shows that AG Van Gerven does not refrain from confirming the International
Fruit Company ruling. As in his view the GATT 1947 has no direct effect in the European
Union, not even on the basis of a general reference such as the one made in the New
Commercial Policy Instrument Regulation.247
“Individuals can invoke GATT 1947 provisions within the Community solely to the extent
that, explicitly or implicitly, that effect can be inferred from the Community rule referring
to those provisions.”
The question arises what this right to invoke actually implies. According to Van Gerven such
a right would allow individuals to ask the Commission - by means of a right to lodge a
complaint - to interpret and apply the GATT 1947 provisions in a certain way. Even though
the GATT 1947 has no direct effect and the Commission has a very extensive power of
interpretation due to weak references in the regulation, this does not prevent the Court from
supervising the Commission’s interpretation. Seeing that it lies still within the duty of the
Court to interpret legislative or treaty provisions as soon as the provisions become applicable
in their particular legal order (directly or indirectly, by transposition or by reference),
246
247
Ibid.
Ibid. at §10.
61 The ECJ and its GATT/WTO rulings: subject of towering discussions
regardless as to whether these provisions have direct effect.248 In Van Gerven’s opinion, the
GATT 1947 should be applied as a ‘yardstick’ for interpretation.249
119. Van Gerven is aware of the implications such reasoning could entail. Certainly in
combination with the conclusions made in his footnote. He first recognizes that, in following
his reasoning,
“any international or foreign provision which is directly applicable or is made applicable
by transposition obtains ipso facto within that legal order a certain direct effect in the
sense that it can be invoked by individuals in any event as an interpretative criterion but
also, it appears to me, as a criteria for assessing the validity of inferior norms or
measures.”250
120. Subsequently, he sets the limits to the Court’s power to interpret and by doing so he
also sets the limits to possible implications of his own reasoning. Namely, with respect to the
GATT
“the Court cannot deliver interpretative judgments which are binding outside the
Community [Union], since it is not responsible vis-à-vis the other parties to the GATT for
ensuring the uniform interpretation of GATT provisions . The Court should therefore
avoid broad interpretations of GATT provisions which go further than normal, in
particular teleological, methods of interpretation if they cannot be based on explicit or
implicit consensus between the parties to the GATT.”251
121. It is also up to the Court to supervise whether the Commission does not exceed its
scope of interpretation, which makes the Commission’s power to interpret GATT provisions
subject to judicial review by the Court. As Maresceau rightly observes, the judicial review by
the Court remains closely intertwined with its own power to interpret. Foremost, the judicial
review is a delicate balancing exercise, weighing the Commission’s power to interpret on the
one hand and the Court’s power to review within the limits set out by Van Gerven on the
other hand.252
248
Ibid. at § 12.
Ibid. at § 13.
250
Ibid. at footnote 8.
251
Ibid. at § 14.
252
MARESCEAU, cited supra note 237, 288.
249
62 The ECJ and its GATT/WTO rulings: subject of towering discussions
122. Nakajima, like Fediol, eventually did not raise much problems relating to the
interpretation of the GATT 1947.253 The fact that the Union anti-dumping Regulation
expressly referred to the GATT 1947 and the Anti-Dumping Code allowed the Court and
Advocate General Lenz to circumvent the question of direct effect.
iii.
Advocate General Gulmann as advocate for a very restrictive approach
123. As already mentioned above, the succession of Fediol and Nakajima had given rise to
speculations concerning a possible change in the Court’s approach with respect to the GATT
1947.254 All the more so because the International Fruit Company ruling had become subject
to severe criticism.255 In Germany v Council the Court definitely put an end to those
speculations and confirmed its previous stance.256 Previously, on 8 June 1994 Advocate
General Gulmann had delivered his opinion.
124. Gulmann did not favour the idea of giving provisions of the GATT 1947 direct effect.
Before examining the question of direct effect, he made a preliminary observation which was
clearly inspired by reasons of trade policy.257
“However, such an acceptance [of direct effect] might also mean a perceptible change in
the possibilities for the competent institutions of the Community [Union] to safeguard the
Community's [Union’s] interests within the legal framework laid down in GATT. In my
view the Court should not come to a decision on the question at issue here without serious
consideration of the views expressed by the Council and the Commission. It is moreover
natural to take as the point of departure the Court's consistent case-law to the effect that
GATT does not have direct effect.”258
125. With respect to the speculations on the Fediol/Nakajima case law, Gulmann contended
that in Nakajima the Court had not accepted in general that obligations under GATT might be
253
Also in Fediol the potential for difficulties relating to the boundaries of interpretation by the Court
was not substantiated. However, a true liability was created by AG Van Gerven. This risk surfaced in
Germany v Council, where the Court was asked to enter a slippery slope of law combined with trade
politics. See infra § 66 - 69.
254
See supra § 66.
255
See infra § 183 et seq.
256
Germany v Council, cited supra note 138.
257
Whereas Advocates General normally take a purely legal stance in search of the best legal solution,
see RITTER, cited supra note 235, 760.
258
Opinion of Advocate General Gulmann in Germany v Council, cited supra note 138 at § 131 – 132.
63 The ECJ and its GATT/WTO rulings: subject of towering discussions
invoked in an application under article 263 TFEU (ex article 230 TEC) in the absence of
direct effect. And that the Court was probably correct in recognising that it cannot be
immediately concluded from the fact that a provision does not have direct effect that it may
not be relied upon in an application for a declaration of invalidity under 263 TFEU. This
gives the impression that Gulmann considered the Fediol/Nakajima rulings as already
overstepping the mark.
126. Still in Gulmann’s opinion it is possible that an agreement may be invoked in the
context of an application under article 263 TFEU (ex article 230 TEC) in spite of the fact
does it does not have direct effect. But,
“the position may also be that the reasons leading to the finding that the agreement does
not have direct effect are of such a nature as in addition to prevent the agreement from
forming part of the legal basis for the Court' s review of legality. That is the position, in
my opinion, as far as GATT is concerned. It is therefore necessary to reproduce the
reasons on which the Court based its finding that GATT did not have direct effect.”259
127. Gulmann condemned the criticism on the Court’s flexibility argument, just like he
turned down the direct effect favourable argument of positive developments in the dispute
settlement system. His position was that it was still to a large extent left to the contracting
parties to solve their disputes by negotiation. For that reason the GATT 1947 could not be
directly invoked in an application for a declaration of invalidity under article 263 TFEU (ex
article 230 TEC). Only if there were special grounds – i.e. references to the relevant GATT
rules - for subjecting the legal acts adopted by the institutions to such a review, the Court
could review the legality of a Union act in the light of the GATT. This was the case in Fediol
and Nakajima, but the facts in Germany v Council did not satisfy that condition in Gulmann’s
view.
128. It is clear that at this point in time, the ECJ’s case law had not yet been questioned by
the Advocates General. On the contrary, in cases like Germany v. Council, the Advocate
General even gave the impression that he did not consider the Court’s rulings restrictive
enough.
259
Ibid. at §§ 137 – 138.
64 The ECJ and its GATT/WTO rulings: subject of towering discussions
§2.
The WTO era: differences in opinion
129. With the arrival of the WTO Agreement, the first suggestions by Advocates General to
alter the Court’s restrictive approach emerged. As mentioned above, a new ruling of the ECJ
was long-anticipated by many.260 The Court had had several chances to take up this pressing
issue, but had smoothly circumvented the subject at every occasion.
i.
Advocate General Cosmas: no new insights... yet
130. In the Affish case, a preliminary ruling, the Court did not rule on the SPS Agreement,
since the referring national Court had not asked the Court to do so.261 However, in his opinion
of 10 December 1996, Advocate General Cosmas did take up the question of the direct effect
of the SPS Agreement, being an Annex to the WTO Agreement.262
131. Cosmas reiterated the conditions for obtaining direct effect as developed by the Court
in its case law relating to the GATT 1947. In light of these conditions, Cosmas considers the
provisions of both the WTO Agreement and GATT 1994 to be still characterised
“by great flexibility, which means that they cannot be regarded as having direct effect and
that an individual is not entitled to rely on them before the national courts. This applies
with respect to the possibility of derogation and the measures to be taken when confronted
with exceptional difficulties as well as to the provisions on the settlement of disputes
between the contracting parties.”
132. Cosmas then continued by referring to several provisions of both the WTO Agreement
and the SPS Agreement to show that the provisions called upon by Affish were not
sufficiently clear and specific and that they required further implementation.263 He also
referred to the preamble of Council Decision 94/800 concerning the conclusion of the WTO
Agreement, which clearly states that by its nature, the WTO Agreement is not susceptible to
being directly invoked in Union or Member State courts'. Although the preamble was not
binding, in Cosmas’ view this was a reflection of
260
See supra § 69.
ECJ case C-183/95, Affish BV v Rijksdienst voor de keuring van Vee en Vlees, ECR 1997, I-04315.
262
Cited supra note 172.
263
Opinion of Advocate General Cosmas in Affish, cited supra note 261 at §§ 120 – 126.
261
65 The ECJ and its GATT/WTO rulings: subject of towering discussions
“the fact that the weighty reasons which led the Court to hold that no direct effect could be
conferred on the GATT 1947 (104) have not ceased to apply with the conclusion of the
GATT 1994 and the WTO Agreement.” 264
133. For a first review of the WTO Agreement, Cosmas’ assessment did not reveal any new
insights. Quite on the contrary, his opinion was strongly inspired by the case law relating to
the GATT 1947. However, he did take the effort of examining to what extent the Commission
decision in question was contrary to Articles 2 and 5 of the SPS Agreement. For reasons of
completeness, in case the Court would grant direct effect to the WTO Agreement after all. He
concluded that the Commission decision was not incompatible with the SPS Agreement.
ii.
Advocate General Tesauro paved the way
134. Although in Hermès the ECJ skipped the question of direct effect and immediately
proceeded to interpreting the TRIPS Agreement, Advocate General Tesauro did not. He
delivered his opinion on 13 November 1997, nearly a year after Cosmas had extrapolated the
reasoning of the Court concerning the GATT 1947 to the WTO Agreement.
135. Advocate General Tesauro began with confirming the ECJ’s jurisdiction to interpret the
TRIPS Agreement. Tesauro then set out to assess the WTO Agreements in order to ascertain
up to what point and to what extent the situation had changed in view of the provisions of the
WTO Agreements, including the TRIPS Agreement. Unlike the Court, he considered this
issue of preliminary importance to the case: if the TRIPS Agreement would not be directly
effective, it would become inapplicable to the case.265
136. In his assessment, Tesauro first looked at the preamble of Council Decision 94/800
concerning the conclusion of the WTO Agreement which precludes the WTO Agreements
from having direct effect. He contended that this recital may not prevent the Court from
concluding that the WTO Agreements do have direct effect. After all, when the EU and other
contracting parties to an international agreement do not agree on the effect that agreement
will have in their internal legal order – which is the case with respect to the WTO Agreements
264
265
Ibid. at § 127.
Opinion of Advocate General Tesauro in Hermès, cited supra note 126 at §8 and § 22.
66 The ECJ and its GATT/WTO rulings: subject of towering discussions
- , it is up to the ECJ to settle that question and not up to the Council. So according to Tesauro
no conclusions can be made from the preamble of Council Decision 94/800, as opposed to
Cosmas who used the preamble as an argument in denying direct effect.266
137. Very quickly it becomes clear that Tesauro is determined to look at the issue from an
unbiased position. While keeping an open mind, Tesauro evaluated the Court’s long
established case law and came to some surprising conclusions as regards the WTO. More
particularly as regards the characteristics of the GATT 1947, he states that these are not very
different from those of other agreements, which the Court had granted direct effect
“Despite the flexibility of some of their provisions and the element of negotiation involved
in the mechanism for the settlement of disputes. (...) Nor do I find the provisions of GATT
that have been brought to the Court's attention less clear, precise and unconditional than
other provisions of agreements to which the Court has, with deliberate generosity,
attributed direct effect. Therefore no difference should be made between the provisions of
GATT 1947 and the provisions of the WTO agreements, in that there is no perceptible
difference between the latter provisions and all the other provisions of agreements to
which the Court has attributed direct effect.” 267
138. However, taking into account the Court’s stubbornness, Tesauro put forward the
reasons for the Court to re-assess its case law. He contends that the WTO has indeed
profoundly changed those features of the GATT 1947 the Court considered decisive in
denying direct effect. Namely, as to the flexibility supposedly characterising the GATT
1947, the system has undergone a radical change. The system of waivers and exceptions
has been firmly embanked.268 As regards the dispute settlement system Tesauro spoke of a
true ‘Copernican innovation’ in referring to the elimination of the blocking possibilities by
the respondent state.269 With respect to the system of compensatory measures, Tesauro
contended that this is a purely provisional measure, not a method of settling disputes and
that it does not encourage the defaulting party to persist indefinitely in its failure to
comply.270 Tesauro concluded that
266
Ibid. at § 23 – 24.
Ibid. at § 27, Tesauro referred to the Kupferberg ruling, see supra §§ 48 - 51.
268
Ibid. at § 29(1).
269
Ibid.
270
Ibid. at § 29(2).
267
67 The ECJ and its GATT/WTO rulings: subject of towering discussions
“the situation has changed vis-à-vis GATT 1947 and that the Court's objections hitherto
must be considered obsolete in the context of the WTO. It should therefore be possible in
future for individuals to invoke compliance with the appropriate provisions of the WTO
agreements, including the TRIPs Agreement, before the courts.”271
139. However, Tesauro stated, one must no go lightly about the reciprocity argument. The
US, Canada and Japan (the EU’s most important trading partners) refuse to recognise the
WTO Agreements as having direct effect. Logically, this argument ought not to have any
effect on the decision about granting direct effect. But, granting direct effect in the absence of
reciprocity would have serious consequences, since doing so would place Union traders at a
disadvantage compared with their foreign competitors.272
“While the foreign trades would be able to invoke provisions in their favour directly
before the courts of the Member States, Community [Union] traders would be unable to do
likewise in the States that refused to recognise that the provisions of the WTO agreements
may have direct effect.”273
140. The fact that Tesauro explicitly referred to this trade policy related argument is
remarkable, the Opinions of Advocates General are not usually coloured by political
considerations. Once again, this shows that the issue of direct effect of WTO law rises above
pure legal relevance, that it is situated at the interface between law, economics and politics.
141. Tesauro, in an effort to approach this matter from a legal perspective, then examined
whether direct effect is conditional upon reciprocity. He first reiterates the Court’s case law
relating to reciprocity of international agreements and made the following observations.274
Reciprocity is not so much about whether the agreement has direct effect in the legal order of
the other contracting parties, what is important is that a reciprocity exists in the
implementation of the agreement and the legal means used to reach that goal are less
271
Ibid. at § 30.
Ibid. at § 31.
273
Ibid.
274
Tesauro referred to Mengozzi, who would become AG himself in 2006, who argues that direct
effect is conditional upon reciprocity. P. MENGOZZI, `Les droits des citoyens de l'Union européenne et
l'applicabilité directe des accords de Marrakech', in Revue du marché unique européeen 1994, 171.
272
68 The ECJ and its GATT/WTO rulings: subject of towering discussions
decisive.275 Following that reasoning, the absence of direct effect would only be decisive
when it would lead to the absence of reciprocity in the implementation as a whole.
142. As regards the WTO Agreements, this means that reciprocity should exist in both
negotiations and in the performance of the agreement. Tesauro indicated that an absence of
direct effect would definitely lead to an imbalance in the fulfilment of the commitments
undertaken in the framework of the WTO. In his view, such an impact would be of the
greatest importance. However, it certainly will not always be easy to assess whether the
absence of direct effect results in an imbalance in reciprocity.
143. Tesauro concluded by firmly recommending to the Court to alter its reasoning:
“I consider that it would certainly be more correct to link recognition of direct effect with
the principle of reciprocity in the implementation of the agreement than to repeat formulas
that were perfectly acceptable in the context of GATT 1947 but are no longer relevant in
the context of the WTO Agreement and it would merely lend weight to the already
widespread view that this is a political, not a legal, solution.”276
iii.
Advocate General Saggio in Portugal v Council: a stronghold under fire
144. Tesauro’s opinion may without a doubt be referred to as ‘refreshing’. Saggio’s opinion,
or should one say ‘plea’, certainly surpasses such a statement. When looking at his opinion in
Portugal v Council, one cannot ignore the heavy criticism on the Court’s case law.277
145. Saggio frequently used the word ‘surprising’ when referring to the Court’s case law on
the subject. Having regard to the actual content of his opinion, Saggio definitely made an
effort to put a gloss on the message he was carrying. Saggio pointed out that
275
Ibid. at § 33. Tesauro refers to both the Kupferberg as Bresciani the judments, cited supra note 100
and 241 in the latter the Court found that an imbalance between the obligations assumed by the EU
towards its contracting parties, which was inherent in the special nature of the Yaoundé Convention,
did not prevent recognition by the EU that some of its provisions have a direct effect (§ 22 – 23). In
Kupferberg the Court held that the fact that the courts of one of the parties consider that certain of the
stipulations in the agreement are of direct application whereas the courts of the other do not recognise
such direct application is not in itself such as to constitute a lack of reciprocity in the implementation of
the agreement (§ 18).
276
Ibid. at §35.
277
Opinion of Advocate General Saggio in Portugal v Council, cited supra note 126.
69 The ECJ and its GATT/WTO rulings: subject of towering discussions
“in principle, the right to review the legality of a Community [Union] act does not depend
on whether the rules invoked as a criterion for determining the legality of that act have
direct effect, in cases where it is claimed that the Community [Union] act infringes rules of
international law other than the GATT. (21) What is even more surprising is the
conclusion that privileged persons, such as Member States, may not invoke the provisions
of the GATT as a criterion of legality in direct actions brought under Article 173 of the
Treaty.”278
146. He thus very explicitly questioned the fact that the Court also imposed the condition of
direct effect in respect of a legality review requested by a Member State pursuant to article
263 TFEU (ex article 230 TEC). In fact, Saggio distinguished between the ‘invocability’ and
the direct effect. For this purpose, Saggio contended that an international agreement, by virtue
of its clear, precise and unconditional terms, can in principle constitute a criterion of legality
for Union acts, thus referring to invocability and not to direct effect. However, in Saggio’s
view, such an international agreement is only capable of conferring rights on individuals if it
shows implicitly from the general context of the agreement that its provisions may be invoked
before the courts.279
147. Saggio then proceeded to analysing the WTO and to what extent it had changed in
comparison with the GATT 1947. He recognised that the WTO features a more balanced and
stable structure than that of the organisation established through practice during the GATT
1947 era. Moreover, the Advocate General emphasised that many provisions of the WTO
Agreements create unconditional obligations and prohibitions, that the dispute settlement
system has indeed become much more compulsory, that the statement in the preamble of
Council Decision 94/800 is ‘simply a policy statement and, as such, cannot affect the
jurisdiction of either Community [Union] or national courts to interpret and apply the rules in
the WTO Agreements.’280
148. With respect to the reciprocity argument, Saggio contended that statements by other
contracting states concerning the effect of the WTO do not affect the effect within the EU’s
legal order. Conversely, the fact that there are no adequate instruments for imposing sanctions
278
Ibid. at § 18.
Ibid.
280
Ibid at § 19 -20.
279
70 The ECJ and its GATT/WTO rulings: subject of towering discussions
when a WTO Member State does not comply with the Agreements could be a strong
argument for “the proposition that the WTO rules are not binding because of the reciprocal
nature of obligations undertaken in an international context.”. However, in this context,
Saggio referred to the principle of inadimplenti non est adimplendum, which justifies the
suspension or even extinction of the agreement when another contracting party does not
comply with material obligations.281 So, in Saggio’s view, such a breach justifies a suspension
of the WTO Agreement and precludes application of the WTO provisions by the judiciary.282
Hence, this option would intercept an imbalance in reciprocity, that resulted from a lack of
direct effect in other WTO Members’ legal order. Finally Saggio, in an answer to an
argument of the Council, decided that the DSU does not limit the jurisdiction of the ECJ.283
149. Saggio concluded that “where a Member State has brought a direct action under Article
173 of the Treaty challenging an act of the Council, the applicant's wish to invoke the WTO
Agreements is in no way inadmissible.” However, he also limited the consequences of his
reasoning in explaining that
“Even if this may cause the Community [Union] to be held to be in breach of international
law, the Court, which has the duty to ensure respect of the independence of the
Community [Union] legal order, may not apply provisions that require the institutions to
act in a manner that is inconsistent with the proper functioning and the objectives of the
Treaty.”
This inconsistency flows from a breach of Union primary law and general principles which
have assumed the nature of constitutional rules. So, Member States must be able to invoke the
WTO Agreements in a direct action questioning the legality of a Union act, but the Court
should not review that particular act in the light of WTO provisions if that act has assumed a
constitutional nature in the Union’s legal order. As already explained above, the Court did not
follow Saggio’s opinion and made a firm statement in confirming its former case law in a
WTO context.284
281
Article 60 VCLT, cited supra note 89; Maresceau is rather sceptic about this solution, he rightly
doubts the feasibility in practice, see MARESCEAU, cited supra note 237, 297.
282
Opinion Advocate General Saggio, cited supra note 126 at §21.
283
Ibid. at §23.
284
See supra at §§ 72 - 77.
71 The ECJ and its GATT/WTO rulings: subject of towering discussions
iv.
iv.a.
Advocate General Alber in Omega and Biret
Omega: changing the terms of debate
150. Before dealing with that other landmark case, Van Parys, it is worth going through the
Opinions of Advocate General Alber in the Omega and Biret rulings.285 Omega concerned a
reference for a preliminary ruling about Regulation 925/1999 concerning noise emissions of
airplanes, more particularly whether this regulation infringed the Agreement on Technical
Barriers to Trade.286 As regards the direct effect of WTO law, Alber sided with the Court in
putting forward the negotiations and flexibility as the most important reasons not to grant
direct effect to the WTO Agreements.287
151. However, Alber’s opinion is innovating as it approached the issue of direct effect from
a WTO perspective in stead of an EU perspective. More particularly, Alber stated that
“direct reliance on rules of WTO law as against measures taken by WTO members appears
inappropriate from the point of view of WTO law as well, however. Regardless of their
wording, all provisions of WTO law are subject to a general reservation which accords the
States concerned various possibilities of reacting to a breach. It is therefore not for the
Court but for the WTO, or the members of the WTO, to ensure that WTO law is observed
in the legal systems concerned. Direct effect of WTO rules is clearly not part of their
legislative content. Such content may not be ascribed, at Community [Union] level, to
WTO law in its original form but at most in the form of transposition measures. (...) Direct
effect of WTO law in the legal systems of the WTO members cannot, on the other hand,
sensibly be brought about unilaterally by individual legal systems, but only at WTO
level.”288
By doing so, in Snyder’s opinion, Alber made two original contributions to the debate. First,
he simply pulled open the debate beyond the ambit of the EU. Secondly, Alber suggested that
285
ECJ cases C-27/00 and C-122/00, Omega Air et al, ECR 2003, I – 2569, Snyder considers this
opinion as having altered the terms of the direct effect debate, SNYDER, cited supra note 233 at 329.
286
Council Regulation (EC) 925/99 of 29 April 1999 on the registration and operation within the
Community of certain types of civil subsonic jet aeroplanes which have been modified and
recertificated as meeting the standards of volume I, Part II, Chapter 3 of Annex 16 to the Convention
on International Civil Aviation, third edition (July 1993), O.J. 1999, L 115/47, Agreement on
Technical Barriers to Trade, annex 1 A to the Agreement Establishing the World Trade Organization,
Marrakesh, 15 April 1994 (www.wto.org). [TBT]
287
Opinion Advocate General Alber in Omega, cited supra note 285 at §§ 92 - 93.
288
Ibid. at § 94 – 95.
72 The ECJ and its GATT/WTO rulings: subject of towering discussions
the decision as to grant WTO law direct effect or not, belongs to the international community
and can therefore not be taken on a unilateral basis.289
152. So, by changing his point of view and stressing the need for multilateralism, Alber
seemed to have created a legally founded reasoning for the reciprocity argument, without
ignoring the political context.290 However, one should not lose sight of other important
observations made in those two defining paragraphs. As an alternative to the lack of direct
effect, Alber expressed his preference for transposition measures, which clearly refers to the
Fediol and Nakajima case law. On top of that, he also implicitly confirmed the relationship
between the Court on the one hand and the Commission and Council on the other hand, as
previously defined by the Court in Portugal v Council: the Council and Commission play the
‘dominant roles’ in the field of international trade law and it is not up to the Court to deprive
them of their scope of manoeuvre, by deciding on its own what effect must be given to WTO
law.
iv.b.
Alber on the effect of DSB recommendations and rulings in Biret
153. Surprisingly, Alber takes a different stance in the Biret case.291 However, Biret
concerned an action for damages for damage suffered due to the Union’s hormone regime
which was found to be in breach of the SPS Agreement by a DSB decision, while Omega
dealt with the preliminary question whether a regulation was in breach of the TBT
Agreement. In Alber’s view, this comes down to the following difference: recognising the
direct applicability of WTO law as a basis for a claim for damages does not have the same
impact as recognising it in the framework of validity review. Recognising the direct effect of
WTO law in Biret would not imply that Biret would be able to “call for the ban on the
importation of meat treated with hormones to be lifted, thereby ending the Community
[Union] legislature's task of health and consumer protection.”292
289
SNYDER, cited supra note 233 , 330 – 331.
Whether this is a well- or ill-founded argument remains to be seen.
291
Biret, cited supra note 171.
292
Opinion of Advocate General Alber in Biret, cited supra note 171 at § 94. Mind how Alber uses the
concepts of direct applicability and direct effect for the same concept, while Van Gerven had so
meticulously distinguished between those two terms.
290
73 The ECJ and its GATT/WTO rulings: subject of towering discussions
154. In order to come to his conclusion, Alber first examined whether DSB decisions could
have effect in the Union’s legal order and if so, to what extent. He observed that once a DSB
recommendation or ruling has been adopted, the respondent Member no longer disposes of
any discretion as to whether to comply with it. It must simply do so "unconditionally" and
"immediately".293 Ultimately, a Member cannot decline to fulfil its obligations under the
WTO agreements. Alber stated that non-compliance with a DSB recommendation or ruling is
not a lawful commercial policy option. Therefore, the legislative and executive bodies of the
EU do not have any discretion that could be deprived by the Court. Alber firmly advised the
Court to
“support the principle of legality by recognising that DSB recommendations and rulings
are binding and that an individual may rely on them in an action for damages after the
expiry of the reasonable period of time allowed to comply with the DSB recommendation
or ruling.”294
155. Moreover, Alber found that Biret may rely on Articles 3 and 5 of the SPS Agreement
embodied in the DSB recommendations of 13 February 1998, because the Union had not
implemented the recommendations within the above-mentioned implementation period.295
Alber gave the impression that it did not matter whether or not the actual damage had been
suffered after the expiry of the implementation period. Instead, he contended that the
implementation period must have expired at the moment of the proceedings before the
European Courts (Biret had filed an action for damages in 2000). For this purpose, Alber
drew a parallel between Biret and Francovich, which concerned the liability for damage
suffered because of the non-implemenation of a directive.296 However, as mentioned above,
the ECJ did not follow him in this reasoning.297
156. The Advocate General also referred to the freedom of trade as a fundamental right or
the freedom to pursue an economic activity as a general principle of Union law. In his view,
it would be unfair to deny a citizen a right to claim damages in a situation where the Union
has been in continued breach of WTO law and thereby reduces the citizen’s fundamental
293
Ibid. at § 83.
Ibid. at § 86.
295
Ibid. at § 120.
296
Ibid. at §§ 104 – 109, ECJ Joined Cases C-6/90 and C-9/90, Francovich and Others v Italy, ECR
1991, I-5357
297
See supra at § 80, nor did the Court, in any event, reject Advocate General Alber’s view.
294
74 The ECJ and its GATT/WTO rulings: subject of towering discussions
rights.298 This argument leans very much to an allegation of a lack of judicial protection, an
argument that will be brought forward more explicitly by Advocate General Maduro in
FIAMM.299
157. Alber also took the effort of addressing the reciprocity argument. He rightly confirmed
that this actually is a policy issue, ‘decked out in the legal trappings of a ‘principle of
reciprocity’.300 This is remarkable, as only years before, Alber himself had decked out this
political consideration in a legal argumentation. In this context Alber emphasised that in the
framework of the DSU “the possibility of negotiations arises only when both parties to the
dispute agree as to the continued existence” of the breach of WTO law.301 Given the Court’s
reasoning that a lack of reciprocity due to recognising direct effect, would render the Union in
a weaker position during negotiations in a particular trade dispute, Alber suggested that this
argument is not relevant when one of the parties, be it the EU or another WTO Member, does
not agree on the continued existence of the breach of WTO law. Moreover, he contended that
the Union’s trading position would not be weakened in case of continued incompliance.
Because in such situation the complaining party may initiate a dispute settlement procedure
and demand compliance with the DSB ruling. So, Alber argued that the EU would still retain
the possibility to start dispute settlement proceedings against other WTO Members which
continue to infringe WTO rules.
158. Alber eventually came to the conclusion that
“the issue is the basis for a possible claim for monetary damages against the Community
[Union] or the competent Community [Union] bodies which have failed to implement the
DSB recommendation or ruling within the period of time prescribed by the WTO.
Recognition of the direct applicability of WTO law embodied in DSB recommendations or
rulings does not therefore mean that meat treated with hormones can be imported into the
Community [Union].
It must consequently be concluded that the Court will not reduce the discretion enjoyed by
the legislative and executive bodies of the Community [Union] in implementing DSB
recommendations if, in the case at issue, it holds that WTO law should apply after the
298
Ibid. at § 92.
See infra §167.
300
Ibid. at § 102.
301
Ibid.
299
75 The ECJ and its GATT/WTO rulings: subject of towering discussions
expiry of the period of time allowed to comply with the DSB recommendations of 13
February 1998.”302
159. Even though Omega and Biret start from a different premises, one cannot overlook the
fundamental change in Alber’s reasoning. However, the fact that a case concerns a claim for
damages instead of invalidity tips the scales for several other observers too.303
v.
Advocate General Tizzano Van Parys
160. In Van Parys the ECJ did no longer avoid the question of the effect of DSB rulings
after the expiry of the implementation period: the expiry of the time-limit did not imply that
the Union had exhausted the possibilities under the DSU of finding a solution to the dispute.
Furthermore, the ECJ once again reconfirmed its reciprocity argument.304 In its reasoning the
ECJ did not follow the Opinion of Advocate General Tizzano.305
161. Tizzano started by briefly reiterating the Court’s rulings in Portugal v Council and
Netherlands v Parliament and Council, in which the Court strongly confirmed its previous
ruling. Tizzano explicitly stated that he would not consider judgments delivered before the
establishment of the WTO.306 Tizzano then turned to the DSU, he gave an outline of the main
characteristics of the system and reiterated the Biret judgment. In doing so, Tizzano paid
particular attention to the Opinion of Advocate General Alber. Moreover, Tizzano practically
copied the relevant passages relating to reciprocity and the effect of DSB ruling from Alber’s
opinion in Biret. Tizzano concluded by expressing his consent:
“I have nothing to add to the Advocate General’s ample arguments except to say that I
agree with them. I too take the view, on the basis of the considerations thus far adduced,
that in a ‘Community [Union] governed by law’ DSB decisions must be considered as a
criterion of the legality of Community measures and that the Court consequently should
not, on grounds of doubtful legal merit, give clear approval to legal arguments that would
lead to the opposite conclusion.”307
302
Ibid. at §§ 94 – 95.
See infra §§ 202 - 209.
304
See supra §§ 81 - 86.
305
Opinion of Advocate General Tizzano in Van Parys, cited supra note 178.
306
Ibid. at §§ 37 – 45.
307
Ibid. at § 73.
303
76 The ECJ and its GATT/WTO rulings: subject of towering discussions
162. The Advocate General then applied Alber’s reasoning to the Van Parys case and
concluded that the Union’s new banana regime was invalid “inasmuch as it is inconsistent
with the WTO rules as established by the DSB on 25 September 1997 and confirmed by the
same body on 6 May 1999.”308 It should be mentioned here that Tizzano does not just copy
Alber’s reasoning, he takes it one step further: Alber developed his reasoning with respect to
a claim for damages, which he clearly considered to be fundamentally different from a
legality review.309 Tizzano extended Alber’s reasoning to a case of pure validity review.
163. Although he considered it encouraging that in Biret, the Court had identified the
question of the effect of DSB decisions and the compatibility of the contested Union
measures with those decisions as a distinct and separate problem, Tizzano anticipated another
direct effect unfavourable ruling and developed an alternative argument, since the Court had
shown to be reluctant to grant direct effect to a DSB ruling.310 More particularly, the
Advocate General asserted that the Union had adopted the new banana regime in order to
implement the DSB rulings. It follows, according to Tizzano, that the measures taken to
implement the DSB recommendations fell within the scope of the Nakajima exception.311
What’s more, the Union legislature intended to implement a ‘particular obligation’ assumed
in the context of the WTO.312 To this end, Tizzano referred to the preamble of Regulation
1637/98, amending Regulation 404/93, which states that ‘the Community’s [Union’s]
international commitments under the [WTO] … should be met’ and to a declaration made on
behalf of the Commission in answer to a parliamentary question saying that, the Union
implemented the recommendations of the World Trade Organisation (WTO) dispute
settlement body of 25 September 1997 in the bananas case by taking the necessary measures
to bring the Community [Union] banana regime into conformity with WTO rules’.313 Also the
simple sequence of events was an indication that those regulations were intended to
implement the DSB decision.314
308
Ibid. at §§ 79 – 83.
See supra 153
310
Ibid. at §§ 75 – 77.
311
Ibid. at §§ 105 -107.
312
Tizzano referred to the judgment in Italy v Council. In which the Court further defined the scope of
the exception created in the Nakajima through the concept of ‘a particular obligation’. Cited supra
note 227.
313
Ibid. at §§ 100 – 101.
314
The banana regime had been amended by the end of the implementation period granted to the Union
to comply with the DSB decision of 25 September 1997. And, most significantly, Article 2 of
regulation 1637/98 provided that it was to apply from 1 January 1999, the precise date on which the
309
77 The ECJ and its GATT/WTO rulings: subject of towering discussions
vi.
Advocate General Maduro: firm but fair
164. On appeal brought by FIAMM and Fedon, the ECJ has blown the whistle on the GC.
Conversely, Advocate General Maduro very convincingly confirmed the existence of a
liability principle in the absence of unlawful conduct.
vi.a.
No direct effect of WTO law
165. Before further analysing Maduro’s stance on such a liability principle, one should first
take a look at Maduro’s findings as regards the direct effect of the WTO Agreements. First of
all, Maduro sided with the ECJ in stating that it is “easy to see that the requirement for an
international agreement to have a direct effect is necessary whatever the type of action and
the status of the applicant, and whether the dispute has been brought before national courts or
before the Community [Union] courts.”315 Secondly, after extensively explaining the
difference – in both scope and concept – between the direct effect of Union law and the direct
effect of international agreements, Maduro resolved to use different terms to describe them in
the future. More particularly, to speak of “the possibility of relying on international
agreements” in stead of ‘direct effect’.316 Thirdly, with respect to the “possibility of relying on
the WTO Agreements” Maduro confirmed the case law of the Court in every possible way. It
would therefore be superfluous to elaborate on this issue. However, a few matters should be
highlighted.
166. First, it is remarkable that Maduro introduced another new expression, i.e. political
freedom. He concluded that accepting a review of the legality of the conduct of the Union
institutions going beyond the Fediol and Nakajima exceptions “in the light of the WTO rules
which the DSB had found to have been infringed by the Union” would severely jeopardise the
political freedom of the Union in the framework of a WTO dispute.317 Secondly, in Maduro’s
view, the financial burden created by the recognition of a fault-based liability would
period of 15 months and one week, granted by the DSB for the Community to comply with that
decision, expired.
315
Opinion of Advocate General Maduro in FIAMM, cited supra note 192 at §30. See also AG
Saggio’s opinion in Portugal v Council, who strongly criticizes this condition of direct effect in direct
actions by Member States, see supra at §§ 145 - 146.
316
Ibid. at § 31.
317
Ibid. at § 35, 49 and 52.
78 The ECJ and its GATT/WTO rulings: subject of towering discussions
“force the political organs of the Community [Union] to eliminate the measure held
incompatible with the WTO rules and hence restrict the freedom of conduct they are
permitted by the legal order of the WTO, since all undertakings affected either by the
Community [Union] measure that is incompatible with the WTO rules or by the retaliatory
measures the opportunity to bring actions and obtain compensation for the entire damage
they have suffered.”318
It becomes very clear that Maduro, unlike most other Advocate Generals, is not afraid of
using policy arguments in order to resolve this issue. This once again proves that direct effect
of WTO law is in fact a matter of trade policy, rather than a matter of law.
vi.b.
Maduro on the principle of no-fault liability of the EU
167. Since, in his view, it is not possible to review the legality of Union conduct in the light
of WTO rules and DSB decisions, it is only logical that no liability for unlawful conduct can
be established in this conduct.319 However, Maduro’s merit lies in his assessment of the
principle of liability of the Union in the absence of fault.320 The Advocate General made an
elaborate study of the concept. He began with examining the scope of article 340 TFEU (ex
article 288 of the EC), more particularly what exactly the expression ‘the general principles
common to the laws of the Member States’ entails as regards the principle of no – fault
liability. In his view
“a mathematical logic of the lowest common denominator would lead to the establishment
of a regime for Community [Union] liability in which the victims of damage attributable to
the institutions would have only a very slim chance of obtaining compensation.” 321
Moreover, one must instead identify the most appropriate legal solution in the context of, and
for the needs of, the Union legal system. From this follows, according to Maduro, that
“the Court has the task of drawing on the legal traditions of the Member States in order to
find an answer to similar legal questions arising under Community [Union] law that both
318
Ibid. at § 50.
As opposed to Alber, who briefly touches upon this issue in his opinion in the Biret case in which he
compares the liability for non-implementation of DSB recommendations with liability arising from
failure to implement directives. See §§ 106 – 110 and §§ 120 – 125 of his opinion, cited supra note
171.
320
Ibid. at §§ 53 – 83.
321
Ibid. at § 55 and note 59, for this purpose Maduro referred to the opinion of AG Roemer who also
rejected the application of the ‘rule of the lowest limit’ that would result if it were decided to adopt
only rules existing in all the Member States (Opinion in ECJ Case 5/71, Zuckerfabrik Schöppenstedt v
Council, ECR 1971, I - 975). Roemer emphasised the importance of evaluative comparative law.
319
79 The ECJ and its GATT/WTO rulings: subject of towering discussions
respects those traditions and is appropriate to the context of the Community [Union] legal
order. From that point of view, even a solution adopted by a minority may be preferred if
it best meets the requirements of the Community system.”322
Maduro then emphasised that the decisive question is whether the recognised principle is
most suitable for the requirements of the Union legal order. In his view, the answer to this
question is affirmative, since the recognition of a principle of no-fault liability would “offset
the severity of the conditions for the incurring of fault-based Union liability”.323 That is even
more so in the case of WTO rules, because individuals are unable to rely un them to plead the
unlawfulness of the conduct of the Union institutions:
“In the absence of the enshrinement of the principle of no-fault Community [Union]
liability, even those who, as a result of the unlawful conduct, have suffered particularly
serious damage would be deprived of all judicial protection.”324
168. Besides the most eminent argument of judicial protection, Maduro also referred to good
governance and the fact that in recognising such a principle the Union would have a choice to
decide whether the costs, resulting from retaliation measures, “must be borne solely by the
undertakings affected by such measures or distributed over society in general”. For this
purpose, he also referred to both French and German administrative law. More specifically to
the notion of the equality of citizens in bearing public burden, which means that
“it is normal that citizens must bear the burdens resulting from public activity without
compensation, but if, in the general interest, the public authorities cause particularly
serious damage to certain individuals and to them alone, the result is a burden that does
not normally fall on them and which must give rise to compensation.”325
Maduro concluded that enshrining in Union law a principle of no-fault Union liability would
advance the case-law from potential to settled, from the era of uncertainties to that of
solutions.326
169. Maduro then set out to define the scope of such a no-fault liability. First, he broadened
the scope from liability in the absence of fault to a regime of absolute liability regardless of
fault. This implies that acts that are unlawful but do not constitute a sufficiently serious
322
Ibid.
Ibid. at § 57.
324
Ibid. at § 58.
325
Ibid. at §§ 62 – 63.
326
Ibid. at § 61.
323
80 The ECJ and its GATT/WTO rulings: subject of towering discussions
infringement would also fall under this concept. Furthermore, both the failure to legislate and
legislative conduct can trigger this liability. However, in order not to disregard the principle
of reciprocity, only Union citizens may rely on this system, no economic operators from third
countries. 327
170. As regards the conditions for no-fault Union liability, the Advocate General confirmed
the three conditions laid down by the GC, being actual damage, causal link and an unusual
and special nature of the damage. However, with respect to the unusual and special nature of
the damage, Maduro considered it necessary to show that the damage is serious or grave in
order to be considered unusual. Otherwise
“the damage would not verge on expropriation that cannot be left uncompensated in view
of the protection that must be given to the right to property. That does not mean that the
damage must be equivalent to total and definitive loss of ownership, but it must
nevertheless entail sufficiently serious harm to the attributes of the right to property.”328
Maduro defined ‘special’ as damage that “affects a particular category of economic operators
with disproportionate severity by comparison with other operators.”329
171. Maduro concluded by observing that in any event the GC was wrong to rule that the
damage of FIAMM was not unusual in that it did not exceed the limits of the economic risks
inherent in their exporting activities. On the contrary, a risk cannot be considered inherent in
operating in the sector concerned
“where there is no link between the act or conduct [by the Union institutions] causing the
damage and the economic sector in which the undertakings suffering the damage operate.
In the absence of such a link, the damage cannot be regarded as the manifestation of a
normal commercial risk against which a prudent operator could and should have protected
himself.”330
According to Maduro, no such link could be established between the Union’s banana regime
and the economic activity of trade in spectacle cases.
327
Ibid. at §§ 64 – 70.
Ibid. at § 76. Besides the requirement for ‘serious’ damage, it also remains necessary that the
damage exceeds the limits of the economic risks inherent in operating in the sector concerned. See also
supra §§ 92 - 96.
329
Ibid. at § 77.
330
Ibid. at § 82.
328
81 The ECJ and its GATT/WTO rulings: subject of towering discussions
§3.
Conclusion
172. When looking at the issue of direct effect through the eyes of the Advocates General,
one sees a varied landscape, which renders it quite difficult to give an answer to the questions
put forward at the start of this chapter. However, what strikes one most is probably the impact
of the establishment of the WTO. As opposed to its impact on the rulings of the ECJ, this has
been a true watershed for the Advocates General. In the GATT 1947 era, everyone agreed
that the GATT could not have direct effect. Although every Advocate General did so on his
own terms. For instance, Van Gerven concentrated on the indirect effect, which he favoured,
and the Court’s competences in this view. Gulmann on the other hand exhibited great
scepticism, even in view of the Fediol and Nakajima exceptions. However, these differences
in approach are nothing compared to the heavy disagreement evoked by the establishment of
the WTO. Even though Advocates General have addressed the issue of the effect of WTO law
in many other cases, it is already very clear from the few opinions discussed above that the
effect of WTO law is a hard nut to crack. But, all opinions do in a way voice criticism on the
ECJ’s conservative approach. This gives the impression that at least the argumentation of the
ECJ is probably no longer tenable, given the changes in the system of WTO dispute
settlement. Tesauro recommended the Court to alter its reasoning since the reciprocity
argument was the only remaining and valid one. In his view, the WTO Agreement had
provided profound change as regards the flexibility and the DSB.331 Saggio did not even agree
with the reciprocity argument in Portugal v Council, in his view the lack of reciprocity
(resulting from direct effect) could be counterbalanced by the principle of inadimpleti non est
adimplendum. On top of that, he expressed severe criticism. The condition of direct effect
should not be imposed in cases of direct actions by Member States. He also referred to the
major changes resulting from the WTO Agreement. Alber’s stance in this issue is twofold.332
Namely, he finds that recognising the direct effect of WTO law as a basis for a claim for
damages does not have the same impact as recognising it in the framework of validity review.
In the context of a claim for damages, Alber asserted that WTO law embodied in a DSB
decision may indeed play its role. Tizzano sided with Alber, not with the ECJ, on the subject
of the effect of DSB decisions in Van Parys. So with respect to the effect of DSB rulings, the
situation is definitely even more pressing. A valid alternative in this matter could be to apply
331
332
Tesauro spoke of a true Copernican innovation. See supra §§ 137- 142.
See supra §§ 150 - 163.
82 The ECJ and its GATT/WTO rulings: subject of towering discussions
Nakajima, as suggested by Tizzano. Or through the recognition of a no-fault liability as
proposed by Maduro.
173. The Advocates General clearly have had their hands full in assessing the effect of
WTO law. The issue of reciprocity has proven to be a steep hill to climb: the opinions of the
Advocates General are not usually coloured by political considerations. This shows that the
discrepancy between the legal reality and the political and economic reality has been a real
challenge for the Advocates General as well. This is another confirmation that it is impossible
to resolve the question of the effect of WTO law without considering the implications on
trade policy. Moreover, a firmer legal foundation of the political/economic motives of the
ECJ’s case law seems out of reach.
174. However, if one looks at this tangle of arguments and nuances, one might also
distinguish the no-fault liability as put forward by Advocate General Maduro as the greatest
common denominator. Maduro, as opposed to Tizzano and Alber, is not favourable to
assessing the legality of Union law in the light of WTO provisions, not even for the sole
purpose of establishing non-contractual Union liability for unlawful conduct. Maduro’s
assessment of the WTO Agreement probably is amongst the most conservative of all
Advocates General, but even Maduro is aware of the problem that is being created in the area
of judicial protection. For this reason, he is probably right in proposing a principle of no-fault
liability since this would mean “to advance from the era of uncertainties to that of solutions”.
This proposal will be most likely supported by the other Advocates General, given their
observations on the effect of WTO law in the opinions reviewed above.
II.
Divergent perceptions and interpretations in legal doctrine
175. A bright analysis of legal doctrine on this subject is quite a challenging task,
considering that the analyst quickly finds himself faced with a panoply of different
approaches and solutions. This chapter aims at creating a certain degree of structure in and
understanding of this panoply in order to make a correct assessment of the ECJ’s case law and
to make a valuable proposition as regards the future direction of the ECJ.
83 The ECJ and its GATT/WTO rulings: subject of towering discussions
§1.
The relationship between GATT/WTO law and the EU legal order: an international
law perspective
176. Of all three ‘stages’ to discuss, the relationship between GATT/WWTO law and the
EU legal order is probably the most abstract one. That relationship is governed by the
principles usually governing the relationship between international law and domestic law (in
this case Union and national law), which is primarily defined by constitutional law and thus
differs from State to State. Generally, a State’s constitution opts for monism or dualism. In
the first instance, international law becomes part of the national legal order without formal
transformation. Under dualism, all international law has to be enacted in the form of domestic
law before it becomes part of the national legal order. Monism is referred to as a pragmatic
approach, favouring international law, while dualism protects sovereignty and the supremacy
of the legislative institutions over the executive and judicial institutions.333
177. This also counts for the relationship between WTO law and the EU legal order. In
assessing the relationship with international law, the ECJ has applied both monism and
dualism.334 From the case law above, it is clear that in case of GATT/WTO law, the ECJ has a
pronounced preference for dualism as opposed to the monist approach it has displayed with
respect to other international agreements.335
178. In this context, it is worth the effort of briefly explaining two adjacent concepts:
namely pluralism and constitutionalism. Pluralism emphasises on separate and distinct legal
orders, like dualism. But pluralism focuses on the plurality of diverse normative systems, as
opposed to dualism, which only deals with the relationship between national and international
law. Similarly, constitutionalism resembles monism in its assumption of a single integrated
legal system. Pluralism stands on the value of diversity in different national and international
legal orders, constitutionalism seeks coherence and common grounds between these
333
EECKHOUT, cited supra note 112, 277, F. G. JACOBS, The effect of treaties in Domestic law, Londen,
Sweet & Maxwell, 1987, introduction, S. BESSON, “European Legal Pluralism after Kadi”, European
Constitutional Law Review 2009, 246.
334
For an analysis of the oscillations between monist and dualist interpretations of the ECJ
jurisprudence, see JAN KLABBERS, “International Law in Community Law: the Law and Politics of
Direct Effect”, Yearbook of European Law 2002, 263.
335
EECKHOUT, cited supra note 112, 302 et seq.
84 The ECJ and its GATT/WTO rulings: subject of towering discussions
systems.336 Looking at the issue of GATT/WTO law through constitutionalist eyes, one sees
an advocacy for direct effect.
179. Only a handful of scholars supports the idea of giving full direct effect to GATT/WTO
law. One of them is a strong constitutionalist and direct effect adept: Petersmann.
Petersmann’s view on world trade, which is a very liberal one, automatically results in a plea
for direct effect. He is clearly inspired by Adam Smith and his ‘invisible hand’, he poses that
economic welfare and equality of freedoms of citizens require the legal protection of equal
freedoms and property rights of citizens through certain legal guarantees and judicial
protection of their individual rights.337 Granting direct effect to GATT/WTO law would, in
his view, probably be one of the legally most effective and economically most efficient means
to achieve that objective. This way WTO rules could be protected and enforced at national
level by specific performance and international disputes would often be prevented.
Petersmann even takes it one step further by stating that GATT/WTO law can effectively
serve as a “third line of constitutional entrenchement” of legal guarantees for nondiscriminatory foreign trade competition. In his view GATT/WTO law could serve as a
“constitutional constraint” on the far-reaching, discriminatory trade policy powers of the
Council and Commission.338 Petersmann constitutional insights are inspired by Hayek,
another classic liberal economist/philosopher who proposes an international constitutionalism
that limits political powers through internationally judicially enforceable and directly
effective “global integration law” protecting economic freedoms and rights.339 However,
Petersmann does not disregard the reality, being a very conservative approach of the ECJ.
Even when direct effect is not an option, judges are “constitutional guardians” and can still
336
G. DE BURCA, “The European Court of Justice and the international legal order after Kadi”, Harvard
International Law Journal 2010, 31 et seq.
337
E.U. PETERSMANN, Constitutional functions and constitutional problems of international economic
law, Switzerland, University Press Fribourg, 1991, 49 – 62 and E.U. PETERSMANN, cited supra note 96,
13 – 17. See also supra § 45.
338
Petersmann on constitutional problems of international economic law, cited supra note 337, 439 440.
339
Hayek’s most known publications are considered classics in modern day economics, a.o. F. V.
HAYEK, The road to Serfdorm, London, George Routledge & Sons, 1944, 265 p and Law, Legislation
& Liberty: a new statement of the liberal principles of justice and political economy, Chicago,
University of Chicago Press, 1973, 3 volumes.
85 The ECJ and its GATT/WTO rulings: subject of towering discussions
“prevent and settle international economic disputes by interpreting domestic laws in
conformity with international legal obligations”.340
180. Up till some level, also Jackson leans towards this approach: in his view GATT/WTO
law should be enforced through specific performance, more particularly that GATT/WTO law
should be directly applicable, and at times even directly effective, in the legal orders of the
WTO Members.341 However, although Jackson’s opinion is very authoritive, one should not
qualify it as the WTO standpoint. Greatly divergent opinions can be expected from that
quarter: Ehlerman, a former member of the AB, is confident that recognising direct effect of
WTO law would damage the WTO itself. This would lead to increasingly aggressive
complaints by Members to compensate for having granted direct effect, which would then
further strengthen panels and the AB at the cost of the political organs of the WTO.342
Trachtman argues that the lack of direct effect provides a political filter, which was formerly
provided by the requirement for consensus in order to adopt panel decisions.343
181. Cottier developes a new theory of direct effect, a theory characterised by a lack of
general statements, a theory most abstracted from the abstract and therefore very contrary to
the above mentioned approach through general concepts of monism, dualism,
constitutionalism. He criticises the Court’s approach in only assessing the normative quality
of a WTO provision: whether it is sufficiently precise for judicial application. In stead, the
question is whether “a court, in the context and under the facts of the particular case, is
provided with sufficient guidelines and criteria to hand down a rationally motivated
decision”.344
340
PETERSMANN, E-U., “Judging Jugdes: from ‘Principal-Agent Theory’ to ‘Constitutional Justice’ in
Mulitlevel ‘Judical Governance’ of Economic Cooperation Among Citizens”, Journal of International
Economic Law 2008, 873 and 877.
341
JACKSON, cited supra note 96.
342
EHLERMANN, D., “Some personal experiences as member of the Appellate Body of the WTO”,
Policy Paper RSC No. 02/9, Robert Schuman Centre for Advanced Studies, EUI, Florence, 41 – 42 and
“Part II: WTO Dispute Settlement: Insight from Practitioner – Reflections on the AB of the WTO”,
Journal of International Economic Law 2003, 704.
343
J. TRACHTMAN, “Bananas, Direct Effect and Compliance”, European Journal of International Law
1999, 660.
344
COTTIER, cited supra note 351.
86 The ECJ and its GATT/WTO rulings: subject of towering discussions
§2.
The ECJ’s conservative approach: criticism and support
182. However, this paper focuses on the effect of WTO law from a European law
perspective. Thus, so much for an ‘exotic’ view on the subject. From a European law
perspective, just as little observers plead for the full direct effect of GATT/WTO law in the
European Union.345 All the more observers have voiced criticism on the ECJ’s reasoning or
conservative approach in recent cases involving liability or direct action by a Member
State.346 But most observers are aware of the delicacy of the issue and handle it with a sense
of circumspection. This chapter shall first address the criticism on the ECJ’s current main
arguments in denying direct effect, namely reciprocity and flexibility. However, it is one
thing to criticise the reasoning, since the reasoning is important. Yet it is another thing to take
issue with the ECJ’s ultimate conclusion, which several observers are less inclined to do.
Consequently, the second chapter shall look in to the reactions to the ECJ’s conclusions with
respect to questions of liability, DSB decisions and direct actions by Member States.
i.
The ECJ’s reasoning: judicial self-restraint
i.a.
The reciprocity argument
183. A great deal of the criticism on the ECJ’s reasoning is voiced with respect to the
reciprocity and flexibility arguments. The reciprocity argument has been a hot topic in the
direct effect debate, probably because of its essential value in the rulings of the Court. Several
observers have criticised the reciprocity argument as being not convincing within the context
of international law. The general objective of many international agreements is to create
mutual benefits to the parties, then why this becomes an issue when assessing the WTO
agreements remains a question not answered by the Court. 347
184. Although most observers do not consider reciprocity a valuable legal argument, their
stance on the political value for the Court left aside, it is worth looking into the ones that do
consider it valuable. Zonnekeyn contends that the recognition of direct effect in the context of
345
e.g. S. GRILLER, ., “Judicial Enforceability of WTO law In the European Union: Annotation to Case
C-146/96, Portugal v Council”, Journal of International Law 2000, 454 et seq.
346
See infra §§ 183 et seq.; e.g. P. EECKHOUT, “Judicial Enforcement of WTO Law in the EU – Some
further reflections”, Journal of International Economic Law 2002, 101.
347
MARESCEAU, cited supra note 105, 259; E-U PETERSMANN, cited supra note 125 at 426; R.
UERPMANN-WITTZACK, “The Constitutional Role of Multilateral Treaty Systems”, in A. VON
BOGDANDY, A. & J. BAST, (eds.), Principles of European constitutional law, Oxford, Hart Publishing,
2006, 157.
87 The ECJ and its GATT/WTO rulings: subject of towering discussions
GATT/WTO would indeed impair reciprocity in its application because most of the other
contracting parties do not recognise direct effect of GATT.348 But more recently, Zonnekeyn
condemned the Court’s reasoning in Portugal v Council as being “an assault to the trias
politica principle”.349 Von Bogdandy’s account on the subject is quite remarkable. In his
view, the reciprocity argument is derived from the principle of legal equality. Accordingly,
this shows from the outset of the ECJ in Portugal v Council to safeguard uniform application
of EC law throughout the Union. Direct effect of WTO law would definitely lead to a
disuniform application of the WTO rules and therefore jeopardise legal equality between
economic operators acting under different municipal legal orders.350 Even with respect to
actions for damages, Von Bogdandy emphasises that the reciprocity argument is by no means
political.
185. When going to extremes, one should as well consider Cottier, who recognises the issue
of reciprocity and foists far-reaching implications upon it: he is convinced that the issue of
direct effect in the EU legal order cannot be solved on a European level, given the multilateral
character of the world trade system.351 Cottier recognises the reality of what he calls the
“political economy” and the implications of the direct effect debate on the allocation of
powers between the EU institutions. He proposes to integrate WTO law in domestic fora step
by step and on a reciprocal basis, by means of introducing minimal standards of direct effect
into the world trading system through negotiations. This proposal is in accordance with the
observations made by AG Alber in his opinion in Omega.352
186. Eeckhout takes a similar stand on the nature of the reciprocity argument, which he
considers only a useful leg up to the actual argument, namely the impact of direct effect on
the EU's political institutions.353 Eeckhout rightly observes that this argument touches upon
the constitutional relations between judiciary, the executive and the legislative. Also Tancredi
qualifies the problem of direct effect as being essentially a matter of balance of power among
348
ZONNEKEYN, cited supra note 122.
G. ZONNEKEYN, “The status of the WTO agreements in the EC legal order after the Portuguese
Textiles Case”, International Trade Law and Regulation 2000, 45.
350
VON BOGDANDY, cited supra note 164, 52 – 53, see also supra § 73.
351
T. COTTIER, “A theory of Direct Effect in Global Law” in A.VON BOGDANDY, P. MAVROIDIS, Y.
MÉNY, (eds.), European Integration and International Co-ordination – Studies in Transnational
Economic Law in Honour of Claus-Dieter Ehlermann, Nederland, Kluwer Law International, 2002,
109.
352
See supra §§ 151 - 152.
353
EECKHOUT, cited supra note 346, 94 – 96.
349
88 The ECJ and its GATT/WTO rulings: subject of towering discussions
the EU institutions.354 Eeckhout recognises the judicial policy making, but does not criticise
it. “Whether pro or contra direct effect, the Court could not avoid reaching a decision on
grounds other than judicial policy. Any formal legal reasoning could only serve to dress (and
disguise?) the judicial decision”.355 Neither Alemanno criticises the Court’s view, in his
opinion reciprocity is a very powerful argument.356 Bronckers does not agree, in his view the
Court follows the policy and institutional structure of other WTO Members too
subserviently.357 More specifically in the case of a direct action by a Member State,
challenging the legality of a Union measure, these political considerations may not put so
much weight in the balance.358
187. Many observers rightly indicate the constitutional weight of this subject. Kuijper puts
forward that it is “no longer tenable to see the Court as having exclusive authority when it
comes to the question of direct effect”.359 He predicts that tensions between the Court and the
legislative power will only increase due to the movement of democratic legitimisation of the
legislative power.
188. Indeed, WTO law has profound implications on the EU constitution. Direct effect
would greatly empower the judiciary, at the cost of the powers of both the legislative and
executive. However, in this case the ECJ restrains itself from performing judicial review. But
even without granting direct effect, WTO law has started to reshape the relations between the
Union and its Member States through the case law of the ECJ putting forward the alternatives
of consistent interpretation, clear reference (Fediol) and transposition (Nakajima).360 It is
clear now that the question of direct effect is a question of balance of power. However, the
question arises whether this is automatically the case.
i.b.
354
The flexibility argument
TANCREDI, cited supra note 57, 942.
EECKHOUT, cited supra note 346, 96.
356
ALEMANNO, A., “Judicial Enforcement of the WTO Hormones Ruling within the European
Community: toward EC Liability for the Non-Implementation of WTO Dispute Settlement
Decisions?”, Harvard International Law Journal 2004, 551.
357
BRONCKERS, cited supra note 166, 1351, 1354.
358
See infra §§ 194 - 196.
359
KUIJPER, cited supra note 166, 1321.
360
On those alternatives see infra §§ 218 - 229 , SNYDER, cited supra note 93, 367.
355
89 The ECJ and its GATT/WTO rulings: subject of towering discussions
189. The ECJ presupposes a certain degree of power to be balanced, it argues that a certain
scope for manoeuvre exists for the executive and legislative institutions of the Union.
However, certain observers argue that there is no such scope for manoeuvre after a DSB
decision has been issued. So when entering the area of institutional implications, the
argument of flexibility should be reviewed as well: the Court reasons that due to an imbalance
in reciprocity, created by direct effect, the Court would tie the hands of the other Union
institutions and thereby deprive them of their scope for manoeuvre.361 This scope for
manoeuvre is in the Court’s view the result of the flexibility of the WTO Agreement and the
DSU. Since negotiations still play a significant role in the dispute settlement system, WTO
obligations are still not unconditional and therefore not suitable to be granted direct effect.
The question arises whether these WTO obligations are indeed not unconditional?
190. With respect to the WTO Agreement, one could easily argue that a large scope for
manoeuvre exists.
362
However, with respect to trade disputes in which the AB has already
given a ruling, the Court is accused of giving an erroneous interpretation of the DSU rules
governing the implementation phase of the procedure.363 Bronckers even appraises the DSU
as being much more developed than the dispute settlement systems of other treaties, which
the Court did hold to have direct effect.364 Jackson argues that the obligation to comply with
WTO rules can be inferred from the language used in the DSU.365 However, the Court
considered compensation and toleration of retaliation suitable alternatives to full and
immediate compliance. These alleged alternatives are negotiable, so by recognising them as
fully fledged definitive solutions, the Court created room for negotiations and scope for
manoeuvre. But, Tancredi rightly observes that although de iure such negotiations should not
take place or should not be of the kind to have an influence on the Court’s reasoning, de facto
WTO Members re-enter into negotiations with a view to reaching a settlement, initially only
temporary (but often “provisoire qui dure”).366 Moreover, WTO Members tend to make
agreements that do not necessarily comply with the WTO Agreement, so called derogatory
361
Portugal v Council, cited supra note 154 at § 46, Van Parys, cited supra note 178 at § 48, FIAMM,
cited supra note 192 at § 119.
362
See supra §§ 18 - 27; EECKHOUT, cited supra note 346.
363
On the implementation phase of the dispute settlement system, see supra § 14. TANCREDI, cited
supra note 57, 945.
364
BRONCKERS, cited supra note 166, 1344.
365
J. JACKSON, "The WTO Dispute Settlement Understanding--misunderstandings on the Nature of a
Legal Obligation", in J. CAMERON and K. CAMPBELL (eds.), Dispute Resolution in the WTO , London,
Cameron & May, 1998, 69-74, 73.
366
Ibid. at 944.
90 The ECJ and its GATT/WTO rulings: subject of towering discussions
agreements. So, Tancredi observes that the actual issue in determining the scope for
manoeuvre of the EU is to analyse the nature of the legal obligations arising from both WTO
substantive norms and DSB rulings.
191. In this context, Steinbach argues that the DSU indeed imposes the definitive obligation
to ensure the implementation of the ruling within twenty days after the expiry of the
implementation period. This is a downright obligation to comply. However, the losing party
still has a scope for manoeuvre as to how it will implement the obligation.367 Therefore, he
does not consider WTO law embodied in a DSB decision unconditional. But the majority of
the doctrine does consider these obligations absolutely binding. Accordingly, compensation
and retaliation are no methods of settling disputes, but only instruments to put pressure on the
respondent Member and to avoid that other WTO Members would suffer damage as a
consequence of the failure to comply.368 Following this reasoning, WTO law embodied in a
DSB decision ís unconditional.
192. Tancredi takes his analysis one step further, since this traditional approach does not
incorporate the practice of post AB rulings negotiations and derogatory agreements. He
concludes that the obligations resulting from a DSB decision probably are not cogent.369 This
means that these do not qualify as ius cogens. As a consequence, such derogative agreements
should be considered unlawful but valid. Since these agreements are valid, transparency is of
the highest importance, so as to inform and enable other WTO Members to file a complaint
against the unlawful agreement. It seems that, in Tancredi’s view, such agreements do not fall
under the scope for manoeuvre. There is only a slight scope for manoeuvre, situated in
between ‘conformity’ and ‘compatibility’.370
367
STEINBACH, cited supra note 32, 945 et seq., C. TIMMERMANS, “The Implementation of the
Uruguay Round by the EC” in J. BOURGEOIS, F. BERROD, E. GIPPINI-FOURNIER, (eds.), The Uruguay
Round Results – A European Lawyer’s perspective, Brussels, European Interuniversity Press, 1995,
504.
368
GRILLER, cited supra note 345, 441, ZONNEKEYN, G, “The status of WTO law in the community
legal order: some comments in the light of the Portuguese Textiles Case”, European Law Review 2000,
293 and VAN DEN BROECK, N., “Legal Persuation, Political Realism and Legitimacy: the European
Court’s Recent Treatment of the Effect of WTO Agreements in the EC Legal Order, Journal of
International Economic Law 2001, 439, P. MENGOZZI, “La Cour de justice et l'applicabilité des règles
de l'OMC en droit communautaire à la lumière de l'affaire « Portugal c. Conseil », Revue du Droit de
l’Union Européenne 2000, 517.
369
See also Opinion of AG Mischo in ECJ case C-104/97 P., Atlanta AG v Council and Commission,
ECR 1999, I-6983.
370
TANCREDI, cited supra note 57, 960.
91 The ECJ and its GATT/WTO rulings: subject of towering discussions
193. From the above, one should conclude that Tancredi is right in observing that indeed a
slight scope for manoeuvre exists. This implies that the DSU does provide a slight degree of
flexibility after the adoption of an AB ruling. However, this does not imply that a DSB
decision is not unconditional. Indeed, there is a scope for manoeuvre, but the ECJ would not
deprive the executive and legislative of that scope by assessing the legality of a Union
measure in the light of a DSB decision, for that illegality has already been established by that
decision. The scope for manoeuvre does not extend so far as to allow the Union to negotiate a
settlement that is not compatible and therefore unlawful. In this respect mention should be
made of the recently resolved banana dispute, which triggered a great deal of cases
concerning direct effect. Eventually, the scope of manoeuvre of the executive and legislative
institutions of the EU turned out to be quite small: the solution that closed the dispute holds
major obligations for the EU with respect to its tariffs, the US and Latin American States on
the other hand are only obliged to settle legal disputes concerning bananas pending against
the EU at the WTO. Would that outcome have been less favourable (if possible) for the EU if
the Court had ruled on the validity of the banana regime?
ii.
Appreciation of the ECJ’s conclusion despite heavy criticism on its reasoning
ii.a.
Direct actions by Member States
194. The fact that the ECJ has not distinguished between individual complainants and
Member States in its case law relating to the effect of GATT/WTO law, ran into a great deal
of misunderstanding.371 After all, direct effect relates to the question whether an individual
can call upon certain rights before domestic courts. Then why impose direct effect as a
condition for the invocability of GATT/WTO law in the review of legality of a Union act by a
Member State? Also AG Saggio had recommended to make the distinction between direct
effect and the invocability of an international agreement.372 But the Court has already in
International Fruit Company created a preconditional link between these two distinct
concepts: in order to be invokable in a validity review the concerning provision of
371
EGLI, P., KOKOTT, J., OXMAN, B., “EC – WTO Agreements – Effect of International Agreements in
European Community Law – Ability of individuals and Member States to rely on WTO Agreements”,
American Journal of International Law 2000, 744; WOUTERS and VAN EECKHOUTTE, cited supra note
111; Wouters observes that in Portugal v Council, the ECJ is careful not to refer to ‘direct effect’,
despite the continuing reference to Kupferberg.
372
See supra §146.
92 The ECJ and its GATT/WTO rulings: subject of towering discussions
international law should have direct effect.373 By doing so the ECJ established a threshold,
being direct effect, in order to protect the validity of Union measures, as Bebr correctly
indicates.374 Yet this ‘technique’ becomes more questionable when Member States file an
action for validity review and the link with direct effect, namely the individual, disappears.
195. Bronckers heavily criticises the ECJ’s reasoning, he refers to this issue as a ‘black hole
for EU Member States”. In his opinion, the Court should have taken more into account the
fact that the Member States play a different role in the constitutional architecture of the Union
than individuals. Member States should be considered ‘privileged applicants’.375 Both
Bronckers and Bourgeouis argue that they should have the same possibility as the Union
institutions to have the Court determine a violation of WTO law by the institutions.376 All the
more so because they are still contracting parties to the WTO and therefore carry international
responsibility for the correct application of WTO obligations by the Union.377 On top of that,
the Member States are bound by a duty of cooperation, which means that EU Member States
among each other “are not allowed to hang out their dirty washing” in a WTO framework.378
Bronckers argues that this calls for an “internal outlet” through which these disagreements
between Member States and EU institutions can be solved within the Union.379 However,
Bronckers recently expressed a more nuanced view to the case law, which has since Portugal
v Council provided alternatives for Member States.380
196. Certainly, the criticism voiced on this specific subject is justified. But once again, one
should be extremely cautious in granting direct effect to the WTO, a multilateral trade
373
International Fruit Company, cited supra note 101, §8.
BEBR, cited supra note 122.
375
Also Saggio referred to the Member States as ‘privileged persons’, see supra §145 - 146.
376
J. BOURGEOUIS, “The European Court of Justice and the WTO: Problems and Challenges”, in J.
WEILER, (ed.), The EU, the WTO and NAFTA: Towards a Common Law of Internatioanl Trade?,
Oxford, Oxford University Press, 2001, 71, 112 – 113. The Court ruled in 1996 that the Commission
could bring an action against a Member State for infringement of EC rules implementing the GATT
1947 in ECJ case C-61/94, Commission v Germany, ECR 1996, I-3989.
377
BRONCKERS, cited supra note 166, 1349; for this purpose Bronckers also refers to U. EVERLING,
“Will Europe Slip on Bananas? The Bananas Judgment of the Court of Justice and National Courts”,
Common Market Law Review1996, 423.
378
ECJ Opinion 1/94 on the Competence of the Community to conclude international agreements
concerning services and the protection of intellectual property, ECR 1994, I – 5276, §§ 108 – 109.
379
Ibid. at 1350.
380
M. BRONCKERS, “From direct effect to muted dialogue: Recent developments in the European
Courts’ Case Law on the WTO and Beyond”, Journal of International Economic Law 2008, 885-898;
See infra §§
374
93 The ECJ and its GATT/WTO rulings: subject of towering discussions
organisation with a very pervasive scope in which negotiations and power still are very
determining. Once again, it comes down to criticism on the reasoning: the Court should
disconnect direct effect and invocability as regards cases brought before it by Member States.
This could enable the Member States to invoke WTO law. However, the intrinsic qualities of
the WTO provision concerned would be taken into account in the legality test itself.
Therefore, the ECJ would still have the opportunity to rule on the clear, precise and
unconditional nature of the provision, and thus to develop new arguments or old ones relating
to the flexibility and the reciprocity of the WTO. Wouters and Van Eeckhoutte rightly argue
that this would be coherent with the ECJ’s case law regarding other international agreements
and customary international law, i.e. the Biotechnology case and Racke.381
ii.b.
The status of DSB decisions in an action for annulment pursuant to article 263
TFEU
197. The question of the effect of DSB decisions is twofold and is independent from the
question of the effect of WTO law.382 One should distinguish between calling upon a DSB
decision in the framework of a damages action, like in Biret, and calling upon a DSB decision
in the framework of a validity review of a Union measure, like in Van Parys. The latter will
be discussed below. DSB Decisions in damages actions will be discussed in the next chapter
relating to Union Liability.383
198. Kuijper does not seem to agree with the ECJ on the fact that the effect of a DSB
decision is a question independent from the question of the effect of WTO law. He argues that
a DSB decision, being a quasi-judicial decision, cannot fundamentally change the character of
a WTO rule. In assessing the DSB decision, the whole WTO should be taken into
consideration, including the absence of direct effect.384
199. Di Gianni and Antonini argue that it is justified to deny DSB decisions direct effect in
actions seeking a declaration of invalidity of Union law, since it would go against the
381
See supra § 67, cited supra note 141; ECJ case C-192/96, Racke, ECR 1998, I-3655; WOUTERS and
VAN EECKHOUTTE, cited supra note 111, 225 et seq.
382
See supra § 79.
383
See infra § 202 et seq.
384
KUIJPER, cited supra note 166, 1335.
94 The ECJ and its GATT/WTO rulings: subject of towering discussions
reciprocity and flexibility characterising the WTO Agreement.385 Also Steinbach does not
favour the direct effect of DSB decisions in actions seeking validity review, he argues that a
DSB decision is not unconditional, on the contrary it leaves the EU leeway in choosing how it
will reach a WTO compatible solution even beyond the expiry of the implementation
period.386
200. This discussion comes down to whether to support the reciprocity and flexibility
argument, namely whether there is still scope for manoeuvre for the other EU institutions.387
From the chapter above it seemed that especially with respect to situations in which the AB
has established the incompatibility with WTO law and the implementation period had
expired, the scope for manoeuvre has been substantially reduced. For an assessment of the
reader is being referred to the chapter on reciprocity and flexibility. However, once more it
becomes apparent that although several authors do not agree with the reasoning of the Court,
they can appreciate the conclusion of the Court in not granting direct effect to DSB decisions
in cases of validity review, since this would imply that the Court would have to annul the
Union measure concerned.388
201. With respect to direct actions by Member States challenging the validity of a Union
measure in the light of a DSB decision, the same remarks should be made as in the previous
chapter. Direct effect should not be required in order for Member States to challenge a Union
measure in the light of a DSB decision.
385
F. DI GIANNI and R. ANTONINI, “DSB decisions and direct effect of WTO law: Should the EC courts
be more flexible when the flexibility of the WTO system has come to an end”, Journal of World Trade
2006, 789 et seq.
386
STEINBACH, cited supra note 32, 1056.
387
See supra §§ 183 - 193.
388
Eeckhout argued otherwise that some type of direct effect could be given to adopted panel and
Appellate Body reports, from the perspective that that would not amount to wholesale direct effect in P.
EECKHOUT, “Domestic legal status of the WTO Agreement: Interconnecting legal systems”, Common
Market Law Review 1997, 53 – 55. However, more recently he adopted a slightly mitigated approach
by advocating for alternatives such as consistent interpretation and the Nakajima exception.
95 The ECJ and its GATT/WTO rulings: subject of towering discussions
iii.
Disagreement with both reasoning and conclusion
iii.a. The status of DSB decisions in an action for damages pursuant to article 340
TFEU
202. With respect to damages, Eeckhout rightly observes and reflects the general tenor
amongst legal scholars that “full direct effect and supremacy - the imperial gowns of
constitutionalism - are clearly undesirable, but complete municipal judicial blindness for
WTO law would be just as inappropriate”.389 Several authors agree with AG Alber in Biret
that recognition of the direct applicability of WTO law embodied in DSB recommendations
or rulings does not therefore mean that the Union measure concerned would be annulled. And
consequently that the Court will not reduce the discretion enjoyed by the legislative and
executive bodies of the Union in granting compensation for the damages suffered by the
complainants.390
203. Alemanno observes that the costs of non-compliance are borne mainly by private
companies. Consequently he argues that allowing individuals to rely on DSB decisions in an
action for damages would result in a better balance between the interests of Member States
and their private business operators. Granting direct effect in damages claims would not
prevent the EU from refusing to conform. It would thus not deprive the executive and
legislative of what little scope for manoeuvre they have left after a DSB decision.391
Steinbach similarly and rightly argues that the prospect of an action for damages is
reconcilable with the binding and unconditional obligation to implement the DSB decision,
such a prospect would not affect the alleged scope of manoeuvre regarding different ways to
implement.392 Moreover, based on the liability doctrine developed in Francovich, he argues
that direct effect should not be a compulsory element once the implementation period has
expired in order to establish an action for compensation.393
389
DI GIANNI and ANTONINI, cited supra note 385, 791; EECKHOUT, cited supra note 346 at § 7.
See supra §§ 153 - 159; STEINBACH, cited supra note 32, 1056 et seq;
391
ALEMANNO, cited supra note 356, 560.
392
STEINBACH, cited supra note 32, 1057.
393
Ibid. at 1060; ECJ Joined Cases C-6/90 and C-9/90, Francovich and Others v Italy, ECR 1991, I5357.
390
96 The ECJ and its GATT/WTO rulings: subject of towering discussions
204. Kuijper, on the other hand, argues against this possibility for the same reasons stated
above with respect to the effect of DSB decisions in view of validity review.394 Moreover, he
considers it “somewhat absurd” to award compensation to individuals in a system like the
WTO, where in principle no compensation is awarded between Members.
205. Thies provides a refreshing view on this issue after a discerning analysis of the FIAMM
judgment. She argues to divide the Union conduct into three different categories. The first one
is the original legislation, found to be non-compliant with WTO law, the second kind of
conduct is the omission to implement fully the DSB ruling, including the deliberate choice to
accept retaliatory measures and thirdly, the Union’s omission to create an internal mechanism
to balance economic loss suffered by private companies.395 In this view, the existence of a
DSB decision and retaliatory measures becomes essential to acquiring compensation for
damage suffered due to the EU’s conduct in a trade dispute. Thies takes into consideration the
ECJ’s conservative approach and rightly indicates that no compensation can be granted for
the first category of conduct, since doing so would undermine the ECJ’s stance in the general
denial of direct effect of the WTO Agreement. More particularly, doing so would interfere
with the scope for manoeuvre. The difference between the first and second category comes
down to the fact that a DSB decision is autonomous from the WTO Agreement.396 It just
approaches the situation from a different – internal - angle, namely how does the EU respond?
206. Thies analysis really makes a difference since it focuses on developing a fully-fletched
alternative to direct effect. She tests the Union conduct against general principles, an
argument also developed by FIAMM. More particularly, she tests whether the deliberate
omission to implement a DSB ruling and consequently face retaliatory measures in
combination with a lack of internal mechanism to balance the economic loss infringes upon
certain general principles being the right to property and the right to pursue an economic
activity, the principle of legitimate expectations and the right to non-discrimination. In sum,
Thies concluded that especially the right to non-discrimination, or in other words the general
principle of equality of public burden, might play a more important role in view of full
judicial protection, because the EU accepts to let only some of its traders bear the costs of an
394
See supra § 198.
A. THIES, “The impact of general principles of EC law on its liability regime towards retaliation
victims after FIAMM”, European Law Review 2009, 897.
396
This is established by the ECJ, see supra § 79.
395
97 The ECJ and its GATT/WTO rulings: subject of towering discussions
international dispute. It could in itself be the basis for a legal obligation of the Union
institutions to provide compensation alongside their acceptance of retaliatory measures.397
207. A same kind of reasoning can be found in AG Maduro’s opinion in FIAMM with
respect to the notion of the equality of citizens in bearing public burden in the context of nofault liability.398 Thies’ train of thoughts certainly has potential in unravelling this heavily
debated issue. It would, however, go beyond the scope of this dissertation to go deeper into
this subject.
208. Another approach could be to qualify the Union measures adopted in the light of a DSB
decision under the Nakajima exception. Also AG Tizzano proposed this solution, he argued
that the Union legislature intended to implement a ‘particular obligation’ assumed in the
context of the WTO, being the recommendations adopted by the panel or AB.399 Also
Eeckhout considers this a valid alternative, he refers the ‘implementation principle’.
However, at the time of Eeckhout’s writing, the ECJ had not yet ruled out this proposal in
Van Parys. Demey rightly observes that even though the situation in Van Parys seemed at
first sight to warrant a clear application of the Nakajima principle, the ECJ found a way out
by referring to the possibility for WTO members to come to a negotiated solution.400 One
might indeed wonder whether this judgment renders the Nakajima exception unworkable, and
consequently whether it still has a future?
209. It is clear now that several proposals have been made by both advocats for direct effect
and more sceptical minds to allow individual complainants to bring an action for damages
before the Courts. From this one should conclude that both the reasoning and the conclusion
made by the Court fail to gain approval in legal doctrine.
iii.b.
No-fault Union liability: FIAMM
210. Before FIAMM, the ECJ had not pronounced itself on the acknowledgement of a
principle of no-fault Union liability. The ECJ had – hypothetically – established the
397
THIES, cited supra note 395, 900 – 901, 913.
See supra § 168.
399
Tizzano referred to the judgment in Italy v Council. In which the Court further defined the scope of
the exception created in the Nakajima through the concept of ‘a particular obligation’. Cited supra note
227.
400
D. DE MEY, “The Effect of WTO Dispute Settlement Rulings in the EC Legal Order: Reviewing
Van Parys v Belgische Interventie- en Restitutiebureau”, German Law Journal 2005, 1032.
398
98 The ECJ and its GATT/WTO rulings: subject of towering discussions
conditions for such a liability, if it ever was to become acknowledged, being actual damage of
a unuasual and special nature and direct causal link.401 When briefly looking back to the
Advocates General, the principle of no-fault liability as put forward by AG Maduro in
FIAMM was the greatest common denominator.402 When looking at legal doctrine, there has
been a high degree of agreement on not to grant full direct effect to the WTO and also a
certain degree of agreement not to grant direct effect to DSB decisions in an action for
legality review. The heavily criticised reasoning of the ECJ left aside of course. With respect
to direct effect of DSB decisions in the framework of an action for damages, opinions are
divided. There certainly is an increase in scholars advocating for Union liability for unlawful
conduct, the unlawful conduct being the non-implementation of a DSB decision in
combination with the acceptance of retaliatory measures. Now the question arises whether
Union liability in the absence of unlawful conduct is a more feasible solution to the problem
in that more observers would agree on it? Or in other words is the FIAMM judgment a missed
opportunity or rather a tricky situation the ECJ managed well?
211. Article 340, § 2 TFEU (ex article 288, §2 TEC) puts forward that the general principles
common to the Member States form the basis for the right to compensation. The ECJ did not
thoroughly examine the status of a principle of no-fault liability among the Member States. It
simply ruled that principles differ from one Member State to another, focusing on the
limitations to Member States’ principles, i.e. legislative discretion. From which it then
concluded that no liability in the absence of unlawful conduct existed on the EU level,
without satisfactorily reviewing the GC’s and the AG’s approach. Both the GC and AG
Maduro recognised such a principle and referred to the existence of non-contractual liability
in the absence of unlawful action in national laws.403 But neither of them have profoundly
examined the situation in the Member States. In Maduro’s view, a Union liability should meet
the specific needs of the EU legal system by using domestic law for guidance only, which in
this case certainly calls for no-fault liability in order to “offset the severity of the conditions
for the incurring of fault-based Union liability”.404
401
Dorsch Consult, cited supra note 202, for an overview of these conditions see supra §§ 91 – 92.
See supra §§ 173 - 174.
403
FIAMM (GC), cited supra note 194 at § 159 and § 152 resp; Maduro, see supra § 167.
404
Ibid. at § 57.
402
99 The ECJ and its GATT/WTO rulings: subject of towering discussions
212. No-fault liability exists in several Member States, albeit in different forms and under
different conditions. However, it would go beyond the scope of this dissertation to examine
the current state of such a principle among the EU Member States. Kuijper observes that a
certain of no-fault liability, more particularly the principle of equality of citizens in bearing
public burden, exists in only a small number of Member States, namely Germany, France, the
Netherlands and Belgium.405 Thies adds that in Germany as well as in Spain, such a principle
is based on the protection of the right to property.406 She rightly observes that in each of those
Member States general principles, which are already recognised as individual general
principles of Union law, lie at the roots of the liability principle.407 She blames the ECJ for
not addressing this issue as it should have done. In Thies opinion, the principle of equality for
public burden could justify an independent liability regime, according to which a right to
compensation arises if Union conduct caused unusual and special damage for some.
213. Kuijper doubts whether there is enough common ground in the legal systems of the
Member States to adopt such a principle at the Union level. He argues that it is probably a
bridge too far to apply the principle of equality of public burden for the first time at the Union
level in the field of external relations. But despite his doubts regarding the feasibility, also
with respect to the conditions of causal link and unusual nature, Kuijper is convinced that the
legislature should “seriously consider allowing compensation under this principle for certain
well-defined groups of individuals”.408 Mind ‘the legislature’ and not the judiciary. Also
Thies considers it unlikely that the ECJ will in the near future alter its reasoning and
conclusion reached in FIAMM.
214. Clearly inspired by Maduro, Thies puts forward three reasons to illustrate the potential
role of the no-fault liability principle in the context of international trade disputes. First, the
fact that it would provide a means of judicial protection for retaliation victims. Second, the
fact that it would not affect the political scope of manoeuvre, while still enabling courts to
grant compensation. She argues that the impact would be purely financial and that it would be
limited due to the condition of unusual and special damage. And third, it would increase good
governance since it would make both the public and the Union institutions more aware of the
consequences of their policy choices. This would lead to a transparent political process which
405
KUIJPER, cited supra note 166, 1340.
THIES, cited supra note 220, 907.
407
Ibid.
408
KUIJPER, cited supra note 166, 1341.
406
100 The ECJ and its GATT/WTO rulings: subject of towering discussions
should be preferred over “leaving it to the power of lobbying within the Union system when
deciding on continuation”.409 Also Von Bogdandy, a true direct effect sceptic, emphasises the
advantages of this “soft solution”. While extending the action for damages to unlawful
conduct based on a DSB decision brought about too much drawbacks, he argues that no-fault
liability would make way for “equity considerations”.410
215. If such a principle would become recognised by the ECJ, observers expressed their
concerns as regards the willingness of the ECJ towards the conditions for such a no-fault
liability, being actual damage of unusual and special nature and causal link. The ECJ did not
make a full assessment of these conditions in FIAMM, however it did not fail to mention that
“a market share constitutes only a momentary economic position, exposed to the risks of
changing circumstances”. In this view and especially with regard to the requirement of the
unusual nature of the damage, which the ECJ seems to allude to, it is recommendable to look
at the opinion of AG Maduro discussed above, who rightly argues that these requirements,
could indeed be fulfilled.411 Also Thies and Bronckers agree: business operators based in the
EU need not take into account a persistent breach of international law by the EU when
calculating their business risk.412
216. It is held against the ECJ that it once again displays judicial self-restraint in order not to
hinder the legislative by the prospect of actions for damages. Indeed, the Court probably took
it one step too far and definitely missed an opportunity here, since it could have provided an
equitable solution to retaliation victims without having to deal with the issue of direct effect
of GATT/WTO law. The question arises whether it will change its rulings in the near future?
§3.
Alternatives – indirect effect
217. The indirect effect of GATT/WTO law falls outside the scope of this thesis. However,
at the moment, it seems to be the only way in which the ECJ is willing to grant effect to
GATT/WTO law. As correctly noted by Bronckers: “As long as a private litigant does not
challenge the legality of EC measures on the basis of WTO law, the European courts show
409
THIES, cited supra note 220, 909.
VON BOGDANDY, cited supra note 174, 65.
411
See supra §§ 170 - 171.
412
BRONCKERS, cited supra note 380, 893; THIES, cited supra note 220, 909.
410
101 The ECJ and its GATT/WTO rulings: subject of towering discussions
themselves quite willing to interpret EC measures as much as possible in conformity with
WTO law.”413 Therefore, before coming to a final conclusion, it is necessary to briefly look
into these forms of indirect effect.
i.
Nakajima en Fediol
218. Both Fediol and Nakajima have nothing to do with direct effect, in stead they are great
examples of how GATT/WTO law can influence Union law through indirect effect.414
Therefore these have not been discussed in the chapter above, but will be discussed here
together with the doctrine of consistent interpretation below. These exceptions allegedly
provide direct effect where the EU intended to implement a particular obligation assumed in
the context of the GATT/WTO (Nakajima) or where a Union measure refers expressly to
precise provisions of the GATT/WTO (Fediol).
219. When discussing Fediol and Nakajima, the question as to why arises automatically.
Here we have always been left in the dark by the Court. A possible reading is that the Court
considered that the executive and legislative had already exercised their scope of manoeuvre.
Or simply that the Court attempts to strike some balance between lack of direct effect and
respect for the EU’s international commitments.415 Looking at the history of application of the
principles, the latter is probably true: the ECJ’s interpretation of the principle has been
lacking underlying rationale. The ECJ has been so restrictive in applying Nakajima, it has
lead some observers to rightly question whether this exception still has a future.416
220. Similarly to the discussion on direct effect, opinions tend to differ when it comes to the
future of Fediol and Nakajima. Certain observers have valued these exceptions and consider
they will be of major importance in the future.417 However, more recently the Court has
adopted some discouraging judgments in this area of law, of which Van Parys is probably the
most eminent one. This led other observers to voice severe criticism on the case-law.418
413
M. BRONCKERS, “Private Appeals to WTO Law: An Update”, Journal of World Trade 2008, 245.
See infra §§222
415
EECKHOUT, cited supra note 346, 105.
416
See supra § 208, more particularly the fact that the ECJ denied to recognise that by adopting a new
banana regime the EU had intended to implement a particular obligation flowing from the DSB
decision which recommended the EU to bring its banana regime into compatibility with the WTO.
417
EECKHOUT, cited supra note, 109; G. ZONNEKEYN, “EC liability for non-implementation of WTO
dispute settlement decisions – are the dice cast?”, Journal of International Economic Law 2004, 483.
418
Kuijper
414
102 The ECJ and its GATT/WTO rulings: subject of towering discussions
221. First and foremost, with respect to Nakajima, several observers disagree with the fact
that the Court maintains that DSB decisions do not create any legal obligation and
consequently that Nakajima does not apply where it is very clear that the EU did intend to
implement a particular obligation.419 Secondly, it is not clear what exactly the Court means by
‘particular obligation’.420 Thirdly, the formulation “intended to implement” is considered by
some to put too many emphasis on the intention of the EU institutions and too little on the
actual legal obligations of the EU. The Court puts forward a subjective criterion in stead of an
objective one.421
222. With respect to the very nature of the Nakajima exception, Kuijper rightly argues that
this has nothing to do with giving direct effect to GATT/WTO law under special
circumstances.422 Indeed, the technique used by the Court much more resembles consistent
interpretation. After analysing Petrotub in which the ECJ has applied Nakajima, Kuijper
concludes that the future of the Nakajima exception lies in a special species of consistent
interpretation.423 This reasoning consequently does away with the idea that the Nakajima
exception could indeed be solution to the question of the effect of DSB decisions. A has
already been confirmed by the ECJ in Van Parys, and thus in its turn confirms Kuijper’s
observations with respect to the future of the Nakajima exception.
223. Although it should be mentioned here that Nakajima is in theory perceived as being
different from consistent interpretation in that it may be relied upon in cases of conflict
between a Union measure and GATT/WTO law. Whilst consistent interpretation can never
lead to a contra legem interpretation of the Union measure.424
224. Fediol has been rarely applied by the Court, and mainly in cases related to the Trade
Barriers Regulation. Yet again, this exception has far less to do with direct effect as expected.
419
DE MEY, cited supra note 400, 1032 ; EGLI, P., “EC – EC Compliance with Rulings of WTO
Dispute Settlement Body in Bananas Dispute – Effect of WTO Agreements and Dispute Settlement
Rulings in EC Law – Standing to Challenge EC Legislation as Inconsistent with WTO Agreements and
Rulings – Van Parys”, American Journal of International Law 2005,453; SNYDER, 347.
420
EECKHOUT, 105; SNYDER, cited supra note 93, 347.
421
SNYDER, 347; G. ZONNEKEYN, “The latest on indirect effect of WTO law in the EC legal order: The
Nakajima case law misjudged?”, Journal of International Law 2001, 602.
422
KUIJPER, cited supra note 166, 1325.
423
ECJ case C-76/00, Petrotub SA and Republica SA v Council, ECR 2003, I-79.
424
See infra §§226 - 228.
103 The ECJ and its GATT/WTO rulings: subject of towering discussions
The Trade Barriers Regulation provides a right for individuals to lodge complaints against the
commercial practices of third countries.425 The complaint must be submitted with the
Commission and the latter must decide on whether the commercial practices concerned are
compatible with the WTO. When a complainant is not satisfied by the Commission’s decision
and brings a case before the Union Courts, than the question is whether the Commission has
exceeded its discretion in economic matters regarding the interpretation of WTO law when
dealing with a complaint. The Court will thus simply interpret WTO law. If the Court comes
to the conclusion that the Commission did exceed its discretion, then the Trade Barriers
Regulation is violated. For that reason, not because of non-conformity with WTO law, the
Commission decision was left aside.426
225. From the above it follows that indeed Fediol and Nakajima are no real exceptions to
the lack of direct effect of GATT/WTO law. On the contrary, they are confirmations of the
dualist approach of the ECJ in matters of GATT/WTO law.427 Nonetheless, one should not
underestimate the value of these exceptions, which lies in their application as interpretation
tools. The ECJ should thus in the future clarify the modalities under which these techniques
can be applied.
ii.
Consistent interpretation
226. Essentially the doctrine of consistent interpretation comes down to interpreting Union
law as far as possible in conformity with GATT/WTO law. This technique has proven to be
efficient and less delicate than direct effect. Consequently, the ECJ has been less reluctant to
apply consistent interpretation, for instance in Hermès.428 However, there are some downsides
to the concept. Consistent interpretation requires first of all the existence of Union legislation.
425
Article 3 and 4 of Council Regulation (EC) 94/3286 of 22 December 1994 laying down Community
procedures in the field of the common commercial policy in order to ensure the exercise of the
Community's rights under international trade rules, in particular those established under the auspices of
the World Trade Organization, O.J. 1994, L 349/71.
426
EECKHOUT, cited supra note 112, 318; KUIJPER, cited supra note 166, 1324.
427
UERPMANN-WITTZACK, cited supra note 347, 163.
428
See supra §§ 106 - 108, examples of other cases: ECJ case C-245/02, Anheuser-Busch v Budvar,
ECR 2004, I-1089; ECJ joined cases C-477/05 and 448/05, Thomson Multimedia & Veste France v
Administration des Douanes, ECR 2007, I-2049.
104 The ECJ and its GATT/WTO rulings: subject of towering discussions
Furthermore, this legislation must be sufficiently flexible, in other words the legislation must
lend itself to interpretation. There may not be a manifest conflict between WTO law and the
legislation to be interpreted.429
227. One might wonder whether it is because of these limitations that the ECJ is much more
willing to take this instrument at hand? After all, one of the largest limitations to the doctrine
of consistent interpretation is indeed that the legislator remains master of the effect of WTO
law in the EU. Or as Trachtman argues: it provides a ‘political filter’ while at the same time
allowing a certain degree of indirect effect of GATT/WTO law.430 This is in accordance with
the conclusions made above, namely that the ECJ has displayed judicial self-restraint in order
not to hinder the legislative and executive institutions of the Union.
228. This probably also explains why those who otherwise oppose direct effect of WTO
law, support this approach. Several observers argue that this technique has the potential to
become a highly effective means of judicially enforcing GATT/WTO law in the EU legal
order. Moreover it should be “the prime inroad” of WTO law in national and regional law.431
Snyder observes that consistent interpretation is also consistent with what he calls the WTO’s
own conception of itself, referring to United States – Sections 301–310 of the Trade Act of
1974.432
iii.
Muted dialogue
229. Bronckers argues that a reference to WTO law can still be useful if one runs against the
limitations of consistent interpretation. He argues that although the ECJ explicitly refuses to
review a certain Union measure in the light of WTO law, that does not imply that the ECJ is
not influenced by WTO law in rendering its judgment. Bronckers refers to two cases in which
the ECJ explicitly refused to formally take into account WTO law, but from which it is very
429
N. NEUWAHL, “Individuals and the GATT: Direct effect and the General Agreement on Tariffs and
Trade in Community Law” in N. EMILIOU and D. O’KEEFFE, (eds.), The European Union and World
Trade Law After the GATT Uruguay Round, New York, Wiley, 1996, 322 – 323; SNYDER, cited supra
note 93, 363.
430
TRACHTMAN, cited supra note 343, 660.
431
T. COTTIER, and K. SCHEFER , “ The relationship between World Trade Organization, national and
regional law”, Journal of International Economic Law 1998, 89- 91; GRILLER , cited supra note 345,
468; WITTZACK, cited supra note 347;
432
SNYDER, cited supra note 93, 365.
105 Conclusion
clear that the ECJ in fact was deliberately influenced by WTO law.433 In this context,
Bronckers argues for a ‘muted dialogue’, he advises complainants to refer to relevant WTO
rules without directly invoking them in order not to engage the ECJ in a principle debate on
direct effect.434
Conclusion
230. Extensive review of the ECJ’s case law shows that the effect of GATT/WTO law
within the EU is a hard nut to crack, the ECJ has not yet succeeded to adopt a satisfying
solution. Otherwise at the forefront of European integration, the ECJ definitely succeeded in
shielding the European legal order from GATT/WTO law and the irreversible and probably
damaging consequences of direct effect. This wariness originates in the very nature of the
WTO Agreement, which is a multilateral trade organisation with a very pervasive and ever
expanding scope of application. Although the DSU introduced a quasi-judicial and ruleoriented mechanism for dispute settlement, the WTO remains a power-based organisation that
favours stronger Member States over weaker. Granting wholesale direct effect to
GATT/WTO law would considerably harm the EU’s position in relation to its major trading
partners. This is an economic and political reality, which forces itself upon the ECJ. The latter
has clearly struggled with finding a legal solution to this issue of trade policy. For that reason,
legal scholars have severely criticised the main arguments put forward by the Court,
flexibility and reciprocity. Although they often do appreciate the restrictive approach
displayed by the Court. However, it shows from extensive review of both the opinions of the
AG’s and legal doctrine that in recent cases the ECJ has overstepped the mark. With respect
to direct actions by Member States, the condition of direct effect as put forward in Portugal v
Council has been seriously questioned as well as the effect of DSB decisions after the expiry
of the implementation period as established in Van Parys and FIAMM. With respect to the
latter, it is held against the ECJ that it displays a too high degree of judicial self-restraint in
order not to hinder the legislative and executive in their scope for manoeuvre. Indeed, the
Court probably took it one step too far and definitely missed an opportunity in FIAMM, since
it could have provided an equitable solution to retaliation victims without having to deal with
433
ECJ case C-310/06, FTS International v Belastingsdienst – Douane West, ECR 2007, I-6749; ECJ
case C-351/04, Ikea v Commissioners of Customs & Excise, ECR 2007, I-7723.
434
BRONCKERS, cited supra note 380, 890.
106 Conclusion
the issue of direct effect of GATT/WTO law and more importantly without interfering with
the alleged scope for manoeuvre of the other EU institutions.
231.
Several observers have shown to be quite optimistic about Fediol, Nakajima and the
doctrine of consistent interpretation and their potential for judicial enforcement of WTO law,
but one should notice that Van Parys has definitely created questions with respect to how
exactly Nakajima is perceived by the ECJ. Although these alternatives to direct effect,
especially consistent interpretation, have proven to be effective, recent cases have shown a
vacuum in legal protection. More particularly, FIAMM, uncovered an already suspected lack
of judicial protection, namely the fact that retaliation victims have no ground to claim
damages against the EU institutions who deliberately accepted these retaliatory measures. The
ECJ should resolve this departing from an internal angle, namely the infringement of general
principles inherent to the EU legal order, as opposed to departing from a WTO angle. The
latter clearly and rightly deters the ECJ, forcing it to issue conservative judgments. The
internal angle would definitely allow for an equitable solution for retaliation victims without
piercing the protective shield the ECJ has so meticulously built. Namely, the establishment of
a right to compensation for retaliation victims on the basis of no-fault EU liability. As regards
the complainants, be it private individuals or Member States, it should be clear now that it is
more advantageous not to engage the ECJ in a principled debate on the direct effect of
GATT/WTO law: the ECJ has proven that it does not go lightly about the international
obligations that rest on the EU. Therefore, the Court will take into account GATT/WTO law
as much as possible, meaning as long as it does not endanger the European integration.
107 Abstract in Dutch
Abstract in Dutch
Nederlandstalige toelichting435
Deze masterproef behandelt het effect van GATT/WTO recht in de rechtsorde van de EU,
meer bepaald over het gebrek aan directe werking. De schrijver behandelt achtereenvolgens
de WTO en meer bepaalt het mechanisme voor geschillenbeslechting, de belangrijkste
arresten van het Hof van Justitie met betrekking tot deze materie, de meest relevante
Conclusies van de Advocaten Generaal bij het Hof en ten slotte biedt deze masterproef een
overzicht op de relevante rechtsleer.
Na onderzoek van zowel rechtspraak en rechtsleer blijkt zeer duidelijk dat het Hof van Justitie
het zeer moeilijk heeft met de handelspolitieke implicaties van het debat. Dit manifesteert
zich door zeer conservatieve arresten, waarin het Hof weigert GATT/WTO recht enige
uitwerking te geven binnen de EU. Vanuit de rechtsleer, en zelfs door Advocaten Generaal,
zijn al verscheidene voorstellen gedaan om deze stringent rechtspraak enigszins te
versoepelen. Deze masterproef behandelt nauwkeurig het merendeel van de gemaakte
voorstellen. De meest haalbare piste lijkt voorlopig om een regime van niet-contractuele
aansprakelijkheid van de EU wegens rechtmatige uitoefening van haar activiteiten op te
richten, gezien het feit dat men het bestaan van een dergelijke aansprakelijkheid kan
vaststellen zonder EU maatregelen te moeten toetsen aan GATT/WTO recht.
435
Voor een werkelijk besluit, zie Conclusion, supra §§ 230 - 231.
108 Bibliography
Bibliography
Legislation
European Union
-
Primary legislation
Treaty on the European Union, 26 February 2001, O.J. C 325 of 24 December 2002.
Treaty establishing the European Community, O.J. C 321 E of 29 December 2006.
Treaty of Lisbon amending the Treaty on European Union and the Treaty establishing
the European Community, signed at Lisbon, 13 December 2007, O.J. C 306 of 17
December 2007.
Consolidated versions of the Treaty on European Union and the Treaty on the
Functioning of the European Union, O.J. C 115 of 9 may 2008.
Fourth ACP-EEC Convention signed at Lomé, 15 December 1989, O.J. L 229/3 of 17 August
1991.
-
Secondary legislation
Verordening (EEG) nr. 459/70 van de Commissie van 11 maart 1970 houdende vaststelling
van vrijwaringsmaatregelen voor de invoer van tafelappelen, OJ 1970, L 57/20.(no English
version).
Verordening (EEG) nr. 565/70 van de Commissie van 25 maart 1970 betreffende het beheer
van het stelsel van invoervergunningen voor tafelappelen en houdende wijziging van
Verordening (EEG) nr. 459/70 , O.J. 1970, L69.
Verordening (EEG) nr. 686/70 van de Commissie van 15 april 1970 houdende derde
wijziging van Verordening (EEG) nr. 565/70 betreffende het beheer van het stelsel van
invoervergunningen voor tafelappelen en houdende wijziging van Verordening (EEG) nr.
459/70, O.J. 1970, L84.
Council Regulation (EEC) 2641/84 of 17 September 1984 on the strengthening of the
common commercial policy with regard in particular to protection against illicit commercial
practices, O.J. 1984, L 252.
109 Bibliography
Council Regulation (EEC) 2423/88 of 11 July 1988 on protection against dumped or
subsidized imports from countries not members of the European Economic Community, O.J.
1988, L 209/1.
Council Regulation (EEC) 3651/88 of 23 November 1988 imposing a definitive anti-dumping
duty on imports of serial-impact dot-matrix printers originating in Japan, O.J. 1988, L 317/33.
Council Decision (EC) 94/800 of 22 December 1994 concerning the conclusion on behalf of
the European Community, as regards matters within its competence, of the agreements
reached in the Uruguay Round multilateral negotiations (1986-1994), O.J. 1994, L 336/1.
Council Regulation (EC) 94/3286 of 22 December 1994 laying down Community procedures
in the field of the common commercial policy in order to ensure the exercise of the
Community's rights under international trade rules, in particular those established under the
auspices of the World Trade Organization, O.J. 1994, L 349/71.
Council Decision (EC) 96/386 of 26 February 1996 concerning the conclusion of Memoranda
of Understanding between the European Community and the Islamic Republic of Pakistan
and between the European Community and the Republic of India on arrangements in the area
of market access for textile products, O.J. 1996, L 153/47.
Bananas [legislation relevant for case study FIAMM, Van Parys et al.]
Council Regulation (EEC) 404/93 of 13 February 1993 on the common organization of the
market in bananas, O.J. 1993, L 47/1.
Council Regulation (EC) 3290/94 of 22 December 1994 on the adjustments and transitional
arrangements required in the agriculture sector in order to implement the agreements
concluded during the Uruguay Round of multilateral trade negotiations, O.J. 1994, L 349/23.
Commission Regulation (EC) 478/95 of 1 March 1995 on additional rules for the application
of Council Regulation 404/93 as regards the tariff quota arrangement for imports of bananas
into the Community and amending Regulation 1442/93, O.J. 1993, L 49/13.
Council Regulation (EC) 925/99 of 29 April 1999 on the registration and operation within the
Community of certain types of civil subsonic jet aeroplanes which have been modified and
recertificated as meeting the standards of volume I, Part II, Chapter 3 of Annex 16 to the
Convention on International Civil Aviation, third edition (July 1993), O.J. 1999, L 115/47.
Council Regulation (EC) 1637/98 of 20 July 1998 amending Regulation 04/93 on the
common organization of the market in bananas, O.J. 1992, L 210/98.
Council Regulation (EC) 216/2001 of 29 January 2001 amending Regulation 404/93 on the
common organization of the market in bananas, O.J. 2001, L 31/2.
110 Bibliography
Council Regulation (EC) 2587/2001 of 19 December 2001 amending Regulation 404/93 on
the common organization of the market in bananas, O.J. 2001, L 345/13.
World Trade Organization
-
Primary Agreements
General Agreement on Tariffs and Trade, Geneva, July 1986 (www.wto.org).
Agreement Establishing the World Trade Organization, Marrakesh, 15 April 1994
(www.wto.org).
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade
1994, annex 1 A to the Agreement Establishing the World Trade Organization, Marrakesh, 15
April 1994 (www.wto.org). [Anti-Dumping Code]
Agreement on Technical Barriers to Trade, annex 1 A to the Agreement Establishing the
World Trade Organization, Marrakesh, 15 April 1994 (www.wto.org). [TBT]
General Agreement on Trade in Services 1994, annex 1 A to the Agreement Establishing the
World Trade Organization, Marrakesh, 15 April 1994 (www.wto.org). [GATS]
Agreement on the Application of Sanitary and Phytosanitary Measures, annex 1 A to the
Agreement Establishing the World Trade Organization, Marrakesh, 15 April 1994
(www.wto.org). [SPS]
Agreement on Trade related aspects of intellectual property rights, annex 1 C to the
Agreement Establishing the World Trade Organization, Marrakesh, 15 April 1994
(www.wto.org). [TRIPS]
Understanding on Rules and Procedures Governing the Settlement of Disputes in World
Trade Organization, annex 2 to the Agreement Establishing the World Trade Organization,
Marrakesh, 15 April 1994 (www.wto.org). [DSU]
Ministerial Decision on the Application and Review of the Understanding on Rules and
Procedures Governing the Settlement of Disputes, Trade Negotiations Committee, Marrakesh,
14 April 1994 (www.wto.org).
-
Other relevant rules and decisions enacted within the framework of the WTO
Rules of procedures for sessions of the ministerial conference and meetings of the general
council, WT/L/161 of 25 July 1996.
111 Bibliography
Rules of Conduct for the Understanding on Rules and Procedures Governing the Settlement
of Disputes, 3 December 1996, WT/DSB/RC/1 (www.wto.org). [Rules of Conduct]
General Council - Accession of Ecuador, WT/ACC/ECU/5 of 22 August 1996.
Dispute Settlement Body - Special Session - Report by the Chairman, Ambassador Péter
Balás, to the Trade Negotiations Committee, TN/DS/9 of 6 June 2003.
Dispute Settlement Body – Special Session – Report by the Chairman, Ambassador David
Spencer to the Trade Negotiations Committee, TN/DS/14 of 25 November 2005
Dispute Settlement Body – Special Session – Contribution from the EC and its Member States
to the improvement and clarification of the WTO DSU, TN/DS/W/38 of 23 January 2003.
Doha Work Programme, Decision Adopted by the General Council, WT/L/579 of 1 August
2004.
Report of the Consultative Board to the Director-General Supachai Panitchpakdi on the
Future of the WTO: Addressing Institutional Challenges in the New Millenium, WTO,
Geneva 2005 at §288-289. [Sutherland Report]
GATT Analytical Index: Guide to GATT Law and Practice (6th edition), Geneva 1995
(www.wto.org).
Case Law
European Court of Justice
-
General Principles
ECJ case 26/62, Van Gend en Loos/Nederlandse administratie der belastingen, ECR 1963, 1.
ECJ case 6/64, Costa/E.N.E.L., ECR 1964, 1203.
ECJ case 57/65, Lütticke GmbH/Hauptzollamt von Saarlouis, ECR 1966, 205.
ECJ case 270/80, Polydor/Harlequin, ECR 1982, 329.
ECJ case 104/81, Hauptzollamt Mainz/Kupferberg, ECR 1982, 3641.
ECJ case 314/85, Foto-Frost/Hauptzollamt, ECR 1987, 4199.
ECJ Joined cases C-46/93 and C-48/93, Brasserie du Pêcheur, ECR 1996, I-1029.
112 Bibliography
-
Relation between international law and Union law, in particular GATT/WTO law
ECJ cases 21 to 24/72, International Fruit Company, ECR 1972, 1219.
ECJ case 92/71, Interfoods, ECR 1972, 231.
ECJ case 9/73, Carl Schluter v. Hauptzollamt Lorrach, ECR 1973, 1135.
ECJ case 181/73, Haegeman, ECR 1974, 449.
ECJ case 126/78, Douaneagent der NV Nederlandse Spoorwegen v. Inspecteur der
invoerrechten en accijnzen, ECR 1975, 1439.
ECJ case 87/75, Conceria Daniele Bresciani v Amministrazione Italiana delle Finanze, ECR
1976, 00129.
ECJ case 266/81, Societa Italiana per l'Oleodotto Transalpino (SIOT) v. Ministero delle
Finanze and others, ECR 1983, 731.
ECJ joined cases 267-269/81, Amministrazione delle Finanze dello Stato v. Societa
Petrolifera Italiane SpA (SPI) and SpA Michelin Italiana (SAMI) ECR 1983, 801.
ECJ case 12/86, Demirel, ECR 1987, 3719.
ECJ case 70/87, Fediol v. Commissie, ECR 1989, 1781.
ECJ case C-69/89, Nakajima v Council, ECR 1991, I-2069.
ECJ case C-105/90, Goldstar, ECR 1992, I-723.
ECJ case C-175/87, Matsushita, ECR 1992, I-1478.
ECJ case C-280/93, Germany v Council, ECR. 1994, I-4973.
ECJ case C-469/93, Chiquita Italia, ECR 1995, I-4533.
ECJ case C-70/94, Werner Industrie-Ausüstungen, ECR 1995, I-3189.
ECJ case C-83/94, Leifer et al, ECR 1995, I-3231.
ECJ case C-61/94, Commission v Germany, ECR 1996, I-3989
113 Bibliography
ECJ case C-150/95, Portugal v Commission, ECR 1997, I-5863.
ECJ case C-183/95, Affish BV v Rijksdienst voor de keuring van Vee en Vlees, ECR 1997, I04315.
ECJ cases C-364/95 and C-365/95, T-Port, ECR. 1998, I - 1023.
ECJ case C-53/96, Hermès International, ECR 1998, I-3603.
ECJ case C-192/96, Racke, ECR 1998, I-3655.
ECJ case C-352/96, Italy v Council, ECR 1998, I-6937.
ECJ case C-104/97 P., Atlanta AG v Council and Commission, ECR 1999, I-6983.
ECJ case C-149/96, Portugal v Council, ECR 1999, I-8395.
ECJ case C-104/97 P, Atlanta AG and others v European Community, ECR 1999, I – 6983.
ECJ case C-300/98 and C-392/98, Dior et al, ECR 2000, I - 11307.
ECJ case C-177/96, Kloosterboer Rotterdam BV v Minister van Landbouw, Natuurbeheer en
Visserij, ECR 2001, I-5659.
ECJ case C-89/99, Schieving-Nijstad vof and Others v. Robert Groeneveld, ECR 2001, I5851.
ECJ case C-373/98, Netherlands v Parliament en Council, ECR 2001, I – 7079.
ECJ case C-307/99, OCT Fruchthandelsgesellschaft, ECR 2001, I - 3159.
ECJ case C-296/00, Prefetto Provincia die Cuneo v Silvano Carbone, ECR 2002, I – 4657.
ECJ case C-76/00, Petrotub SA and Republica SA v Council, ECR 2003, I-79.
ECJ cases C-27/00 and C-122/00, Omega Air et al, ECR 2003, I - 2569.
ECJ case C-93/02 P, Biret International v Council, ECR 2003, I - 10497.
ECJ case C-94/02 P, Établissements Biret v Council, ECR 2003, I - 10565.
ECJ case C-245/02, Anheuser-Busch v Budvar, ECR 2004, I-1089.
ECJ case C-377/02, Van Parys, ECR 2005, I – 1465.
114 Bibliography
ECJ joined cases C-477/05 and 448/05, Thomson Multimedia & Veste France v
Administration des Douanes, ECR 2007, I-2049.
ECJ case C-310/06, FTS International v Belastingsdienst – Douane West, ECR 2007, I-6749.
ECJ case C-351/04, Ikea v Commissioners of Customs & Excise, ECR 2007, I-7723.
ECJ joined cases C-120/06 and 121/06, Fabbrica italiana accumulatori motocarri
Montecchio SpA (FIAMM) and others v Council and Commission, ECR 2008, I -0000.
ECJ Opinion 1/94 on the Competence of the Community to conclude international
agreements concerning services and the protection of intellectual property, ECR 1994, I –
5276.
-
Union Liability
ECJ Case 5/71, Zuckerfabrik Schöppenstedt v Council, ECR 1971, I - 975
ECJ Case 81/86, De Boer Buizen v Council and Commission, ECR 1987, I-3677.
ECJ Joined Cases 64/76, 113/76, 167/78, 239/78, 27/79, 28/79 and 45/79 Dumortier and
Others v Council, ECR 1979, I-3091.
ECJ Case 26/81, Oleifici Mediterranei v EEC, ECR 1982, I-3057.
ECJ Joined Cases C-6/90 and C-9/90, Francovich and Others v Italy, ECR 1991, I-5357.
ECJ Case C-237/89 P, Dorsch Consult v Council, ECR 2000, I-4549.
European Court of First Instance
GC Case T-175/94, International Procurement Services v Commission, ECR 1996, II-729, §
44. (liability)
GC joined cases T-33 and 34/98, Petrotub SA and Republica SA v Council, ECR 1999, II3837.
GC Case T-336/94, Efisol v Commission, ECR 1996, II-1343, § 30.(liability)
GC Case T-213/97, Eurocoton and others v Council, ECR 1997, II-1609.
GC Case T-48/96, Acme Industry Co. Ltd. v Council, ECR 1999, II-3089.
GC case T-188/99, Euroalliages v Commission, ECR 2000, II-1758.
115 Bibliography
GC case T-69/00, FIAMM and FIAMM Technologies v Council and Commission , ECR 2005,
II-05393.
GC case T-151/00, Le Laboratoire du Bain v Council and Commission, ECR 2005, II-00023.
GC case T-301/00, Groupe Fremaux SA and Palais Royal Inc. v Council and Commission,
ECR 2005, II-00025.
GC case T-320/00, CD Cartondruck AD v Council and Commission, ECR 2005, II-00027.
GC case T-135/01, Giorgio Fedon & Figli S.p.A., Fedon S.r.l. and Fedon America USA Inc.
V Council and Commission, ECR 2005, II-00029.
WTO Dispute Settlement
EC – Regime for the Importation, Sale and Distribution of Bananas, Arbitration, Award of
the Arbitrator, Said El-Naggar, WT/DS27/15 of 7 January 1998.
EC – Regime for the Importation, Sale and Distribution of Bananas, Recourse to Article 21.5,
WT/DS27/RW/EEC of 12 April 1999.
EC – Regime for the Importation, Sale and Distribution of Bananas, Arbitration, Recourse to
Article 22.6, WTO/DS27/ARB/RW of 9 April 1999.
EC – Regime for the Importation, Sale and Distribution of Bananas, Recourse to Article 21.5,
WT/DS27/RW/ECU of 12 April 1999 and WT/DS27/ARB/ECU of 24 March 2000.
EC - Regime for the Importation, Sale and Distribution of Bananas - Second Recourse to
Article 21.5, WT/DS27/AB/RW/USA and WT/DS27/AB/RW2/ECU of 28 November 2008.
EC – Measures Concerning Meat and Meat Products (Hormones), WT/DS26/ARB of 16
January 1998.
EC – Measures Concerning Meat and Meat Products (Hormones), WT/DS48/AB/R of 16
January 1998.
Brazil – Export Financing Programme for Aircraft, WT/DS46/ARB of 28 August 2000.
Mexico – Corn Syrup (Article 21.5 – US), WT/DS132/AB/RW of 22 October 2001.
United States – Import Prohibition of certain shrimp and shrimp products, WT/DS58/AB/R
of 12 October 1998.
116 Bibliography
United States – Sections 301–310 of the Trade Act of 1974, WT/DS152/R of 22 December
1999.
United States – Import Measures on Certain Products from the European Communities, ,
WT/DS/165/R of 19 April 2000
United States – Import Measures on certain products from the European Communities,
WTO/DS165/AB/R of 11 December 2000.
Doctrine
Books
BHUIYAN, S., National Law in WTO Law – Effectiveness and Good Governance in the World
Trading System, Cambridge, Cambridge University Press, 2007, 316p.
BETHLEHEM, D., MCRAE, D., NEUFELD, R., VAN DAMME, I., (eds.), The Oxford Handbook of
International Trade Law, New York, Oxford University Press, 2009, 801p.
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