THE WTO FILTER FOR SCIENTIFIC UNCERTAINTY
A. WTO LAW
3. The Legal Order of the WTO
The WTO legal system is part of international economic law.
It focuses on regulatory activities of governments, as opposed to the transactional activities of private entrepreneurs.64 The following sections provide a brief overview of the sources of WTO law and the methods of interpretation.
(a) The Sources of WTO Law
To determine, where the law stands, all legal systems refer to sources of law and a hierarchy between them. In general international law, the sources of law are listed under Article 38 of the Statute of the International Court of Justice ( the "ICJ Statute"), which refers to covenants, custom, general principles of law, and learned writings.65
62DSU, Article 22.6.
63Jackson, John H, "Restructuring the GATT System" (New York: Council on Foreign Relations Press, The Royal Institute of International Affairs, 1990), at 51 and "The World Trade Organization", at 103.
64According to John H., Jackson, international economic law can be divided into two broad approaches, which he terms "transactional" or "regulatory".
See, Jackson, John H., "Global Economics and International Economic Law" 1 JIEL (1998), pp. 1-23, at 9.
65Article 38 of the ICJ Statute provides in full:
The Court whose function is to decide in accordance with international law such disputes as are submitted to it, shall apply.
(a) international conventions, whether general or particular, establishing rules expressly recognized by the contesting States;
(b) international custom, as evidence of a general practice accepted as law;
(c) the general principles of law recognized by civilized nations;
(d) judicial decisions and the teachings of the most highly qualified publicists of the various nations, as subsidiary means for the determination of rules of law.
See, for an overview, Malanczuk, Peter, "Akehurst's Modern Introduction to International Law" (7th edition, London: Routledge, 1997), at 35.
WTO law takes a different approach. According to Article 3.2 of the DSU, the dispute settlement system is to "preserve the rights and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law."
Pursuant to Article 7.2 of the DSU "panels shall address the relevant provisions in any covered agreement or agreements cited by the parties to the dispute."66
(i) Covered Agreements
The covered agreements are the WTO Agreement together with the multilateral trade agreements contained in Annex 1, the DSU and, if agreed so by the parties, the plurilateral trade agreements.67 These, together with amendments made under Article X of the WTO Agreement, are obviously sources of WTO law.
(ii) GATT Acquis
With respect to the GATT Acquis, Article XVI:1 of the WTO Agreement provides that "the WTO shall be guided by the decisions, procedures and customary practices followed by the CONTRACTING PARTIES to GATT 1947 and the bodies established in the framework of GATT 1947". These include adopted panel reports, which create legitimate expectations among WTO Members and are taken into account where relevant to any dispute.68 Unadopted panel reports, by contrast, "have no legal status in the GATT or WTO system since they have not been endorsed through decisions by the Contracting Parties to GATT or WTO Members".69 The Appellate Body also clarified
66(Emphasis added).
67DSU, Article 1.1 and Appendix 1.
68Appellate Body Report, Japan – Taxes on Alcoholic Beverages, ("Japan – Alcoholic Beverages"), WT/DS8/AB/R, WT/DS10/AB/R, WT/DS11/AB/R, adopted 1 November 1996, at 14.
69Ibid., at 11.
that Panels can find "useful guidance in the reasoning of an unadopted panel report that is considered to be relevant".70
(iii) Interpretations
According to Article IX:2, the Ministerial Conference and the General Council shall have the exclusive authority to adopt interpretations of the WTO Agreement and the other Multilateral Trade Agreements. However, such interpretations cannot be used to amend the rights and obligations of the Members.
(iv) Appellate Body and Panel Reports
Panel and Appellate Body reports are only binding between the parties. The Appellate Body, however, found it "worth noting"
that Article 59 of the ICJ Statute, which has the same effect has not inhibited the development of a body of case law with de facto precedential effect.71 Panels follow the interpretation of the Appellate Body.72 While the precise legal status of Appellate Body reports is still debated in the literature, there is overall agreement that the reports of the Appellate Body share the nature of the reports of the International Court of Justice or municipal supreme courts.73 This was described by Shabtai Rosenne in the following way: "Precedents may be followed or discarded, but not disregarded".74
70Ibid. The guidance to be found in other decisions and understandings of the Contracting Parties has been interpreted in a restrictive manner, See Appellate Body Report, United States – Tax Treatment for "Foreign Sales Corporations"
("United States – FSC"), para. 119.
71Appellate Body Report, Japan – Alcoholic Beverages, at 14, footnote 30.
72See Table IV, Part A "BISD and Dispute References sorted by dispute settlement decision", in: Bernan's Annotated Reporter, World Trade Organization, Dispute Settlement Decisions, Annotations, Tables & Cumulative Index, Decisions Reported Volumes 1-10, January 20, 1996-April 14, 1999.(Lanham, Maryland, USA: Bernan Press, 1999).
73Chua, Adrian T. L., "Precedent and Principles of WTO Panel Jurisprudence", Berkeley Journal of International Law, Vol. 16, 171, at 183;
Palmeter/Mavroidis, above n. at 404.
74Rosenne, Shabtai, "The Law and Practice of the International Court", 1920-1996, Volume III: Procedure (3rd edition, The Hague, Boston, London:
Martinus Nijhoff Publishers, 1997), at 56.
(v) Other International Treaties
Some of the multilateral trade agreements incorporate provisions of other international treaties which then enjoy the status of enforceable WTO obligation.75 For example, the TRIPS Agreement refers to obligations incurred under the Paris Convention or the Berne Convention.76 Another technique of importing international rules can be found in the SPS Agreement, which refers to standards set by international organizations, e.g., the Codex Alimentarius Commission.
These standards are a reference-point for the interpretation of WTO obligations.
Where no such linkage provisions exist, the precise status of external treaties is not crystal clear. Some suggest, that such rules, belong to WTO law.77 Others have emphasized the distinction between sources of WTO obligations in the strict sense and other
"outside" treaties, which can be used for the interpretation of WTO law, but cannot create enforceable obligations.78 Indeed, the text of Articles 3.2, 7.2. and 11 of the DSU indicates that disputes can only be adjudicated with reference to the covered agreements, the provisions of which are clarified in accordance with customary rules of interpretation of public international law. According to the Appellate Body, Article 3.2 of the DSU "reflects a measure of recognition that the General Agreement is not to be read in clinical isolation from public international law."79 In European Communities
75See, Maresceau, Gabrielle, "A Call for Coherence in International Law – Praises for the Prohibition Against "Clinical Isolation" in WTO Dispute Settlement, 33 (5) Journal of World Trade 87 (1999), at 112.
76TRIPS Agreement, Articles 9 and 10.
77Palmeter, N. David/Mavroidis, Petros C., "The WTO Legal System:
Sources of Law", AJIL Vol. 92 (1998), at 398-413, list the sources of WTO law following Article 38 of the ICJ statute and also include custom, general teachings, general principles of law and other international instruments.
78See, Marceau, Gabrielle, "A Call for Coherence in International Law – Praises for the Prohibition Against "Clinical Isolation" in WTO Dispute Settlement, 33 (5) Journal of World Trade 87 (1999), at 109-115.
79Appellate Body Report, United States – Gasoline, p. 17 (emphasis on
"read" added).
– Measures Affecting Importation of Certain Poultry Products ("European Communities – Poultry"), the Appellate Body held that an agreement which is not a "covered agreement" within the meaning of Articles 1 and 2 of the DSU cannot form the legal basis of a dispute.80 The Appellate Body clarified that the legal basis of a dispute can only be an obligation set forth in one of the agreements covered by the DSU, "which must be interpreted in accordance with the "customary rules of interpretation of public international law".81 Although the line between the use of a norm as source of law, and for its interpretation might sometimes be hazy, it appears to be important to distinguish carefully between sources of law in the strict sense and interpretative material.
(vi) Custom, General Principles of Law, etc.
The other sources of general international law, as listed in Article 38 of the ICJ Statute share the nature of international treaties, and are, thus, not sources of WTO law in the strict sense. However, the line between sources of law and sources of interpretation got sometimes blurred, e.g. in Korea – Measures Affecting Government Procurement ("Korea – Government Procurement")82, where the Panel filled a gap with respect to non-violation complaints in cases of legitimate expectations from negotiations by referring to the general international law.83 Such jurisdiction affects the proper role of the precautionary principle in WTO law, and will, thus, be discussed in more detail in Part 3 of this thesis.
(b) Methods of Interpretation
Article 3.2 of the DSU requires to clarify the existing provisions of the WTO agreements "in accordance with customary rules of interpretation of public international law". The Appellate
80WT/DS69/AB/R, adopted 23 July 1998, para. 81.
81Ibid.
82Panel Report, WT/DS163/R, adopted 19 June 2000.
83Ibid., paras. 7. 83 and 7. 93 ff.
Body, in interpreting Article 3.2 of the DSU, confirmed that the rules of treaty interpretation in Articles 31 and 32 of the Vienna Convention on the Law of Treaties (the "Vienna Convention")84 apply in interpreting the WTO agreements.85 The Appellate Body has repeatedly stressed that pursuant to the principles of treaty interpretation provided for in Article 31 of Vienna Convention86, the words of a particular treaty are the foundation of the interpretative process, and that these words are to be given their ordinary meaning, in their context and in the light of the object and purpose of the treaty.87 This reference to Articles 31 and 32 of the Vienna Convention has become a common pattern of treaty interpretation in the Appellate Body jurisdiction.88 The purpose of treaty interpretation
84Done at Vienna, 23 May 1969, 1155 U.N.T.S. 33; 8 I.L.M. 679.
85Appellate Body Report, United States – Gasoline, p. 17. See also, Appellate Body Report, Japan – Alcoholic Beverages, p. 10.
86Article 31 of the Vienna Convention provides in full:
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account, together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.
87Appellate Body Report, Japan – Alcoholic Beverages, pp. 11-12. See also Appellate Body Report, Argentina – Measures Affecting Imports of Footwear, Textiles, Apparel and Other Items ("Argentina – Textiles and Apparel"), WT/DS56/AB/R, adopted 22 April 1998, para. 47.
88Skouteris, Thomas, "Customary Rules of Interpretation of Public International Law and Interpretative Practices in the WTO Dispute Settlement System", in: Mengozzi, Paolo (ed.), "International Trade Law on the 50th Anniversary of the Multilateral Trading System", (Milano: Dott. A. Giuffrè editore, 1999) pp. 113-144.
under Article 31 of the Vienna Convention is "to ascertain the common intentions of the parties".89 Starting point is the text of a provision of WTO law90, followed by an inquisition into its object and purpose, which can also be inferred from the Preamble of the WTO Agreement.91 The drafting history has been used as a supplementary means of interpretation, if, after applying Article 31 the meaning of the term remains ambiguous or obscure, or leads to a result which is manifestly absurd or unreasonable.92
In addition, the Appellate Body uses general rules of interpretation, e.g., the principle of effective treaty interpretation93 (ut res magis valeat quam pereat)94, whereby the interpreter "is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility"95, but "must read all applicable provisions of a treaty in a way that gives meaning to all of them harmoniously".96
Moreover, also other interpretative principles, commonly used in international law have already been applied in the interpretation of
89Appellate Body Report, European Communities – Customs Classification of Certain Computer Equipment ("European Communities – Computer Equipment"), WT/DS62,AB/R, WT/DS67/AB/R, WT/DS68/AB/R, adopted 22 June 1998, para. 84.
90Appellate Body Report, Japan – Alcoholic Beverages, p. 11. See also, Appellate Body Report, United States – Shrimp, para. 114.
91Appellate Body Report, United States – Shrimp, para. 153. See generally, Sinclair, Ian, "The Vienna Convention on the Law of Treaties", (2nd edition Manchester: Manchester University Press, 1984), at 127 and 130.
92Appellate Body Report, Japan – Alcoholic Beverages, p. 10. See also, Appellate Body Report, European Communities – Computer Equipment, para. 92.
93Where a treaty is open to two interpretations one of which does not enable the treaty to have appropriate effect, good faith and the object and purpose of the treaty demand that the former interpretation be adopted. See, Report of the Commission to the General Assembly, Yearbook of International Law Commission 1966, VO. II, at 219; Ipsen, Knut, "Völkerrecht" (3rd edition, München: Beck, 1990)
§ 11 para. 16, and Sinclair, above n.91, at 118.
94Appellate Body Report, Japan – Alcoholic Beverages, p. 8. See also, Appellate Body Report, Guatemala - Cement, para. 75 and Argentina - Safeguards, para. 88.
95Appellate Body Report, United States – Gasoline, p. 23.
96Appellate Body Report, Argentina – Footwear, para. 81.
WTO law, including the in dubio mitius principle.97 This suggests that all interpretative principles used in general international law, such as, e.g., the argumentum e contrario98 or a fortiori, can be applied in the interpretation of WTO law.
97Appellate Body Report, European Communities – Hormones, para. 165.
See, Ipsen, above n. 93, §11 para. 20; McNair, Lord, "The Law of Treaties"
(Oxford: Clarendon Press, 1961) at 765, who refers to this rule as rule of restrictive interpretation, and Jennings, Sir Robert/Watts, Sir Arthur (eds.), "Oppenheim's International Law", Vol. I Peace, Teil 2-4 (Longman House, Harlow, 9. Aufl. 1992), at 1278.
98Anglo-American legal systems refer to this rule as expressio unius est exclusio alterius. See, McNair, above, n.97, at 399.
B. THE SPS AGREEMENT
The Agreement on Sanitary and Phytosanitary Measures (the
"SPS Agreement") was inspired by two developments during the Uruguay Round: First, the hormones conflict. Several attempts to resolve that long festering trade dispute were made without success.99 Analysts concluded that the rules and procedures provided by the GATT 1947 and the Tokyo Round Agreement on Technical Barriers to Trade100 did not adequately address the specific problems posed by sanitary and phytosanitary measures.101
The second major development was the negotiation of the Agreement on Agriculture, which achieved significant liberalization of trade in agricultural goods, i.e., the freezing and gradual reduction of subsidies, tariffication of market access barriers and a tariff reduction of 36 per cent.102 Negotiators wanted to ensure that governments would not undermine the effects of these commitments by resorting to
99The United States raised the issue of the European ban in March 1987.
After bilateral consultations had failed to resolve the dispute, the United States requested the establishment of a technical export group to evaluate the scientific basis for the ban. This request was denied following the European Communities response that the use of hormonal growth promotants in beef production was a PPM that did not violate the Standards Code. After the Hormones ban entered into force, the US introduced retaliatory measures in the form of 100 per cent duties on a list of products. The European Communities requested the establishment of a GATT dispute settlement panel to rule on the legality of these duties, but the US denied the request. See for further details, Meng, Werner P., "The Hormone Conflict Between the EEC And the United States within the Context of GATT", 11 Michigan Journal of International Law, (1990), pp. 819-839., at 836; Wirth, above n. 26, at 822.
Roberts, Donna, "Preliminary Assessment of the Effects of the WTO Agreement on Sanitary and Phytosanitary Trade Regulations", 1 JIEL 1998, pp. 377-405, at 380 f.
100Tokyo Round Agreement on Technical Barriers to Trade, OJ No L 71 of 17. 3. 1980, pp. 29-43.
101Roberts, above, n. 99, at 379; Stanton, Gretchen, "Implications of the WTO Agreement on Sanitary and Phytosanitary Measures", in: Orden, David/Roberts, Donna (eds.) "Understanding Technical Barriers to Trade" (St. Paul:
International Agricultural Trade Research Consortium, 1997); Wirth, David A.,
"The Role of Science in the Uruguay Round and NAFTA Trade Disciplines, 27 Cornell Int´l L. J. (1994), pp. 817-859, at 824.
102See for an overview, Brosch, Kevin J., "The Uruguay Round Agreement on Agriculture", Practising Law Institute, Commercial Law and Practice Course Handbook Series, 1995, 722, at 865.
regulatory compensation.103 Therefore, the Declaration of Punta del Este envisaged to "achieve greater liberalization of trade in agriculture", by "minimizing the adverse effects that sanitary and phytosanitary regulations and barriers can have on trade in agriculture, taking into account the relevant international agreements".104 The Agreement on Agriculture expressly stipulates the commitment of Members to reach and implement an agreement on sanitary and phytosanitary measures.105
The SPS Agreement has essentially been negotiated within the years of fall 1988, when the Working Group on Sanitary and Phytosanitary Measures was established, and the 1990 Ministerial Meeting in Brussels.106 The main negotiating groups were the European Communities, United States, the Cairns Group, the Nordic Group and the developing countries.107
1. Overview
The SPS Agreement elaborates and refines the obligations under the GATT.108
103Roberts, above, n. 99, at 378 with further references.
104"Ministerial Declaration on the Uruguay Round", Punta del Este, 1986, reprinted in Stewart, Terence P. (ed.), "The GATT Uruguay Round", Vol. III:
Documents (Deventer and Boston: Kluwer Law and Taxation Publishers, 1993), 6.
105Agreement on Agriculture, 4th preambular paragraph and Article 14.
106Breen, John M., "Agriculture", in Stewart, Terence P. (ed.), "The GATT Uruguay Round", Vol. I: Commentary (Deventer and Boston: Kluwer Law and Taxation Publishers, 1993), pp.125-254, at 200.
107Ibid., at 193.
108Compare for an overview, Barceló, John, "Product Standards to Protect the Local Environment – the GATT and the Uruguay Round Sanitary and Phytosanitary Agreement", 27 Cornell Int'l L. J. 755 (1994); Ritter, Markus, "Das WTO-Übereinkommen und seine Auswirkungen auf das Deutsche und Europäische Lebensmittelrecht", EuZW 1997, pp. 133-138; Stanton, Gretchen, "Implications of the WTO Agreement on Sanitary and Phytosanitary Measures", in: Orden, David/Roberts, Donna (eds.) "Understanding Technical Barriers to Trade" (St. Paul:
International Agricultural Trade Research Consortium, 1997); Wirth, David A.,
"The Role of Science in the Uruguay Round and NAFTA Trade Disciplines", 27 Cornell Int´l L. J. (1994), pp. 817-859.
(a) The GATT: Non-Discrimination Test and Exception The GATT employs a non-discrimination test coupled with an exception for human, animal and plant life or health. Article XI of the GATT prohibits quantitative restrictions and Article III:4 essentially requires that Members accord "treatment no less favourable" to imported products "than that accorded to like products of national origin". Commentators agreed that as long as imported and domestic goods were subject to the same requirements, governments were free to pursue any national regulatory objective.109
In the hormones conflict it became evident, that the "like"
product test was not sophisticated enough to answer the question whether beef treated with growth hormones, and natural beef are similar, and whether Article III:4 of the GATT was violated.110 The
"accordion" like concept of likeness111, did not provide a clear guidance whether risks associated with a certain product make it unlike another product although both serve the same end uses and are otherwise substitutable.112
Could one argue that growth hormones or genetic modification only affect the production process, but not the product itself, so that following the product-process doctrine developed in the Tuna/Dolphin
109See for an overview, Hudec, Robert E., "GATT/WTO Constraints on National Regulation: Requiem for an "Aim and Effects" Test", 32 The International Lawyer (1998), pp. 619-649; Petersmann, Ernst-Ulrich, "Trade and Environmental Protection: The Practice of GATT and the European Community Compared", in Cameron, James/Demaret, Paul/Geradin, Damien, "Trade & The Environment:
The Search for Balance", London, 1994, pp. 147-181.
110See Jackson, John H., "World Trade Rules and Environmental Policies:
Congruence or Conflict?" 49 Washington and Lee Law Review, (1992), at 1237;
Meng, above n., 99, at 830 and 835.
111Appellate Body Report, Japan – Alcoholic Beverages, p. 21.
112Essentially, in applying the "like" product criterion panels have to determine, on a case-by-case basis, whether two products are "similar" by taking into account the following criteria: the product's end-uses in a given market;
consumer's tastes and habits, which change from country to country; the product's properties, nature and quality. See, GATT, "Border Tax Adjustment": Report of the Working Party, adopted 2 December 1970, BISD 18S/97, at 102.