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The Decisions Bridging the GATT 1947 and the WTO Agreement

Published online by Cambridge University Press:  27 February 2017

Patrick M. Moore
Patrick M. Moore*
Affiliation:
Of the California Bar
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Extract

On September 20, 1986, the contracting parties to the General Agreement on Tariffs and Trade of 1947 (GATT 1947) agreed to launch an eighth round of multilateral trade negotiations known as the Uruguay Round. More than seven years later they concluded the round, not with an amended version of the GATT 1947, but with an entirely new treaty, the Agreement Establishing the World Trade Organization.

Type
Current Developments
Information
American Journal of International Law , Volume 90 , Issue 2 , April 1996 , pp. 317 - 328
Copyright
Copyright © American Society of International Law 1996

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Footnotes

*

I wish to thank Andrew Shoyer, Legal Adviser to the Office of the United States Trade Representative in Geneva, Switzerland, who guided me through the issues discussed in this paper during an internship under his tutelage in the fall of 1994.

References

1 The Uruguay Round was concluded on December 15, 1993. Instruments resulting from the negotiations included the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, opened for signature Apr. 15, 1994, GATT Doc. MTN/FA (1993), reprinted in 33 ILM 1125, 1143 (1994) (whereby signatories agreed “to submit, as appropriate, the WTO Agreement for the consideration of their respective competent authorities with a view to seeking approval … and … to adopt the Ministerial Declarations and Decisions”); this embodied the Agreement Establishing the World Trade Organization, opened for signature Apr. 15, 1994, reprinted in 33 ILM at 1144 (entered into force Jan. 1, 1995) [hereinafter WTO Agreement].

2 WTO Agreement, supra note 1, Art. XTV:1.

3 Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, opened for signature Apr. 12,1979, GATT, Basic Instruments and Selected Documents [BISD], 26th Supp. 171 (1979), 31 UST 4919.

4 Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade, opened for signature Apr. 12, 1979, GATT, BISD, 26th Supp. 56 (1979), 31 UST 513.

5 See Ian Sinclair, The Vienna Convention on the Law of Treaties 93–98 (1984).

6 Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, 1155 UNTS 331, reprinted in 8ILM679 (1969).

7 For a discussion, of the entire gamut of legal relationships created by the transition, see Gabrielle Marceau, Transition from GATT to WTO: A Most Pragmatic Operation, 29 J. World Trade 147 (1995), an article that came to this author's attention shortly before publication.

8 It is questionable whether Article 30 is applicable to the transition from the GATT 1947 to the WTO Agreement at all. Article 11:4 of the WTO Agreement, which provides that the GATT 1994 is “legally distinct” from the GATT 1947, may have been intended to ensure that the WTO Agreement would not be viewed as a successor treaty to the GATT 1947. On the one hand, “legally distinct” would seem to suggest the severance of any juridical link between the GATT 1947 and the WTO Agreement. On the other hand, a successor treaty is legally distinct from the predecessor treaty, not only by virtue of textual differences, but also because it is accepted separately. Hence, it is not evident that the definition of the GATT 1994 as “legally distinct” from the GATT 1947 necessarily meant that Article 30 of the Vienna Convention would not apply.

9 See “The Coexistence Decisions,” infra p. 319.

10 Decision on Transitional Co-Existence of the GATT 1947 and the WTO Agreement, adopted Dec. 8, 1994, GATT Doc. PC/12–L/7583 (final), reprinted in GATT, Focus (Information and Media Relations, Geneva, Switzerland), Dec. 1994, at 4, and in draft form in 11 Int'l Trade Rep. (BNA) 1992 (Dec. 21, 1994); Decision on Transitional Co-Existence of the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade and the Marrakesh Agreement Establishing the World Trade Organization, adopted Dec. 8, 1994, GATT Doc. PC/13–L/7584 (final), reprinted in draft form in 11 Int'l Trade Rep., supra, at 1992; and Decision on the Transitional Co-Existence of the Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement on Tariffs and Trade and the Marrakesh Agreement Establishing the World Trade Organization, adopted Dec. 8, 1994, GATT Doc. PC/16–L/7587 (final).

11 Because the codes do not have MFN provisions, the coexistence decisions regarding the codes and the WTO Agreement do not have a provision similar to paragraph 1 (a).

12 GATT 1947 Article 1:1 provides in part:

With respect to customs duties and charges of any kind … , any advantage, favour, privilege or immunity granted by any contracting party to any product originating in or destined for any other country shall be accorded immediately and unconditionally to the like product originating in or destined for the territories of all other contracting parties.

General Agreement on Tariffs and Trade, Oct. 30, 1947, TIAS No. 1700, 55 UNTS 188. For subsequent amendments, see John H. Jackson & William J. Davey, Legal Problems of International Economic Relations: Documents Supplement 1 (1989).

13 See text at notes 8—9 supra.

14 Arrangement Regarding International Trade in Textiles, Dec. 20, 1973, GATT, BISD, 21st Supp. 3 (1975), 25 UST 1001 [hereinafter MFA].

15 Henry R. Zheng, Legal Structure of International Textile Trade 1–5, 103 (1988).

16 Agreement on Textiles and Clothing, Annex 1A to WTO Agreement, supra note 1, Art. 1:1 [hereinafter WTO Textiles Agreement].

17 Two of the criteria for justifying quantitative restrictions under the GATT 1947 Article XIX “serious injury” test are that an increase in imports occurred and that this increase resulted from unforeseen circumstances. In contrast, under the “market disruption” test of MFA Article 3 and Article 6:4 of the WTO Textiles Agreement, an “imminent increase” in imports is sufficient, and this increase need not result from unforeseen circumstances.

18 Success! The Most Comprehensive Round Ever Is Concluded, GATT Focus, Dec. 1993, at 6.

19 GATT 1947, supra note 12, Article 11:1 (b) provides in part:

The products described in Part I of the Schedule relating to any contracting party, which are the products of territories of odier contracting parties, shall, on their importation into the territory to which the Schedule relates, and subject to the terms, conditions or qualifications set forth in that Schedule, be exempt from ordinary customs duties in excess of those set forth and provided therein.

20 General Agreement on Tariffs and Trade 1994, in Annex 1A to WTO Agreement, supra note 1, reprinted in 33 ILM at 1154.

21 Id., Art. 1(a).

22 Understanding on Rules and Procedures Governing die Setdement of Disputes, Annex 2 to WTO Agreement, supra note 1, reprinted in 33 ILM at 1226.

23 Improvements to the GATT Dispute Settlement Rules and Procedures, GATT, BISD, 36th Supp. 61 (1989).

24 Paragraph F(a) of the Montreal Rules, id. at 63, provides in part: “a decision to establish a panel … [must] be taken at the latest at the Council meeting following that at which the request first appeared as an item on the Council's regular agenda, unless at that meeting the Council decides otherwise.”

25 Although GATT 1947 Article XXV:4 ostensibly permitted the contracting parties to reach decisions pursuant to Article XXIII by majority vote, the GATT Council, which acted on behalf of the contracting parties, had to authorize the establishment of a panel. Agreed Description of the Customary Practice of the GATT in the Field of Dispute Setdement, annexed to Understanding regarding Notification, Consultation, Dispute Setdement and Surveillance, GATT, BISD, 26th Supp. 210 (1979). The normal practice of the Council was to act by consensus, which required the consent of the defendant government. GATT Secretariat, Guide to GATT Law and Practice: Analytical Index 1022–23 (1994); see Robert E. Hudec, Enforcing International Trade Law: The Evolution of the Modern GATT Legal System 54 (1993).

26 See “Withdrawal from the Old Regime,” supra p. 319.

27 Decision of the Committee on Anti-Dumping Practices on Transitional Arrangements, adopted Dec. 8, 1994, GATT Doc. PC/14–L/7585 (final), reprinted in draft form in 11 Int'l Trade Rep. (BNA) 1993 (Dec. 21, 1994); Decision of the Committee on Subsidies and Countervailing Measures on Transitional Arrangements, adopted Dec. 8, 1994, GATT Doc. PC/15–L/7586 (final), reprinted in draft form in 11 Int'l Trade Rep., supra, at 1993.

28 A decision on the consequences of withdrawal from the GATT 1947 was presumably unnecessary because a GATT 1947 contracting party that had initiated a dispute against a party that withdrew from the GATT 1947 before the dispute was resolved could always reinitiate the dispute once both parties became WTO members. However, Article 18.3 of the WTO Anti-Dumping Agreement, Agreement on Implementation of Article VI of GATT 1994, Annex 1A to WTO Agreement, supra note 1, and Article 32.3 of the WTO Subsidies Agreement, Agreement on Subsidies and Countervailing Measures, id., stipulate that their rules are applicable only to investigations and reviews initiated pursuant to applications made after their entry into force for a WTO member. Hence, if a country initiated a domestic investigation or review (or an application by the affected industry had been made but no investigation had been initiated) before that country withdrew from the Anti-Dumping or Subsidies Code, another country could not dispute the findings of the investigation under the WTO Anti-Dumping or Subsidies Agreement. It was therefore important to ensure that such disputes would be completed under the old regime.

29 Article 15:7 of the Anti-Dumping Code, supra note 3, provides in part: “Further to paragraphs 1–6 the settlement of disputes shall mutatis mutandis be governed by the provisions of the Understanding regarding Notification, Consultation, Dispute Settlement and Surveillance.” This Understanding, see note 25 supra, did not depart from the GATT Council's long-standing practice of consensus decision making.

30 See Robert E. Hudec, GATT Dispute Settlement After the Tokyo Round, 13 Cornell Int'l L.J. 145, 172 (1980) (discussing typical pretexts for delay, such as lack of notice, linkage to other trade problems, and conflicting jurisdiction of other GATT committees).

31 For example, in the most complex cases, U.S. domestic law permits authorities as much as 420 days from the date of application for an investigation until final determination. Robert W. McGee, The Case to Repeal the Antidumping Laws, 13 J. Int'l L. & Bus. 491, 496 n.31 (1993). The duration of dispute settlement proceedings under the Anti-Dumping Code varies according to the complexity of the case; however, the average duration from the request for consultation to adoption of a panel report has been about 20 months in recent years. Hence, if an application for an investigation were initiated the day before entry into force of the WTO Agreement, a panel report relating to the matter raised in the application might not be adopted until nearly three years after the date of entry into force of the WTO Agreement. Since the withdrawal decision would remain in effect for only two years, such a case would have to be discontinued.

32 See text at notes 23–25 supra.

33 Article 26 of the Vienna Convention, supra note 6, translates this principle as follows: “Every treaty in force is binding upon the parties to it and must be performed by them in good faith.”

34 Shabtai Rosenne, Developments in the Law of Treaties: 1945–1986, at 140–41 (1989).

35 See 1 Lassa Oppenheim, International Law: A Treatise 704–05 (4th ed. 1928).