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XXIII. Article XXI back to top
A. Text of
Article XXI
Article XXI: Security Exceptions
Nothing in this Agreement shall be construed
(a) to require any
contracting party to furnish any information the disclosure of which it
considers contrary to its essential security interests; or
(b)
to prevent any
contracting party from taking any action which it considers necessary
for the protection of its essential security interests
(i)
relating to
fissionable materials or the materials from which they are derived;
(ii)
relating to the traffic in arms, ammunition
and implements of war and to such traffic in other goods and materials
as is carried on directly or indirectly for the purpose of supplying a
military establishment;
(iii)
taken in time of war or other emergency in
international relations; or
(c)
to prevent any contracting party from taking
any action in pursuance of its obligations under the United Nations
Charter for the maintenance of international peace and security.
B. Interpretation and Application of Article XXI back to top
1. GATT practice
956.
See GATT Analytical Index.
XXIV. Article XXII
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A. Text of Article XXII
Article XXII: Consultation
1.
Each contracting party shall accord sympathetic
consideration to, and shall afford adequate opportunity for consultation
regarding, such representations as may be made by another contracting
party with respect to any matter affecting the operation of this
Agreement.
2.
The CONTRACTING PARTIES may, at the request of
a contracting party, consult with any contracting party or parties in
respect of any matter for which it has not been possible to find a
satisfactory solution through consultation under paragraph
1.
B. Interpretation and Application of Article XXII back to top
957.
The consultation clause of Article XXII
of the GATT 1994 is one of the “consultation and dispute settlement
provisions of the covered agreements” which are administered by the
Dispute Settlement Body under the DSU. Concerning WTO practice in
respect of consultations, see the material under Article 4 in the
Chapter on the DSU.
958.
Concerning GATT practice in respect of
Article XXII.
XXV. Article XXIII
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A. Text of Article XXIII
Article XXIII: Nullification or Impairment
1.
If any contracting party should consider that
any benefit accruing to it directly or indirectly under this Agreement
is being nullified or impaired or that the attainment of any objective
of the Agreement is being impeded as the result of
(a)
the failure of another contracting
party to carry out its obligations under this Agreement, or
(b)
the application by another contracting
party of any measure, whether or not it conflicts with the provisions of
this Agreement, or
(c)
the existence of any other situation,
the contracting party may, with a view to the
satisfactory adjustment of the matter, make written representations or
proposals to the other contracting party or parties which it considers
to be concerned. Any contracting party thus approached shall give
sympathetic consideration to the representations or proposals made to
it.
2.
If no satisfactory adjustment is effected
between the contracting parties concerned within a reasonable time, or
if the difficulty is of the type described in paragraph 1 (c) of this
Article, the matter may be referred to the CONTRACTING PARTIES. 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. The CONTRACTING PARTIES may consult with
contracting parties, with the Economic and Social Council of the United
Nations and with any appropriate intergovernmental organization in cases
where they consider such consultation necessary. 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 party or parties of
such concessions or other obligations under this Agreement as they
determine to be appropriate in the circumstances. If the application to
any contracting party of any concession or other obligation is in fact
suspended, that contracting party shall then be free, not later than
sixty days after such action is taken, to give written notice to the
Executive Secretary(1) to the Contracting Parties of its intention to
withdraw from this Agreement and such withdrawal shall take effect upon
the sixtieth day following the day on which such notice is received by
him.
(footnote original)
1 By the Decision of 23 March 1965,
the CONTRACTING PARTIES changed the title of the head of the GATT
secretariat from “Executive Secretary” to “Director-General”.
B. Interpretation and Application of Article XXIII
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1. General
(a)
Relationship between Articles XXIII:1(a) and XXIII:1(b)
959.
In EC — Asbestos, Canada claimed that the French ban on
the sale and imports of products containing asbestos nullified or
impaired benefits accruing to it under Article
XXIII:1(b). In response,
the European Communities raised preliminary objections, arguing on two
grounds that the measure fell outside the scope of application of
Article XXIII:1(b). The Panel rejected both objections. In addressing
the European Communities appeal against the Panel’s rejection of these
preliminary objections, the Appellate Body explained the relationship
between Articles XXIII:1(a) and XXIII:1(b):
“Article XXIII:1(a) sets forth a cause of action for a
claim that a
Member has failed to carry out one or more of its obligations under the
GATT 1994. A claim under Article XXIII:1(a), therefore, lies when a
Member is alleged to have acted inconsistently with a provision of the
GATT 1994. Article XXIII:1(b) sets forth a separate cause of action for
a claim that, through the application of a measure, a Member has ‘nullified
or impaired’ ‘benefits’ accruing to another Member, ‘whether or
not that measure conflicts with the provisions’ of the GATT 1994.
Thus, it is not necessary, under Article
XXIII:1(b), to establish that
the measure involved is inconsistent with, or violates, a provision of
the GATT 1994. Cases under Article XXIII:1(b) are, for this reason,
sometimes described as ‘non-violation’ cases; we note, though, that
the word ‘non-violation’ does not appear in this provision. The
purpose of this rather unusual remedy was described by the panel in European
Economic Community — Payments and Subsidies Paid to Processors and
Producers of Oilseeds and Related Animal-Feed Proteins … in the
following terms:
‘The idea underlying [the provisions of Article XXIII:1
(b)] is
that the improved competitive opportunities that can legitimately be
expected from a tariff concession can be frustrated not only by measures
proscribed by the General Agreement but also by measures consistent with
that Agreement. In order to encourage contracting parties to make tariff
concessions they must therefore be given a right of redress when a
reciprocal concession is impaired by another contracting party as a
result of the application of any measure, whether or not it conflicts
with the General Agreement.(1355) (emphasis added)’”(1356)
2. Article XXIII:1(b)
(a) Overview of the non-violation complaint
960.
In EC — Asbestos, Canada claimed that the French ban on
the sale and import of products containing asbestos nullified or
impaired benefits accruing to it under Article
XXIII:1(b). The Appellate
Body stated that “[l]ike the panel in [Japan — Film], we
consider that the remedy in Article XXIII:1(b) ‘should be approached
with caution and should remain an exceptional remedy.’”(1357)
The Appellate Body went on to refer to the Panel’s finding in Japan
— Film referenced in paragraph 961 below.
961.
In Japan — Film, the United States argued, under
Article XIII:1(b) of GATT 1994, that certain Japanese “measures”,
relating to commercial distribution of photographic film and paper,
large retail stores and sales promotion techniques nullified or impaired
benefits accruing to the United States based on tariff concessions made
by Japan in the course of three rounds of multilateral trade
negotiations. In addressing the United States’ claims, the Panel made
a general statement about the significance of the non-violation remedy
within the WTO/GATT legal framework, holding that “the non-violation
nullification or impairment remedy should be approached with caution and
treated as an exceptional concept”:
“Although the non-violation remedy is an important and accepted
tool of WTO/GATT dispute settlement and has been ‘on the books’ for
almost 50 years, we note that there have only been eight cases in which
panels or working parties have substantively considered Article
XXIII:1(b) claims.(1358) This suggests that both the GATT
contracting parties and WTO Members have approached this remedy with
caution and, indeed, have treated it as an exceptional instrument of
dispute settlement. We note in this regard that both the European
Communities and the United States in the EEC — Oilseeds case, and the
two parties in this case, have confirmed that the non-violation
nullification or impairment remedy should be approached with caution and
treated as an exceptional concept.(1359) The reason for this
caution is straightforward. Members negotiate the rules that they agree
to follow and only exceptionally would expect to be challenged for
actions not in contravention of those rules.” (1360)
(b) Purpose
962.
The Panel in Japan — Film elaborated upon the purpose
of Article XXIII:1(b) as follows:
“[The purpose of Article XXIII:1(b) is] to protect the balance of
concessions under GATT by providing a means to redress government
actions not otherwise regulated by GATT rules that nonetheless nullify
or impair a Member’s legitimate expectations of benefits from tariff
negotiations.(1361)”(1362)
(c) Scope
963.
In EC — Asbestos, the Appellate Body rejected the
European Communities argument that Article XXIII:1(b) only applies to
measures which do not otherwise fall under other provisions of the GATT
1994. The Appellate Body emphasized the phrase, contained in Article
XXIII:1(b), “whether or not [the measure] conflicts with the
provisions of this Agreement”:
“The text of Article XXIII:1(b) stipulates that a claim under that
provision arises when a ‘benefit’ is being ‘nullified or impaired’
through the ‘application … of any measure, whether or not it
conflicts with the provisions of this Agreement ’. (emphasis
added) The wording of the provision, therefore, clearly states that a
claim may succeed, under Article XXIII:1(b), even if the measure ‘conflicts’
with some substantive provisions of the GATT 1994. It follows that a
measure may, at one and the same time, be inconsistent with, or
in breach of, a provision of the GATT 1994 and, nonetheless, give
rise to a cause of action under Article
XXIII:1(b). Of course, if a
measure ‘conflicts’ with a provision of the GATT 1994, that measure
must actually fall within the scope of application of that provision of
the GATT 1994. We agree with the Panel that this reading of Article
XXIII:1(b) is consistent with the panel reports in Japan — Film
and EEC — Oilseeds, which both support the view that Article
XXIII:1(b) applies to measures which simultaneously fall within the
scope of application of other provisions of the GATT 1994.(1363)
Accordingly, we decline the European Communities’ first ground of
appeal under Article XXIII:1(b) of the GATT
1994.”(1364)
964.
In EC — Asbestos, the Appellate Body further rejected
the European Communities argument that it is possible to have “legitimate
expectations” only in connection with a purely “commercial measure”
unlike the measure at issue, which had allegedly been taken to protect
human life or health. The Appellate Body stated that “the text [of
Article XXIII:1(b)] does not distinguish between, or exclude, certain
types of measures” and that such distinctions would be “very
difficult in practice”:
“[W]e look to the text of Article
XXIII:1(b), which provides that
‘the application by another Member of any measure’ may give
rise to a cause of action under that provision. The use of the word ‘any’
suggests that measures of all types may give rise to such a cause of
action. The text does not distinguish between, or exclude, certain types
of measure. Clearly, therefore, the text of Article XXIII:1(b)
contradicts the European Communities’ argument that certain types of
measure, namely, those with health objectives, are excluded from the
scope of application of Article XXIII:1(b).
In any event, an attempt to draw the distinction suggested by the
European Communities between so-called health and commercial measures
would be very difficult in practice. By definition, measures which
affect trade in goods, and which are subject to the disciplines of the
GATT 1994, have a commercial impact. At the same time, the health
objectives of many measures may be attainable only by means of
commercial regulation. Thus, in practice, clear distinctions between
health and commercial measures may be very difficult to establish. Nor
do we see merit in the argument that, previously, only ‘commercial’
measures have been the subject of Article XXIII:1(b) claims, as that
does not establish that a claim cannot be made under Article
XXIII:1(b) regarding a ‘noncommercial’ measure.”(1365)
(d) Test under Article XXIII:1(b)
965.
In Japan — Film, the Panel summarized the elements of a
non-violation case:
“The text of Article XXIII:1(b) establishes three elements that a
complaining party must demonstrate in order to make out a cognizable
claim under Article XXIII:1(b): (1) application of a measure by a WTO
Member; (2) a benefit accruing under the relevant agreement; and (3)
nullification or impairment of the benefit as the result of the
application of the measure.”(1366)
966.
In EC — Asbestos, the Panel followed the three-part
test of the Japan — Film Panel.(1367) The Panel’s
application of this test was not appealed.
(e) Burden of proof
967.
The Panel in Japan — Film explained that the burden of
proof under Article XXIII:1(b) falls upon the complaining party:
“Consistent with the explicit terms of the DSU and established WTO/GATT
jurisprudence, and recalling the Appellate Body ruling that ‘precisely
how much and precisely what kind of evidence will be required to
establish … a presumption [that what is claimed is true] will
necessarily vary from … provision to provision’, we thus consider
that the United States, with respect to its claim of non-violation
nullification or impairment under Article
XXIII:1(b), bears the burden
of providing a detailed justification for its claim in order to
establish a presumption that what is claimed is true. It will be for
Japan to rebut any such presumption.”(1368)
968.
In EC — Asbestos, Canada claimed that the French ban on
the sale and imports of products containing asbestos nullified or
impaired benefits accruing to it under Article
XXIII:1(b). The Panel’s
finding on the burden of proof, which was not appealed, was that “with
respect to its claims of non-violation, Canada bears the primary burden
of presenting a detailed justification for its claims.(1369)”(1370)
In support of its proposition, with reference to Article 26.1 of the DSU,
the Panel cited the finding of the Panel in Japan — Film
referenced in paragraph 967 above.(1371)
969.
In EC — Asbestos, Canada argued, citing the Appellate
Body Report on India — Patent (US)(1372) and the Panel
Report on Japan — Film(1373), that when a complainant
proves that it enjoys a tariff concession and the respondent
subsequently adopts a measure that affects the value of this concession,
the complainant benefits from the presumption that it could not
reasonably anticipate that this concession would be nullified or
otherwise impaired by this measure. The Panel, in a finding that was not
appealed, rejected this argument:
“We do not consider that Canada has correctly interpreted the Panel
report in Japan — Film. First of all, the presumption to which
the Panel refers is that, if it is shown that a measure has been
introduced after the conclusion of the tariff negotiations in question,
then the complainant should not be considered as having anticipated that
measure, which is only one of the tests applied by the Panel. Moreover,
if the interpretation of the burden of proof suggested by Canada were
followed, the obligation to present a detailed justification for which
Article 26.1(a) provides might in certain cases be evaded. Accordingly,
we do not follow the interpretation proposed by Canada but the rule laid
down in Japan — Film.
Furthermore, in the light of our reasoning in paragraph 8.272 above,
we consider that the special situation of measures justified under
Article XX, insofar as they concern non-commercial interests whose
importance has been recognized a priori by Members, requires
special treatment. By creating the right to invoke exceptions in certain
circumstances, Members have recognized a priori the possibility
that the benefits they derive from certain concessions may eventually be
nullified or impaired at some future time for reasons recognized as
being of overriding importance. This situation is different from that in
which a Member takes a measure of a commercial or economic nature such
as, for example, a subsidy or a decision organizing a sector of its
economy, from which it expects a purely economic benefit. In this latter
case, the measure remains within the field of international trade.
Moreover, the nature and importance of certain measures falling under
Article XX can also justify their being taken at any time, which
militates in favour of a stricter treatment of actions brought against
them on the basis of Article XXIII:1(b).
Consequently, the Panel concludes that because of the importance
conferred on them a priori by the GATT 1994, as compared with the
rules governing international trade, situations that fall under Article
XX justify a stricter burden of proof being applied in this context to
the party invoking Article XXIII:1(b), particularly with regard to the
existence of legitimate expectations and whether or not the initial
Decree could be reasonably anticipated.”(1374)
970.
Further, the Panel stated that the burden of proof for a claim
concerning a concession which had been made a long time previously “must
be all the heavier inasmuch as the intervening period has been so long”:
“[W]e consider that in view of the time that elapsed between those
concessions and the adoption of the Decree (between 50 and 35 years),
Canada could not assume that, over such a long period, there would not
be advances in medical knowledge with the risk that one day a product
would be banned on health grounds. For this reason, too, we also
consider that the presumption applied in Japan — Film cannot be
applied to the concessions granted in 1947 and 1962. Any other
interpretation would extend the scope of the concept of non-violation
nullification well beyond that envisaged by the Panel in Japan — Film. On the contrary, it is for Canada to present detailed evidence
showing why it could legitimately expect the 1947 and 1962 concessions
not to be affected and could not reasonably anticipate that France might
adopt measures restricting the use of all asbestos products 50 and 35
years, respectively, after the negotiation of the concessions concerned.
In the present case, the burden of proof must be all the heavier
inasmuch as the intervening period has been so long. Indeed, it is very
difficult to anticipate what a Member will do in 50 years time. It would
therefore be easy for a Member to establish that he could not reasonably
anticipate the adoption of a measure if the burden of proof were not
made heavier.”(1375)
(f) “measure”
971.
In the Panel in Japan — Film, Japan argued that a
measure, in order to be classified as such, must provide a benefit or
impose a legally binding obligation. The Panel stated that even
non-binding actions “can potentially have adverse effects on
competitive conditions of market access”:
“[A] government policy or action need not necessarily have a
substantially binding or compulsory nature for it to entail a likelihood
of compliance by private actors in a way so as to nullify or impair
legitimately expected benefits within the purview of Article
XXIII:1(b).
Indeed, it is clear that non-binding actions, which include sufficient
incentives or disincentives for private parties to act in a particular
manner, can potentially have adverse effects on competitive conditions
of market access. For example, a number of non-violation cases have
involved subsidies, receipt of which requires only voluntary compliance
with eligibility criteria.”(1376)
972.
The Panel in Japan — Film noted that the WTO Agreement
is an international agreement signed by national governments and customs
territories. According to the Panel, the term “measure” in Article
XXIII:1(b) and Article 26.1 of the DSU “refers only to policies or
actions of governments, not those of private parties.”(1377)
973.
The Panel in Japan — Film held that the non-violation
remedy is limited to measures that are currently being applied, and
found confirmation for this finding in GATT/WTO precedent:
“The text of Article XXIII:1(b) is written in the present tense,
viz. ‘If any Member should consider that any benefit accruing
to it directly or indirectly under this Agreement is being
nullified or impaired … as the result of … (b) the application by
another Member of any measure, whether or not it conflicts with
the provisions of this Agreement’. It thus stands to reason that,
given that the text contemplates nullification or impairment in the
present tense, caused by application of a measure, ‘whether or not it
conflicts’ (also in the present tense), the ordinary meaning of this
provision limits the non-violation remedy to measures that are currently
being applied.
Moreover, GATT/WTO precedent in other areas, including in respect of
virtually all panel cases under Article
XXIII:1(a), confirms that it is
not the practice of GATT/ WTO panels to rule on measures which have
expired or which have been repealed or withdrawn.(1378) In only a
very small number of cases, involving very particular situations, have
panels proceeded to adjudicate claims involving measures which no longer
exist or which are no longer being applied. In those cases, the measures
typically had been applied in the very recent past.(1379)
[W]e do not rule out the possibility that old ‘measures’ that
were never officially revoked may continue to be applied through
continuing administrative guidance. Similarly, even if measures were
officially revoked, the underlying policies may continue to be applied
through continuing administrative guidance. However, the burden is on
the United States to demonstrate clearly that such guidance does in fact
exist and that it is currently nullifying or impairing benefits.”(1380)
(g) “benefit”
974.
In Japan — Film, the Panel examined whether the
benefits legitimately expected by a Member can be derived from
successive rounds of tariff negotiations. The Panel recalled that in all
GATT cases dealing with Article XXIII:1(b), except one, the claimed
benefit was that of legitimate expectations of improved market-access
opportunities arising out of relevant tariff concessions.(1381)
The Panel referred to Article 1(b)(i) of the GATT 1994 and went on to
state that “[t]he conclusion that benefits accruing from concessions
granted during successive rounds of tariff negotiations may separately
give rise to reasonable expectations of improved market access is
consistent with past panel reports”:
“GATT 1994 incorporates both ‘protocols and certifications
relating to tariff concessions’ under paragraph 1(b)(i) and ‘the
Marrakesh Protocol to GATT 1994’ under paragraph
1(d). The ordinary
meaning of the text of paragraphs 1(b)(i) and
1(d) of GATT 1994, read
together, clearly suggests that all protocols relating to tariff
concessions, both those predating the Uruguay Round and the Marrakesh
Protocol to GATT 1994, are incorporated into GATT 1994 and continue to
have legal existence under the WTO Agreement.
Where tariff concessions have been progressively improved, the
benefits — expectations of improved market access — accruing
directly or indirectly under different tariff concession protocols
incorporated in GATT 1994 can be read in harmony. This approach is in
accordance with general principles of legal interpretation which, as the
Appellate Body reiterated in US — Gasoline, teach that
one should endeavour to give legal effect to all elements of a treaty
and not reduce them to redundancy or inutility.
The conclusion that benefits accruing from concessions granted during
successive rounds of tariff negotiations may separately give rise to
reasonable expectations of improved market access is consistent with
past panel reports.(1382) The panel in
EEC — Canned Fruit found that the United States had a reasonable expectation
arising from the EEC’s 1974 tariff concessions pursuant to Article
XXIV:6 negotiations and 1979 Tokyo Round tariff concessions (even though
the panel separately found that the United States could have anticipated
certain subsidies in respect of the Tokyo Round tariff concessions).(1383)
And the EEC — Oilseeds panel found that the United
States had a reasonable expectation arising from the EEC’s 1962 Dillon
Round tariff concessions.(1384) As the United States points out,
these findings would not have been possible if subsequent multilateral
tariff agreements or enlargement agreements were deemed to extinguish
wholesale the tariff concessions in prior tariff schedules.”(1385)
975.
After making the finding referenced in paragraph 974
above, the
Panel in Japan — Film then quoted with approval the
following excerpt from the GATT Panel Report on EEC — Oilseeds
I:
“‘In these circumstances, the partners of the Community in the
successive renegotiations under Article XXIV:6 could legitimately
assume, in the absence of any indications to the contrary, that the
offer to continue a tariff commitment by the Community was an offer not
to change the balance of concessions previously attained. The Panel
noted that nothing in the material submitted to it indicated that the
Community had made it clear to its negotiating partners that the
withdrawal and reinstitution of the tariff concessions for oilseeds as
part of the withdrawal of the whole of the Community Schedule meant that
the Community was seeking a new balance of concessions with respect to
these items. There is in particular no evidence that the Community, in
the context of these negotiations, offered to compensate its negotiating
partners for any impairment of the tariff concessions through production
subsidies or that it accepted compensatory tariff withdrawals by its
negotiating partners to take into account any such impairment. The
balance of concessions negotiated in 1962 in respect of oilseeds was
thus not altered in the successive Article XXIV:6 negotiations. The
Panel therefore found that the benefits accruing to the United States
under the oilseed tariff concessions resulting from the Article XXIV:6
negotiations of 1986/87 include the protection of reasonable
expectations the United States had when these concessions were initially
negotiated in 1962’.”(1386)
976.
The Panel in Japan — Film ultimately reached the
following conclusion:
“We consider, therefore, that reasonable expectations may in
principle be said to continue to exist with respect to tariff
concessions given by Japan on film and paper in successive rounds of
Article XXVIIIbis negotiations.”(1387)
977.
The Panel in EC — Asbestos held, in a statement
not appealed:
“[T]he Panel in Japan — Film recalled that, with
only one exception, in all the previous cases in which Article XXIII:1
(b) was invoked the benefit claimed consisted in the legitimate
expectation of improved market access opportunities resulting from the
relevant tariff concessions. We first need to know what benefit Canada
could legitimately have expected from the Community concessions on
chrysotile asbestos. We note, however, that previous panels approached
the question differently, insofar as they appear to have assumed the
existence of a benefit in the form of improved market access
opportunities and then considered whether a party could have had a legitimate
expectation of a given benefit.”(1388)
(h) Legitimate expectations
978.
In Japan — Film, the Panel examined whether the
United States could not have anticipated that the benefits related to
improved market access would be offset by the subsequent application of
a measure by Japan. The Panel held that if measures were anticipated, no
legitimate expectations of improved market access could exist with
respect to the impairment caused by these anticipated measures:
“As suggested by the 1961 report,(1389) in order for
expectations of a benefit to be legitimate, the challenged measures must
not have been reasonably anticipated at the time the tariff concession
was negotiated. If the measures were anticipated, a Member could not
have had a legitimate expectation of improved market access to the
extent of the impairment caused by these measures.
Thus, under Article
XXIII:1(b), the United States may only claim
impairment of benefits related to improved market access conditions
flowing from relevant tariff concessions by Japan to the extent that the
United States could not have reasonably anticipated that such benefits
would be offset by the subsequent application of a measure by the
Government of Japan.”(1390)
979.
The Panel in Japan — Film then considered the
standard by which to ascertain the existence of “reasonable
anticipation”. Where measures had been introduced after tariff
negotiations had taken place, the Panel held that a presumption would
exist that the United States, the complaining party, should not be held
to have anticipated these measures:
“We consider that the issue of reasonable anticipation should be
approached in respect of specific ‘measures’ in light of the
following guidelines. First, in the case of measures shown by the United
States to have been introduced subsequent to the conclusion of the
tariff negotiations at issue, it is our view that the United States has
raised a presumption that it should not be held to have anticipated
these measures and it is then for Japan to rebut that presumption. Such
a rebuttal might be made, for example, by establishing that the measure
at issue is so clearly contemplated in an earlier measure that the
United States should be held to have anticipated it. However, there must
be a clear connection shown. In our view, it is not sufficient to claim
that a specific measure should have been anticipated because it
is consistent with or a continuation of a past general government
policy. As in the EEC — Oilseeds case(1391), we
do not believe that it would be appropriate to charge the United States
with having reasonably anticipated all GATT-consistent measures, such as
‘measures’ to improve what Japan describes as the inefficient
Japanese distribution sector. Indeed, if a Member were held to
anticipate all GATT-consistent measures, a non-violation claim would not
be possible. Nor do we consider that as a general rule the United States
should have reasonably anticipated Japanese measures that are similar to
measures in other Members’ markets. In each such instance, the issue
of reasonable anticipation needs to be addressed on a case-by-case
basis.”(1392)
980.
After holding that “the issue of reasonable anticipation needs
to be addressed on a case-by-case basis” and that it was “not
sufficient to claim that a specific measure should have been
anticipated because it is consistent with or a continuation of a past general
government policy”, the Panel in Japan — Film held
that with respect to measures introduced prior to the conclusion of the
tariff negotiations at issue, a presumption would exist that the
complaining party “should be held to have anticipated those measures”:
“[I]n the case of measures shown by Japan to have been introduced
prior to the conclusion of the tariff negotiations at issue, it is our
view that Japan has raised a presumption that the United States should
be held to have anticipated those measures and it is for the United
States to rebut that presumption. In this connection, it is our view
that the United States is charged with knowledge of Japanese government
measures as of the date of their publication. We realize that knowledge
of a measure’s existence is not equivalent to understanding the impact
of the measure on a specific product market. For example, a vague
measure could be given substance through enforcement policies that are
initially unexpected or later changed significantly. However, where the
United States claims that it did not know of a measure’s relevance to
market access conditions in respect of film or paper, we would expect
the United States to clearly demonstrate why initially it could not have
reasonably anticipated the effect of an existing measure on the film or
paper market and when it did realize the effect. Such a showing will
need to be tied to the relevant points in time (i.e., the conclusions of
the Kennedy, Tokyo and Uruguay Rounds) in order to assess the extent of
the United States’ legitimate expectations of benefits from these
three Rounds. A simple statement that a Member’s measures were so
opaque and informal that their impact could not be assessed is not
sufficient. While it is true that in most past non-violation cases, one
could easily discern a clear link between a product-specific action and
the effect on the tariff concession that it allegedly impaired, one can
also discern a link between general measures affecting the internal sale
and distribution of products, such as rules on advertising and premiums,
and tariff concessions on products in general.”(1393)
981.
In EC — Asbestos, in examining a non-violation
claim by Canada, the Panel decided to assess whether the measure in
question could reasonably have been anticipated, as referenced in
paragraph 969 above. With regard to what factors should not be
taken into account to answer this question, the Panel considered, in a
finding not reviewed by the Appellate Body:
“[P]revious panels found that a number of elements were not
relevant. We consider it necessary to assess their applicability in
relation to the circumstances of the present case.
(a) First of all, we note that the reports in Japan
— Film
and EEC — Oilseeds concluded that a specific measure
could not be considered foreseeable solely because it was consistent
with or a continuation of a past general government policy. However, we
note that, in contrast to the two cases mentioned above, France had
already developed a specific policy in response to the health problems
created by asbestos before the adoption of the Decree. This factor must
certainly be taken into account in our analysis.(1394)
(b) The Panel in Japan
— Film, also concluded that it
would not be appropriate to charge the United States with having
reasonably anticipated all GATT-consistent measures. Consequently, we do
not consider that Canada reasonably anticipated all GATT-consistent
measures, or even possible measures justifiable under Article XX.
(c) Finally, insofar as the Decree postdates the most recent tariff
negotiations, we could apply the presumption applied by the Panel in Japan
— Film, according to which normally Canada should not be
considered to have anticipated a measure introduced after the tariff
concession had been negotiated. However, we do not consider such a
presumption to be consistent with the standard of proof that we found to
be applicable in paragraph 8.272 above in the case of an allegation of
non-violation nullification concerning measures falling under Article XX
of the GATT 1994.”(1395)
982.
After listing some of the elements which it considered should
not be taken into account when determining the existence of legitimate
expectations, the Panel in EC — Asbestos distinguished
the case before it from that in Japan — Film:
“Moreover, the circumstances of the present case seem
to us to be different from the situation envisaged in
Japan — Film. In that case, the measures in question
concerned the organization of the Japanese domestic market. They were
therefore economic measures of a kind that a third country might find
surprising and, accordingly, difficult to anticipate. Here, it is a
question of measures to protect public health under Article XX(b), that
is to say, measures whose adoption is expressly envisaged by the GATT
1994. We therefore consider that the presumption applied in Japan — Film is not applicable to the present case.”(1396)
983.
Following the finding referenced in paragraphs 981–982
above,
in deciding that Canada had no legitimate expectations of maintaining or
even developing its exports of certain asbestos products at the
conclusion of the Uruguay Round, the Panel in EC — Asbestos
noted that the increasing evidence showing the hazardous nature of
asbestos and the growing number of international and Community decisions
concerning the use of asbestos “could not do other than create a climate
which should have led Canada to anticipate a change in the attitude of
the importing countries, especially in view of the long-established
trend towards ever tighter restrictions on the use of asbestos”:
“As we have found … the presumption applied by the Panel in Japan — Film cannot be applied to the present case.(1397)
Unlike Canada, which claims that no recent scientific development could
have made the measure foreseeable, we consider that there is evidence to
show that regulations restricting the use of asbestos could have been
anticipated. First of all, the hazardous nature of chrysotile has long
been known….
Moreover, in the light of the information submitted by the parties
and the experts, we consider that the study of the diseases associated
with the inhalation of asbestos is a field of science in which any
possible conclusion would appear to be based on the observation of
pathological cases day by day….
On the other hand, the accumulation of international and Community
decisions concerning the use of asbestos, even if it did not necessarily
make it certain that the use of asbestos would be banned by France,
could not do other than create a climate which should have led
Canada to anticipate a change in the attitude of the importing
countries, especially in view of the long-established trend towards ever
tighter restrictions on the use of asbestos. We also note that the use
of chrysotile asbestos was banned by Members of the WTO well before it
was banned by France. Admittedly, in Japan — Film the
Panel considered that the adoption in other Members’ markets of
measures similar to the measures in question could not make the latter
foreseeable. However, here again it was a question of commercial
measures. We consider that in the present case the situation is
different since it concerns public health and the competent
international organizations have already taken a position on the
question. The adoption, in an already restrictive context, of public
health measures by other States, faced with a social and economic
situation similar to that in France, creates an environment in which the
adoption of similar measures by France is no longer unforeseeable.
Moreover, as noted above, at the end of the Uruguay Round France
already had in place a number of measures regulating the use of
asbestos. These included, in particular, measures relating to the
exposure of workers taken after asbestos was recognized as a carcinogen
by the IARC (Decree 77-949 of 17 August 1977) and the adoption of ILO
Convention 162, as well as for the purpose of implementing Community
directives applicable. The Panel also notes that Decree 88-466 of 28
April 1988 on products containing asbestos had prohibited the use of
chrysotile asbestos in the manufacture of certain products.(1398)”(1399)
984.
The Panel in Korea — Procurement, referring to
the finding of the Appellate Body in EC — Computer Equipment,
discussed the relevance of negotiation history in addressing issues of
reasonable or legitimate expectation in cases relating to non-violation:
“At the outset of our analysis of this issue, we must address some
relevant issues relating to use of negotiating history which arose in
the European Communities — Computer Equipment dispute.
In that dispute, the Appellate Body specifically found that the standard
of reasonable expectation or legitimate expectation existing with
respect to non-violation cases had no role in reviewing negotiating
history in order to aid in resolving the issues pertaining to a
violation case. One of the reasons is that in a non-violation case the
relevant question is what was the reasonable expectation of the
complaining party. However, if it is necessary to go beyond the text in
a violation case, the relevant question is to assess the objective
evidence of the mutual understanding of the negotiating parties.(1400)
This involves not just the complaining and responding parties, but also
involves possibly other parties to the negotiations. It is also
important to note that there is a difference in perspectives of the
reasonable expectations of one party as opposed to the mutual
understanding of all the parties. The information available at the time
of the negotiations may be available to some parties but not all. In
other words, the evidence before the panel may be different in the two
analyses and the weighting and probative value may also differ.”(1401)
985.
With respect to the issue of legitimate expectations in the
context of violation complaints, see Chapter on the DSU, Section
XXIII.B.2.
(i) “nullified or impaired”
986.
In Japan — Film, the Panel examined the third
element required for a claim of non-violation, i.e. “nullification and
impairment”. The Panel equated “nullification and impairment” with
“upsetting the competitive relationship” between domestic and
imported products and held that the complaining party “must show a
clear correlation between the measures and the adverse effect on the
relevant competitive relationships”:
“[I]t must be demonstrated that the competitive position of the
imported products subject to and benefitting from a relevant market
access (tariff) concession is being upset by (‘nullified or
impaired … as the result of’) the application of a measure not
reasonably anticipated. The equation of ‘nullification or impairment’
with ‘upsetting the competitive relationship’ established between
domestic and imported products as a result of tariff concessions has
been consistently used by GATT panels examining non-violation complaints. For example, the EEC — Oilseeds
panel, in describing its findings, stated that it had ‘found … that
the subsidies concerned had impaired the tariff concession because they upset
the competitive relationship between domestic and imported oilseeds,
not because of any effect on trade flows’.(1402) The same
language was used in the Australian Subsidy and Germany — Sardines cases. Thus, in this case, it is up to the United
States to prove that the governmental measures that it cites have upset
the competitive relationship between domestic and imported photographic
film and paper in Japan to the detriment of imports. In other words, the
United States must show a clear correlation between the measures and the
adverse effect on the relevant competitive relationships.”
987.
The Panel in Japan — Film then sub-divided the
issue of “causality” into four separate issues: the degree of
causation, origin-neutrality of the measure at issue, the relevance of
intent with respect to causality and “the extent to which measures may
be considered collectively in an analysis of causation”:
“As to the first issue … Japan should be responsible for what is
caused by measures attributable to the Japanese Government as opposed,
for example, to what is caused by restrictive business conduct
attributable to private economic actors. At this stage of the
proceeding, the issue is whether such a measure has caused nullification
or impairment, i.e., whether it has made more than a de minimis
contribution to nullification or impairment.
In respect of the second issue … even in the absence of de jure
discrimination (measures which on their face discriminate as to origin),
it may be possible for the United States to show de facto
discrimination (measures which have a disparate impact on imports).
However, in such circumstances, the complaining party is called upon to
make a detailed showing of any claimed disproportionate impact on
imports resulting from the origin-neutral measure. And, the burden of
demonstrating such impact may be significantly more difficult where the
relationship between the measure and the product is questionable.
We note that WTO/GATT case law on the issue of de facto
discrimination is reasonably well-developed, both in regard to the
principle of most-favoured-nation treatment under GATT Article I(1403)
and in regard to that of national treatment under GATT Article
II(1404)
… We consider that despite the fact that these past cases dealt with
GATT provisions other than Article XXIII:1(b), the reasoning contained
therein appears to be equally applicable in addressing the question of de
facto discrimination with respect to claims of non-violation
nullification or impairment, subject, of course, to the caveat, that in
an Article XXIII:1(b) case the issue is not whether equality of
competitive conditions exists but whether the relative conditions of
competition which existed between domestic and foreign products as a
consequence of the relevant tariff concessions have been upset.
The third issue is the relevance of intent to causality …. We note
… that Article XXIII:1(b) does not require a proof of intent of
nullification or impairment of benefits by a government adopting a
measure. What matters for purposes of establishing causality is the
impact of a measure, i.e. whether it upsets competitive relationships.
Nonetheless, intent may not be irrelevant. In our view, if a measure
that appears on its face to be origin-neutral in its effect on domestic
and imported products is nevertheless shown to have been intended to
restrict imports, we may be more inclined to find a causal relationship
in specific cases, bearing in mind that intent is not determinative
where it in fact exists.
Finally, as for the US position that the Panel should examine the
impact of the measures in combination as well as individually (a
position contested by Japan), we do not reject the possibility of such
an impact. It is not without logic that a measure, when analysed in
isolation, may have only very limited impact on competitive conditions
in a market, but may have a more significant impact on such conditions
when seen in the context of — in combination with — a larger set of
measures. Notwithstanding the logic of this theoretical argument,
however, we are sensitive to the fact that the technique of engaging in
a combined assessment of measures so as to determine causation is
subject to potential abuse and therefore must be approached with caution
and circumscribed as necessary.” (1405)
988.
In EC — Asbestos, Canada claimed that the French
ban on the sale and imports of products containing asbestos nullified or
impaired benefits accruing to it under Article
XXIII:1(b). In this
regard, the Panel stated:
“[T]he Panel finds it appropriate to consider that in view of the
type of measure in question the ‘upsetting of the competitive
relationship’ can be assumed. By its very nature, an import ban
constitutes a denial of any opportunity for competition, whatever the
import volume that existed before the introduction of the ban. We will
therefore concentrate on the question of whether the measure could
reasonably have been anticipated by the Canadian Government at the time
that it was negotiating the various tariff concessions covering the
products concerned.”(1406)
(j) Non-violation complaints in relation to the Agreement on
Government Procurement
989.
In Korea — Procurement, the
Panel noted the three requirements enunciated by the Panel in Japan
— Film as necessary for a claim of non-violation under Article
XXIII:1(b). The Panel observed that the key difference between a
traditional non-violation case and the case involving the Agreement
on Government Procurement before it was that the question of “reasonable
expectation” in a traditional non-violation case is whether or not it
was reasonable to be expected that the benefit under an existing
concession would be impaired by the measures, but in the instant case,
the question was “whether or not there was a reasonable expectation of
an entitlement to a benefit that had accrued pursuant to the negotiation
rather than pursuant to a concession.” The Panel continued:
“[T]he non-violation remedy as it has developed in GATT/ WTO
jurisprudence should not be viewed in isolation from general principles
of customary international law. As noted above, the basic premise is
that Members should not take actions, even those consistent with the
letter of the treaty, which might serve to undermine the reasonable
expectations of negotiating partners. This has traditionally arisen in
the context of actions which might undermine the value of negotiated
tariff concessions. In our view, this is a further development of the
principle of pacta sunt servanda in the context of Article
XXIII:1(b) of the GATT 1947 and disputes that arose there under, and
subsequently in the WTO Agreements, particularly in Article 26 of the
DSU. The principle of pacta sunt servanda is expressed in Article
26 of the Vienna Convention(1407) in the following manner:
‘Every treaty in force is binding upon the parties to it and must
be performed by them in good faith.’”(1408)
990.
The Panel in Korea — Procurement then addressed
the issue of “error in treaty negotiation”:
“One of the issues that arise in this dispute is whether the
concept of non-violation can arise in contexts other than the
traditional approach represented by pacta sunt servanda. Can, for
instance, the question of error in treaty negotiation be addressed under
Article 26 of the DSU and Article XXII:2 of the
GPA? We see no reason
why it cannot. Parties have an obligation to negotiate in good faith
just as they must implement the treaty in good faith.”(1409)
991.
The Panel in Korea — Procurement explained its
decision to review the claim of nullification or impairment within the
framework of principles of international law which are generally
applicable not only to the performance of treaties but also to treaty
negotiation as follows:
“[W]e will review the claim of nullification or impairment raised
by the United States within the framework of principles of international
law which are generally applicable not only to performance of treaties
but also to treaty negotiation.(1410) To do otherwise potentially
would leave a gap in the applicability of the law generally to WTO
disputes and we see no evidence in the language of the WTO Agreements
that such a gap was intended. If the non-violation remedy were deemed
not to provide a relief for such problems as have arisen in the present
case regarding good faith and error in the negotiation of GPA
commitments (and one might add, in tariff and services commitments under
other WTO Agreements), then nothing could be done about them within the
framework of the WTO dispute settlement mechanism if general rules of
customary international law on good faith and error in treaty
negotiations were ruled not to be applicable. As was argued above, that
would not be in conformity with the normal relationship between
international law and treaty law or with the WTO Agreements.”(1411)
(k) Relationship with other WTO Agreements
(i) Anti-Dumping Agreement
992.
With respect to the relationship between Article XXIII of the
GATT 1994 and Article 17 of the Anti-Dumping
Agreement, see the
excerpts from the reports of the panels and Appellate Body referenced in
the Chapter on the Anti-Dumping Agreement.
3. Article XXIII:1(c)
993.
See GATT Analytical Index and Article 26.2 in the Chapter on the DSU.
4. Article XXIII:2
994.
Regarding practice under Article XXIII:2 in general, see Chapter
on the DSU, Article 4, Article
6.1, Article 11 and Article
22.
5. GATT practice
995.
See GATT Analytical Index (Article XXIII
in general); (practice Article
XXIII:1(b)).
Footnotes:
1355. Panel Report, EEC
— Oilseeds I,
para. 144. back to text
1356. Appellate Body Report, EC
— Asbestos,
para. 185. back to text
1357. Appellate Body Report, EC
— Asbestos, para. 186. back to text
1358. (footnote original) Report of the Working Party on Australia
— Ammonium Sulphate; Panel Report, Germany
— Sardines;
[Panel Report,] Uruguay — Recourse to Article XXIII; Panel
Report, EC — Citrus; Panel Report, EEC
— Canned Fruit;
[Panel Report,] Japan — Semi-Conductors; EEC
— Oilseeds I;
[Panel Report,] US — Sugar Waiver. back to text
1359. (footnote original) In EEC
— Oilseeds I, the
United States stated that it “concurred in the proposition that
non-violation nullification or impairment should remain an exceptional
concept. Although this concept had been in the text of Article XXIII of
the General Agreement from the outset, a cautious approach should
continue to be taken in applying the concept”. EEC
— Oilseeds I,
para. 114. The EEC in that case stated that “recourse to the ‘non-violation’
concept Article XXIII:1(b) should remain exceptional, since otherwise
the trading world would be plunged into a state of precariousness and
uncertainty”. Ibid., para. 113. back to text
1360. Panel Report, Japan
— Film, para. 10.36. back to text
1361. (footnote original) GATT Panel Report, EEC
— Oilseeds I, para. 144. back to text
1362. Panel Report, Japan
— Film,
para. 1050. back to text
1363. (footnote original) See Panel Report, para. 8.263, which
refers to the Panel Report in Japan
— Film, supra,
footnote 187, para. 10.50, and footnote 1214; and EEC
— Oilseeds,
supra, footnote 186, para. 144. back to text
1364. Appellate Body Report, EC
— Asbestos, para. 187. back to text
1365. Appellate Body Report, EC
— Asbestos, paras. 188–189. back to text
1366. Panel Report, Japan
— Film,
para. 10.41. See also Panel
Report, Korea — Procurement, para. 7.85. back to text
1367. Panel Report, EC
— Asbestos,
para. 8.283. back to text
1368. Panel Report, Japan
— Film
para. 10.32. back to text
1369. Previous Panels have not defined the precise scope of the
concept of detailed justification. back to text
1370. Panel Report, EC
— Asbestos,
para. 8.278. back to text
1371. Panel Report, EC
— Asbestos,
para. 8.277. back to text
1372. Appellate Body Report, India
— Patents (US), para. 41. back to text
1373. Panel Report, Japan
— Film,
para. 10.79. back to text
1374. Panel Report, EC
— Asbestos,
paras. 8.280–282. back to text
1375. Panel Report, EC
— Asbestos,
para. 8.292. back to text
1376. Panel Report, Japan
— Film,
para. 10.49. back to text
1377. Panel Report, Japan
— Film,
para. 10.52. back to text
1378. (footnote original) See Panel Report on US
— Gasoline, para. 6.19, where the panel observed that “it had not
been the usual practice of a panel established under the General
Agreement to rule on measures that, at the time the panel’s terms of
reference were fixed, were not and would not become effective”. See
also Panel Report on Argentina
— Footwear, Textiles and Apparel,
pp. 84–86. back to text
1379. (footnote original) See, e.g., Panel Report on US
— Wool Shirts and Blouses, where the panel ruled on a measure that was
revoked after the interim review but before issuance of the final report
to the parties; Panel Report on EEC
— Measure on Animal Feed
Proteins, where the panel ruled on a discontinued measure, but one
that had terminated after the terms of reference of the panel had
already been agreed; Panel Report on United States
— Prohibitions
on Imports of Tuna and Tuna Products from Canada, para. 4.3., where
the panel ruled on the GATT consistency of a withdrawn measure but only
in light of the two parties’ agreement to this procedure; Panel Report
on EEC — Restrictions on Imports of Apples from Chile, where
the panel ruled on a measure which had terminated before agreement on
the panel’s terms of reference but where the terms of reference
specifically included the terminated measure and, given its seasonal
nature, there remained the prospect of its reintroduction. back to text
1380. Panel Report, Japan
— Film,
paras. 10.57–10.59. back to text
1381. Panel Report, Japan
— Film,
para. 10.62. The Panel
cited GATT Panel Reports on Australia — Ammonium Sulphate; Germany
— Sardines; Uruguay — Recourse to Article XXIII; EC
— Citrus; EEC — Canned Fruit; Japan
— Semi-Conductors; EEC
— Oilseeds I; US — Sugar Waiver,
The Panel then stated as follows: back to text
“Only in EC — Citrus Products did the complaining party
claim that the benefit denied was not improved market access from tariff
concessions granted under GATT Article
II, but rather GATT Article I:1 (‘most-favoured-nation’)
treatment with respect to unbound tariff preferences granted by the EC
to certain Mediterranean countries.” back to text
1382 (footnote original) See Panel Reports on EEC
— Canned Fruit; and EEC
— Oilseeds I. back to text
1383. (footnote original) Panel Report on
EEC — Canned Fruit, para. 54. back to text
1384. (footnote original) Panel Report on EEC
— Oilseeds I,
paras. 144–146. back to text
1385. Panel Report, Japan
— Film,
paras. 10.64–10.66. back to text
1386. Panel Report, EC
— Oilseeds I, para. 146, quoted in
Panel Report, Japan
— Film,
para. 10.67. back to text
1387. Panel Report, Japan
— Film,
para. 10.70. back to text
1388. Panel Report, EC
— Asbestos,
para. 8.285. back to text
1389. The “1961 report” referenced to is the GATT Panel Report, Operation
of the Provisions of Article XVI, adopted on 21 November 1961, BISD
10S/201. back to text
1390. Panel Report, Japan
— Film,
paras. 10.76–10.77. back to text
1391. (footnote original) Panel Report on EEC
— Oilseeds I,
paras. 147 and 148. back to text
1392. Panel Report, Japan
— Film,
para. 10.79. back to text
1393. Panel Report, Japan
— Film,
paras. 10.76–10.77 and
10.79–10.80. back to text
1394. (footnote original) In our opinion, there is a difference
between, on the one hand, an import ban following upon a series of
national measures gradually reinforcing, since 1977, the measures taken
to protect public health against the effects of asbestos and, on the
other, the relationship which the EC tried to establish in EEC
— Oilseeds
between the existence in 1962 of oilseeds subsidies in
certain member States of the European Communities and the development of
a subsidy programme insulating oil-seed producers from competition from
imports (see para. 149 of the panel report). back to text
1395. Panel Report, EC
— Asbestos,
para. 8.291. back to text
1396. Panel Report, EC
— Asbestos,
para. 8.291. back to text
1397. (footnote original) Even if it were applicable, we
consider that the EC rebutted this presumption by their references to
the systems established at international and Community level concerning
the use of asbestos. back to text
1398. (footnote original) See Annex II, reply of the European
Communities to the Panel’s question No. 4 at the Second Meeting with
the Parties, paras. 254 to 261. back to text
1399. Panel Report, EC
— Asbestos,
paras. 8.295–8.298. back to text
1400. (footnote original) Appellate Body Report on EC
— Computer Equipmentat paragraphs 81–84, 93. back to text
1401. Panel
Report, Korea — Procurement, para. 7.75. back to text
1402. (footnote original) Follow-up on the GATT Panel Report on
EEC — Oilseeds, BISD 39S/91, para. 77 (emphasis added). back to text
1403. (footnote original) See, e.g., Panel Report on European
Economic Community — Imports of Beef from Canada, paras. 4.2, 4.3.
back to text
1404. (footnote original) See Panel Reports on US
— Section 337, para. back to text
5.11; Canada — Import, Distribution and Sale of Certain
Alcoholic Drinks by Provincial Marketing Agencies, paras. 5.12–5.14
and 5.30–5.31; US — Malt Beverages, para. 5.30; and Panel
Reports on US — Gasoline, para. 6.10; Japan
— Alcoholic
Beverages II, para. 6.33; and EC — Bananas III, paras.
7.179–7.180. back to text
1405. Panel Report, Japan
— Film,
paras. 10.83–10.88. back to text
1406. Panel Report, EC
— Asbestos,
para. 8.289. back to text
1407. (footnote original) A reference to the rule of pacta
sunt servanda also appears in the preamble to the Vienna Convention.
back to text
1408. Panel
Report, Korea — Procurement, para. 7.93. back to text
1409. Panel
Report, Korea — Procurement, para. 7.100. back to text
1410. (footnote original) We note that
DSU Article 7.1 requires
that the relevant covered agreement be cited in the request for a panel
and reflected in the terms of reference of a panel. That is not a bar to
a broader analysis of the type we are following here, for the GPA would
be the referenced covered agreement and, in our view, we are merely
fully examining the issue of non-violation raised by the United States.
We are merely doing it within the broader context of customary
international law rather than limiting it to the traditional analysis
that accords with the extended concept of pacta sunt servanda.
The purpose of the terms of reference is to properly identify the claims
of the party and therefore the scope of a panel’s review. We do not
see any basis for arguing that the terms of reference are meant to exclude
reference to the broader rules of customary international law in
interpreting a claim properly before the Panel. back to text
1411. Panel
Report, Korea — Procurement, para. 7.101. back to text
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