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T.1.1 Article II:1 of the GATT 1994. See also Agreement
on Agriculture, Article 4.2 and Footnote 1 (A.1.9-13)
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T.1.1.1 Argentina —
Textiles and Apparel, para. 45
(WT/DS56/AB/R, WT/DS56/AB/R/Corr.1)
… Paragraph (a) of Article II:1 contains a general prohibition
against according treatment less favourable to imports than that
provided for in a Member’s Schedule. Paragraph (b) prohibits a
specific kind of practice that will always be inconsistent with
paragraph (a): that is, the application of ordinary customs duties in
excess of those provided for in the Schedule. Because the language of
Article II:1(b), first sentence, is more specific and germane to the
case at hand, our interpretative analysis begins with, and focuses on,
that provision.
T.1.1.2 Argentina —
Textiles and Apparel, para. 55
(WT/DS56/AB/R, WT/DS56/AB/R/Corr.1)
We conclude that the application of a type of duty different from the
type provided for in a Member’s Schedule is inconsistent with Article II:1(b), first sentence, of the GATT 1994 to the extent that it results
in ordinary customs duties being levied in excess of those provided for
in that Member’s Schedule. In this case, we find that Argentina has
acted inconsistently with its obligations under Article II:1(b), first
sentence, of the GATT 1994, because the DIEM regime, by its structure
and design, results, with respect to a certain range of import prices in
any relevant tariff category to which it applies, in the levying of
customs duties in excess of the bound rate of 35 per cent ad valorem
in Argentina’s Schedule.
T.1.1.3 Canada — Dairy, para. 134
(WT/DS103/AB/R, WT/DS113/AB/R, WT/DS103/AB/R/Corr.1,
WT/DS113/AB/R/Corr.1)
… Under Article II:1(b) of the GATT 1994, the market access
concessions granted by a Member are “subject to” the “terms,
conditions or qualifications set forth in [its] Schedule”. (emphasis
added) In our view, the ordinary meaning of the phrase “subject to”
is that such concessions are without prejudice to and are subordinated to, and are, therefore, qualified by, any “terms,
conditions or qualifications” inscribed in a Member’s Schedule. …
The phrase “terms and conditions” is a composite one which, in its
ordinary meaning, denotes the imposition of qualifying restrictions or
conditions. A strong presumption arises that the language which is
inscribed in a Member’s Schedule under the heading, “Other Terms and
Conditions”, has some qualifying or limiting effect on
the substantive content or scope of the concession or commitment.
T.1.2 Interpretation and clarification of tariff concessions
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T.1.2.1 EC — Computer Equipment, para. 84
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
The purpose of treaty interpretation under Article 31 of the Vienna
Convention is to ascertain the common intentions of the
parties. These common intentions cannot be ascertained on the
basis of the subjective and unilaterally determined “expectations”
of one of the parties to a treaty. Tariff concessions provided
for in a Member’s Schedule — the interpretation of which is at issue
here — are reciprocal and result from a mutually-advantageous
negotiation between importing and exporting Members. A Schedule is made
an integral part of the GATT 1994 by Article II:7 of the GATT 1994.
Therefore, the concessions provided for in that Schedule are part of the
terms of the treaty. As such, the only rules which may be applied in
interpreting the meaning of a concession are the general rules of treaty
interpretation set out in the Vienna Convention.
T.1.2.2 EC — Computer Equipment, paras. 89-90
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… We believe, however, that a proper interpretation of Schedule
LXXX should have included an examination of the Harmonized System
and its Explanatory Notes.
… we consider that in interpreting the tariff concessions in
Schedule LXXX, decisions of the WCO may be relevant …
T.1.2.3 EC — Computer Equipment, para. 92
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… In the light of our observations on “the circumstances of [the]
conclusion” of a treaty as a supplementary means of interpretation
under Article 32 of the Vienna Convention, we consider that the
classification practice in the European Communities during the Uruguay
Round is part of “the circumstances of [the] conclusion” of the WTO Agreement and may be used as a supplementary means of
interpretation within the meaning of Article 32 of the Vienna
Convention. …
T.1.2.4 EC — Computer Equipment, para. 93
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… The purpose of treaty interpretation is to establish the common
intention of the parties to the treaty. To establish this intention, the
prior practice of only one of the parties may be relevant, but it
is clearly of more limited value than the practice of all parties. In
the specific case of the interpretation of a tariff concession in a
Schedule, the classification practice of the importing Member, in fact,
may be of great importance. However, the Panel was mistaken in finding
that the classification practice of the United States was not
relevant.
T.1.2.5 EC — Computer Equipment, para. 95
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… Consistent prior classification practice may often be
significant. Inconsistent classification practice, however, cannot
be relevant in interpreting the meaning of a tariff concession. …
T.1.2.6 EC — Computer Equipment, para. 97
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… we conclude that the Panel erred in finding that the “legitimate
expectations” of an exporting Member are relevant for the purposes of
interpreting the terms of Schedule LXXX and of determining whether the
European Communities violated Article II:1 of the GATT 1994 …
T.1.2.7 EC — Computer Equipment, paras. 109-110
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… Tariff negotiations are a process of reciprocal demands and
concessions, of “give and take”. It is only normal that importing
Members define their offers (and their ensuing obligations) in terms
which suit their needs. On the other hand, exporting Members have to
ensure that their corresponding rights are described in such a manner in
the Schedules of importing Members that their export interests, as
agreed in the negotiations, are guaranteed. There was a special
arrangement made for this in the Uruguay Round. For this purpose, a
process of verification of tariff schedules took place from 15 February
through 25 March 1994, which allowed Uruguay Round participants to check
and control, through consultations with their negotiating partners, the
scope and definition of tariff concessions. Indeed, the fact that
Members’ Schedules are an integral part of the GATT 1994 indicates
that, while each Schedule represents the tariff commitments made by one
Member, they represent a common agreement among all Members.
… We consider that any clarification of the scope of tariff
concessions that may be required during the negotiations is a task for all
interested parties.
T.1.2.8 US — Gambling, para. 233
(WT/DS285/AB/R)
… the chapeau to Article XVI:2 … contemplates circumstances in
which a Member’s Schedule includes a commitment to allow market
access, and points out that the function of the sub-paragraphs in
Article XVI:2 is to define certain limitations that are prohibited
unless specifically entered in the Member’s Schedule. Plainly, the
drafters of sub-paragraph (a) had in mind limitations that would impose
a maximum limit of above zero. Similarly, Article II:1(b) of the
GATT 1994 prohibits Members from imposing duties “in excess of” the
bound duty rate. Such bound duty rate will usually be above zero.
Yet this does not mean that Article II:1(b) does not also refer to bound
rates set at zero.
T.1.3 Relationship between Schedules of concessions and the GATT 1994
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T.1.3.1 EC — Bananas III, paras. 154-155
(WT/DS27/AB/R)
The market access concessions for agricultural products that were
made in the Uruguay Round of multilateral trade negotiations are set out
in Members’ Schedules annexed to the Marrakesh Protocol, and
are an integral part of the GATT 1994. By the terms of the Marrakesh
Protocol, the Schedules are “Schedules to the GATT 1994”, and
Article II:7 of the GATT 1994 provides that “Schedules annexed to this
Agreement are hereby made an integral part of Part I of this Agreement”.
With respect to concessions contained in the Schedules annexed to the
GATT 1947, the panel in United States — Restrictions on Importation
of Sugar (“United States — Sugar Headnote”) found that:
… Article permits contracting parties to incorporate into their
Schedules acts yielding rights under the General Agreement but not acts
diminishing obligations under that Agreement.
This principle is equally valid for the market access concessions and
commitments for agricultural products contained in the Schedules annexed
to the GATT 1994. The ordinary meaning of the term “concessions”
suggests that a Member may yield rights and grant benefits, but it
cannot diminish its obligations. This interpretation is confirmed by
paragraph 3 of the Marrakesh Protocol which provides:
The implementation of the concessions and commitments contained in
the schedules annexed to this Protocol shall, upon request, be subject
to multilateral examination by the Members. This would be without
prejudice to the rights and obligations of Members under Agreements in
Annex 1A of the WTO Agreement. (emphasis added)
The question remains whether the provisions of the Agreement on
Agriculture allow market access concessions on agricultural products
to deviate from Article XIII of the GATT 1994. The preamble of the Agreement
on Agriculture states that it establishes “a basis for initiating
a process of reform of trade in agriculture” and that this reform
process “should be initiated through the negotiation of commitments on
support and protection and through the establishment of strengthened and
more operationally effective GATT rules and disciplines”. The
relationship between the provisions of the GATT 1994 and of the Agreement
on Agriculture is set out in Article 21.1 of the Agreement on
Agriculture:
The provisions of GATT 1994 and of other Multilateral Trade
Agreements in Annex 1A to the WTO Agreement shall apply subject to the
provisions of this Agreement.
Therefore, the provisions of the GATT 1994, including Article XIII,
apply to market-access commitments concerning agricultural products,
except to the extent that the Agreement on Agriculture contains
specific provisions dealing specifically with the same matter.
T.1.3.2 EC — Poultry, para. 98
(WT/DS69/AB/R)
… The ordinary meaning of the term “concessions” suggests that
a Member may yield or waive some of its own rights and grant benefits to
other Members, but that it cannot unilaterally diminish its own
obligations. …
T.1.3.3 EC — Poultry, para. 99
(WT/DS69/AB/R)
Therefore, the concessions contained in Schedule LXXX pertaining to
the tariff-rate quota for frozen poultry meat must be consistent with
Articles I and XIII of the GATT 1994.
T.1.4 Relationship between Members’ Schedules and the Agreement on
Agriculture. See also Agreement on Agriculture, Relationship
between the Agreement on Agriculture and the GATT 1994 (A.1.37)
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T.1.4.1 EC — Export Subsidies on Sugar, paras. 220-223
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)
… we find no provision under the Agreement on Agriculture
that authorizes Members to depart, in their Schedules, from their
obligations under that Agreement. Indeed, as we have noted, Article 8
requires that, in providing export subsidies, Members must comply with
the provisions of both the Agreement on Agriculture and the
export subsidy commitments specified in their Schedules. This is
possible only if the commitments in the Schedules are in conformity with
the provisions of the Agreement on Agriculture. Thus, we see no
basis for the European Communities’ assertion that it could depart
from the obligations under the Agreement on Agriculture through
the claimed commitment provided in Footnote 1.
In any event, we note that Article 21 of the Agreement on
Agriculture provides that: “[t]he provisions of [the] GATT 1994
and of other Multilateral Trade Agreements in Annex 1A to the WTO
Agreement shall apply subject to the provisions of this Agreement.” In
other words, Members explicitly recognized that there may be conflicts
between the Agreement on Agriculture and the GATT 1994, and
explicitly provided, through Article 21, that the Agreement on
Agriculture would prevail to the extent of such conflicts.
Similarly, the General interpretative note to Annex 1A to the WTO
Agreement states that, “[i]n the event of conflict between a
provision of the [GATT 1994] and a provision of another agreement in
Annex 1A …, the provision of the other agreement shall prevail to the
extent of the conflict.” The Agreement on Agriculture is
contained in Annex 1A to the WTO Agreement.
As we noted above, Footnote 1, being part of the European Communities’
Schedule, is an integral part of the GATT 1994 by virtue of Article 3.1
of the Agreement on Agriculture. Therefore, pursuant to Article 21 of the Agreement on Agriculture, the provisions of the Agreement
on Agriculture prevail over Footnote 1. …
As a separate matter, we note that the European Communities asserts
that Footnote 1 was “negotiated” with its partners in the Uruguay
Round negotiations and that it has been “respected”. Accordingly,
Footnote 1 forms part of the treaty ratified by the WTO Members.
Similarly, the ACP Countries allege that Footnote 1 “was negotiated
and agreed upon” or acquiesced in by the Complaining Parties before
the end of the Uruguay Round. The Panel found, however, that “[t]he
evidence and submissions produced by all parties show that the
Complainants did not agree to any European Communities’ deviations
from the Agreement on Agriculture.” The Panel concluded that
“participants in the Uruguay Round and WTO Members did not agree to
the European Communities’ inclusion of Footnote 1 as an agreed
departure from the European Communities’ basic obligations under the Agreement
on Agriculture.” Accordingly, we see no basis in the Panel Reports
for the contention of the European Communities and the ACP Countries
that the Complaining Parties or the WTO Members negotiated or agreed to
Footnote 1 as a departure from the European Communities’ obligations
under the Agreement on Agriculture.
T.1.5 Interpretation of Members’ Schedules. See also GATS,
Schedules, Interpretation of Schedules (G.1.2.1)
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T.1.5.1 EC — Computer Equipment, para. 84
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
The purpose of treaty interpretation under Article 31 of the Vienna
Convention is to ascertain the common intentions of the
parties. These common intentions cannot be ascertained on the
basis of the subjective and unilaterally determined “expectations”
of one of the parties to a treaty. Tariff concessions provided
for in a Member’s Schedule — the interpretation of which is at issue
here — are reciprocal and result from a mutually-advantageous
negotiation between importing and exporting Members. A Schedule is made
an integral part of the GATT 1994 by Article II:7 of the GATT 1994.
Therefore, the concessions provided for in that Schedule are part of the
terms of the treaty. As such, the only rules which may be applied in
interpreting the meaning of a concession are the general rules of treaty
interpretation set out in the Vienna Convention.
T.1.5.2 EC — Computer Equipment, para. 93
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… The purpose of treaty interpretation is to establish the common
intention of the parties to the treaty. To establish this intention, the
prior practice of only one of the parties may be relevant, but it
is clearly of more limited value than the practice of all parties. In
the specific case of the interpretation of a tariff concession in a
Schedule, the classification practice of the importing Member, in fact,
may be of great importance. However, the Panel was mistaken in finding
that the classification practice of the United States was not
relevant.
T.1.5.3 EC — Computer Equipment, para. 95
(WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R)
… Consistent prior classification practice may often be
significant. Inconsistent classification practice, however, cannot
be relevant in interpreting the meaning of a tariff concession. …
T.1.5.4 EC — Export Subsidies on Sugar, paras. 166-167
(WT/DS265/AB/R, WT/DS266/AB/R, WT/DS283/AB/R)
A preliminary question for our consideration is what rules apply in
interpreting export subsidy commitments specified in a Member’s
Schedule under the Agreement on Agriculture. We observe that
Article II:7 of the General Agreement on Tariffs and Trade 1994
(the “GATT 1994”) provides that the “Schedules annexed to this
Agreement are hereby made an integral part of Part I of this Agreement.”
Furthermore, Article 3.1 of the Agreement on Agriculture provides
that “export subsidy commitments in Part IV of each Member’s
Schedule … are hereby made an integral part of [the] GATT 1994.”
The applicable rules for interpreting the provisions of the GATT 1994
are the “customary rules of interpretation of public international law”.
The Appellate Body has held that these rules are codified in the Vienna
Convention on the Law of Treaties (the “Vienna Convention”).
As provisions of a Member’s Schedule are “part of the terms of the
treaty”, they are subject to these same rules of treaty
interpretation. …
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