WTO ANALYTICAL INDEX: MARRAKESH AGREEMENT
Marrakesh Agreement Establishing the World Trade Organization
The texts reproduced here do not have the legal standing of the original documents which are entrusted and kept at the WTO Secretariat in Geneva.
- Article I
- Article II
- Article III
- Article IV
- Article V
- Article VI
- Article VII
- Article VIII
- Article IX
- Article X
- Article XI
- Article XII
- Article XIII
- Article XIV
- Article XV
- Article XVI
- Explanatory Notes
- Ministerial Decisions and Declarations Regarding the WTO as an International Organization
The Parties to this Agreement,
Recognizing that their relations in the field of trade and economic endeavour should be conducted with a view to raising standards of living, ensuring full employment and a large and steadily growing volume of real income and effective demand, and expanding the production of and trade in goods and services, while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development.
Recognizing further that there is a need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth of international trade commensurate with the needs of their economic development,
Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations,
Determined to preserve the basic principles and to further the objectives underlying this multilateral trading system,
Agree as follows:
B. Interpretation and Application of the Preamble
1. Legal relevance of the Preamble
(a) First recital: environmental context
1. The Appellate Body in US — Gasoline emphasized the importance of the Preamble of the WTO Agreement in the context of environmental issues:
“Indeed, in the preamble to the WTO Agreement and in the Decision on Trade and Environment, there is specific acknowledgement to be found about the importance of coordinating policies on trade and the environment. WTO Members have a large measure of autonomy to determine their own policies on the environment (including its relationship with trade), their environmental objectives and the environmental legislation they enact and implement. So far as concerns the WTO, that autonomy is circumscribed only by the need to respect the requirements of the General Agreement and the other covered agreements.”(1)
2. In US — Shrimp, to interpret the meaning of “exhaustible natural resources” in GATT Article XX(g), the Appellate Body referred to the Preamble of the WTO Agreement:
“The words of Article XX(g), ‘exhaustible natural resources’, were actually crafted more than 50 years ago. They must be read by a treaty interpreter in the light of contemporary concerns of the community of nations about the protection and conservation of the environment. While Article XX was not modified in the Uruguay Round, the preamble attached to the WTO Agreement shows that the signatories to that Agreement were, in 1994, fully aware of the importance and legitimacy of environmental protection as a goal of national and international policy. The preamble of the WTO Agreement — which informs not only the GATT 1994, but also the other covered agreements — explicitly acknowledges ‘the objective of sustainable development’…
From the perspective embodied in the preamble of the WTO Agreement, we note that the generic term ‘natural resources’ in Article XX(g) is not ’static’ in its content or reference but is rather ‘by definition, evolutionary’… .
Given the recent acknowledgement by the international community of the importance of concerted bilateral or multilateral action to protect living natural resources, and recalling the explicit recognition by WTO Members of the objective of sustainable development in the preamble of the WTO Agreement, we believe it is too late in the day to suppose that Article XX(g) of the GATT 1994 may be read as referring only to the conservation of exhaustible mineral or other non-living natural resources.”(2)
3. On this topic, the Appellate Body in US — Shrimp further stated:
“At the end of the Uruguay Round, negotiators fashioned an
appropriate preamble for the new WTO Agreement, which strengthened the
multilateral trading system by establishing an international
organization, inter alia, to facilitate the implementation,
administration and operation, and to further the objectives, of that
Agreement and the other agreements resulting from that Round. In
recognition of the importance of continuity with the previous GATT
system, negotiators used the preamble of the GATT 1947 as the template
for the preamble of the new WTO Agreement. Those negotiators evidently
believed, however, that the objective of ‘full use of the resources of
the world’ set forth in the preamble of the GATT 1947 was no longer
appropriate to the world trading system of the 1990s. As a result, they
decided to qualify the original objectives of the GATT 1947 with the
‘… while allowing for the optimal use of the world’s resources in accordance with the objective of sustainable development, seeking both to protect and preserve the environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development,…’
We note once more that this language demonstrates a recognition by WTO negotiators that optimal use of the world’s resources should be made in accordance with the objective of sustainable development. As this preambular language reflects the intentions of negotiators of the WTO Agreement, we believe it must add colour, texture and shading to our interpretation of the agreements annexed to the WTO Agreement, in this case, the GATT 1994. We have already observed that Article XX(g) of the GATT 1994 is appropriately read with the perspective embodied in the above preamble….
It is proper for us to take into account, as part of the context of the chapeau, the specific language of the preamble to the WTO Agreement, which, we have said, gives colour, texture and shading to the rights and obligations of Members under the WTO Agreement, generally, and under the GATT 1994, in particular.”(3)
(b) Second recital: developing countries and trade
4. The Panel in Brazil — Aircraft (Article 21.5 — Canada) referred to the Preamble in reference to Article 27 of the SCM Agreement and the interests of developing countries:
“The preamble to the WTO Agreement recognises ‘that there is need for positive efforts designed to ensure that developing countries, and especially the least-developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development.’
This overarching concern of the WTO Agreement finds ample reflection in the SCM Agreement. Article 27 of that Agreement recognizes that ’subsidies may play an important role in economic development programmes of developing country Members’ and provides substantial special and differential treatment for developing countries, including in respect of export subsidies.”(4)
5. The Panel in India — Quantitative Restrictions invoked the Preamble in the context of recognizing the need to address the concerns of developing countries:
“At the outset, we recall that the Preamble to the WTO Agreement recognizes both (i) the desirability of expanding international trade in goods and services and (ii) the need for positive efforts designed to ensure that developing countries secure a share in international trade commensurate with the needs of their economic development. In implementing these goals, WTO rules promote trade liberalization, but recognize the need for specific exceptions from the general rules to address special concerns, including those of developing countries.”(5)
6. In EC — Tariff Preferences, the Appellate Body recognized that:
“[T]he Enabling Clause is among the ‘positive efforts’ called for in the Preamble to the WTO Agreement to be taken by developed-country Members to enhance the ‘economic development’ of developing-country Members.”(6)
7. In EC — Tariff Preferences, the Appellate Body further found:
“[T]he Preamble to the WTO Agreement, which informs all the covered agreements including the GATT 1994 (and, hence, the Enabling Clause), explicitly recognizes the ‘need for positive efforts designed to ensure that developing countries, and especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development’. The word ‘commensurate’ in this phrase appears to leave open the possibility that developing countries may have different needs according to their levels of development and particular circumstances.”(7)
(c) Third recital: “reciprocal and mutually advantageous arrangements”
8. In EC — Computer Equipment, the Appellate Body stated that:
“[T]he security and predictability of ‘the reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade’ is an object and purpose of the WTO Agreement, generally, as well as of the GATT 1994.”(8)
9. In EC — Chicken Cuts, the Panel stated that:
“Taken together, the relevant aspects of the WTO Agreement and the GATT 1994 indicate that concessions made by WTO Members should be interpreted so as to further the general objective of the expansion of trade in goods and the substantial reduction of tariffs. It is also clear that such an interpretation is limited by the condition that arrangements entered into by Members be reciprocal and mutually advantageous. In other words, the terms of a concession should not be interpreted in such a way that would disrupt the balance of concessions negotiated by the parties. Finally, the interpretation must ensure the security and predictability of the reciprocal and mutually advantageous arrangements manifested in the form of concessions.”(9)
10. In US — Gambling, the Panel referred to several objectives of the covered agreements, including the objective of “entering into reciprocal and mutually advantageous arrangements”, in the context of interpreting the US Schedule to the GATS. The Appellate Body stated that:
“We agree with the Panel’s characterization of these objectives, along with its suggestion that they reinforce the importance of Members’ making clear commitments. Yet these considerations do not provide specific assistance for determining where, in the United States’ Schedule, “gambling and betting services” fall. Accordingly, it is necessary to continue our analysis by examining other elements to be taken into account in interpreting treaty provisions.”(10)
11. In compliance proceedings regarding the EU’s banana régime, the Panel found that when the Banana Framework Agreement expired on 31 December 2002, the EC’s tariff quota concession necessarily also expired. The Appellate Body disagreed with the Panel:
“We agree with the Panel that ‘concessions made by WTO Members should be interpreted so as to further the general objective of expanding trade in goods and services and reducing barriers to trade, through the negotiation of reciprocal and mutually advantageous arrangements.’ We also consider that the ‘objective of promoting security and predictability in international trade’ is furthered ‘through the exchange of concessions’, which are subject to conditions and qualifications inscribed in Members’ Schedules. However … it is not consistent with the objective of promoting security and predictability in international trade through the exchange of concessions if terms, conditions, and temporal limitations relating to an agreement on quota allocation are improperly read to qualify a tariff quota concession that is bound as the ‘final quota quantity and in-quota tariff rate’.
… If the Panel’s interpretation that paragraph 9 of the Bananas Framework Agreement ‘extinguished’ the tariff quota concession from Part I, Section I-B of the European Communities’ Schedule were accepted, only the out-ofquota tariff rate bound in Part I, Section I-A at a level of €680/mt would remain, coupled with a requirement to consult on a rebinding. In our view, this would not provide security or predictability of tariff concessions and would not promote the objective of expanding trade and reducing barriers to trade through the negotiation of reciprocal and mutually advantageous concessions and arrangements.”(11)
(d) Fourth recital: “an integrated … multilateral trading system”
12. The Appellate Body report on Brazil — Desiccated Coconut invoked the Preamble in the context of the integrated WTO system that replaced the old GATT 1947:
“The authors of the new WTO regime intended to put an end to the fragmentation that had characterized the previous system. This can be seen from the preamble to the WTO Agreement which states, in pertinent part:
Resolved, therefore, to develop an integrated, more viable and durable multilateral trading system encompassing the General Agreement on Tariffs and Trade, the results of past trade liberalization efforts, and all of the results of the Uruguay Round of Multilateral Trade Negotiations.”(12)
2. Relationship with other WTO Agreements
13. See paragraphs 2–3 above.
14. The Panel in Turkey — Textiles also referred to the Preamble in the context of the discussion regarding GATT Article XXIV stating that it does not constitute a shield from other GATT/WTO prohibitions or the introduction of measures considered to be ipso facto incompatible with GATT/WTO:
“At the conclusion of the Uruguay Round Members reiterated the same general objective and principles in the GATT 1994 Understanding on Article XXIV:
‘Reaffirming that the purpose of such agreements should be to facilitate trade between the constituent territories and not to raise barriers to the trade of other Members with such territories; and that in their formation or enlargement the parties to them should to the greatest possible extent avoid creating adverse effects on the trade of other Members;’
and in the Preamble to the WTO Agreement:
‘Being desirous of contributing to these objectives by entering into reciprocal and mutually advantageous arrangements directed to the substantial reduction of tariffs and other barriers to trade and to the elimination of discriminatory treatment in international commerce …’ (emphasis added)
We also recall the Singapore Ministerial Declaration:
‘7. … We reaffirm the primacy of the multilateral trading system, which includes a framework for the development of regional trade agreements, and we renew our commitment to ensure that regional trade agreements are complementary to it and consistent with its rules’
From the above cited provisions, we draw two general conclusions for the present case. Firstly, the objectives of regional trade agreements and those of the GATT and the WTO have always been complementary, and therefore should be interpreted consistently with one another, with a view to increasing trade and not to raising barriers to trade, thereby arguing against an interpretation that would allow, on the occasion of the formation of a customs union, for the introduction of quantitative restrictions. Secondly, we read in these parallel objectives a recognition that the provisions of Article XXIV (together with those of the GATT 1994 Understanding on Article XXIV) do not constitute a shield from other GATT/WTO prohibitions, or a justification for the introduction of measures which are considered generally to be ipso facto incompatible with GATT/WTO. In our view the provisions of Article XXIV on regional trade agreements cannot be considered to exempt constituent members of a customs union from the primacy of the WTO rules.”(13)
15. See paragraph 4 above.
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II. Article I
Article I: Establishment of the Organization
The World Trade Organization (hereinafter referred to as “the WTO”) is hereby established.
B. Interpretation and Application of Article I
16. The World Trade Organization (WTO) was established at the conclusion of the Uruguay Round of multilateral trade negotiations. The name “World Trade Organization” was established at the meeting of the Trade Negotiating Committee on 15 December 1993.(14)
17. In March 1994, the Secretariats of the GATT and the World Tourism Organization reached an understanding on steps to help the World Trade Organization and the World Tourism Organization minimize the risk of confusion that could arise from use of the acronym “WTO” by both organizations. These steps included: the World Trade Organization would use a logo that is distinct and not susceptible of confusion with that of the World Tourism Organization; the World Trade Organization would seek to avoid using the WTO acronym in connection with work specifically on tourism services (using the full name or “WTO-OMC”); and the Secretariats of the two organizations would consult as necessary to resolve any practical issues arising in this context.(15)
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III. Article II
1. The WTO shall provide the common institutional framework for the conduct of trade relations among its Members in matters related to the agreements and associated legal instruments included in the Annexes to this Agreement.
2. The agreements and associated legal instruments included in Annexes 1, 2 and 3 (hereinafter referred to as “Multilateral Trade Agreements”) are integral parts of this Agreement, binding on all Members.
3. The agreements and associated legal instruments included in Annex 4 (hereinafter referred to as “Plurilateral Trade Agreements”) are also part of this Agreement for those Members that have accepted them, and are binding on those Members. The Plurilateral Trade Agreements do not create either obligations or rights for Members that have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as specified in Annex 1A (hereinafter referred to as “GATT 1994”) is legally distinct from the General Agreement on Tariffs and Trade, dated 30 October 1947, annexed to the Final Act Adopted at the Conclusion of the Second Session of the Preparatory Committee of the United Nations Conference on Trade and Employment, as subsequently rectified, amended or modified (hereinafter referred to as “GATT 1947”).
B. Interpretation and Application of Article II
(a) WTO agreements as part of a single undertaking
18. In Brazil — Desiccated Coconut, the Appellate Body referred to Articles II:2 and II:4 and Annex 1A of the WTO Agreement, as well as the DSU to illustrate the “single undertaking” nature of the WTO Agreement(16): “[t]he single undertaking is further reflected in the provisions of the WTO Agreement dealing with original membership, accession, non-application of the Multilateral Trade Agreements between particular Members, acceptance of the WTO Agreement, and withdrawal from it.(17) Within this framework, all WTO Members are bound by all the rights and obligations in the WTO Agreement and its Annexes 1, 2 and 3.”(18)
19. In Korea — Dairy, and Argentina — Footwear (EC), the Appellate Body relied on Article II:1 as a basis to find that Article XIX of the GATT 1994 and the Safeguards Agreement are an “inseparable package”:
“It is important to understand that the WTO Agreement is one treaty. The GATT 1994 and the Agreement on Safeguards are both Multilateral Agreements on Trade in Goods contained in Annex 1A, which are integral parts of that treaty and are equally binding on all Members pursuant to Article II:2 of the WTO Agreement.”(19)
“In light of the interpretive principle of effectiveness, it is the duty of any treaty interpreter to ‘read all applicable provisions of a treaty in a way that gives meaning to all of them, harmoniously.’ An important corollary of this principle is that a treaty should be interpreted as a whole, and, in particular, its sections and parts should be read as a whole. Article II:2 of the WTO Agreement expressly manifests the intention of the Uruguay Round negotiators that the provisions of the WTO Agreement and the Multilateral Trade Agreements included in its Annexes 1, 2 and 3 must be read as a whole.”(20)
“The GATT 1994 and the Agreement on Safeguards are both Multilateral Agreements on Trade in Goods contained in Annex 1A of the WTO Agreement, and, a such, are both ‘integral parts’ of the same treaty, the WTO Agreement, that are ‘binding on all Members’.(21) Therefore, the provisions of Article XIX of the GATT 1994 and the provisions of the Agreement on Safeguards are all provisions of one treaty, the WTO Agreement. They entered into force as part of that treaty at the same time. They apply equally and are equally binding on all WTO Members. And, as these provisions relate to the same thing, namely the application by Members of safeguard measures, the Panel was correct in saying that ‘Article XIX of GATT and the Safeguards Agreement must a fortiori be read as representing an inseparable package of rights and disciplines which have to be considered in conjunction.’ Yet a treaty interpreter must read all applicable provisions of a treaty in a way that gives meaning to all of them, harmoniously.(22) And, an appropriate reading of this ‘inseparable package of rights and disciplines’ must, accordingly, be one that gives meaning to all the relevant provisions of these two equally binding agreements.”(23)
20. In US — FSC, the Appellate Body again relied on Article II:1 as a basis for finding that the “legal instruments … that entered into force under the GATT 1947” and are incorporated by reference in the GATT 1994 are “integral parts” of the WTO Agreement and “binding on all Members”.(24)
21. In US — Upland Cotton, the Appellate Body referred to the finding above in Argentina — Footwear (EC) and found that Article 3.1(b) of the SCM Agreement could be read together with the provisions on domestic support in the Agreement on Agriculture in a coherent and consistent manner.(25)
22. In US — Poultry (China), the Panel recalled that “in accordance with Article II:2 of the WTO Agreement, the multilateral trade agreements included in its Annexes 1, 2 and 3 must be interpreted as a whole, and in a manner that gives meaning to all of them harmoniously.”(26)
23. In US — Cotton Yarn, the Panel referred to Article II:1 as the basis for finding that the GATT 1994 constituted context relevant to interpreting the Agreement on Textiles and Clothing.(27)
24. In Australia — Apples, the Appellate Body noted that “because Annex A(1) to the SPS Agreement and Article III:1 of the GATT 1994 form part of the same treaty by virtue of Article II:2 of the WTO Agreement, each constitutes context relevant to the interpretation of the other.”(28)
25. The Panel Report on Canada — Periodicals relied on Article II:2 as a basis for rejecting Canada’s argument that obligations under the GATS superseded obligations under the GATT 1994:
“The ordinary meaning of the texts of GATT 1994 and GATS as well as Article II:2 of the WTO Agreement, taken together, indicates that obligations under GATT 1994 and GATS can co-exist and that one does not override the other. If the consequences suggested by Canada were intended, there would have been provisions similar to Article XVI:3 of the WTO Agreement or the General Interpretative Note to Annex 1A in order to establish hierarchical order between GATT 1994 and GATS. The absence of such provisions between the two instruments implies that GATT 1994 and GATS are standing on the same plane in the WTO Agreement, without any hierarchical order between the two.”(29)
26. In EC — Trademarks and Geographical Indications (Australia), the Panel similarly relied on Article II:1 as a basis for finding that obligations under the TRIPS Agreement and the GATT 1994 “can coexist and that one does not override the other.”(30)
27. The Appellate Body referred to Article II:4 as well in its rulings on Brazil — Desiccated Coconut, see paragraph 18 above, and Argentina — Footwear (EC), see paragraph 19 above.
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IV. Article III
Article III :Functions of the WTO
1. The WTO shall facilitate the implementation, administration and operation, and further the objectives, of this Agreement and of the Multilateral Trade Agreements, and shall also provide the framework for the implementation, administration and operation of the Plurilateral Trade Agreements.
2. The WTO shall provide the forum for negotiations among its Members concerning their multilateral trade relations in matters dealt with under the agreements in the Annexes to this Agreement. The WTO may also provide a forum for further negotiations among its Members concerning their multilateral trade relations, and a framework for the implementation of the results of such negotiations, as may be decided by the Ministerial Conference.
3. The WTO shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes (hereinafter referred to as the “Dispute Settlement Understanding” or “DSU”) in Annex 2 to this Agreement.
4. The WTO shall administer the Trade Policy Review Mechanism (hereinafter referred to as the “TPRM”) provided for in Annex 3 to this Agreement.
5. With a view to achieving greater coherence in global economic policy-making, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.
B. Interpretation and Application of Article III
(a) “implementation, administration and operation … of the Multilateral Trade Agreements”
28. Material on the WTO’s activities facilitating the implementation, administration and operation of particular Multilateral Trade Agreements appears in this work under the relevant WTO agreements.
(ii) Circulation and derestriction of documents
29. On 14 May 2002, the General Council adopted a Decision on Procedures for the Circulation and Derestriction of Documents(31), replacing its decision of 18 July 1996 on the same subject:(32)
“1. All official WTO documents(33) shall be unrestricted.
2. Notwithstanding the provisions of paragraph 1,
(a) any Member may submit a document as restricted, which shall be automatically derestricted after its first consideration by the relevant body or 60 days after the date of circulation, whichever is earlier, unless requested otherwise by that Member.(34) In the latter case, the document may remain restricted for further periods of 30 days, subject to renewed requests by that Member within each 30-day period. The Secretariat shall remind Members of such deadlines, and derestrict the document upon receipt of a written instruction. Any document may be derestricted at any time during the restriction period at the request of the Member concerned.
(b) any WTO body when requesting a document to be prepared by the Secretariat shall decide whether it shall be issued as restricted or unrestricted. Such documents which are issued as restricted shall automatically be derestricted 60 days after the date of circulation, unless requested otherwise by a Member. In the latter case, the document shall remain restricted for one additional period of 30 days after which it shall be derestricted.
(c) minutes of meetings (including records, reports and notes) shall be restricted and shall be automatically derestricted 45 days after the date of circulation.(35)
(d) documents relating to modification or renegotiation of concessions or to specific commitments pursuant to Article XXVIII of the GATT 1994 or Article XXI of the GATS respectively shall be restricted and automatically derestricted upon certification of such changes in the schedules.
(e) documents relating to working parties on accession shall be restricted and shall be automatically derestricted upon the adoption of the report of the working party.
3. Translation of official WTO documents in all three official WTO languages (English, French and Spanish) shall be completed expeditiously. Once translated in all three official WTO languages, all official WTO documents that are not restricted shall be made available via the WTO web-site to facilitate their dissemination to the public at large.(36)”(37)
30. On 13 June 2006, the General Council adopted a Decision on Derestriction of Official GATT 1947 Documents, providing that “[a]ll official restricted GATT 1947 documents shall be derestricted as of 1 June 2006.”(38)
(a) “forum for negotiations among its Members”
31. The 1996 Singapore Ministerial Declaration (see Section V.B.2 below) included the recommendations below regarding the “built-in agenda” of negotiations on issues provided for in the WTO Agreements:
“We, the Ministers, have met in Singapore … as called for in Article IV of the Agreement Establishing the World Trade Organization, to further strengthen the WTO as a forum for negotiation …
… a periodic examination and updating of the WTO Work Programme is a key to enable the WTO to fulfil its objectives… . A major share of the Work Programme stems from the WTO Agreement and decisions adopted at Marrakesh. As part of these Agreements and decisions we agreed to a number of provisions calling for future negotiations on Agriculture, Services and aspects of TRIPS, or reviews and other work on Anti-Dumping, Customs Valuation, Dispute Settlement Understanding, Import Licensing, Preshipment Inspection, Rules of Origin, Sanitary and Phyto-Sanitary Measures, Safeguards, Subsidies and Countervailing Measures, Technical Barriers to Trade, Textiles and Clothing, Trade Policy Review Mechanism, Trade-Related Aspects of Intellectual Property Rights and Trade-Related Investment Measures….”(39)
(ii) E-commerce Work Programme and moratorium on customs duties on electronic transmissions
32. At the Geneva Ministerial Meeting, on 20 May 1998 Ministers adopted a Declaration on Global Electronic Commerce:
Recognizing that global electronic commerce is growing and creating new opportunities for trade,
The General Council shall, by its next meeting in special session, establish a comprehensive work programme to examine all trade-related issues relating to global electronic commerce, including those issues identified by Members. The work programme will involve the relevant World Trade Organization (‘WTO’) bodies, take into account the economic, financial, and development needs of developing countries, and recognize that work is also being undertaken in other international fora. The General Council should produce a report on the progress of the work programme and any recommendations for action to be submitted at our third session.
Without prejudice to the outcome of the work programme or the rights and obligations of Members under the WTO Agreements, we also declare that Members will continue their current practice of not imposing customs duties on electronic transmissions. When reporting to our third session, the General Council will review this declaration, the extension of which will be decided by consensus, taking into account the progress of the work programme.”(40)
33. On 25 September 1998, the General Council adopted a Decision on the Work Programme on Electronic Commerce(41), establishing a work programme and listing issues regarding electronic commerce to be examined by the Council for Trade in Services, Council for Trade in Goods, TRIPS Council and Committee on Trade and Development. The Decision provided in part:
“Exclusively for the purposes of the work programme, and without prejudice to its outcome, the term ‘electronic commerce’ is understood to mean the production, distribution, marketing, sale or delivery of goods and services by electronic means. The work programme will also include consideration of issues relating to the development of the infrastructure for electronic commerce.”(42)
34. Paragraph 34 of the Doha Declaration provided:
“We take note of the work which has been done in the General Council and other relevant bodies since the Ministerial Declaration of 20 May 1998 and agree to continue the Work Programme on Electronic Commerce… . We instruct the General Council to consider the most appropriate institutional arrangements for handling the Work Programme, and to report on further progress to the Fifth Session of the Ministerial Conference. We declare that Members will maintain their current practice of not imposing customs duties on electronic transmissions until the Fifth Session.”(43)
35. Paragraph 1(h) of the General Council’s Decision of 1 August 2004 after the Cancún Ministerial Meeting provided: “the General Council and other relevant bodies shall report in line with their Doha mandates to the Sixth Session of the Ministerial Conference. The moratoria covered by paragraph 11.1 of the Doha Ministerial Decision on Implementation-related Issues and Concerns and paragraph 34 of the Doha Ministerial Declaration are extended up to the Sixth Ministerial Conference.”(44)
36. Paragraph 46 of the Ministerial Declaration adopted at the Hong Kong Ministerial Conference provided:
“We take note of the reports from the General Council and subsidiary bodies on the Work Programme on Electronic Commerce, and that the examination of issues under the Work Programme is not yet complete. We agree to reinvigorate that work, including the development-related issues under the Work Programme and discussions on the trade treatment, inter alia, of electronically delivered software. We agree to maintain the current institutional arrangements for the Work Programme. We declare that Members will maintain their current practice of not imposing customs duties on electronic transmissions until our next Session.”(45)
37. At the Seventh Ministerial Meeting, on 2 December 2009, the Ministers adopted a Decision on the Work Programme on Electronic Commerce, again extending the moratorium on customs duties on electronic transmissions:
“We take note of the reports from the General Council and subsidiary bodies on the Work Programme on Electronic Commerce and express our concern that the examination of issues under the Work Programme is not yet complete. We decide to intensively reinvigorate that work, based on the Work Programme and guidelines given in the General Council Decision of 25 September 1998.
We instruct the General Council to hold periodic reviews of the progress on the Work Programme in its sessions of July 2010, December 2010 and July 2011. The reports of these reviews, including any recommendations for action, would be taken into consideration during our next session, which we have decided to hold in 2011, for decisions under this item.
The Work Programme shall include development-related issues, basic WTO principles including among others non-discrimination, predictability and transparency, and discussions on the trade treatment, inter alia, of electronically delivered software. We agree to maintain the current institutional arrangements for the Work Programme.
We decide that Members will maintain their current practice of not imposing customs duties on electronic transmissions until our next session, which we have decided to hold in 2011.”(46)
(iii) Negotiations launched at the Doha Ministerial Conference
38. At the Doha Ministerial Conference (see Section V.B.2 below), Members adopted a decision to launch a new round of negotiations, known as the “Doha Round”.(47) As regards the declarations and decisions adopted at the Doha Ministerial Conference, see paragraph 56 below and Section XIX.D below. The Doha Declaration provided general guidelines for the organization of the new Round. Regarding the process leading to the Doha Declaration, see the 2004 edition of the Analytical Index.
39. On 1 August 2004, as a follow-up to the Cancún Ministerial Conference, the General Council adopted a decision (also known as the “July Package”), which, inter alia, amended the scope of the Doha negotiations. (48) On 18 December 2005, the Ministers, meeting in Hong Kong, agreed to a Declaration providing further guidance for the negotiations.(49) The texts of the July Package and the Hong Kong Declaration can be found in Section XIX below.
(a) “shall administer the Understanding on Rules and Procedures Governing the Settlement of Disputes”
40. Regarding the administration of the DSU, see the Chapter on the DSU.
(a) “shall administer the Trade Policy Review Mechanism”
41. Regarding the administration of the TPRM, see the Chapter on the TPRM.
5. Article III:5: cooperation with the IMF and the World Bank
(a) “The WTO shall cooperate, as appropriate”
42. At the Marrakesh Ministerial Meeting, the Ministers adopted the Declaration on the Contribution of the World Trade Organization to Achieving Greater Coherence in Global Economic Policymaking, and the Declaration on the Relationship of the WTO with the IMF. The texts of these Declarations appear in Section XIX below.
43. In 1995, the Director-General was mandated by the General Council(50) to develop draft agreements for cooperation with the IMF and the World Bank. Accordingly, the Secretariat worked with the staffs of the Fund and the Bank to develop agreements with the IMF and the World Bank. At its meeting of 7, 8 and 13 November 1996, the General Council adopted a decision(51) approving a package(52) consisting of the draft agreements with the IMF and the World Bank, side letters from the Managing Director of the IMF and the President of the World Bank(53), and documents of commentary on the provisions of each agreement which were prepared jointly and agreed between the WTO Secretariat and the Fund and Bank staffs. The decision authorized the Director-General to sign the agreements on behalf of the WTO and to implement the agreements in accordance with the terms of the decision. Paragraph 2 of this decision requires the Director-General to inform Members regularly regarding implementation of the Agreements.
44. The agreement between the WTO and the IMF was signed on 9 December 1996. The agreement between the WTO and the World Bank was signed on 28 April 1997. One year after the General Council’s decision to approve the agreements, the Director-General reported to the Members on concrete aspects of their implementation.(54)
45. The IMF and the World Bank have observer status in the WTO as provided for in their respective agreements with the WTO. See also paragraphs 163–165 below.
(iii) Cooperation agreements do not modify, add to or diminish rights and obligations of Members
46. In Argentina — Textiles and Apparel, the Appellate Body upheld the Panel’s finding “that there is nothing in the Agreement Between the IMF and the WTO, the Declaration on the Relationship of the WTO with the IMF or the Declaration on Coherence which justifies a conclusion that a Member’s commitments to the IMF shall prevail over its obligations under Article VIII of the GATT 1994.”(55) The Appellate Body explained:
“The 1994 Declaration on Coherence is a Ministerial decision that articulates the objective of promoting increased cooperation between the WTO and the IMF in order to encourage greater coherence in global economic policy-making. This objective is more explicitly recognized in the treaty language of the WTO Agreement in Article III:5, which states:
‘With a view to achieving greater coherence in global economic policy-making, the WTO shall cooperate, as appropriate, with the International Monetary Fund and with the International Bank for Reconstruction and Development and its affiliated agencies.’ (emphasis added)
In furtherance of the WTO’s mandate to ‘cooperate, as appropriate’ with the IMF, the Agreement Between the IMF and the WTO was concluded in 1996.(56) This Agreement provides for specific means of administrative cooperation between the two organizations. It provides for consultations and the exchange of information between the WTO Secretariat and the staff of the IMF in certain specified circumstances, and grants to each organization observer status in certain of the other’s meetings.(57)
The Agreement Between the IMF and the WTO, however, does not modify, add to or diminish the rights and obligations of Members under the WTO Agreement, nor does it modify individual States’ commitments to the IMF. It does not provide any substantive rules concerning the resolution of possible conflicts between obligations of a Member under the WTO Agreement and obligations under the Articles of Agreement of the IMF or any agreement with the IMF. However, paragraph 10 of the Agreement Between the IMF and the WTO contains a direction to the staff of the IMF and the WTO Secretariat to consult on ‘issues of possible inconsistency between measures under discussion’.
In the 1994 Declaration on the Relationship of the WTO with the IMF, Ministers reaffirmed that, unless otherwise provided for in the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, ‘the relationship of the WTO with the International Monetary Fund, with regard to the areas covered by the Multilateral Trade Agreements in Annex 1A of the WTO Agreement, will be based on the provisions that have governed the relationship of the CONTRACTING PARTIES to the GATT 1947 with the International Monetary Fund.’ We note that certain provisions of the GATT 1994, such as Articles XII, XIV, XV and XVIII, permit a WTO Member, in certain specified circumstances relating to exchange matters and/or balance of payments, to be excused from certain of its obligations under the GATT 1994. However, Article VIII contains no such exception or permission.”(58)
(iv) No requirement for WTO panels to consult with IMF
47. In Argentina — Textiles and Apparel, rejecting the claim that the Panel did not make “an objective assessment of the matter” as required under Article 11 of the DSU, by not acceding to the parties’ request to seek information from the IMF so as to obtain its opinion on certain issues, the Appellate Body stated that “[a]s in the WTO Agreement, there are no provisions in the Agreement Between the IMF and the WTO that require a panel to consult with the IMF in a case such as this [i.e. not involving Article XV:2].”(59) In this relation, see the Chapter on the DSU, and material under Article XV in the Chapter on the GATT 1994.
(b) “with a view to achieving greater coherence in global economic policy-making”
48. The Managing Director of the IMF, the President of the World Bank and the Director-General of the WTO jointly issued a report on Coherence(60) on 21 October 1998, pursuant to paragraph 5 of the Geneva Ministerial Declaration.
49. At its meeting of 15–16 February 1999, the General Council authorized the Chairman to hold special informal meetings regarding coherence issues at the request of Members or the Director-General.(61) The General Council held additional meetings on 13 May 2003(62) and 22 October 2004(63) and discussed issues on coherence.
50. For the text of the Declaration on the Contribution of the WTO to Achieving Greater Coherence in Global Economic Policymaking, see Section XIX.A below.
51. Pursuant to paragraph 2 of the Declaration of the General Council on “Agreements between the WTO, the IMF and the World Bank”, the Director-General issues an annual report to Members on the activities carried out by the WTO under its cooperation agreements with these aforementioned institutions.(64)