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I. Preamble back to top
A. Text of the Preamble
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
following words:
‘… 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
(i) “positive efforts”
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)
(ii) “commensurate”
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
(a) GATT 1994
(i) Article XX(g)
13. See paragraphs 2–3
above.
(ii) Article XXIV
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)
(b) SCM Agreement
15. See paragraph 4
above.
II. Article I
back to top
A. Text of 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)
III. Article II back to top
A. Text of Article II
Article II: Scope of the WTO
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
1. Article II:2
(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)
(b) Common context
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)
(c) Coexistence
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)
2. Article II:4
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.
IV. Article III back to top
A. Text of 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
1. Article III:1
(a) “implementation, administration and operation
… of the
Multilateral Trade Agreements”
(i) General
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)
2. Article III:2
(a) “forum for negotiations among its Members”
(i) “Built-in Agenda”
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:
“Ministers,
Recognizing that global electronic commerce is growing and
creating new opportunities for trade,
Declare that:
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.
3. Article III:3
(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.
4. Article III:4
(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”
(i) General
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)
(ii) Observer status
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”
(i) General
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.
(ii) Annual reports
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)
Footnotes:
1. Appellate Body Report, US — Gasoline, p. 30. back to text
2.
Appellate Body Report, US — Shrimp, paras. 129–131. back to text
3.
Appellate Body Report, US — Shrimp, paras. 152, 153
and 155. back to text
4.
Panel Report, Brazil — Aircraft (Article 21.5 — Canada), para. 6.47, fn 49. back to text
5. Panel Report, India — Quantitative Restrictions, para. 7.2. back to text
6. Appellate Body Report, EC — Tariff Preferences, para. 92. back to text
7. Appellate Body Report, EC — Tariff Preferences, para. 161. back to text
8.
Appellate Body Report, EC — Computer Equipment, para. 82. back to text
9. Panel Reports, EC — Chicken Cuts, para. 7.320. back to text
10.
Appellate Body Report, US — Gambling, para. 189. back to text
11.
Appellate Body Report, EC — Bananas III (Article
21.5 — Ecuador II)/EC — Bananas III
(Article 21.5 — US), paras. 433–434. back to text
12.
Appellate Body Report, Brazil — Desiccated Coconut,
p. 17. back to text
13. Panel Report, Turkey — Textiles, paras. 9.161–9.163. back to text
14. GATT doc.
MTN.TNC/40. back to text
15. GATT doc.
MTN.TNC/W/146, p. 4. back to text
16.
Appellate Body Report, Brazil — Desiccated Coconut,
pp. 12–13. back to text
17. (footnote original) WTO Agreement, Articles
XI, XII, XIII,
XIV and XV, respectively. back to text
18.
Appellate Body Report, Brazil — Desiccated Coconut,
p. 12. back to text
19. Appellate Body Report, Korea — Dairy, para. 79. back to text
20. Appellate Body Report, Korea — Dairy,
para. 81. back to text
21. (footnote original) WTO Agreement, Article
II:2. back to text
22. (footnote original)We have recently confirmed this
principle in our Report in Korea — Dairy, para. 81. See
also Appellate Body Reports on US — Gasoline, p. 23;
Japan — Alcoholic Beverages II, p. 12; and India — Patents
(US), fn. 25. back to text
23. Appellate Body Report, Argentina — Footwear (EC),
para. 81. back to text
24. Appellate Body Report, US — FSC, para. 107. back to text
25. Appellate Body Report, US — Upland Cotton, para.
549. back to text
26.
Panel Report, US — Poultry (China), para. 7.466. back to text
27.
Panel Report, US — Cotton Yarn, para. 7.46. back to text
28. Appellate Body Report, Australia — Apples, fn.
285. back to text
29. Panel Report, Canada — Periodicals, para. 5.17. back to text
30.
Panel Report, EC — Trademarks and Geographical
Indications (Australia), para. 7.244. back to text
31.
WT/L/452. back to text
32.
WT/L/160/Rev.1. back to text
33. (footnote original) For the purposes of this Decision, an
official WTO document shall be any document submitted by a Member or
prepared by the Secretariat to be issued in any one of the following WTO
document series: WT-series (including reports of panels and the
Appellate Body); G-series (except G/IT-series); S-series; IP-series;
GATS/EL-series; GATS/SC-series; the Schedules of Concessions and
TN-series. Where a new WTO document series is created, the relevant WTO
body shall decide on the derestriction procedures applicable to that
series, taking into account the present decision. back to text
34. (footnote original) However, any document that contains
only information that is publicly available or information that is
required to be published under any agreement in Annex 1, 2 or 3 of the
WTO Agreement shall be unrestricted. back to text
35. (footnote original) It is understood that, normally,
minutes (including records, reports and notes) of meetings shall be
circulated within three weeks after a meeting of a WTO body and not
later than the notice convening the following meeting of that body.
Pursuant to Section C, paragraph (vi) of the Trade Policy Review
Mechanism contained in Annex 3 of the WTO Agreement, minutes of the
Trade Policy Review Body shall continue to be circulated as
unrestricted. back to text
36. (footnote original) Notwithstanding paragraph 3, any
document that contains information that is publicly available or
information required to be published under any agreement in Annex 1, 2
or 3 of the WTO Agreement shall continue to be made available via the
WTO web-site immediately in the original WTO language in which it is
written. back to text
37.
WT/L/452, paras. 1–3. back to text
38. WT/L/647. GATT 1947 documents are available on the WTO website at
http://www.wto.org/english/docs_e/gattdocs_e.htm. back to text
39. WT/MIN(96)/DEC
paras. 1 and 19. back to text
40. WT/DEC(98)/DEC/2. back to text
41. WT/L/274. back to text
42. WT/L/274,
para. 1.3. back to text
43. WT/MIN(01)DEC, para. 34. back to text
44. WT/L/579, para. 1(h). back to text
45. WT/MIN (05)/DEC, para. 46. back to text
46. WT/L/782. back to text
47. WT/MIN(01)/DEC/1. back to text
48. WT/L/579. back to text
49. WT/MIN(05)/DEC. back to text
50.
WT/GC/M/5; see also background note at
PC/IPL/W/10. back to text
51.
WT/GC/M/16, section 7;
WT/L/194 and Adds. 1–2 (decision to
approve the agreements, Statement by the Director-General on
consultations and coherence, estimate of budgetary implications of the
agreements). back to text
52. Package in WT/L/195. back to text
53. In addition, the WTO–IMF agreement was accompanied by a letter
from the Managing Director of the Fund stating that he had recommended
that the Director-General of the WTO be invited as an observer to the
IMF’s Interim and Development Committees and to restricted sessions
where matters of common interest are to be addressed. The WTO–World
Bank agreement was accompanied by a letter from the President of the
World Bank stating that he had recommended that the Director-General of
the WTO be invited regularly as an observer to the plenary sessions of
the Development Committee and to restricted sessions where matters of
common interest are to be addressed. back to text
54. WT/GC/W/68. back to text
55. Appellate Body Report, Argentina — Textiles and Apparel, para. 70. back to text
56. (footnote original) Done at Singapore, 9 December 1996. back to text
57. (footnote original) Excluding the DSB and dispute
settlement panels, except where “matters of jurisdictional relevance
to the Fund are to be considered”. The WTO may invite a member of the
staff of the Fund to attend a meeting of DSB “when the WTO, after
consultation between the WTO Secretariat and the staff of the Fund,
finds that such a presence would be of particular common interest to
both organizations.” Agreement Between the IMF and the WTO,
para. 6. back to text
58. Appellate Body Report, Argentina — Textiles and Apparel,
paras. 70–73. back to text
59. Appellate Body Report, Argentina — Textiles and Apparel,
para. 85. back to text
60.
WT/GC/13. back to text
61.
WT/GC/M/35, section 3. back to text
62. WT/GC/M/79; see also background note at
WT/TF/COH/S/7. back to text
63.
WT/GC/M/89; see also background note at WT/TF/COH/S/9. back to text
64.
WT/TF/COH/S/3–6,
8, and
10–15. back to text
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