The World Trade Organization : law, practice, and policy

942 Pages·2017·4.3 MB·English

by  Hahn

THE OXFORD INTERNATIONAL LAW LIBRARY
THE OXFORD INTERNATIONAL LAW LIBRARY
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The World Trade
Organization
Law, Practice, and Policy
THIRD EDITION
MITSUO MATSUSHITA
THOMAS J. SCHOENBAUM
PETROS C. MAVROIDIS
MICHAEL HAHN
1
3
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Preface to the Third Edition
Onceagaintheauthorsarepleasedtoofferthisbookasacomprehensivesnapshotof
the law of the World Trade Organization (WTO), the centerpiece of the multilateral
tradingsystem.Wearepleasedtoaddcontributionsbyanewco-author,MichaelHahn
oftheUniversityofBern.Wehaveendeavoured,aswithpreviouseditions,toincorp-
orateintheanalysis,thelatestcaselawoftheWTOPanelsandtheAppellateBody.We
believe that the law of the WTO must be understood as a synthesis of the text of the
WTOtreatiesandinterpretationsoftheWTOdisputesettlementbodies.Forthisnew
edition,wehavenotonlyupdatedallthechaptersbuthavealsoreorganizedthebook
somewhat.Wehopethisneweditionwillbuildonthesuccessofthefirsttwoeditions
in providing an understanding of international trade law, not only to specialists—
economistsandlawyers—butalsotolaypersonsinterestedinthefield.
Since the publication of the last edition, many events have occurred that affect
international trade policies. The most important event, of course, was the Global
Financial Crisis (GFC), which began in 2007 and is, at least in some respects, still
ongoing. This crisis affected the entire world profoundly and international trade was
no exception. International trade volumes plummeted as a result of the crisis and
nations were less inclined to create new deals to foster increased trade. Food and
naturalresourcesshortagescreatedaclimateforexportrestrictionsbymanycountries.
Nevertheless, it is heartening that, thanks in large part to G-20 meetings, nations
largely avoided repeating the mistakes of the 1930s, when they reacted to economic
woesbyconstructinghighimporttariffs.
While the GFC enhanced the influence of the World Bank and the International
MonetaryFund(IMF),thesamecannotbesaidfortheWTO.Thedefactodemiseof
the Doha Development Agenda can be attributed, partly at least, to the GFC. In fact,
the future role of the WTO is now in doubt; the era of ambitious and far-reaching
global trade deals and new trade rules seems to be at an end. International economic
negotiationsnowfocusonpreferentialtradedealsthathavethepotentialtoundermine
furthertheinfluenceoftheWTO.
Nevertheless, throughout this period of economic crisis, the WTO dispute settle-
mentsystemhascontinuedtofunction,creatingavastnewbodyofcaselawontrade.
Although far from perfect, the WTO dispute settlement system has achieved a modi-
cumofthe‘ruleoflaw’ininternationaleconomicmatters,nosmallaccomplishment.
Itisthis‘ruleoflaw’thatweattempttodepictinthisbook.
Weare alwayshappytohearfrom readersof thisbook,and wethankthe editorsof
OxfordUniversityPressfortheirencouragementandpatiencewithrespecttothiswork.
MitsuoMatsushita
ThomasJ.Schoenbaum
PetrosMavroidis
MichaelHahn
January2015

Contents
ListofAbbreviatedDisputeNames xiii
TableofWTOandGATTDecisions xlv
TableofCourtandAdministrativeDecisions lxiii
TableofWTOandGATTDocuments lxix
TableofOtherTreaties lxxv
ListofAbbreviations lxxxix
1. TheWorldTradeOrganization 1
1. BrettonWoodsandthefailureoftheInternationalTrade
Organization 1
2. TheGATTbecomesaninternationalorganization 2
3. AsummaryofGATTobligations 3
4. ThehistoricalcontextoftheGATT 4
5. Theneedforaninternationalorganizationconcernedwithtrade 6
6. TheGATTtariffnegotiatingrounds 9
7. ThecreationoftheWTO 9
8. TheWTO:functionsandstructure 11
9. Ongoingworkandactivities 16
10. PrincipalaccomplishmentsoftheGATT/WTO 18
11. MajorchallengesconfrontingtheWTO 19
12. TheDohaDevelopmentAgenda 26
13. The‘BaliPackage’ 27
14. ThefutureoftheWTO 27
2. WTOLawandDomesticLaw 31
1. Introduction 31
2. TheEuropeanUnion 33
3. Japan 41
4. TheUnitedStates 43
5. Conclusion 46
3. SourcesofLawandPrinciplesofInterpretation 47
1. Introduction 47
2. SourcesoflawapplicableinWTOadjudication 50
3. Interpretativeelements(oftheWTOsourcesoflaw) 63
4. The‘self-containedregime’ problem 79
5. Concludingremarks 81
4. DisputeSettlement 83
1. Introduction 83
2. DisputesettlementintheGATT 84
3. WTOdisputesettlement 86
viii Contents
5. EnforcementofWTOObligations:RemediesandCompliance 111
1. Overview:implementingtheDSB’s‘recommendationsandrulings’ 111
2. Remediesincasesofsuccessfulnon-violationandsituationcomplaints 113
3. Thestartingpoint:rulingsandrecommendationsbasedon
recommendationsandsuggestionspursuanttoDSUArticle19 114
4. Lexspecialisremedies 119
5. Promptcomplianceandthereasonableperiodoftime(RPT) 120
6. CompliancereviewpursuanttoDSUArticle21.5 127
7. EnforcementmeasurespursuanttoDSUArticle22 132
8. Compliancefollowingtheadoptionofcountermeasures 147
9. Thesequencingissue:DSUArticle21.5vs.22.2 148
10. Conclusions 152
6. MostFavouredNationTreatment 155
1. Themostfavourednationobligationasamanifestation
oftheprincipleofnon-discrimination 155
2. GATTArticleI 158
3. MFNintheGATS:preliminaryremarks 173
4. ExceptionstoMFN 173
5. Conclusions 177
7. NationalTreatment 179
1. Nationaltreatment—arecurringthemeinallWTOagreements 179
2. NationaltreatmentpursuanttoGATTArticleIII 182
3. ArticleIII:2—internaltaxation 193
4. ArticleIII:4—internallawsandregulations 204
5. ApplicationofArticleIIItostate-tradingmonopolies 211
6. ApplicationofArticleIIInationaltreatmentobligationsto
sub-nationalunitsofWTOmembers 211
7. TherelationshipbetweenGATTArticleIIIandArticleXI 212
8. Exceptionstothenationaltreatmentprinciple 212
8. Tariffs,Quotas,andOtherBarrierstoMarketAccessforGoods 215
1. Introduction 215
2. Tariffsandcustomsrules 216
3. Non-tariffbarriersI:customs-relatedmeasures 233
4. Non-tariffbarriersII:quantitativerestrictions 239
5. Non-tariffbarriersIII:othermeasuresrestrictingmarketaccess 244
9. AgriculturalTrade 251
1. Introduction 251
2. Historicalcontext 253
3. Non-tradeconcernsinagriculturaltrade(‘multifunctionality’) 256
4. TheAgreementonAgriculture:anoverview 258
5. TheAgreementonAgriculture’smarketaccessprovisions 261
6. TheAgreementonAgriculture’sdomesticsupportprovisions 269
7. TheAgreementonAgriculture’sexportcompetitionprovisions 274
8. Reviewandremedies 287
Contents ix
9. Specialtreatmentofdevelopingcountries 289
10. ThechanginginterestsinagricultureandtheDohaRound
negotiations 289
10. SubsidiesandCountervailingDuties 299
1. Thepowerofthepurse 299
2. ThescopeoftheSCMAgreement:specificsubsidies 304
3. Prohibitedsubsidies(‘redlightsubsidies’) 329
4. Actionablesubsidies(‘yellowlightsubsidies’) 337
5. Counteractingsubsidies:themultilateraltrack 354
6. Counteractingsubsidies:countervailingdutiesasaunilateraloption 359
7. Specialanddifferentialtreatment 372
8. Institutionalset-up 372
11. Antidumping 375
1. Whatisdumping? 375
2. Theregulationofantidumpingduties 379
3. Criminalpenaltiesandprivateremedies 401
4. Conclusions 405
12. Safeguards 409
1. Introduction 409
2. Thelegalandpolicyframeworkforsafeguardsinthe
GATT/WTOregime 410
3. GATTArticleXIXandtheAgreementonSafeguards 410
4. Safeguardmeasuresforbalanceofpaymentreasons 426
5. Safeguardmeasuresintextileandclothingtrade 430
6. Prohibitiononvoluntaryexportrestraints 430
13. TechnicalRegulations,Standards,andHealthMeasures 433
1. TheroleoftheTBTandSPSAgreements 433
2. ThelegalrelationshipbetweentheGATT,TBT,andSPS 434
3. TheTBTAgreement 436
4. TheSPSAgreement 464
5. Conclusions 503
14. PreferentialTradeAgreements 507
1. Discipliningpreferentialtradeagreements 507
2. ThenegotiatinghistoryofGATTArticleXXIV 508
3. Aviewfromtheworldofeconomics 509
4. Thetestforcompliance 513
5. PTAsinWTOdisputesettlement 527
15. ExportMeasuresandControls 535
1. Introduction 535
2. Cases 537
3. WTORulesonexportmeasures 541
4. Exporttariffs 542
5. Naturalresources 543