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Overlaps and Conflicts of Jurisdiction between the World Trade Organization and Regional Trade Agreements
Published online by Cambridge University Press: 09 March 2016
Summary
This article addresses the issue of horizontal allocation of judicial jurisdiction between the dispute settlement mechanisms of regional trade agreements (RTAs) and that of the World Trade Organization (WTO). There could be various instances where overlaps of jurisdiction in dispute settlement could occur. Overlaps and even conflicts of jurisdiction are unavoidable due to the quasi-automatic and compulsory nature of the WTO dispute settlement mechanism. With a view to furthering discussions on this issue, the article proceeds to examine a number of principles of international commercial law that deal with overlaps and conflicts: forum conveniens and forum non conveniens; lis alibi pendens and res judicata as well as the principle of general international law; abuse of process, abuse of rights, and good faith; the exhaustion of RTA remedies; reference to the International Court of Justice; and the possibility of invoking Article 13 of the DSU to obtain evidence from RTA proceedings. Finally, the article suggests that in the current state of international law, no rules seem to offer any effective answer to resolve conflicts resulting from overlaps of jurisdiction in the context of the WTO Agreement and RTAs. It is thus for states to decide how the dispute settlement mechanisms of the WTO and RTAs should operate and interact with each other. The article concludes by pointing to areas of further discussions.
- Type
- Articles
- Information
- Canadian Yearbook of International Law/Annuaire canadien de droit international , Volume 41 , 2004 , pp. 83 - 152
- Copyright
- Copyright © The Canadian Council on International Law / Conseil Canadien de Droit International, representing the Board of Editors, Canadian Yearbook of International Law / Comité de Rédaction, Annuaire Canadien de Droit International 2004
References
1 On the issue of jurisdiction generally and the relationship between the jurisdiction of the World Trade Organization [hereinafter WTO] and that of other treaties and institutions, see Trachtman, Joel, “Institutional Linkages: Transcending ‘Trade and …’” (2002) 96(1) A.J.I.L 77 Google Scholar. On the issue of universal jurisdic-tion, see the recent judgment of the International Court of Justice [hereinafter ICJ] in Case Concerning the Arrest Warrant of 11 April 2000 (Democratic Republic of Congo v. Belgium), February 14, 2002. The full text of the judgment (including separate and dissenting opinions) is available at <www.icj-cji.org>.
2 This categorization is suggested by Joel P. Trachtman who argues that the linkage problem between “[t]rade and … is a problem of allocation of jurisdiction; he suggests that there are three basic, and related, types of allocation of jurisdiction: (i) horizontal allocation of jurisdiction among States, (ii) vertical allocation of jurisdiction between states and international organizations and (iii) horizontal allocation of jurisdiction among international organisation.” Trachtman, supra note 1 at 79.
3 General Agreement on Tariffs and Trade, October 30, 1947, 61 Stat. A-11, TIAS 1700, 55 U.N.T.S. 194 [hereinafter GATT].
4 Turkey — Restrictions on Imports of Textile and Clothing Products, Appellate Body Report, October 22, 1999, Doc. WT/DS34, para. 58. Presently, Article XXIVand WTO jurisprudence clearly establish that it is for the parties to the regional trade agreement [hereinafter RTA] to prove that the concerned free trade area or customs union is compatible with Article XXIV of GATT (and/or Article IV of the General Agreement on Trade in Services [hereinafter GATS] in World Trade Organization, Results of the Uruguay Round Multilateral Trade Negotiations: The Legal Texts, 325, text is also available at <http://www.wto.org/english/docs_e/legal_e/legal_e.htm#services>.) This test has, however, been severely criticized for being unrealistic.
5 Marrakesh Agreement Establishing the World Trade Organization, in World Trade Organisation, Results of the Uruguay Round Multilateral Trade Negotiations: The Legal Texts, 33, text is also available at <http://www.wto.org/english/docs_e/legal_e/14-ag.pdf> [hereinafter WTO Agreement].
6 The arbitral tribunal of the International Centre for the Settlement of Investment Disputes/International Tribunal for the Law of the Sea stated that “[t]here is frequently a parallelism of treaties, both in their substantive content and in their provisions for settlement of disputes arising thereunder.” Southern Bluefin Tuna (New Zealand v. Japan; Australia v. Japan), Provisional Measures Order of 27 August 1999 (International Tribunal for the Law of the Sea), Award on Jurisdiction and Admissibility of 4 August 2000, p. 91 [hereinafter Southern Bluefin Tuna case].
7 Understanding on Rules and Procedures Governing the Settlement of Disputes, 1994, Annex 2 to the WTO Agreement, supra note 5 [hereinafter DSU].
8 The WTO jurisprudence has confirmed that any WTO member that is a “potential exporter” has the sufficient legal interest to initiate a WTO panel process (European Communities — Regime for the Importation, Sale and Distribution of Bananas, Appellate Body Report, April 9, 1999, WTO Doc. WT/DS27/ARB at para. 136); and in WTO disputes, there is no need to prove any trade effect for a measure to be declared WTO inconsistent (DSU, supra note 7 at Article 3.8). This is to say, in the context of a dispute between two WTO members, involving situations covered by both the RTA and the WTO Agreement, any member that considers that any of its WTO benefits have been nullified or impaired has an absolute right to trigger the WTO dispute settlement mechanism and request consultations and the establishment of a panel (United States — Measures Affecting Imports of Woven Wool Shirts and Blouses from India, Appellate Body Report, Doc. WT/DS33, para. 13). Arguably, a single WTO member cannot even agree to take its WTO dispute in another forum.
9 The issue of forum shopping is not new. In the old GATT days, parties to the Tokyo Round codes had the choice between the general GATT dispute settlement mechanism and that of the codes (Agreement on Implementation of Article VI of the General Agreement on Trade and Tariffs (1979), Article 15, text is available at <http://www.wto.org/english/docs_e/legal_e/tokyo_adp_e.doc>).
10 North American Free Trade Agreement, December 17, 1992; Model Rules of Procedure for Chapter Twenty of the North American Free Trade Agreement; Code of Conduct for Dispute Settlement Procedures under Chapters 19 & 20 of the North American Free Trade Agreement [hereinafter NAFTA], text is available at <http://www.sice.oas.org/cp_disp/English/dsm_II.asp>.
11 NAFTA, supra note 10 at Article 2005(3).
12 NAFTA, supra note îoatArticle 2005(7), concludes that for purposes of Article 2005, dispute settlement proceedings under the GATT are deemed to be initiated by a party’s request for a panel, such as under Article XXIII:2 of GATT 1947. Indeed, the explicit references to “GATT” and to the “General Agreement on Tariffs and Trade 1947” raise the question whether the same rules would continue to apply to the new DSU of the WTO. However, since the first paragraph of Article 2005 refers to “any successor agreement (GATT)” and the recent NAFTA panel described GATT as “an evolving system of law” that includes the results of the Uruguay Round, the provisions of Article 2005 of NAFTA would be applicable to the dispute settlement rules of the WTO. Arbitral Panel Established Pursuant to Article 2008 of the North American Free Trade Agreement, In the Matter of Tariffs Applied by Canada to Certain US — Origin Agricultural Products, Final Report (December 2, 1996).
13 Canada — Certain Measures Concerning Periodicals, July 30, 1997, Doc. WT/DS31/AB/R is a good example of potential overlap. The United States initiated its dispute against Canada under the DSU of the WTO rather than that of the NAFTA.
14 Free Trade Agreement between the EU and Mexico, Decision no. 2/2000 of the EC/Mexico Joint Council of 23 March 2000 (covering trade in goods, gov-ernment procurement, cooperation for competition, consultation on intellectual property rights, dispute settlement), Article 41, entered into force on July 1, 2000, text is available at <http://europa.eu.int/comm/trade/bilateral/mexico/fta.htm >.
15 Free Trade Agreement between the European Free Trade Association States and Singapore, signed on June 26, 2002, entered into force on January 1, 2003, text is available at <http://secretariat.efta.int/Web/ExternalRelations/PartnerCountries/Singapore/SG/SG_FTA.pdf>.
16 Ibid. at Article 56(2).
17 Free Trade Agreement between the Government of Canada and the Government of the Republic of Costa Rica, Article XIII:6, entered into force on November 1, 2002, text is available at <http://www.dfaitmaeci.gc.ca/tna-nac/Costa_Rica_toc-en.asp>.
18 Ibid.
19 Ibid.
20 The Southern Common Market [hereinafter MERCOSUR] was created by the l991 Treaty of Asunción, approved by Act 2398l/91 (Argentina, Official Bulletin, September 12, 1991), text is available at <www.mercosul.org.uy/pagina1esp.htm>.
21 Protocol of Brasilia, Council Decision MERCOSUR/CMD/DEC NO. 01/91; Protocol of Brasilia for Dispute Settlement, Article 1, signed on December 17, 1991, text is available at <http://www.mercosul.gov.br/textos/default.asp?Key=231>.
22 Protocol of Olivos for the Settlement of Disputes in MERCOSUR, Article 1, signed on February 18, 2002, text is available at <http://www.mercosul.gov.br/textos/default.asp?Key=232>.
23 The legal issues in the WTO were slightly different from those before the MERCOSUR arbitrators and could have led to very complicated questions relating to the WTO compatibility of the MERCOSUR customs union and whether countries in a customs union can impose safeguard measures against imports from another member.
24 See Argentina — Definitive Anti-Dumping Duties on Poultry from Brazil, Panel Report, May 22, 2003, Doc. WT/DS241/R.
25 Ibid. at para. 7.17.
26 Ibid. at para. 7.19.
27 Ibid. at para. 7.18
28 Ibid.
29 Ibid. at para. 7.22.
30 Ibid. at para. 7.30.
31 Ibid. at para. 7.36.
32 Vienna Convention on the Law of Treaties, May 23, 1969, Can. TS. 1980 No. 37 (entered into force January 27, 1980) [hereinafter Vienna Convention].
33 Argentina —Definitive Anti-Dumping Duties on Poultry from Brazil, supra note 24 at para. 7.41.
34 It is interesting to note that the new Protocol of Olivos on Dispute Settlement, supra note 22, now contains an exclusive forum clause: “Once a dispute settlement procedure pursuant to the preceding paragraph has begun, none of the parties may request the use of the mechanisms established in the other fora, as defined by article 14 of this Protocol.” At the time of this dispute, it was not yet in force.
35 United States — Margin of Preferences, BISD II/11, Decision of August 9, 1949.
36 See Roucounas, Emmanuel, Engagements parallèles et contradictoires, Cours de la Haye (1987), 197.Google Scholar
37 Southern Bluefin Tuna case, supra note 6 at 91 [emphasis added].
38 “[I]n order to minimize such possibility as may occur of significant conflicting interpretations of international law, there might be virtue in enabling other international tribunals to request advisory opinions of the International Court of Justice on issues of international law that arise in cases before those tribunals that are of importance to the unity of international law … There is room for the argument that even international tribunals that are not United Nations organs, such as the International Tribunal for the Law of the Sea, or the International Criminal Court when established, might, if they so decide, request the General Assembly — perhaps through the medium of a special committee established for the purpose — to request advisory opinions of the Court.” Schwebel, Stephen M., President of the ICJ, Address to the Plenary Session of the General Assembly of the United Nations, October 26, 1999, text is available at <http://www.icj-cij.org/>..>Google Scholar
39 See, for instance, the note by Guillaume, Gilbert, “La mondialisation et la Cour internationale de justice” (2000) 2(4) Forum (ILA) at 242.Google Scholar
40 Higgins, Roselyn, “The ICJ, The ECJ, and the Integrity of International Law” (2003) 52 I.C.L.Q. 1–20 at 20.CrossRefGoogle Scholar
41 Vienna Convention, supra note 32 at Article 30.2.
42 United States — Singapore Free Trade Agreement, signed on May 6, 2003, text is available at <http://www.ustr.gov/new/fta/Singapore/final.htm>.
43 Agreement between Japan and the Republic of Singapore for a New-Age Economic Partnership, signed on January 13, 2002 and entered into force on November 30, 2002, text is available at <http://www.mti.gov.sg/public/FTA/frmFTADefault.asp?sid=28>.
44 Singapore — Australia Free Trade Agreement, signed on February 17, 2003 and entered into force on July 28, 2003, text is available at <http://www.austlii.edu.au/au/other/dfat/treaties/2003/16.html>. Article 1801 of the Canada-United States Free Trade Agreement, infra note 45, envisaged that disputes arising under both this agreement and GATT (including the Tokyo Round codes) could be settled in either forum at the discretion of the complaining party but that once a matter has been brought before either forum, the procedure initiated shall be used to the exclusion of any other.
45 Canada — United States Free Trade Agreement, signed on January 2, 1989, text is available at <http://wehner.tamu.edu/mgmt.www/nafta/fta/complete.pdf>.
46 Artide 2005 of NAFTA, supra note 10, provides that after consultation “the dispute normally shall be settled under this Agreement.” Paragraphs 3 and 4 of Article 2005 go further and prescribe the exclusive application of NAFTA to the detriment of GATT: When the responding party claims that its action is subject to Article 104 of the Environmental and Conservation Agreements (inconsistency with certain environmental and conservation agreements), sanitary and phytosanitary measures, or standards-related measures adopted or maintained by a party to protect its human, animal or plant life or health, or its environment, and that raises factual or scientific issues on these aspects, “the complaining Party may, in respect of that matter, thereafter have recourse to dispute settlement procedures solely under [NAFTA].” According to paragraph 5 of Article 2005, if the complaining party has already initiated GATT procedures on the matter, “the complaining Party shall promptly withdraw from participation in those proceedings and may initiate dispute settlement procedures under Article 2007.” See the Agreement between the Government of Canada and the Government of the United States of America Concerning the Transboundary Movement of Hazardous Waste, signed on October 28, 1986; and the Agreement between the United States of America and the United Mexican States on Cooperation for the Protection and Improvement of the Environment in the Border Area, signed on August 14, 1983.
47 Free Trade Agreement between the Government of the Republic of Chile and the Government of the United Mexican States, signed on April 17, 1998 and entered into force on August 1, 1999, text is available at <http:www.sice-oas.org>.
48 Free Trade Agreement between the Government of Canada and the Government of the Republic of Chile, signed on December 5, 1996, text is available at <http://www.dfait-maeci.gc.ca/tna-nac/cda-chile/menu-en.asp>.
49 Article N-05 of the Free- Trade Agreement between the Government of Canada and the Government of Chile, supra note 48; and Free Trade Agreement between the Republic of Chile and the Government of Mexican States, supra note 47, Article 18–03, Para. 2.
50 Lowe affirms that the doctrine of abuse of process is “well established, though occasions for its application are likely to be very rare.” Lowe, Vaughan, “Over-lappingjurisdictions in International Tribunals” (2000) 20 Australian Y.B. Int’l L. 113.Google Scholar
51 Brownlie wrote that “[i]t is not unreasonable to read the principle of abuse of right as a general principle of law.” See Brownlie, Ian, Principles of Public International Law, 5 th ed. (Oxford: 1998), 447–48Google Scholar. See also United States — Import Prohibition of Certain Shrimp and Shrimp Products, Appellate Body Report, October 26, 2001, Doc. WT/DS58, at para. 158.
52 See, for instance, Petersmann, Ernst-Ulrich, “Settlement of International Disputes through the GATT: The Case of Anti-Dumping Law,” in Petersmann, Ernst-Ulrich and Janicke, Gunther, Adjudication of International Trade Disputes in International and National Economic Law (Fribourg: University Press, 1992), 126;Google Scholar
53 On the issue of the exhaustion of local remedies in international law and its application in WTO law, see Jan Kuijper, Pieter, “The Law of GATT as a Special Field of International Law” (1994) Neth. Y. B. Int’l L. 227 Google Scholar; Jan Kuijper, Pieter, “The New WTO Dispute Settlement System — The Impact on the European Community” (1995) 29(6) J. World T. 49 Google Scholar; and Rutsel Silvestre, J. Martha, “World Trade Dispute Settlement and the Exhaustion of Local Remedies Rule” (1996) 30 J. World T. 107.Google Scholar
54 He referred to the model found in Article 177 of the Treaty Establishing the European Community (consolidated text), Official Journal C 325 of 24 De-cember 2002) [hereinafter EC Treaty] (now Article 234). See, for instance, Guillaume, supra note 39 at 242. In contrast, see Higgins, supra note 40 at 20.
55 On this issue, see Sawaki, T., “Battle of Lawsuits — Lis Pendens in International Relations” (1979–80) 23 Japanese Ann. Int’l L. 17.Google Scholar
56 Fawcett, J. J., Deciding Jurisdiction in Private International Law (Oxford: 1995), 5–6 and 10.Google Scholar
57 Lowe, supra note 50 at 12.
58 Fawcett, supra note 56 at 26.
59 As Lowe points out, in most cases, the fact that a state has sought adjudication under one treaty cannot deprive it of the right to seek a declaration in respect of another treaty. See Lowe, supra note 50 at 14.
60 General Treaty on Central American Economic Integration between Guatemala, El Salvador, Honduras and Nicaragua, December, 1960; Protocol of Tegulcigalpa to the Charter of the Organization of Central American States, December 13, 1991; Protocol of Guatemala to the General Treaty on Central American Economic Integration, October 29, 1993; Convenio del Estatuto de la Corte Centroamericana de Justicia, December 13, 1992, text is available at <http://www.sice.oas.org/cp_disp/English/dsm_II.asp>.
61 This is not to say that other jurisdictions do not have the capacity to read, take into account, and somehow interpret WTO provisions to the extent that it is necessary to interpret their own treaty.
62 The assumption is that the RTA otherwise respect the prescriptions of Article XXIV. See the Appellate Body report in Turkey — Restrictions on Imports of Textile and Clothing Products, supra note 4 at para. 48.
63 GATS, supra note 4.
64 Even an arbitration performed pursuant to Article 25 of the DSU would be a WTO arbitration, hence, covered by the exclusivity provision of Article 23 of the DSU.
65 See note 8.