Treaty Interpretation by the WTO Appellate Body ISABELLE VAN DAMME OXFORD UNIVERSITY PRESS
Contents General Editor's Preface Foreword Acknowledgements Abbreviations List of Cited WTO Panel and Appellate Body Reports, Initiated WTO Disputes, and their Common Abbreviations List of Cited GATT Panel and Working Party Reports, and their Common Abbreviations Table of Cases Introduction vii ix xi xxi xxv xlvii xlix lxiii I. The Basic Principles and Concepts Governing WTO Dispute Settlement and Treaty Interpretation 1. The WTO Dispute Settlement System 3 1.1 Introduction 3 1.2 The Character of WTO Dispute Settlement 4 1.3 The Jurisdiction of WTO Panels and the Appellate Body 8 1.3.1 Exclusive but Not General Jurisdiction 8 1.3.2 Jurisdiction over Facts and Law 12 1.4 The Applicable Law in WTO Dispute Settlement 13 1.5 Treaty Interpretation in WTO Dispute Settlement 22 1.6 Authentic Interpretation versus Judicial Interpretation 26 1.7 Conclusion 30 2. Principles of Treaty Interpretation: Meaning and Function 32 2.1 Introduction 32 2.2 The Position under General International Law 34 2.2.1 Principles, Not Rules 34 2.2.2 Categories of Principles of Treaty Interpretation 37 2.2.2.1 Codified Principles 37 A Historical Note 37 Articles 31 to 33 VCLT 49 2.2.2.2 Non-Codified Principles 52 2.2.3 Functions of Principles of Treaty Interpretation 53 2.2.4 The Inter-Temporal Element in Treaty Interpretation 55
xvi Contents 2.3 The Position in WTO Dispute Settlement 56 2.3.1 The Appellate Body's Appreciation ofjtreaty Interpretation 56 2.3.2 The Appellate Body's Application of Codified and Non-Codified Principles of Interpretation 57 2.3.3 Special Principles of Treaty Interpretation 58 2.3.3.1 A Questionable Category 58 2.3.3.2 Illustration 1: The Alleged Principle of In Dubio Mitius 61 2.3.3.3 Illustration 2: The Principle of Legitimate Expectations 65 2.3.3.4 Illustration 3: Article 17.6(ii) Anti-Dumping Agreement 68 2.4 Conclusion 72 3. The Subject of Treaty Interpretation in WTO Dispute Settlement 73 3.1 Introduction 73 3.2 The Scope of WTO 'Treaty Language' 74 3.2.1 WTO 'Treaty Language' 74 3.2.1.1 Articles and Ad Articles 77 3.2.1.2 Cross-References and Incorporation by Reference 77 3.2.1.3 Waivers and 'GATT/WTO Issues' 78 3.2.1.4 Footnotes and Understandings 80 3.2.2 The Character of the WTO Covered Agreements 81 3.2.2.1 The ILC's View: No Formal Classes or Categories of Treaties 81 3.2.2.2 The Contractual versus the Law-Making Approach 83 3.2.2.3 The Distinction Applied to the WTO Covered Agreements 86 3.2.2.4 Constitutional Theories and the Interpretation of WTO Treaty Language 87 3.3 The Special Case of Schedules of Commitments 93 3.3.1 Schedules of Commitments Negotiation and Conclusion 93 3.3.2 Article 2(l)(a) VCLT and Schedules of Commitments 99 3.3.3 The Appellate Body's Interpretation of Schedules of Commitments 100 3.3.4 Alternative Approaches to the Interpretation of Schedules of Commitments 102 3.3.4.1 The ICJ's Interpretations of Unilateral Declarations 102 3.3.4.2 Struggling Towards a Solution in WTO Dispute Settlement 106 3.4 Conclusion 108
Contents 4. The Interpretation of Silence in the WTO Covered Agreements 110 4.1 Introduction 110 4.2 Non Liquet and the Completeness of International and WTO Law 112 4.2.1 General International Law 112 4.2.1.1 Gaps, Non Liquet, Completeness, and Judicial Power 112 4.2.1.2 Problems with the Traditional Discourse 116 4.2.2 WTO Law 117 4.2.2.1 Judicial Law-Making in the WTO 117 4.2.2.2 Illustration 1: The Applicable Law and the Principle of Institutional Balance 120 4.2.2.3 Illustration 2: The Zeroing Saga 121 4.3 An Alternative Perspective: Silence in WTO Treaty Language 124 4.3.1 Silence in Treaty Language 124 4.3.2 Interpretation of Some Silences in the WTO Covered Agreements 126 4.3.2.1 Introduction 126 4.3.2.2 Silence Outside the Scope of the Applicable Law 128 4.3.2.3 Genuine Silences 129 Procedural and Substantive Silences 135 Procedural Silences 135 Substantive Silences 139 Causes and Motivations 141 Defective Treaty-Drafting 141 Deliberate Silences in Treaty-Drafting 143 Techniques for Interpreting Silences 146 The Use of Customary International Law and General Principles 146 The Use of Practice 147 The Use of Cross-Referencing 148 The Use of the Principle of Effectiveness 152 The Use of the Object and Purpose 153 4.4 Conclusion 155 5. Inherent Powers and Treaty Interpretation 157 5.1 Introduction 157 5.2 The International Judicial Function and the WTO Appellate Body 159 5.3 The Role of the Judicial Function in the WTO 162 5.4 Powers and the Judicial Process 164 5.5 Inherent Powers of the WTO Appellate Body 168 5.5.1 Inherent Powers and Jurisdiction 169 5.5.2 Inherent Powers and Admissibility 177 xvii
xviii Contents 5.5.3 Inherent Powers and Interpreting Other Procedural Rules 189 5.5.3.1 Amicus Curiae BriefsV. 191 5.5.3.2 Open Hearings 192 5.5.3.3 Legal Certainty and jurisprudence Constante 195 5.5.3.4 Due Process and Preliminary Rulings 203 5.5.3.5 Burden of Proof 207 5.6 Inherent Powers and Interpreting Substantive Rules 208 5.7 Conclusion 209 II. The Interpretative Practice of the WTO Appellate Body 6. The Contextual Interpretation of the WTO Covered Agreements 213 6.1 Introduction 213 6.2 Meaning and Function of Context in Article 31 VCLT 214 6.2.1 Incomplete Description of Context in Article 31 VCT 214 6.2.2 The History of Context in Article 31 VCLT 216 6.3 Meaning and Function of Context in the Appellate Body's Jurisprudence 221 6.3.1 Literal Interpretation as the Starting Point 221 6.3.2 Contextualized Ordinary Meaning 222 6.3.2.1 Ordinary Meaning: Text and Grammar 223 6.3.2.2 Contextualized Plain and Dictionary Meaning 225 The Limited Value of Dictionaries 226 Choosing between Dictionaries and Dictionary Definitions 229 Complementary Dictionary Meanings 230 Affirming Dictionary Meanings 230 Dictionary Preferences 231 Contextualizing Dictionary Definitions through their Use 232 6.3.3 The Technique of Cross-Referencing 235 6.3.3.1 Function of Cross-Referencing 235 Cross-Referencing to Establish Ordinary Meaning 237 Cross-Referencing to Confirm Ordinary Meaning 239 Necessity of Cross-Referencing 240 6.3.3.2 Types of Cross-Referencing 242 Identical Treaty Language 242 Similar Treaty Language 245 Different Treaty Language 249 6.3.3.3 A Special Case: Cross-Referencing between Schedules 251 6.3.4 Context Relating to the Conclusion of the Treaty 253 6.3.4.1 Agreements and Instruments in Connection with the Conclusion of the Treaty 253 6.3.4.2 Is the Harmonized System Context? 254
-> Contents xix 6.3.4.3 Are Explanatory Notes and Scheduling Guidelines Context? 256 63.5 Teleology of the Treaty 257 6.3.6 Other Extrinsic Elements 264 6.3.6.1 Trade Negotiations and WTO Committees 264 6.3.6.2 Economic Conditions of Disputants 265 6.3.6.3 Ad Articles 266 6.3.6.4 Scientific Knowledge 267 6.3.6.5 Academic Literature 268 6.3.6.6 Business and Trade Practices 268 6.4 Factual Context 269 6.5 Conclusion 272 7. The Effective Interpretation of the WTO Covered Agreements 275 7.1 Effectiveness as a Principle of Treaty Interpretation 275 7.1.1 The VCLT and the Principle of Effective Interpretation 275 7.1.2 Some Applications of the Principle of Effectiveness 278 7.2 Effective Interpretation in WTO Dispute Settlement 282 7.3 Interaction between Effectiveness and Contextualism: Harmonious Interpretation 285 7.4 Effective Interpretation of the Contextualized Ordinary Meaning 287 7.5 Effective Interpretation of the Unity of the Treaty Language 292 7.6 Giving Effect to Values in Treaty Interpretation 294 7.7 Conclusion 303 8. Other Issues in WTO Treaty Interpretation 305 8.1 Introduction 305 8.2 Supplementary Means of Interpretation (Article 32 VCLT) 306 8.2.1 General International Law 306 8.2.2 WTO Law 310 8.2.2.1 Residual Character of Article 32 VCLT 310 8.2.2.2 Preparatory Work as a Problem and as a Solution 315 8.2.2.3 Other Supplementary Means of Interpretation 321 8.2.2.4 Article 32 VCLT and the Interpretation of Schedules 324 8.3 Other Authentic Versions of the Treaty (Article 33 VCLT) 327 8.3.1 General International Law 327 8.3.1.1 History of Article 33 VCLT 327 8.3.1.2 Meaning of Article 33 VCLT 329 8.3.2 WTO Law 332 8.4 Use of Subsequent Practice (Article 31(3)(b) VCLT) 338 8.4.1 Definition in WTO and International Law 338
xx Contents 8.4.2 Practice of the WTO and Other International Organizations 340 8.4.3 Finding Subsequent Practice ^ 343 8.4.3.1 What Qualifies as Practice? 343 8.4.3.2 Agreement Among Parties Who Have Not Engaged in the Practice 345 8.4.3.3 Consistency of Practice 346 8.5 Use of Subsequent Agreements (Article 31(3)(a) VCLT) 346 8.6 Special Meanings (Article 31(4) VCLT) 350 8.6.1 General International Law 350 8.6.2 WTO Law 351 8.7 Conclusion 353 9. WTO Treaty Interpretation against the Background of Other International Law 355 9.1 Harmonization of WTO Law and International Law 355 9.2 The Role of International Law in Treaty Interpretation 357 9.2.1 The Principle of Harmonious Interpretation 357 9.2.2 History of Article 31(3)(c) VCLT 359 9.2.3 Interpretation of Article 31(3)(c) VCLT 360 9.2.4 Limited Value of Article 31(3)(c) VCLT 365 9.2.5 Article 31(3)(c) VCLT and Jurisdiction 366 9.3 Article 31(3)(c) VCLT in WTO Dispute Settlement 367 9.3.1 Application of Article 31(3)(c) VCLT 368 9.3.2 Implied Interpretation of Article 31(3)(c) VCLT 373 9.4 Conclusion 374 III. Conclusions Conclusions 379 Appendix Articles 31, 32, and 33 VCLT 385 Bibliography 387 Index 413