Services Negotiations in the Doha Round: Lost in Flexibility?

The World Trade Organization (WTO) rules for services trade,under the General Agreement on Trade in Services (GATS), arefar broader in policy coverage than their counterpart provisionsunder the General Agreement on Tariffs and Trade (GATT), reflecting,inter alia, the Agreement’s extension to cross-bordermovements of services consumers and factors of production. Atthe same time, the GATS is significantly more flexible in applicationthan the GATT. There are virtually no political sensitivities,protectionist or not, that could not be formally accommodatedwithin its structure. Moreover, the paucity of relevant jurisprudenceon key concepts and a yet incomplete rule-making agenda haveprovided additional scope for ‘creative’ interpretation.However, while flexibility was a sine qua non for the conclusionof the Agreement, given the diversity of institutional conditions,political concerns, and so on among participants, it has notbeen conducive to one of the key objectives: ‘early achievementof progressively higher levels of liberalization’. Thisarticle discusses possible approaches that, within the Agreement’scurrent structure, could promote the clarity, quantity, andcommercial relevance of services commitments and address remainingrule-making issues. However, there is no panacea. The challengeremains to find a reasonable balance between economically meaningfuldisciplines and their broad application across sectors, modesof supply, and WTO Members.     

Due Process and 'Good' Regulation Embedded in the GATS - Disciplining Regulatory Behaviour in Services Through Article VI of the GATS

On the occasion of the US – Gambling ruling, the GeneralAgreement on Trade in Services (GATS) came to the forefront.Several critiques against this ruling highlighted the urgentneed to clarify important concepts laid down in the GATS. Domesticregulation is arguably the overarching concept when it comesto trade in services, inter alia, because of the regulatoryintensity that characterizes many service sectors. Article VIof the GATS aspires to discipline non-discriminatory domesticregulatory measures. In this respect, World Trade Organization(WTO) Members are required to adhere to certain due processobligations and to develop additional rules of ‘good’regulation through the completion of the work program set outin Article VI:4 of the GATS. This paper provides a comprehensiveanalysis of Article VI. In doing this, it explores the objectivefunction and the mechanics of this provision bearing in mindthe delicate balance between trade liberalization and regulatorysovereignty that becomes apparent in Article VI more than inany other GATS provision.     

WTO for Trade and Development Post-Doha

The WTO Members’ negotiations under the Doha mandate onspecial and differential treatment (‘SDT’) and developmentissues have made little progress. The gap between developedcountries and developing countries in this regard seems toowide to be bridged. This gap originates from a fundamental differencein their basic stances on cross-cutting issues. In principle,without prejudice to currently available SDT under individualWTO Agreements, developing countries should be given flexibilitiesin implementing WTO rules, which may result in the rebalancingof rights and obligations of WTO Members but only when policymeasures at issue can contribute to particular developing countries’development needs and no alternative less-trade restrictivemeasures are reasonably available. After reviewing WTO Members’discussions since the adoption of the Doha Ministerial Declaration,this article suggests a ‘measure-specific ex ante approach’for a workable solution to bridging the gap between developedcountries and developing countries on SDT and development issues.     

The WTO's First Antitrust Case - Mexican Telecom: A Sleeping Victory for Trade and Competition

A World Trade Organization (WTO) dispute panel has decided theWTO’s first antitrust case. It resolved the matter infavour of the United States’ claim that Mexico had anticompetitivelyfacilitated exploitative prices and a cartel that raised theprice of terminating cross-border telephone calls in Mexicoand thereby harmed trade and competition. The case is Mexico– Measures Affecting Telecommunications Services (April2004) (‘the Mexican telecom case’). This essay arguesthat if the WTO’s antitrust clause was in fact triggered(which is a point of contention), Mexico’s conduct violatedits obligations. Furthermore, it argues that the GATS antitrustobligation in the telecommunications sector should be acknowledgedas occupying an important place at the intersection of trade,competition and industrial policies. Antitrust law is the otherside of the coin of liberal trade law. Antitrust law opens marketsby prohibiting private and other commercial restraints, whiletrade law opens markets by prohibiting public restraints. BeforeMexican telecom, no legal discipline was regarded as copiousor flexible enough to address combined public and private restraints.In particular, nations were allowed free rein to privilege nationalchampions that harmed competition in and out of their country,imposing costs on outsiders as well as on their own people.A positive reading of the antitrust clause helps to fill thegap.     

King Cotton, Developing Countries and the 'Peace Clause': The WTO's US Cotton Subsidies Decision

Although the World Trade Organization (WTO) is a powerful vehiclefor promoting economic development, the Uruguay Round has beenperceived by developing country WTO members as an unequal bargain.Especially with respect to agriculture, the Uruguay Round yieldedonly limited concessions. In September 2003, Doha Round effortsstalled at Cancún when developing countries coalescedto oppose a proposal that insufficiently liberalized trade inagriculture. In March 2005, the Dispute Settlement Body adopteda panel decision upholding Brazil’s legal challenge ofUS subsidies to cotton producers. The US Cotton Subsidies decisionrepresents a dramatic victory for Brazil and other developingcountry WTO members. The timing of the decision, coincidingwith ongoing Doha Round agriculture negotiations, ensures thatit will influence any outcome of the Round. This article examinesthe US Cotton Subsidies decision, describes the subsidy programsat issue in the dispute, reviews applicable WTO rules, and outlinesthe major findings of the panel and Appellate Body. The articleconcludes that Brazil’s victory in US Cotton Subsidiesmay represent a broader shift within the WTO away from a systemdominated by the US and EC toward a system that increasinglyis influenced by emerging market economies.     

The Doha Round's Public Health Legacy: Strategies for the Production and Diffusion of Patented Medicines under the Amended TRIPS Provisions

The entry into force of the World Trade Organization (WTO) TRIPSAgreement in 1995 transformed the international intellectualproperty system. The harmonization of basic intellectual propertystandards has operated to protect investment in innovation,limiting risks from unjustified ‘free riding’. Yetthese same harmonized IP standards sharply curtailed the traditionalcapacity of suppliers of public goods, such as health care andnutrition, to address priority needs of less affluent membersof society, particularly in (but not limited to) developingcountries. In the Doha Declaration, the Waiver Decision of 30August 2003 and the Article 31bis Protocol of Amendment, stakeholdersconcerned with re-opening policy space for the supply of newerpharmaceutical products pushed back against restrictive elementsof the TRIPS Agreement. Governments around the world are in the process of decidingwhether to ratify and accept the Article 31bis Amendment. Basedon their Study for the International Trade Committee of theEuropean Parliament, the authors argue that acceptance of theAmendment will provide a ‘net benefit’ for countriesseeking to improve access to medicines. At the insistence ofWTO delegations acting on behalf of the originator pharmaceuticalindustry lobby, Article 31bis regrettably is saddled with unnecessaryadministrative hurdles. Nonetheless, through skillful lawyering,political determination and coordinated planning, the systemcan be made to work. Among other options, expeditious back-to-backcompulsory licensing linked with pooled procurement strategiesmay effectively achieve economies of scale in production anddistribution of medicines. The authors doubt that the international political environmentwould support renegotiation of an ‘improved’ solution.They express concern that failure to bring the Amendment intoforce will open the door to a campaign to undermine the WaiverDecision. Recent events in Brazil and Thailand illustrate boththe opportunities and risks associated with implementing TRIPSexception mechanisms, and help to inform views on the negotiatingenvironment. Specific proposals for regional cooperation inimplementing the Amendment are laid out, and the authors emphasizethe importance of pursuing concrete transfer of technology measuresin support of developing country pharmaceutical manufacturing.Over-reliance on private market mechanisms for the supply ofpublic health goods leaves the international community withan unresolved collective action problem on a large scale.     

Eleven Years of GATS Case Law: What Have We Learned?

The General Agreement on Trade in Services (GATS) negotiatorsfaced a significant challenge when having to craft a comprehensiveset of disciplines governing multilateral trade in services,and the result is somewhat complex. Some obligations, in particularthe most favoured-nation treatment (MFN) obligation, apply acrossthe board. Others, like the market access and national treatmentobligations, apply only in respect of service sectors of a Member'schoosing. There is overlap between the market access and nationaltreatment obligations, and the relationship between these twodisciplines and those on domestic regulation is not clearlyestablished. Additional obligations have been adhered to ona voluntary basis, in particular in the areas of telecommunicationsand financial services. In general, the interpretation and understandingof Members’ Schedules of Specific Commitments proves tobe a laborious exercise. This provides fertile ground for difficultand often sensitive interpretive issues to arise. Although Membershave thus far not made extensive use of dispute settlement proceduresto resolve them, existing World Trade Organization (WTO) decisionsalready show the reach of GATS disciplines and their potentialimpact on Members’ policies and regulations. The Gamblingcase has, in particular, sparked a debate as to what shouldbe the right balance between trade constraints and the autonomyof Members’ service regulators. This article reviews theGATS case law with a view to offering a critical assessmentof the main systemic issues that have been addressed by WTOadjudicatory bodies. These issues are, respectively, the scopeof application of the GATS, the interpretation of specific commitmentsin Members’ Schedules, market access, non-discriminatorytreatment, and general exceptions.     

Rulemaking Amidst Growing Diversity: A Club-of-Clubs Approach to WTO Reform and New Issue Selection

The diverse nature of World Trade Organization (WTO) membershipmakes it highly unlikely that members will all be willing andable to sign on to the full range of agreements that many membersmight find desirable. The paper proposes an approach in whichthe WTO would supplement its core agreements with additional‘clubs’ to which only some members would subscribe.The approach is a compromise in which diversity can co-existwith a more extensive set of commitments for willing members.The paper provides suggestions for how the clubs would be selectedand how they would operate. Clubs would be chosen where theycould help promote the WTO’s central missions: loweringbarriers to trade, reducing the discriminatory effects of domesticpolicies, and enhancing economic development through trade.All WTO members would participate in negotiating club rules,but members would be free not to join. Clubs would use the DisputeSettlement Understanding (DSU) to deal with disputes, but suspensionof concessions in the event of violations would be confinedto the provisions of the same club in which the violation occurred.     

The Authoritative Interpretation Under Article IX:2 of the Agreement Establishing the World Trade Organization: Current Law, Practice and Possible Improvements

The Agreement Establishing the World Trade Organization reservesthe right to adopt ‘authoritative interpretations’of the multilateral trade agreements to the Ministerial Conferenceand the General Council. Given that, to date, this instrumenthas not been used, the present article intends to highlightits structural importance for the balance of powers within thelegal system of the World Trade Organization. It identifiesthe use that could and should be made of it and reviews thepractice so far. The article attempts to explain the reasonsfor the present lack of authoritative interpretations in theWorld Trade Organization and presents several options for thefuture. At the outset, this article explores the parametersthat are relevant for this discussion, notably the possiblescope and legal effects of an authoritative interpretation.Important questions are whether an authoritative interpretationis legally binding on all WTO Members, whether it may modifythe existing law or whether the rules of treaty interpretationare relevant in the formulation of an authoritative interpretation,and whether its validity can be challenged in dispute settlement.     

The Myth of 'Rebalancing' Retaliation in WTO Dispute Settlement Practice

It is generally assumed that trade retaliation under the WTOperforms some kind of ‘rebalancing’ by allowingthe injured Member to suspend ‘concessions and obligations’vis-à-vis the violating Member of a level equivalentto the level of ‘nullification and impairment’ sufferedby the injured Member. This article argues that this perceptionis misguided. The article first questions if a sensible comparatorexists with which equivalence for purposes of ‘rebalancing’could be evaluated. It then argues that WTO arbitration decisionsdo not even succeed in their limited goal of providing for retaliationthat will affect trade in the same amount as the WTO-inconsistentmeasure at issue. One reason is the use of an asymmetric andunderspecified trade effects comparator. The other reason isvery significant miscalculation of the trade effects of theviolation, as shown by detailed legal-economic analysis of allrelevant arbitration decisions. The decisions concerning countermeasuresagainst prohibited export subsidies do not make any attemptat ‘rebalancing’ in the first place. The articleconsiders political explanations of arbitration decisions. Itconcludes with some suggestions for improvement.     

Banking on China's WTO Commitments: 'Same Bed, Different Dreams' in China's Financial Services Sector

Foreign banks and the Chinese Government have different dreamsabout the business opportunities and obligations that ariseunder China's World Trade Organization (WTO) commitments onfinancial services. This article provides an overview of China'sbanking sector reforms and its gradual opening to foreign participationin the context of General Agreement on Trade in Services (GATS)rules governing international trade in financial services andthe obligations that apply since China's WTO accession in December2001. The article highlights the contradictory interpretationsthat China and other Members have issued regarding China's GATScommitments and provides a framework for assessing the WTO consistencyof China's banking measures. An analysis is conducted underthis framework to evaluate whether China has fully implementedits GATS commitments on (i) the acquisition of Chinese banksby foreign financial institutions, (ii) legitimate ‘prudentialregulation’ in the banking sector, and (iii) full marketaccess for credit card and electronic payment services. Notwithstandingthe apparent complexity of GATS rules, the article concludesthat the WTO legal framework supports the case for increasedaccess to China's financial services market consistent withits GATS commitments, and fully consistent with China's plansfor continuing domestic growth and its medium-term financialservices export interests.     

Making drugs available at affordable prices: how universities' technology transfer offices can help developing countries

Legal context: In recent years, the prices at which medicines are soldin, and to, developing countries has become a hot politicalsubject affecting the international pharmaceutical industry.Specific legislative measures have followed the political debate,including (1) the EU Regulation 816/2006 on ‘compulsorylicensing of patents relating to the manufacture of pharmaceuticalproducts for export to countries with public health problems’and (2) the The Doha Declaration adopted by the Fourth MinisterialConference of the World Trade Organisation (WTO) in 2001, andthe subsequent Decisions by the WTO General Council to implementthe Declaration in August 2003 and to amend the TRIPs (Trade-RelatedAspects of Intellectual Property Rights) Agreement in December2005. Universities are increasingly considering whether to includeterms in their licence agreements with pharmaceutical companiesthat address this issue. Key points and practical significance: Universities may wish to consider whether it is part of theirmission to negotiate special terms in licence agreements tobenefit the developing world. Where universities decide that,in principle, they wish to include ‘humanitarian-licensing’clauses in their licence agreements, they need to find a formof words that is likely to achieve their objectives and be acceptableto pharmaceutical industry licensees. This article considerssome of the options and suggests some specimen wording.     

Does Dworkin Commit Dworkin's Fallacy?: A Reply to Justice in Robes

In an article entitled ‘Dworkin's Fallacy, Or What thePhilosophy of Language Can't Teach Us about the Law’,I argued that in Law's Empire Ronald Dworkin misderived hisinterpretive theory of law from an implicit interpretive theoryof meaning, thereby committing ‘Dworkin's fallacy’.In his recent book, Justice in Robes, Dworkin denies that hecommitted the fallacy. As evidence he points to the fact thathe considered three theories of law—‘conventionalism’,‘pragmatism’ and ‘law as integrity’—inLaw's Empire. Only the last of these is interpretive, but each,he argues, is compatible with his interpretive theory of meaning,which he describes as the view that ‘the doctrinal conceptof law is an interpretive concept’. In this Reply, I arguethat Dworkin's argument that he does not commit Dworkin's fallacyis itself an example of the fallacy and that Dworkin's fallacypervades Justice in Robes just as much as it did Law's Empire.     

Influence of WTO decisions on international intellectual property

Legal context: The task of harmonization in the IP framework is currently atrisk. This conclusion is shown by the way EU Member States have recentlyenacted Directive 2001/29 on the harmonization of certain aspectsof copyright and related rights on the information society.Particularly, no Member State seems to have considered the interpretationof the three-step test of the Berne Convention given in 2000by the WTO panel, notwithstanding its importance. Moreover, three recent opinions of the French Cour de Cassation,the French Conseil Constitutionnel, and the German Federal Courtof Justice appear not to have endorsed the WTO's interpretationof the three-step test. This scenario confirms the impressionthat the international framework is devoid of any degree ofharmonization. Key points: Although the aims of certainty and predictability in the internationaltrading system are among its main tasks, the World Trade Organizationhas not yet tackled the plight of harmonization, preferringa political approach to smooth conflicts and disputes. Yet,the World Trade Organization has recently taken important stepsthat seem to herald a new attitude. In United States—Sections301-310 of the Trade Act of 1974, the World Trade Organizationdismissed the traditional deference towards national legislations.In addition, at international and national levels, the AlleghenyLudlum and Softwood Lumber cases aligned their interpretationsto that of the World Trade Organization.     

Treaty Interpretation and the WTO Appellate Body Report in US - Gambling: A Critique

‘Before the game begins players should agree on a dictionaryto use in case of a challenge.’ (from the Official Rulesof SCRABBLE®)

Treaty interpretation in WTO law continues to represent a topicof highly theoretical and practical importance. The Panel’sand the Appellate Body’s reports in the recent US –Gambling dispute have critically turned on ascertaining themeaning of the United States’ GATS Schedule and ArticleXVI GATS on the basis of the public international law rulesof treaty interpretation as codified in the Vienna Conventionon the Law of Treaties. The paper’s principal aim is toreview the interpretative approach followed in particular bythe Appellate Body in reaching its decision in US – Gambling.Its main argument is that, although the Appellate Body appearsto be trying to emancipate itself from a rigorous textual approach,it has not yet embraced a holistic approach to treaty interpretation,one in which the treaty interpreter looks thoroughly at allthe relevant elements of the general rule on treaty interpretationpursuant to Article 31(1) of the Vienna Convention.     

Shadows in Paradise - Exploring Non-Refoulement as an Open Concept

The principle of non-refoulement contains a paradox. While stateshave committed to respecting the principle by joining the 1951Refugee Convention and key human rights conventions, its contentis not established in international law. In other words, stateshave committed to a principle the content of which is indeterminate.Since no common definition exists, in practice, national andinternational bodies have extensive powers of discretion togive content to the terms ‘persecution’, ‘torture’,‘degrading’ or ‘cruel’ treatment. Thepurpose of this article is to explore non-refoulement as anopen and ambiguous concept. Acknowledgement of the indeterminacyis important, as open concepts never remain such in practicebut are always issued with content or interpreted. This approachcalls for a further question: how do interpretations come aboutand what kind of factors influence them? The conclusion of thearticle is that different national and international actorspromote their own ‘correct’ interpretations of thiskeystone of refugee protection.     

Community trade mark case law round-up 2006

Legal Context: This article looks at the important decisions of 2006 on theCommunity Trade Mark made by the Court of First Instance, theEuropean Court of Justice and the OHIM. These cases concernthe application of Council Regulation 40/94 on the CommunityTrade Mark, and also preliminary rulings from the European Courtof Justice on the interpretation of Council Directive 89/104(the Trade Mark Directive). Key Points: The volume of case law relating to Community trade marks, notto mention the variety of official languages in which the lawis interpreted, makes it almost impossible for even the conscientiouspractitioner to keep abreast with developments as they occur. This article provides an overview of the shifts in Communitytrade mark practice, in terms of not only the relatively accessiblesubstantive law but also the far more diffuse areas of procedurallaw and Office practice. In seeking to review and explain these shifts, the authors haveadopted a view of the case law that is functional rather thanphilosophical. In doing so, they lay bare the manner in whichthe institutions that administer and adjudicate Community trademark issues interrelate to one another. Practical Significance: Practitioners can quickly find the important decisions from2006 relating to particular articles of the Council Regulation40/94 on the Community Trade Mark. This article provides an overview of the most significant trademark cases decided in 2006 by the European Courts of Justiceand the OHIM Boards of Appeal. The article enables practitionersto access rapidly the key decisions of 2006. The cases discussed concern the application of Council Regulation40/94 on the Community trade mark (‘CTMR’), CommissionRegulation 2868/95 implementing the CTMR (‘CTMIR’),and Council Directive 89/104 (the ‘Trade Mark Directive’).     

Dutch Courts' Universal Jurisdiction over Violations of Common Article 3 qua War Crimes

On 14 October 2005, The Hague District Court sentenced two Afghanasylum seekers for their role and participation in the tortureof civilians during the Afghan War of 1978–1992. The Courtheld in both cases that it had ‘universal jurisdiction’over violations of Common Article 3 of the Geneva Conventionsand that the accused were guilty of ‘torment’ (‘foltering’)and torture as a war crime (‘marteling’). The jurisdictionalbasis relied upon by the Court and the Court's legal reasoningin both cases is open to criticism.     

Civilized Squatting

This article seeks to trace the origins of the requirement thata squatter must have an intention to possess (animus possidendi)in order to establish title by adverse possession. The requirementhas been confirmed by the House of Lords in the recent caseof Pye (Oxford) Ltd v Graham [2003] 1 AC 419. Its origins canreadily be traced back to the decision of the Court of Appealin Littledale v Liverpool College [1900] 1 Ch 19, but thereis little evidence of any need for intention before that case,and no convincing authority is cited for it. Possible explanationsfor the source of this requirement are considered by the article(for instance cases on re-entry by landlords and the so-called‘found chattel’ cases), but these are ultimatelyrejected. The article goes on to suggest that the reason forthis is that the intention requirement was ‘imported’into English law from German Pandectist writers of the nineteenthcentury. It suggests that Littledale was the case in which thishappened. It seeks to support this hypothesis by reference tobiographical details of Lindley MR, who gave the leading judgmentin Littledale, and who not only trained in part in Germany butalso took an active interest in German scholarship of the time.A brief survey of the relevant German sources is undertaken,focusing primarily on the work of Savigny, but also consideringthe rival theory of Jhering. Finally, it tracks the developmentand refinement of the content of animus possidendi, first by19th century legal scholars and then by 20th century judges,to make it ‘fit’ with English property law. It seeksto address the question of whether the animus possidendi requirementis a free-standing element (the ‘strong’ will theory),or whether it is simply implied from the acts of the squatter(the ‘weak’ will theory), and suggests a solutionby reference to the German sources and later English cases.Finally, it considers how the House of Lords decision in Pyereflects the logical culmination of the acceptance of this ‘legaltransplant’ into the common law.     

Planes, Trains and Automobiles: The Impact of the WTO 'Court' on Canada in its First Ten Years

Observers interested in the nature and scope of judicial policy-makingtraditionally focused on the extent to which domestic courtsshaped national policy arrangements. With the emergence of morerobust international tribunals, however, many are raising questionsabout the degree to which foreign judges are influencing domesticlegal regimes. This project addresses one corner of this debateby analysing the impact of the WTO ‘court’ on Canada.The legal challenges have provoked considerable controversyas the country has lost, either in whole or in part, each casebrought against it. Moreover, there has been widespread publicconcern about these disputes as many have involved significantsocial issues. Yet despite the country’s successive defeatsbefore the WTO ‘court’, the policy impact of thetrade tribunal has been relatively modest. Contrary to suggestions,the WTO dispute settlement mechanism has not superimposed someform of neo-liberal order on the Canadian state via its judicialdecision-making process.