CYIL vol. 8 (2017)

CYIL 8 ȍ2017Ȏ

FROM TURKEY – TEXTILES

TO PERU – ADDITIONAL DUTY …

jurisdiction by Peru on the basis of the fact that the invoked FTA was not yet in force, the Appellate Body preferred to take the chance of clarifying the delicate issue of the relation between FTAs and the WTO system, providing for highly important indications on the way in which RTAs have to be formulated in order to be WTO compatible. Peru claimed that, even if the FTA was not in force, the Marrakesh Agreements had to be interpreted in light of such Agreement, as the latter would nevertheless represent “relevant rules of international law applicable in the relations between the [WTO] parties” to be taken into account when interpreting multilateral trade rules, according to what indicated by Article 31(3) let. c) of the 1969 Vienna Convention on the Law of Treaties, 59 the provision codifying international customary law on treaty interpretation, recalled by Article 3, para. 2 of the DSU. The Appellate Body rejected Peru arguments, rightly observing that “such an approach would suggest that WTO provisions can be interpreted differently, depending on the Members to which they apply and on their rights and obligations under an FTA to which they are parties.” 60 The defendant then observed that the Peru / Guatemala FTA could be qualified as a bilateral agreement modifying the WTO obligations on PRS, as allowed by Article 41 of the 1969 Vienna Convention, concerning the possibility for two or more of the parties to a multilateral treaty to modify the latter as between themselves through an ad hoc agreement concluded among them. The Appellate Body did not accept this argument as well. The AB judges in fact observed that the recalled Article 41 is superseded by the ad hoc WTO provisions concerning the exceptions for regional trade agreements: … the WTO Agreements contain specific provisions addressing amendments, waivers, or exceptions for regional trade agreements …, which prevail over the general provisions of the Vienna Convention, such as Article 41. This is particularly true in the case of FTAs considering that Article XXIV of the GATT 1994 specifically permits departures from certain WTO rules in FTAs. However, Article XXIV conditions such departures on the fulfilment of the rule that the level of duties and other regulations of commerce, applicable in each of the FTA members to the trade of non-FTA members, shall not be higher or more restrictive than those applicable prior to the formation of the FTA. In the light of the above, we consider that the proper routes to assess whether a provision in an FTA that may depart from certain WTO rules is nevertheless consistent with the covered agreements are the WTO provisions that permit the formation of regional trade agreements – namely: Article XXIV of the GATT 1994, or the Enabling Clause … as far as agreements between developing countries are concerned, in respect of trade in goods; and Article V of the General Agreement on Trade in Services (GATS) in respect of trade in services. 61 However, as Peru did not invoke GATT Article XXIV to justify its PRS, and as both disputants agreed during the DSU hearings that an agreement not yet in force, like the prior approval of the Congress. Peru also declared that it did not exclude expressing its consent to be bound by the FTA, “provided that the balance agreed between Peru and Guatemala therein [was] respected,” and that it was not proceeding “with the exchange of notifications at this time since the case brought by Guatemala has created uncertainty with regard to the existence of the balance negotiated.” Cfr. WT/DS457/R, para. 7.33. 59 United Nations, Vienna Convention on the Law of Treaties , 23 May 1969, United Nations, Treaty Series, vol. 1155, p. 331, available at: http://www.refworld.org/docid/3ae6b3a10.html (accessed 19 January 2017). 60 WT/DS457/AB/R, para. 5.106. 61 WT/DS457/AB/R, paras. 5.112 and 5.113.

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