CYIL vol. 8 (2017)

ELISA BARONCINI CYIL 8 ȍ2017Ȏ FTA at issue, could not benefit from the defence of Article XXIV of the GATT 1994, the Appellate Body decided there was no “need to consider whether the PRS [was] consistent with the requirements set forth in Article XXIV.” 62 We have already reported that Peru alleged that Guatemala did not act in good faith when starting WTO proceedings, as requested by Articles 3.7 and 3.10 of the DSU. 63 In Peru’s view, Guatemala, by signing the FTA containing the possibility of maintaining Lima’s PRS, implicitly relinquished its right to challenge the Peruvian price range system before the WTO dispute settlement mechanism. The Appellate Body did not exclude the possibility for parties to an FTA to waive their rights under the WTO DSU. However, the Permanent Tribunal strongly stated that “any such relinquishment must be made clearly.” Examining the legal arguments and the text itself of the FTA, which includes a provision declaring that “[i]n the event of any dispute that may arise under this Treaty or under another free trade agreement to which the disputing Parties are party or the WTO Agreement , the complaining Party may choose the forum for settling the dispute,” the WTO adjudicatory body concluded that in the case at issue there was not “a clear stipulation of a relinquishment of Guatemala’s right to have recourse to the WTO dispute settlement system” with the consequence that the claimant could not be “considered as having acted contrary to its good faith obligations under Articles 3.7 and 3.10 of the DSU when it initiated these proceedings to challenge the consistency of the PRS with the WTO covered agreements.” 64 8. Conclusions: relevance of the WTO case-law contribution for the primacy of the multilateral trade system and the positive law solutions in the new mega-regionals The overview of the WTO case-law on RTAs clearly reveals the constant efforts of the Geneva adjudicatory bodies for the primacy of the multilateral trade system. The Marrakesh legal framework continues to consider regional agreements as an important tool to strengthen economic integration, thus allowing derogations from the principle of non-discrimination. Such derogations to the WTO system have nevertheless to happen according to the ad hoc WTO provisions for RTAs -i.e. Article XXIV of the GATT 1994, paragraphs 2(c) and 3(a) of the Enabling Clause, 65 and Article V of the GATS. The Geneva dispute settlement mechanism has thus clearly stated the primacy of WTO law with reference to preferential agreements. In particular the Appellate Body has clearly demonstrated that it is possible to interpret WTO law and RTAs in a harmonious way, i.e. without disregarding regional agreements in favour of WTO law, but reading the two treaty-systems together instead, as they usually share the common principle of sustainable economic development. The WTO jurisprudence seems to have been taken into considerations by the negotiators of the current mega-regionals. In particular, in CETA, the agreement between the European 62 WT/DS457/AB/R, para. 5.117. 63 The recalled DSU provisions say, respectively, that “[b]efore bringing a case, a Member shall exercise its judgement as to whether action under these procedures would be fruitful”; and that “the use of the dispute settlement procedures should not be intended or considered as contentious acts and that, if a dispute arises, all Members will engage in these procedures in good faith in an effort to resolve the dispute.” 64 WT/DS457/AB/R, para. 5.28. 65 Decision on Differential and More Favourable Treatment, Reciprocity, and Fuller Participation of Developing Countries , GATT Document L/4903, BISD 26S/203 (28 November 1979) (Enabling Clause).

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