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Settling NAFTA and WTO Disputes: A Net of Parallel and Contradictory Commitments?

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European Yearbook of International Economic Law 2014

Part of the book series: European Yearbook of International Economic Law ((EUROYEAR,volume 5))

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Abstract

In May 2012, the Appellate Body of the World Trade Organization (WTO) issued a report on the labeling of tuna in a dispute between the United States and Mexico, known as the US—Tuna II (Mexico) case. The case has attracted a fair amount of attention, but not on the fact that it raised, at an early stage, procedural questions of utmost importance for the jurisdiction of the WTO. The article studies this issue of contradictory claims in matter of exclusive jurisdiction. It argues that 20 years of adjudication at the WTO has not solved the issue of conflicting claims. The first part develops the case of NAFTA Article 2005 as an instance of free trade agreement (FTA) containing a claim of exclusive jurisdiction. The second part reviews the obligations of WTO Members in matters of dispute settlement, paying particular attention to the last 20 years of jurisprudence on this issue. The article reaches the conclusion that deep tensions may exist between these obligations. The third part discusses the role of general rules of public international law invoked to resolve such conflicts between parallel and contradictory commitments. The article argues that, contrary to what is often argued in doctrine, the Vienna Convention on the Law of Treaties does not fully solve this conflict.

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Notes

  1. 1.

    WTO Appellate Body, WTO/DS381, United States—Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products (“US — Tuna II”), adopted 16 May 2012.

  2. 2.

    See Ankersmit/Lawrence, The Future of Environmental Labelling: US – Tuna II and the Scope of the TBT, Legal Issues of Economic Integration 39 (2012) 1, p. 127; Trujillo, The Tuna-Dolphin Encore - WTO Rules on Environmental Labeling, ASIL Insights, 16 (2012) 7, p. 1 (7), online: http://www.asil.org/insights120307.cfm (Last consulted: April 9th, 2013).

  3. 3.

    Gao/Lim, Saving the WTO from the Risk of Irrelevance: the WTO Dispute Settlement Mechanism as a ‘Common Good’ for RTA Disputes, Journal of International Economic Law 11 (2008) 4, p. 1.

  4. 4.

    Gao/Lim, The Politics of Competing Jurisdictional Claims in WTO and RTA Disputes. The Role of Private International Law Analogies, in: Broude/Busch/Porges (eds.), The Politics of International Economic Law, 2011, pp. 282–314.

  5. 5.

    Shany, The Competing Jurisdictions of International Courts and Tribunals, 2003, pp. 1–418.

  6. 6.

    The purpose of this work is to clarify the rules governing the relationship between parallel jurisdictions within the international legal order. The approach considers that the foundations of international law stem from the will of states and that their relations are governed by contractual relationships between sovereign states. In this approach, special attention is paid to formal sources of international law and “the fundamental source of law in the WTO is (…) the texts of the relevant covered agreements themselves” (Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (398)). However, the text of the WTO Agreements does not encompass all potential sources of law: “prior practice under the WTO’s predecessor, the General Agreement on Tariffs and Trade (GATT), including reports of GATT dispute settlement panels; WTO practice, particularly reports of dispute settlement panels and the WTO Appellate Body; custom; the teachings of highly qualified publicists; general principles of law; and other international instruments–all contribute to the rapidly growing and increasingly important body of law known as WTO law” (Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (399); on the status of Panels and Appellate Body reports: Matsushita/Schoenbaum/Mavroidis, The World Trade Organization. Law, Practice, and Policy, 2006, 2nd ed., pp. 61–64.)

  7. 7.

    For a discussion of the US-Tuna II case, see Acerbi/Carter/Jardim de Santa Cruz Oliveira, Regional Trade Agreement Choice-of-Forum-Clause as a Procedural Defence Before the WTO Dispute Settlement in United States - Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, Trade and Investment Law Clinic of the Graduate Institute of International and Developmental Studies (2010), p. 1 (33).

  8. 8.

    Other examples include the Softwood Lumber dispute, which is a case of adjudication under NAFTA Chapter 19 and the WTO DSB on similar matters. “In many instances, NAFTA binational panels as well as WTO panels and the Appellate Body have reached different conclusions based on the same administrative determinations issued under very similar provisions” (Gantz, Regional Trade Agreements. Law, Policy and Practice, 2009, p. 55). Most interestingly, the settlement agreement that was found in 2006 between Canada and the United States chose the London Court of International Arbitration as the exclusive forum and precluded any party to bring a dispute arising out of the agreement to NAFTA or the WTO (Softwood Lumber Agreement Between the Government of Canada and the Government of the United States of America, Sep. 12 2006. Online: http://www.international.gc.ca/controls-controles/softwood-bois_oeuvre/other-autres/agreement-accord.aspx (Last consulted: 9th April 2013).

  9. 9.

    Office of the United States Trade Representative Press Release from (November 2009), “United States Initiates NAFTA Dispute with Mexico over Mexico’s Failure to Move Its Tuna-Dolphin Dispute from the WTO to the NAFTA”, online: http://www.ustr.gov/about-us/press-office/press-releases/2009/november/united-states-initiates-nafta-dispute-mexico-over (Last consulted: 9th April 2013). See also WTO, Dispute Settlement Body, “Minutes of Meeting - Held in the Centre William Rappard on April 20th 2009”, WT/DSB/M/267, June 26th 2009, pp. 18–19.

  10. 10.

    Press Release from Office of the United States Trade Representative (November 2009), “United States Initiates NAFTA Dispute with Mexico over Mexico’s Failure to Move Its Tuna-Dolphin Dispute from the WTO to the NAFTA”, on-line: http://www.ustr.gov/about-us/press-office/press-releases/2009/november/united-states-initiates-nafta-dispute-mexico-over (Last consulted: 9th April 2013).

  11. 11.

    Press Release from the Office of the United States Trade Representative (24 September 2010) “United States Requests Dispute Settlement Panel in Tuna Dolphin NAFTA Choice of Forum Dispute”, online: http://www.ustr.gov/about-us/press-office/press-releases/2010/september/united-states-requests-dispute-settlement-panel (Last consulted: 9th April 2013). See also Press Release from Office of the United States Trade Representative (November 2009), “United States Initiates NAFTA Dispute with Mexico over Mexico’s Failure to Move Its Tuna-Dolphin Dispute from the WTO to the NAFTA”, online: http://www.ustr.gov/about-us/press-office/press-releases/2009/november/united-states-initiates-nafta-dispute-mexico-over (Last consulted: 9th April 2013). Note that, contrary to this statement, the NAFTA Status Report of Dispute Settlements presents no trace of any dispute related to the Tuna-Dolphin Dispute, online: http://www.nafta-sec-alena.org/en/StatusReportResults.aspx (Last consulted: 9th April 2013).

  12. 12.

    According to the USTR spokesperson: “This is an important right that has not previously been invoked by a NAFTA party, and defending our right under this clause preserves and strengthens the NAFTA dispute settlement regime.” Debbie Mesloh, USTR spokesperson cited by Press Release from Office of the United States Trade Representative (November 2009), “United States Initiates NAFTA Dispute with Mexico over Mexico’s Failure to Move Its Tuna-Dolphin Dispute from the WTO to the NAFTA”, on-line: http://www.ustr.gov/about-us/press-office/press-releases/2009/november/united-states-initiates-nafta-dispute-mexico-over (Last consulted: 9th April 2013).

  13. 13.

    NAFTA Chapter 20 incorporates the provisions generally applicable in disputes between the parties unless a dispute is covered by a specific provision (De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 320–321). On NAFTA Chapter 20: De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), pp. 317–332; Graewert, Conflicting Laws and Jurisdiction in the Dispute Settlement Process of Regional Trade Agreements and the WTO, Contemporary Asia Arbitration Journal 1 (2008) 2, p. 287 (305–307); Huerta-Goldman, Mexico in the WTO and NAFTA: Litigating International Trade Disputes, 2009, p. 13 and pp. 203–206.

  14. 14.

    “Subject to paragraphs 2, 3 and 4, disputes regarding any matter arising under both this Agreement and the General Agreement on Tariffs and Trade, any agreement negotiated thereunder, or any successor agreement (GATT), may be settled in either forum at the discretion of the complaining Party” (NAFTA, Art. 2005.1). This article is entitled GATT Dispute Settlement. See De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 321.

  15. 15.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), pp. 321–322.

  16. 16.

    Paragraph 4 of NAFTA Article 2005 provides: “In any dispute referred to in paragraph 1 that arises under Section B of Chapter Seven (Sanitary and Phytosanitary Measures) or Chapter Nine (Standards-Related Measures): (a) concerning a measure adopted or maintained by a Party to protect its human, animal or plant life or health, or to protect its environment, and (b) that raises factual issues concerning the environment, health, safety or conservation, including directly related scientific matters, where the responding Party requests in writing that the matter be considered under this Agreement, the complaining Party may, in respect of that matter, thereafter have recourse to dispute settlement procedures solely under this Agreement.” The conditions for the imposition of trade restrictions vary under NAFTA and the WTO (Oñate Acosta/Medina Casas, L’articulation des modes de règlement des différends entre l’OMC et l’ALENA, Revista Columbiana de Derecho Internacional 6 (2005), p. 11 (32)).

  17. 17.

    Shany, The Competing Jurisdictions of International Courts and Tribunals, 2003, p. 209.

  18. 18.

    See also Acerbi/Carter/Jardim de Santa Cruz Oliveira, Regional Trade Agreement Choice-of-Forum-Clause as a Procedural Defence Before the WTO Dispute Settlement in United States - Measures Concerning the Importation, Marketing and Sale of Tuna and Tuna Products, Trade and Investment Law Clinic of the Graduate Institute of International and Developmental Studies (2010), p. 1 (33).

  19. 19.

    On extraterritoriality, see Vranes, Trade and the Environment: Fundamental Issues in International and WTO Law, 2009, pp. 95–100.

  20. 20.

    Oñate Acosta/Medina Casas, L’articulation des modes de règlement des différends entre l’OMC et l’ALENA, Revista Columbiana de Derecho Internacional 6 (2005), p. 11 (28).

  21. 21.

    Understanding on Rules and Procedures Governing the Settlement of Disputes (Marrakesh, Morocco, April 15th 1994), Marrakesh Agreement Establishing the World Trade Organization, Annex 2, THE LEGAL TEXTS: THE RESULTS OF THE URUGUAY ROUND OF MULTILATERAL TRADE NEGOTIATIONS 354 (1999), 1869 U.N.T.S. 401, 33 I.L.M. 1226 (1994) [hereinafter DSU].

  22. 22.

    DSU, Art. 23. Paragraph 1 states that “When Members seek the redress of a violation of obligations or other nullification or impairment of benefits under the covered agreements or an impediment to the attainment of any objective of the covered agreements, they shall have recourse to, and abide by, the rules and procedures of this Understanding” (DSU, Art. 23.1). DSU Article 3.2 states that the DSB must interpret WTO Agreements “in accordance with customary rules of interpretation of public international law” (DSU, Art. 3.2). Concretely, WTO Panels relied on articles 31 and 32 of the Vienna Convention on the Law of Treaties. For more details, see Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (406); WTO Appellate Body, WT/DS2/AB/R, United States—Standards for Reformulated and Conventional Gasoline (“US—Gasoline”), p. 16.

  23. 23.

    DSU, Art. 6.1, Art. 16.4, Art. 17.14, and Art. 22.6.

  24. 24.

    DSU, Art. 23.2(a).

  25. 25.

    Canal-Forgues, Le règlement des différends à l’OMC, 2003, pp. 30–31. See WTO Panel, WT/DS301/R, European Communities-Measures Affecting Trade in Commercial Vessels (“EC-Commercial Vessels”), para. 7.193.

  26. 26.

    NAFTA, Art. 2019.3. See De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 324; Sebastian, The law of permissible WTO retaliation, in: Bown/Pauwelyn (eds.), The Law, Economics and Politics of Retaliation in WTO Dispute Settlement, 2010, p. 89 (89–127).

  27. 27.

    DSU, Art. 3.2.

  28. 28.

    DSU, Art. 3.2 (emphasis added).

  29. 29.

    WTO Dispute Settlement Body, “Minutes of Meeting - Held in the Centre William Rappard on April 20th 2009”, WT/DSB/M/267, June 26th 2009, p. 19.

  30. 30.

    DSU, Art. 10.1.

  31. 31.

    DSU, Art. 10.2 and Art. 10.4.

  32. 32.

    Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (10).

  33. 33.

    While drafting GATT Article XXIV: 12, the “founding fathers” of the GATT 1947 had no idea of the tremendous growth FTA would experience (De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 251; Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (12)). The principles laid down in Article XXIV need to be interpreted in the broader context of rights and obligations of the WTO, including third party rights. On the effect of third party participation to complaints, see Busch/Reinhardt, Three’s a Crowd. Third Parties and WTO Dispute Settlement, World Politics 58 (2006) 3, p. 446 (446–477).

  34. 34.

    DSU, Art. 5 and Art. 25.

  35. 35.

    Third party participation varies according to the legal basis invoked for introducing a complaint (GATT Article XXIII:1 or Article XXII).

  36. 36.

    Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (10).

  37. 37.

    See the US—Softwood Lumber V case (WTO Appellate Body, WT/DS264/AB/R, United States—Final Dumping Determination on Softwood Lumber from Canada (“US—Softwood Lumber V”)). See Anderson, Can Someone Please Settle this Dispute? Canadian Softwood Lumber and the Dispute Settlement Mechanisms of the NAFTA and the WTO, The World Economy 29 (2006) 5, p. 585.

  38. 38.

    Vienna Convention on the Law of Treaties, Art. 31.3(b).

  39. 39.

    Matsushita/Schoenbaum/Mavroidis, The World Trade Organization. Law, Practice, and Policy, 2006, 2nd ed., pp. 582–589.

  40. 40.

    On the notion of GATT acquis: Cameron/Gray, Principles of International Law in the WTO Dispute Settlement Body, The International and Comparative Law Quarterly 50 (2001) 2, p. 248 (273).

  41. 41.

    Matsushita/Schoenbaum/Mavroidis, The World Trade Organization. Law, Practice, and Policy, 2006, 2nd ed., pp. 111–112.

  42. 42.

    DSU, Art. 3.2. This article is counterbalanced by the principle that decisions of the DSB cannot modify the substantive rights and obligations contained in the WTO agreements (DSU, Art. 3.5).

  43. 43.

    Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (400). The WTO judiciary adopts a system of “precedents” analogous to the ICJ, where the Court refers to its earlier decisions but is not legally compelled to follow them. This method carries practical consequences, since a reasoning departing from the reasoning of previous Panels implicitly bears the “burden of proof” (Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (402–403)).

  44. 44.

    The existence of implied powers inherent to international courts is widely accepted. See Shaw, International Law, 2003, 5th ed., p. 1197; ICJ, Nuclear Tests (Australia v. France), Judgment, I.C.J. Rep. 1974 (Dec. 20), pp. 259–260.

  45. 45.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”).

  46. 46.

    Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (403–406). According to Palmeter and Mavroidis, “The Appellate Body is likely to be even more prone than panels to follow its own prior decisions. This is because the Appellate Body is effectively a standing judicial body, while panels are not” (Palmeter/Mavroidis, The WTO Legal System: Sources of Law, American Journal of International Law 92 (1998) 3, p. 398 (405)).

  47. 47.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 45.

  48. 48.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 45. In this case, the Appellate Body referred to WTO Appellate Body, WT/DS136/AB/R, WT/DS162/AB/R, United States—Anti-Dumping Act of 1916, Complaint by the European Communities, Complaint by Japan (“US—1916 Act”), para. 54, note n° 30. See also WTO Appellate Body, WT/DS132/AB/RW, Mexico—Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States—Recourse to Article 21.5 of the DSU by the United States (“Mexico—Corn Syrup (Article 21.5—US)”), para. 53.

  49. 49.

    On the Mexico - Soft Drinks case: Lavranos, On the Need to Regulate Competing Jurisdictions between International Courts and Tribunals, EUI Working Paper MWP 14 (2009), p. 1 (22–26). Available at: http://ssrn.com/abstract=1418518; Graewert, Conflicting Laws and Jurisdiction in the Dispute Settlement Process of Regional Trade Agreements and the WTO, Contemporary Asia Arbitration Journal 1 (2008) 2, p. 287 (307–308).

  50. 50.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 49 and note n° 97; WTO Appellate Body, WT/DS132/AB/RW, Mexico—Anti-Dumping Investigation of High Fructose Corn Syrup (HFCS) from the United States—Recourse to Article 21.5 of the DSU by the United States (“Mexico—Corn Syrup (Article 21.5—US)”), para. 36.

  51. 51.

    WTO Appellate Body , WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 51. Huerta-Goldman therefore considers: “This suggests that from the WTO perspective, rules of double jurisdiction under the FTA do not easily amend the DSU process when it has been triggered” (Huerta-Goldman, Mexico in the WTO and NAFTA: Litigating International Trade Disputes, 2009, p. 203).

  52. 52.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 52.

  53. 53.

    WTO Panel, WT/DS152/R, United States—Sections 301–310 of the Trade Act 1974 (“US—Section 301 Trade Act”); Lowenfeld, International Economic Law, 2nd ed., 2008, pp. 201–202.

  54. 54.

    Luff, Le droit de l’Organisation Mondiale du Commerce, 2004, pp. 967–969.

  55. 55.

    WTO Panel, WT/DS152/R, United States—Sections 301–310 of the Trade Act 1974 (“US—Section 301 Trade Act”), para. 7.35.

  56. 56.

    WTO Panel, WT/DS152/R, United States—Sections 301–310 of the Trade Act 1974 (“US—Section 301 Trade Act”), para. 7.43 (emphasis added).

  57. 57.

    WTO Panel, WT/DS152/R, United States—Sections 301–310 of the Trade Act 1974 (“US—Section 301 Trade Act”), paras. 7.59, 7.75 (emphasis added) and 7.94.

  58. 58.

    WTO Panel, WT/DS165/R, United States—Import Measures on Certain Products from the European Communities (“US—Certain EC Products”).

  59. 59.

    WTO Panel, WT/DS165/R, United States—Import Measures on Certain Products from the European Communities (“US—Certain EC Products”), para. 6.17.

  60. 60.

    Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 443–450.

  61. 61.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 44.

  62. 62.

    WTO Panel, WT/DS241/R, Argentina—Definitive Anti-Dumping Duties on Poultry from Brazil (“Argentina—Poultry Anti-Dumping Duties”). See Henkels, Overcoming jurisdictional isolationism at the WTO-FTA nexus: a potential approach for the WTO, European Journal of International Law 19 (2008) 3, p. 571 (575).

  63. 63.

    Olivos Protocol for the Settlement of Disputes in MERCOSUR (Olivos, February 18th 2002), 2251 U.N.T.S. A-37341, 42 I.L.M. 2, entered into force on January 1st 2004 [hereinafter Olivos Protocol]. See Lucarelli de Salvio/Gama Sá Cabral, Considerations on the MERCOSUR Dispute Settlement Mechanism and the Impact of its Decisions in the WTO Dispute Resolution System, Journal of World Trade 42 (2008) 6, p. 1013 (1020–1022).

  64. 64.

    WTO Panel, WT/DS241/R, Argentina—Definitive Anti-Dumping Duties on Poultry from Brazil (“Argentina—Poultry Anti-Dumping Duties”), para. 7.38. See Brasilia Protocol for the Settlement of Disputes (Brasilia, December 17th 1991), 2145 U.N.T.S. A-37341, entered into force on April 22nd 1993.

  65. 65.

    WTO Panel, WT/DS241/R, Argentina—Definitive Anti-Dumping Duties on Poultry from Brazil (“Argentina—Poultry Anti-Dumping Duties”), para. 7.34. For a discussion of the principle of good faith and a distinction between “good faith standard” and “good faith obligations”, see Panizzon, Good Faith in the Jurisprudence of the WTO. The Protection of Legitimate Expectations, Good Faith Interpretation and Fair Dispute Settlement, 2006, pp. 273–323.

  66. 66.

    WTO Appellate Body, WT/DS217/AB/R, WT/DS234/AB/R, United States—Continued Dumping and Subsidy Offset Act of 2000 (“US—Offset Act (Byrd Amendment)”), para. 297.

  67. 67.

    The jurisdiction of a panel to decide on the principle of good faith is called into question by some authors. See Luff, Le droit de l’Organisation Mondiale du Commerce, 2004, p. 815.

  68. 68.

    WTO Panel, WT/DS241/R, Argentina—Definitive Anti-Dumping Duties on Poultry from Brazil (“Argentina—Poultry Anti-Dumping Duties”), para. 7.38. The Panel noted that the Protocol of Olivos is not applicable, since it does not cover disputes introduced under the Protocol of Brasilia (WTO Panel, WT/DS241/R, Argentina—Definitive Anti-Dumping Duties on Poultry from Brazil (“Argentina—Poultry Anti-Dumping Duties”), para. 7.38).

  69. 69.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 54.

  70. 70.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 46.

  71. 71.

    On this point, Davey and Sapir sustain that the application of res judicata is not possible for a WTO panel: “The setting in which the cases arose would be different, and to the extent that proper interpretation requires consideration of context and of the object and purpose of the agreement, it is inevitable that the WTO agreement and the other agreement would not be identical in those respects” (Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (9–10) and note n° 52). A fortiori, if the res judicata principle is not applicable, the existence of proceedings conducted in parallel should have no effect. As such, the principle of judicial comity is irrelevant de lege lata in international law.

  72. 72.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 54.

  73. 73.

    The Appellate Body concludes: “For all these reasons, we uphold the Panel’s conclusion (…) that ‘under the DSU, it ha[d] no discretion to decline to exercise its jurisdiction in the case that ha[d] been brought before it’. Having upheld this conclusion, we find it unnecessary to rule in the circumstances of this appeal on the propriety of exercising such discretion.” (WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 57.). Luff notes that “l’Organe d’appel, contrairement aux groupes spéciaux, est tenu de statuer sur toutes les allégations d’erreur qui lui ont été soumises, et ce même si à un stade intermédiaire de son raisonnement il dispose de suffisamment d’éléments pour infirmer le rapport du groupe spécial” (Luff, Le droit de l’Organisation Mondiale du Commerce, 2004, p. 913).

  74. 74.

    WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico- Soft Drinks”), para. 54.

  75. 75.

    Gantz, Regional Trade Agreements. Law, Policy and Practice, 2009, p. 53.

  76. 76.

    WTO, Dispute Settlement Body, “Minutes of Meeting - Held in the Centre William Rappard on April 20th 2009”, WT/DSB/M/267, June 26th 2009, p.18.

  77. 77.

    Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (6). See the Appellate Body: “We see no basis in the DSU for panels and the Appellate Body to adjudicate non-WTO disputes.” (WTO Appellate Body, WT/DS308/AB/R, Mexico—Tax Measures on Soft Drinks and Other Beverages (“Mexico—Soft Drinks”), para. 56). See also Cameron/Gray, Principles of International Law in the WTO Dispute Settlement Body, The International and Comparative Law Quarterly 50 (2001) 2, p. 248 (252–256); Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 264–274.

  78. 78.

    WTO Appellate Body, WT/DS27/AB/R, European Communities—Regime for the Importation, Sale and Distribution of Bananas (“EC—Bananas III”). The Panel had to consider the Lomé Convention to clarify the scope of the Lomé Waiver. On the EC—Bananas III case: Josling, Bananas and the WTO: Testing the New Dispute Settlement Process, in: Josling/Taylor (eds.), Banana Wars. The Anatomy of a Trade Dispute, 2003, pp. 169–194.

  79. 79.

    Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (6); Henkels, Overcoming jurisdictional isolationism at the WTO-FTA nexus: a potential approach for the WTO, European Journal of International Law 19 (2008) 3, p. 571 (571–599).

  80. 80.

    Article 31 (3) c) of the Vienna Convention on the Law of Treaties allows the panels to consider the law governing relations between the parties, including non-WTO law, for the interpretation of their obligations (Graewert, Conflicting Laws and Jurisdiction in the Dispute Settlement Process of Regional Trade Agreements and the WTO, Contemporary Asia Arbitration Journal 1 (2008) 2, p. 287 (296)).

  81. 81.

    WTO Appellate Body, WT/DS2/AB/R, United States—Standards for Reformulated and Conventional Gasoline (“US—Gasoline”), p. 16. In the Korea—Various Measures on Beef case, the Panel used bilateral agreements binding Korea, indicating that the Panel used these agreements “strictly for the purpose of interpreting an ambiguous WTO provision” (WTO Panel, WT/DS161/R, Korea—Measures Affecting Imports of Fresh, Chilled and Frozen Beef (“Korea—Various Measures on Beef”), para. 539). See Tan Son, Towards a Compatible Interaction between Dispute Settlement under the WTO and Regional Trade Agreements, MqJlBLaw 6 (2008) 5, p. 113 (128).

  82. 82.

    Mitchell, Legal Principles in WTO Disputes, 2008, pp. 133–137; Cameron/Gray, Principles of International Law in the WTO Dispute Settlement Body, The International and Comparative Law Quarterly 50 (2001) 2, p. 248 (293).

  83. 83.

    Trachtman, Jurisdiction in WTO Dispute Settlement, in: Yerxa/Wilson (eds.), Key Issues in the WTO Dispute Settlement. The first ten years, 2005, p. 140.

  84. 84.

    Henkels, Overcoming jurisdictional isolationism at the WTO-FTA nexus: a potential approach for the WTO, European Journal of International Law 19 (2008) 3, p. 571 (3).

  85. 85.

    Davey and Sapir consider that “it can be argued that the WTO system need not and should not concern itself with protecting claims of exclusive jurisdiction made by other systems, especially given that to do so could undermine the WTO system” (Davey/Sapir, The Soft Drinks Case: The WTO and Regional Agreements, World Trade Review 8 (2009) 1, p. 5 (5)).

  86. 86.

    DSU, Art. 1.1. In the EC-Commercial Vessels case, the Panel said: “We note in this respect that it is clear from Article 1 of the DSU that the DSU not only protects rights and obligations under a covered agreement but also applies to disputes concerning rights and obligations under the DSU” (WTO Panel, WT/DS301/R, European Communities—Measures Affecting Trade in Commercial Vessels (“EC—Commercial Vessels”), para. 7.206).

  87. 87.

    On the notion of successive, parallel, and contradictory commitments, Roucounas, Engagements parallèles et contradictoires, R.C.A.D.I. 207 (1987) tome VI, pp. 35–41.

  88. 88.

    Borgen, Resolving Treaty Conflicts, The George Washington International Law Review 37 (2005) 3, p. 573 (587–590); Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 240–244. This presumption serves the purpose of solving apparent conflicts: “interpretation of the terms in question may resolve apparent conflicts; it cannot resolve genuine conflicts” (Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, p. 272).

  89. 89.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 257–258. On the relation to other agreements, see NAFTA Article 103.1: “The Parties affirm their existing rights and obligations with respect to each other under the General Agreement on Tariffs and Trade and other agreements to which such Parties are party” (NAFTA, Art. 103.1). According to Shany: “Although NAFTA refers to the GATT 1947 and not to the WTO or GATT 1994, it seems to be common view that the WTO structures have for the purposes of NAFTA replaced the old GATT framework” (Shany, The Competing Jurisdictions of International Courts and Tribunals, 2003, p. 208, note n° 99).

  90. 90.

    NAFTA Article 103.2 acknowledges the possibility of incompatibility between NAFTA and other obligations. The article explicitly provides the hierarchical superiority of NAFTA in the event of a conflict of obligations: “In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement” (NAFTA, Art. 103.2). See De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 257.

  91. 91.

    Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, p. 325.

  92. 92.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 366. On the concept of conflict of obligations: Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 6–10.

  93. 93.

    On the customary nature of Article 30: Paolillo, Article 30, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, pp. 1247–1283 ; Orakhelashvili, Article 30, in: Corten/Klein (eds.), The Vienna Conventions on the Law of Treaties: A Commentary, 2011, p. 764 (764–801). For a detailed and critical analysis of Article 30: Roucounas, Engagements parallèles et contradictoires, R.C.A.D.I. 207 (1987) tome VI, pp. 79–104; Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 361–385.

  94. 94.

    Vienna Convention on the Law of Treaties, Art. 30.1.

  95. 95.

    The issue of “same subject matter” also arises in relation to the principle of “res judicata” (Huerta-Goldman, Mexico in the WTO and NAFTA: Litigating International Trade Disputes, 2009, p. 205). The principle of “res judicata” requires three conditions: same parties, same subject matter, and same legal claim. Out of these conditions, “same subject matter” is the most complex. Huerta-Goldman asks, “When does a measure stop being that measure and turn into a new measure? Would a measure be a law or one of its articles? What about non-continuous acts? Are they different measures or the same measure?” He adds that the definition of a “measure is shaped in a certain way by the complainant based on the acts or omissions by the defendant” (Huerta-Goldman, Mexico in the WTO and NAFTA: Litigating International Trade Disputes, 2009, p. 205).

  96. 96.

    Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, p. 320.

  97. 97.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), pp. 255–256; Shany, The Competing Jurisdictions of International Courts and Tribunals, 2003, p. 208.

  98. 98.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), pp. 255–256.

  99. 99.

    Tan Son, Towards a Compatible Interaction between Dispute Settlement under the WTO and Regional Trade Agreements, MqJlBLaw 6 (2008) 5, p. 113 (127).

  100. 100.

    Vienna Convention on the Law of Treaties, Art. 30.1.

  101. 101.

    Vienna Convention on the Law of Treaties, Art. 30.2. The term ‘predominance’ relates to the application and not the substantive value of treaties. Indeed, if, for Lauterpacht, the validity of a treaty was compromised when its implementation imposed the violation of previously established treaty obligations (Paolillo, Article 30, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, p. 1250), the Third Rapporteur adopted a radical turn away from this approach; the debate was no more about the validity, or invalidity, of the treaty but about possible rules of priority for the application of one treaty over another. Waldock made clear that “Accordingly, it hardly seems justifiable to provide, as a special case, that a later treaty shall be void if it conflicts with a prior treaty which contains an express prohibition against inconsistent bilateral agreements. An undertaking in a treaty not to enter into a conflicting treaty does not, it is thought, normally affect the treaty-making capacity of the States concerned, but merely places them under a contractual obligation not to exercise their treaty-making powers in a particular way. A breach of this obligation engages their responsibility; but the later treaty which they conclude is not a nullity” (Second Report by Sir H. Waldock, doc. A/CN.4/156 and add 1–3 du 20 mars, 10 avril, 30 avril et 5 juin 1963, vol. II article 14, para. 19, mentioned by Paolillo, Article 30, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, p. 1254).

  102. 102.

    Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, p. 321. Pauwelyn confirms the little value of conflict clause dealing with future treaties (Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 335–336).

  103. 103.

    See above discussion on NAFTA Article 103.2.

  104. 104.

    NAFTA entered into force one year prior to the WTO Agreements (Huerta-Goldman, Mexico in the WTO and NAFTA: Litigating International Trade Disputes, 2009, p. 200.).

  105. 105.

    Vienna Convention on the Law of Treaties, Art. 41.1.

  106. 106.

    Paragraph 5 specifically refers to the provisions of Article 41 of the Vienna Convention on the Law of Treaties, which deals with multilateral treaties. This paragraph also specifies that “Paragraph 4 is without prejudice to article 41, or to any question of the termination or suspension of the operation of a treaty under article 60 or to any question of responsibility which may arise for a State from the conclusion or application of a treaty the provisions of which are incompatible with its obligations towards another State under another treaty” (Vienna Convention on the Law of Treaties, Art. 30.5).

  107. 107.

    Paragraph 1 of Article 41 of the Vienna Convention on the Law of Treaties provides: “Two or more of the parties to a multilateral treaty may conclude an agreement to modify the treaty as between themselves alone if: (a) the possibility of such a modification is provided for by the treaty; or (b) the modification in question is not prohibited by the treaty and: (i) does not affect the enjoyment by the other parties of their rights under the treaty or the performance of their obligations; (ii) does not relate to a provision, derogation from which is incompatible with the effective execution of the object and purpose of the treaty as a whole.”

  108. 108.

    See also Pauwelyn, A Typology of Multilateral Treaty Obligations: Are WTO Obligations Bilateral or Collective in Nature?, European Journal of International Law 14 (2003) 5, p. 907 (907–951).

  109. 109.

    Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, pp. 326–330. This typology goes back to the preliminary discussions in the International Law Commission on Article 30. Fitzmaurice’s intention was to establish exceptions to which the rule of invalidity would apply (Paolillo, Article 30, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, p. 1252). He distinguished reciprocal treaties—treaties that provide a set of rights and obligations towards other parties—from non-reciprocal multilateral treaties. For the former, the general principle of the validity of the two incompatible treaties would have been applied; for the latter, Fitzmaurice distinguished the rights and obligations of interdependent type (where a fundamental breach by one party allows the default of the other parties—as for a disarmament treaty) and of integral type (where the performance of the obligation is intrinsic and does not depend on the fulfillment of other parties’ obligations—as for humanitarian law conventions) (Paolillo, Article 30, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, p. 1253).

  110. 110.

    In the final version of the Vienna Convention on the Law of Treaties, inter se agreements are not nullified, as Fitzmaurice would have liked, but they are simply regarded as incompatible with the multilateral treaty, and the parties to the inter se agreement engage their international responsibility (Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, p. 330. On inter se agreements within the WTO context: Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 298–313).

  111. 111.

    Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, p. 327.

  112. 112.

    Fitzmaurice/Elias, Contemporary Issues in the Law of Treaties, 2005, p. 327.

  113. 113.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 258.

  114. 114.

    Gao/Lim, Saving the WTO from the Risk of Irrelevance: the WTO Dispute Settlement Mechanism as a ‘Common Good’ for RTA Disputes, Journal of International Economic Law 11 (2008) 4, p. 1 (21).

  115. 115.

    Gao/Lim, Saving the WTO from the Risk of Irrelevance: the WTO Dispute Settlement Mechanism as a ‘Common Good’ for RTA Disputes, Journal of International Economic Law 11 (2008) 4, p. 1 (20).

  116. 116.

    Yerxa, The Power of the WTO dispute settlement, in: Yerxa/Wilson (eds.), Key Issues in the WTO Dispute Settlement. The first ten years, 2005, p. 4.

  117. 117.

    Pauwelyn, Conflict of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 78–87. In the present article, the question is not about the status of WTO obligations in general but is limited to obligations directly related to the settlement of trade disputes.

  118. 118.

    Rigaux/Simon, Article 41, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, pp. 1576–1577.

  119. 119.

    Vienna Convention on the Law of Treaties, Art. 41.1(b) 2).

  120. 120.

    Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 391–411. Pauwelyn considers that, in some cases, an international court or tribunal would need to pronounce a non liquet if conflict resolution rules do not solve the conflict (Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, pp. 419–422).

  121. 121.

    Sinclair, The Vienna Convention on the Law of Treaties, 1984, 2nd ed., p. 93, cited by Paolillo, Article 30, in: Corten/Klein (eds.), Les Conventions de Vienne sur le droit des traités. Commentaire article par article, Vol II, 2006, p. 1249.

  122. 122.

    Henkels, Overcoming jurisdictional isolationism at the WTO-FTA nexus: a potential approach for the WTO, European Journal of International Law 19 (2008) 3, p. 571 (578); Seidl-Hohenveldern, Hierarchy of Treaties, in: Klabbers/Lefeber (eds.), Essays on the Law of Treaties. A collection of Essays in Honour of Bert Vierdag, 1998, p. 10.

  123. 123.

    De Mestral, The North American Free Trade Agreement: a Comparative Analysis, R.C.A.D.I. 275 (2001), p. 322.

  124. 124.

    Trachtman, Jurisdiction in WTO Dispute Settlement, in: Yerxa/Wilson (eds.), Key Issues in the WTO Dispute Settlement. The first ten years, 2005, p. 140.

  125. 125.

    Graewert, Conflicting Laws and Jurisdiction in the Dispute Settlement Process of Regional Trade Agreements and the WTO, Contemporary Asia Arbitration Journal 1 (2008) 2, p. 287 (297). Graewert mentions the position of the Panel in the India—Autos case, where the Panel developed its reasoning so as to avoid a ruling on the prohibition of recourse to the WTO contained in an agreement between India and the European Communities (WTO Panel, WT/DS146/R, WT/DS175/R, India — Measures Affecting Trade and Investment in the Motor Vehicle Sector (“India—Autos”), para. 7.116).

  126. 126.

    Tan Son, Towards a Compatible Interaction between Dispute Settlement under the WTO and Regional Trade Agreements, MqJlBLaw 6 (2008) 5, p. 113 (127).

  127. 127.

    Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, p. 382. Pauwelyn writes: “Thus, although the inter se agreement is not invalid or void under the law of treaties, as a result of its illegality grounded in Art. 41 or Art. 58 and the law of state responsibility, the inter se agreement must be ended and cannot, therefore, be enforced, not even as between the parties to it” (Pauwelyn, Conflicts of Norms in Public International Law. How WTO Law Relates to Other Rules of International Law, 2003, p. 313). Note that this would apply only to inter se agreement in a strict sense.

  128. 128.

    Liability may arise not only because of the breach of obligations due to states’ action or inaction but also because of the mere conclusion of a treaty in breach of their obligations. See Rosenne, Essays on International Law and Practice, 2007, pp. 515–531.

Acknowledgments

The author is thankful to Nicolas Angelet for thoughtful comments on an early version of this work and to the editors of the Yearbook for their useful remarks.

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  1. Institute for European Studies – ULB, Université libre de Bruxelles, Av. F.D. Roosevelt 39 – CP 172, 1050, Bruxelles, Belgium

    Josué F. Mathieu

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  1. European Law, European and International Economic Law, University of Passau Chair for Constitutional and Administrat, Passau, Germany

    Christoph Herrmann

  2. Chair for Public Law and International Law, University of Erlangen-Nürnberg, Erlangen, Germany

    Markus Krajewski

  3. Chair for Public Law, European and International Law, Leuphana University Lüneburg, Lüneburg, Germany

    Jörg Philipp Terhechte

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Mathieu, J.F. (2013). Settling NAFTA and WTO Disputes: A Net of Parallel and Contradictory Commitments?. In: Herrmann, C., Krajewski, M., Terhechte, J. (eds) European Yearbook of International Economic Law 2014. European Yearbook of International Economic Law, vol 5. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-40913-4_10

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