I. INTRODUCTION
Within the universe of international institutions, the WTO exists in a special and particular context. It provides a forum for the negotiation of trade agreements that are enforced through its unique dispute settlement system. The trade agreements that are clarified and enforced by the WTO's dispute settlement mechanism can be characterized broadly as three interrelated regimes regulating trade measures from similar, yet divergent perspectives. These three regulatory regimes concern trade in goods, trade in services, and trade-related aspects of intellectual property rights.
The potential for conflict between the regulatory pillars of the WTO is heightened by several factors. First, the increasing complexity of trade measures can result in a single measure affecting simultaneously rights and obligations under the General Agreement on Tariffs and Trade 1994 (GATT), the General Agreement on Trade in Services (GATS) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Thus, the boundaries between multilateral rules regulating trade in goods, trade in services and trade-related aspects of intellectual property rights can become blurred. Second, the nature of the Marrakesh Agreement Establishing the World Trade Organization (WTO Agreement) as a single undertaking appears to demand cumulative compliance with all covered agreements.
The absence of a negotiated conflict rule in the WTO Agreement defining the relationship between its different annexes leaves the relationship between the GATT, GATS and TRIPS formally undefined. As a result, the precise contours of the relationship between the norms contained in these agreements are left to be defined through the WTO dispute settlement system. On the one hand, this provides a considerable degree of flexibility to examine the relationship between the agreements on a case-by-case basis while, on the other hand, intra WTO norm conflict can, by quasi-judicial fiat, become a legal phenomenon that is real, apparent or avoided. At its basic level, intra treaty conflict can be reduced to an issue of treaty interpretation. And because treaty interpretation is more in the nature of an art than a science, a treaty interpreter is afforded a significant margin of appreciation in assessing whether treaty norms are in a state of conflict. A treaty interpreter confronted with seemingly contradictory or overlapping treaty provisions may: (i) recognize real conflict that can only be resolved by applying a conflict rule; (ii) avoid conflict altogether by adopting a definition of ‘conflict’ that is at odds with the provisions being considered; or (iii) designate conflict as apparent and prevent the clashing of norms by employing principles/rules of treaty interpretation. Thus far, WTO adjudicating bodies have demonstrated a marked reluctance to recognize real norm conflict between the GATT, GATS and TRIPS.
This article explores the issue of intra WTO norm conflict. Any discussion of norm conflict between treaty provisions must necessarily draw a critical distinction between an apparent conflict, on the one hand, and a real conflict, on the other hand. An apparent conflict is one where the content of two or more norms is at first glance contradictory, yet the conflict can be avoided, most often by interpretative means. In contrast, a real conflict represents an irreconcilable divergence between norms which cannot be interpreted away and can only be solved by the application of a conflict rule.
A legal issue is best understood and appreciated within the parameters of the institutional and normative environment in which it arises, or can potentially arise. Thus, the issue of intra WTO norm conflict cannot be considered as an abstract notion but, instead, must be considered against the backdrop of the institutional and normative environment of the WTO. In this connection, several questions arise when the notion of intra WTO conflict is placed in its proper context: Is intra WTO norm conflict a real legal issue that can arise under WTO law? If not, is this because the norms contained in WTO agreements are, in fact, internally consistent or, is this because the normative and institutional environment in which the special regime of WTO law is situated, does not privilege its existence as a legal issue? It is submitted that intra WTO norm conflict is hardly likely to arise as a legal issue under WTO law. This is not because the various provisions of the WTO covered agreements are, necessarily, and as a matter of fact, internally consistent. Rather, intra WTO norm conflict is unlikely to arise because the normative and institutional environment of the WTO militates against treating overlapping WTO provisions as situations of real norm conflict. In this connection, the single undertaking nature of WTO rights and obligations presumes that WTO norms constitute an integrated and coherent system of multilateral rules; creates a heavy presumption against conflict; demands cumulative and simultaneous compliance with all WTO norms; disengages the application of conflict rules under international law such as the lex posterior rule codified in Article 30 of the Vienna Convention on the Law of Treaties (VCLT); and appears to privilege an application of the principle of lex specialis that, to some degree, diverges from the understanding of that principle under general international law.
In addition, the conceptual contours of the notion of treaty conflict have not been clearly defined, leaving foundational considerations like the very definition of ‘norm conflict’ in a state of uncertainty. This uncertainty provides a treaty interpreter with one means of avoiding treaty conflict by adopting a definition of conflict which has the result of avoiding conflict between treaty provisions. Moreover, if at its basic level, the notion of treaty conflict is construed as an issue of treaty interpretation, then a treaty interpreter is afforded a significant degree of latitude to designate conflict as merely apparent and streamline possible conflicts by interpretative means without having to apply a conflict rule. Taken together, the foregoing considerations might explain why WTO adjudicating bodies have demonstrated a marked reluctance to recognize intra WTO norm conflict. The institutional and normative environment of the WTO allows for, and potentially mandates a judicial approach to intra WTO conflict that accords with the telos of the single undertaking as an integrated framework regulating international trade. In the result, intra WTO conflict will possibly never be real; will often be deemed as merely apparent; and will sometimes be avoided.
The article proceeds as follows: In Section II, the basic structure of WTO rights and obligations as a single undertaking and its consequences for intra WTO conflict is examined. In Section III, the question of what constitutes conflicting norms is discussed in the context of demonstrating how a definition of conflict is used to avoid situations of norm conflict between treaty provisions. In Section IV, treaty interpretation is discussed as a means by which a treaty interpreter may designate conflict as apparent, and avoid the clashing of norms by employing principles of interpretation of international law. An attempt is then made to distill the approach of WTO adjudicating bodies to intra WTO conflict by using Panel and Appellate Body Reports concerning the GATT/GATS and the GATT/TRIPS relationships as points of reference. Finally, the article concludes by noting that while there has arguably not been a case of real norm conflict before the WTO dispute settlement system, WTO adjudicating bodies have approached the question of overlap in the application of WTO agreements in a manner which, tacitly, excludes the possibility of real intra WTO norm conflict arising.
II. THE STRUCTURE OF WTO RIGHTS AND OBLIGATIONS AS A SINGLE UNDERTAKING
The potential for overlap and internal conflict among WTO covered agreements is significant. This is due, in large part, to the basic structure of WTO rights and obligations.Footnote 1 Therefore, an appropriate point of departure for the assessment of intra WTO norm conflict is an overview of the basic structure of the WTO Agreement that establishes the road map of rights and obligations that WTO Members have agreed to be guided by in their international economic relations.
Structurally, at the apex of the pyramid of WTO rights and obligations is the WTO Agreement. This agreement is largely institutional in nature and contains provisions regulating issues such as membership, amendment and decision making. Annexed to that agreement are numerous other agreements and understandingsFootnote 2. Annex 1 contains three general agreements: Annex 1A contains multilateral agreements on trade in goods, namely, the GATTFootnote 3 and 12 other agreements regulating trade in goods;Footnote 4 Annex 1B contains the GATS; and Annex 1C contains the TRIPS. Taken together, Annexes 1 A, B and C of the WTO Agreement constitute a triad of substantive trade rules; the three regulatory pillars of the WTO regulating measures affecting trade in goods, trade in services and trade-related aspects of intellectual property rights respectively.
A. Breeding Ground for Norm Conflict
The basic structure of the WTO Agreement as briefly outlined above provides a fertile ground and an enabling environment for potential conflict or overlap in the application of WTO norms. The approach taken by negotiators during the Uruguay Round was to opt for a single package of multilateral trade agreements that were annexed to the WTO Agreement. The result is a single undertaking, ie, a single package of agreements that is equally binding on all Members of the WTO. Accession to the WTO, ipso facto, means acceptance of all the rights and obligations contained in all of the multilateral agreements annexed to the WTO Agreement. The single undertaking approach that characterized the Uruguay Round of trade negotiations represented a regulatory shift in multilateral trade regulation. In the Tokyo Round, the adoption of autonomous Codes which dealt with GATT-related topics arguably undermined the coherence of the GATT because many Members of the GATT were not party to and, consequently, not bound by these Codes.Footnote 5 Thus, the single undertaking approach, which has been dubbed an ingenious deviceFootnote 6, avoids the so-called GATT à la carte problem associated with the Tokyo Round and purports to foster coherence between interrelated agreements. The thrust of the single undertaking approach may be seen as a recognition that the WTO Agreement, as an integrated whole, is stronger than the sum of its constituent parts. In one of its first reports, the Appellate Body underscored the fact that the WTO Agreement is an integrated multilateral system of trade rules, in contrast to the GATT system which preceded it.Footnote 7 The provisions of these agreements represent ‘an inseparable package of rights and disciplines which have to be considered in conjunction’.Footnote 8
Although the single undertaking approach appears to foster coherence between interrelated agreements, one may question the extent to which coherence between these agreements is actually realized. While the single undertaking approach achieved the result of bringing virtually all WTO commitments under a single umbrella, it is far from obvious that this resulted in creating a coherent system of legal rights and obligations.Footnote 9 The need cumulatively to comply with obligations that are potentially mutually exclusive is sustainable only if situations of conflict have been sufficiently foreseen and catered for. Unfortunately, the decision to make the results of the Uruguay Round a single undertaking was an afterthought; a postscript of sorts. Pauwelyn makes the point succinctly:
Only at a late stage of the negotiations was it decided to bring all the results of the Uruguay Round together under one umbrella agreement… This had the unintended result of creating repetitions, omissions and possible conflicts. No time was left to work out the complex interrelationship between the different legal texts. To reopen the negotiations for that purpose would have jeopardized the delicate consensus reached under each of these legal instruments.Footnote 10
It appears that the need for a rule regulating the interrelationship of the GATT, the GATS and the TRIPS was an issue that was placed in the ‘too difficult’ basket and, consequently, this issue was never worked out at the negotiating table. The result is a potential breeding ground for norm conflict between the GATT, the GATS and the TRIPS. In the absence of a rule regulating the interaction of the norms contained in these agreements, it becomes very difficult to clearly and precisely define the legal parameters of the relationship between these agreements.Footnote 11
B. GATT, GATS, TRIPS: Conceptually Distinct Yet Closely Related
The single undertaking nature of the WTO Agreement demands cumulative compliance with obligations contained in the GATT, the GATS and the TRIPS. At the same time, the subject matter of these agreements, while conceptually distinct, is closely related. Rules on intellectual property might affect the sale of goods, as might rules on distribution services.Footnote 12 The scope of each of the agreements is sufficiently broad so that overlaps among their provisions are probable, if not inevitable.Footnote 13 A concrete example illustrates the point.
GATT Article III:4 imposes a national treatment obligation in respect of laws, regulations and requirements affecting the internal sale, offering for sale, purchase, transportation, distribution or use of products. The term ‘affecting’ in that provision has been interpreted as far back as the 1958 GATT Panel report in Italy — Agricultural Machinery as covering not only laws and regulations which directly govern conditions of sale but, more broadly, any law or regulation which might adversely modify the conditions of competition between domestic and imported products in the internal market.Footnote 14 Given the broad, all-affecting scope of GATT Article III:4, any trade measure which on its face applies to a service sector or an intellectual property right but which, tangentially, affects the internal sale of a product would, in principle, also be susceptible to examination under GATT Article III:4. Admittedly, overlapping obligations or the need cumulatively to comply with different agreements need not necessarily raise serious legal issues insofar as these obligations are not mutually exclusive. However, the mere existence of overlapping regimes means that the potential for norm conflict is heightened and thus cannot be excluded.Footnote 15
C. GATT, GATS, TRIPS: A Relationship Undefined
Notwithstanding the potential for conflict to arise between WTO norms, the WTO Agreement scarcely addresses the issue of conflict by failing, to a large extent, to define the relationship between its constituent legal instruments. It seems fairly obvious that this undefined relationship fosters conflict since there is no guiding light to elucidate the way in which the agreements should interact. A survey of the WTO Agreement reveals only a few conflict rules. First, the WTO Agreement in Article XVI:3 defines the relationship between itself and any of the agreements annexed to it by providing that the WTO Agreement shall prevail to the extent of any conflict. Given the institutional nature of the WTO Agreement—regulating primarily institutional matters as it does—the possibility of conflict with a substantive annexed trade agreement seems remote, at best. Second, an interpretative note to Annex 1A containing the multilateral agreements on trade in goods provides that in the event of a conflict between a provision of the GATT and a provision of any of the other Annex 1A agreements, the provision of the other agreement will prevail. It should be noted that this interpretative note only defines the relationship between the GATT and the provisions of the other Annex 1A agreements and does not, generally, define the relationship among the Annex 1A agreements other than the GATT.Footnote 16 Therefore, if the intent of the interpretative note to Annex 1A is to minimize situations of conflict among the Annex 1A agreements, it is, to some extent, an incomplete exercise. Third, a number of the Annex 1A agreements contain conflict rules, for example, Article 21.1 of the Agreement on Agriculture which provides that it prevails over the provisions of the GATT and of any of the other Annex 1A agreements.Footnote 17 Lastly, Article 1.2 of the Dispute Settlement Understanding (DSU) provides that it applies subject to certain special or additional rules and procedures on dispute settlement that are contained in other WTO agreements specified in the annex to the DSU.
Noticeably absent in the WTO Agreement is any provision that recognizes, let alone addresses, potential conflicts that may arise between the GATT, the GATS and the TRIPS. One may ponder the reason for this curious state of affairs. Was this intended and calculated? Was this an omission reflecting an inability to arrive at consensus on what the approach to conflict should be? Are we able to attribute this omission to the fact that, by and large, the agreements were written by diplomats and not by lawyersFootnote 18? It is neither useful, nor productive, to seek out the perceived intentions of negotiators from negotiating history that is often obscure. Recourse to negotiating history as a supplementary means of discerning the intentions of the parties to the WTO Agreement is complicated by the fact that ‘preparatory works’ were not formally recorded in the course of the Uruguay Round of multilateral trade negotiations. In any event, in the Uruguay Round, the covered agreements were negotiated by different negotiating groups and it is not clear that there was a high degree of coordination between these groups. Moreover, because the decision to make the results of the Uruguay Round a single undertaking was taken at the last minute, there was no time to address the question of the extent of overlap between the GATT, the GATS and the TRIPS. Thus, the absence of a negotiated conflict rule regulating the interrelationship between these agreements should not be seen as an indication that these agreements are internally consistent. Rather, the circumstances under which these agreements were concluded simply did not allow for a comprehensive examination of whether, and to what extent these agreements are, in fact, internally consistent. Two commentators have posited that:
[i]n grouping under a framework agreement various negotiated texts, without any extensive discussion of the internal organization and hierarchy of WTO norms, negotiators may have hoped that the flexibility inherent in some of the WTO treaty provisions would suffice to reconcile all tensions among its various provisions. The wording of some WTO provisions does not always support such hope.Footnote 19
There are complex, outstanding issues with regard to the principles governing the interrelationship of the WTO agreementsFootnote 20 and the precise contours of the relationship between the norms contained therein are left to be defined through the WTO dispute settlement system.
D. Resolving Treaty Conflict in Public International Law
Resolving norm conflict between treaties will be a feature of almost any system of international dispute settlement. This is so because not every treaty expressly regulates the manner in which its provisions should interact with the provisions of other treaties. The expansion of international law in the past half century potentially raises numerous problems of balancing different rights and obligations contained within a single treaty, reconciling norms and procedures in multiple treaties governing the same topic, and of resolving conflicts across regimes.Footnote 21
Article 30 of the VCLT provides two main rules governing conflicts between treaties relating to the same subject matter and the same parties: (i) specific provisions in treaties governing conflicts with other treaties must be respected (Article 30.2); and (ii) generally, the treaty later in time should prevail over the earlier one on the same subject matter (lex posterior derogat priori, Article 30.3–4).Footnote 22 There is a temporal element that is central to the application of Article 30 VCLT. Its application presupposes the existence of treaties that have entered into force at different times. The GATT 1994 is virtually the GATT 1947 legal text as modified by six understandings on specific provisions. Therefore, it is tempting to submit that the GATT is an agreement earlier in time than the TRIPS, or that the GATS is an agreement later in time than the GATT. Article 30 VCLT could then apply in a situation of conflict, and the TRIPS or the GATS, as the agreements later in time, would prevail over the GATT. This, however, would be legally inaccurate. As a result of the single-undertaking nature of the WTO Agreement, the GATT, the GATS and the TRIPS constitute a single treaty that entered into force on 1 January 1995. As stated earlier, the single-undertaking nature of the WTO Agreement has significant implications for the issue of intra WTO norm conflict. First, it increases the potential for norm conflict. Second, by necessarily disengaging the possibility of applying the VCLT rules for resolving treaty conflict, it reduces the tools in a treaty interpreter's toolbox that can be used to resolve situations of real conflict between norms contained in different annexes to the WTO Agreement.Footnote 23
III. CONFLICT DEFINITION AS A CONFLICT AVOIDANCE TOOL
An examination of intra WTO norm conflict must necessarily entail an analysis of what constitutes conflicting norms. The definition of conflict is of utmost importance as it constitutes an indispensable first step in assessing seemingly contradictory or overlapping treaty norms. It is simply impossible to resolve norm conflict between treaty provisions without first identifying the existence of conflicting norms.Footnote 24 This section focuses on the definition of conflict and, while arguing for the adoption of a broad and flexible definition of conflict in WTO law, highlights the formulation of a narrow definition of conflict, adopted by a few WTO panels, as one means by which conflict can be avoided, without necessarily being solved.
A. What Constitutes Conflicting Norms—Conflicting Definitions of ‘Conflict’
A survey of the academic literature and the relevant limited WTO jurisprudence (discussed in section IIIB) reveals a measure of divergence on the definition of norm conflict.Footnote 25 It is possible to discern two definitions of ‘conflict’ between treaty norms. The first definition—which appears to be the prevailing one in international law—is a narrow definition that posits that conflict can exist only as between obligations.Footnote 26 Based on the narrow definition of conflict, conflicting norms are extant where a state party ‘cannot simultaneously comply with its obligations under both treaties’.Footnote 27 The second definition is a broader definition which recognizes that conflict may exist between an obligation and an expressly conferred right.Footnote 28 Based on the broader definition of conflict, conflicting norms are extant not only where two obligations clash but also where a provision in one treaty permits what a provision in another treaty prohibits.
B. WTO Case Law on the Definition of Conflict
Thus far, WTO adjudicating bodies have vacillated between narrow and broad definitions of conflict. A WTO Panel considered the definition of conflict for the first time in EC — Bananas III and adopted a broad definition that explicitly contemplates the possibility of conflicting norms as between an obligation, on the one hand, and an expressly conferred right, on the other hand. The Panel opined that there would be conflict: (i) where there are clashes between obligations that are mutually exclusive, so a WTO Member cannot comply with both obligations simultaneously; and (ii) where a rule in one agreement prohibits what a rule in another agreement explicitly permits.Footnote 29 In contrast, the Panel in Indonesia — Autos adopted a narrow definition of norm conflict, stating that ‘under public international law a conflict exists in the narrow situation of mutually exclusive obligations for provisions that cover the same type of subject matter’.Footnote 30 This definition necessarily excludes the possibility of conflicting norms as between an obligation and an expressly conferred right.
It may be possible to reconcile, to some extent, the divergence in the definitions of conflict adopted by the panels in EC — Bananas III and Indonesia — Autos. First, although the Panel in Indonesia — Autos opted for a narrow definition of conflict, its position must be understood in the light of that Panel's explicit proviso that even if it were to accept the broad definition of conflict adopted by the Panel in EC — Bananas III, ‘there [could be] no conflict because the SCM Agreement does not “explicitly permit” local content subsidies’.Footnote 31 This constitutes dicta that, at the very least, contemplate norm conflict in the broader sense articulated by the Panel in EC — Bananas III, provided that an explicitly conferred right in fact exists.Footnote 32 Second, it is noteworthy that the Panel report in Indonesia — Autos was not reviewed by the Appellate Body, in contrast to the Panel report in EC — Bananas III which was appealed. And notwithstanding the fact that the Panel's broad definition of conflict in EC — Bananas III was not directly scrutinized by the Appellate Body, the Panel's findings that were based on the recognition of a conflict between rights and obligations was upheld.Footnote 33 Thus, the view of the Appellate Body on the definition of conflict may be discerned, albeit tacitly, from its report in EC — Bananas III.
C. The Case for a Broad Definition of Conflict in WTO Law
There are very good reasons why a narrow definition of norm conflict should be rejected in the context of the WTO covered agreements. The proponents of a narrow definition of conflict in WTO law base their contention primarily on a principle of public international law, pursuant to which norm conflict can exist only between mutually exclusive obligations.Footnote 34 The authority that is often cited in support of this proposition is Wilfred Jenks' work on conflict of law-making treaties.Footnote 35 This narrow definition of treaty conflict has crept into WTO jurisprudence with panels making explicit reference to Jenks' definition.Footnote 36 With regard to the proposition that international law mandates a narrow definition of treaty conflict, Bartels has pointed out that this is not unambiguously accurate since other authorities, equally as eminent as Jenks, including Humphrey Waldock, Hans Aufricht and Hersch Lauterpacht have taken the broader view of conflict. Moreover, the jurisprudence of international tribunals is undecided on the issue.Footnote 37 It is also noteworthy that the International Law Commission (ILC) in its study on the fragmentation of international law has defined a conflict of norms as a situation where two rules or principles suggest different ways of dealing with a problem.Footnote 38 Certainly, the ILC's definition of conflict constitutes a formula that is broad enough to encapsulate conflict between obligations, as well as conflict between rights and obligations.
The Panel in Indonesia — Autos relied on the presumption against conflict in international law to justify its narrow definition of conflict. It would seem that the rationale of this justification is that the presumption against conflict should privilege a narrow definition of treaty conflict that operates to limit the possibility of conflicting norms. There can be little doubt that such a presumption exists in international law and it has, in fact, been applied by WTO adjudicating bodies.Footnote 39 Admittedly, the single-undertaking nature of the WTO Agreement should reinforce an even stricter application of the presumption relative to its application in the broader international law context.Footnote 40 This is so because it can reasonably be presumed that WTO Members, by concluding a series of agreements as a single undertaking, meant for these agreements to be internally consistent. That being said, the limits of the presumption against conflict must be recognized at the outset. In operational terms, the presumption against conflict requires a treaty interpreter to interpret treaties—so far as possible—in a way that avoids conflict. However, the presumption against conflict should, in and of itself, have little bearing on the definition of conflict.Footnote 41 There is little reason why the presumption against conflict in international law should operate so as to mandate a narrow construction of conflict which, by definition, excludes explicitly conferred rights from the equation. Indeed, a WTO Panel has, subsequent to Indonesia — Autos, applied the presumption without subordinating rights contained in an incorporated World Intellectual Property Organization (WIPO) treaty to obligations contained in the TRIPS.Footnote 42
The narrow definition of conflict is premised on a proposition that there is no conflict ‘if it is possible to comply with the obligations of one instrument by refraining from exercising a privilege or discretion accorded by another’.Footnote 43 This, however, is precisely the problem with the narrow definition of conflict. It calls for a mechanical subordination of rights to obligations and reduces to naught explicitly conferred rights that have been the subject of negotiation between the parties to a treaty. This result does not square well with the principle of effective interpretation (discussed further in section IV.B.2) which was understood by the Appellate Body in US — Gasoline to mean ‘that interpretation must give meaning and effect to all the terms of the treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility’.Footnote 44 On the other hand, Marceau relies precisely on the principle of effective interpretation to justify retaining a narrow definition of treaty conflict. According to Marceau, the principle of effective interpretation can be employed to ensure that rights are not mechanically subordinated to obligations and, therefore, the narrow definition of conflict need not be extended to include explicitly conferred rights.Footnote 45 In this author's view, it is less than clear whether Marceau's proposed approach would solve the problems created by the narrow definition of conflict in all cases. An application of the principle of effectiveness seeks to establish the interpretation that gives the most appropriate effect to a treaty. In operational terms, this requires a treaty interpreter to make a reasoned choice with regard to which of two seemingly contradictory norms should be interpreted narrowly, and which extensively, in order to give the treaty an appropriate effect.Footnote 46 By retaining a narrow definition of conflict that is predicated essentially on the premise that treaty obligations reign supreme over treaty rights, it would seem that the treaty interpreter, in applying the principle of effectiveness, would need to interpret the treaty right narrowly and the treaty obligation extensively. Seen in this light, the narrow definition of conflict would have a controlling and undesirable effect on the principle of effectiveness when seemingly contradictory rights and obligations are the subjects of an interpretative exercise. The choice of which norm should be interpreted narrowly, and which extensively, would be a foregone conclusion with the treaty obligation being deemed the best candidate for extensive interpretation as a direct result of the narrow definition of conflict. Thus, it is doubtful that the principle of effective interpretation can, in all cases, resolve the problem created by the narrow definition of conflict, namely, the mechanical subordination of treaty rights to treaty obligations.
Another reason why the narrow definition of treaty conflict should be rejected is that it is logically unsound insofar as it mistakes one possible solution for norm conflict—the fact that it can to an extent be avoided—with the actual existence of conflict.Footnote 47 Thus, the distinction between the definition of conflict, on the one hand, and the question of how to solve an alleged conflict, on the other hand, becomes blurred. This is well explained by Pauwelyn who considers that where a narrow definition of conflict is adopted which does not acknowledge potential conflict between a right and an obligation, ‘the alleged conflict is then not solved by a rule on how to solve conflict but by the very definition of conflict’.Footnote 48
Quite apart from the esoteric considerations that militate against the narrow definition of conflict, there are formidable policy considerations that support a broad definition of conflict in WTO law. The provisions of the single package of WTO agreements represent a carefully negotiated balance of rights and obligations achieved by way of attaining a delicate consensus among WTO Members. The WTO Agreement is not a sterile text. Rather, it constitutes a fertile ground in which the legitimate expectations of WTO Members find their genesis and are firmly rooted. In this connection, it suffices to recall the Appellate Body's statement in India — Patents that ‘the legitimate expectations of the parties to a treaty are reflected in the language of the treaty itself”.Footnote 49 Embodied in the language of the WTO agreements are treaty obligations and explicitly conferred rights. Therefore, a WTO Member can legitimately expect not merely that obligations imposed on other Members will be complied with but, also, that it will be able to exercise explicitly conferred rights or, at the very least, that these rights will not automatically be trumped by obligations. A definition of conflict which disregards treaty rights and, by extension, defeats the legitimate expectations of WTO members is undesirable. The importance of protecting treaty rights in the context of the WTO is especially reinforced and confirmed by Article 3.2 of the DSU which states an overarching purpose of the WTO dispute settlement system, namely, that it ‘serves to preserve the rights and obligations of Members under the covered agreements’.Footnote 50 The implications of this have been well explained by Bartels:
If both WTO rights and obligations are equally deserving of protection, then it seems fair to say that, in a situation in which it is not possible to protect both at the same time, at the very least a reasoned choice must be made between equally applicable rights and obligations. This possibility would be precluded by the application of a conflicts rule that ipso facto diminishes WTO rights in favour of WTO obligations.Footnote 51
The rigid approach to conflict affords a treaty interpreter an ‘easy way out’ by defining away conflicting norms. Indeed, it must be seen as the primary and most effortless conflict avoidance technique. There is no easier way to avoid conflicting norms than by defining them away. The analysis in the preceding paragraphs reveals the need to reject a narrow definition of conflict in WTO law. Legal relations are not limited to obligations. Therefore, different types of legal norms may interact and potentially clash in different cases. Consequently, it may not be useful to formulate a rigid definition of conflict that applies only in respect of obligations; a single category of legal norms. What is required is a definition that is broad enough to encapsulate all types of norms or a definition that is flexible enough to accommodate the interaction of rights and obligations on a case-by-case basis. Borrowing from the imagery used by the Appellate Body in Japan — Alcoholic Beverages II to explain the concept of ‘like products’ in GATT Article III,Footnote 52 the definition of conflict should evoke the image of an accordion that stretches and squeezes depending on the potentially conflicting norms at hand in a given case. In this respect, the two-tiered definition of conflict adopted by the Panel in EC — Bananas III which recognizes that treaty conflict occurs where: (i) there are clashes between obligations that are mutually exclusive; and (ii) where a rule in one agreement prohibits what a rule in another agreement explicitly permits, appears to be the correct approach. Nevertheless, the question of whether a narrow or broad definition of treaty conflict should be adopted in WTO law remains shrouded in uncertainty.Footnote 53 The Appellate Body will, hopefully, have occasion to place the definition of conflict on a more solid footing.
IV. THE APPROACH OF WTO ADJUDICATING BODIES TO OVERLAPPING WTO AGREEMENTS
It was stated earlier that norm conflict in international law can be reduced to an issue of treaty interpretation. This section examines the use of treaty interpretation as a means by which a treaty interpreter may designate conflict as apparent, and avoid the clashing of norms by employing principles of interpretation of international law. Whether the designation of conflict as apparent is appropriate or not in any single case will depend on the extent to which the rules of treaty interpretation are appropriately applied. When the outer limits of interpretative principles are stretched, the result may be that conflict is falsely characterized as apparent, rather than real. However, an appropriate use of interpretative tools can provide a legitimate means to solve norm conflict that is merely apparent rather than real. Using Panel and Appellate Body reports concerning the GATT/GATS and the GATT/TRIPS relationships as points of reference, the approach of WTO adjudicating bodies to potential norm conflict will be examined.
A. Apparent versus Real Conflict
In discussing the use of treaty interpretation as a technique for resolving norm conflict between treaties, a fundamental distinction must be drawn between apparent and real conflict. This distinction is critical as it defines the parameters within which treaty interpretation can legitimately be used. An apparent conflict is one where the content of two or more norms is at first glance contradictory, yet the conflict can be avoided, most often by interpretative means.Footnote 54 In other words, to the extent that an apparent conflict represents a reconcilable divergence between treaty norms, this divergence can be streamlined through treaty interpretation. On the other hand, treaty interpretation reaches its upper limit as a conflict avoidance technique in the face of a real conflict.Footnote 55 An actual or real conflict represents an irreconcilable divergence between norms which cannot be interpreted away without improperly stretching the outer limits of interpretative principles.
B. Treaty Interpretation as a Conflict Avoidance Tool
1. Interpretation of WTO agreements
It is axiomatic that WTO agreements are to be interpreted in accordance with the established principles of interpretation of public international law. This arises directly from Article 3.2 of the DSU which requires WTO adjudicating bodies to clarify the existing provisions of the covered agreements in accordance with the customary principles of interpretation of public international law. The Appellate Body has consistently interpreted this to be a reference to the rules of interpretation set forth in Articles 31 and 32 of the VCLTFootnote 56 and the intricacies of the interpretative principles embodied in these provisions have been fleshed out in a plethora of Panel and Appellate Body reports.Footnote 57
2. The principle of effectiveness
The rules of treaty interpretation under international law are not limited to those expressed in the VCLT.Footnote 58 The principle of effectiveness, although not explicitly provided for in the VCLT, is a general rule of interpretation that flows from the contextual analysis required under Article 31 VCLT.Footnote 59 According to this principle of interpretation, when a treaty is open to two interpretations, one of which does, and the other does not enable the treaty to have appropriate effect, good faith and the object and purpose of the treaty demand that the former interpretation be adopted.Footnote 60 The principle of effective interpretation embodied in the maxim ut res magis valeat quam pereat will often, if not always, be relevant in any dispute in which seemingly contradictory treaty provisions are implicated. This is so because the general function of the principle of effectiveness is to seek harmony rather than dissonance between treaty norms. To the extent that the principle of effectiveness seeks harmony between treaty norms, it can be seen as operationalizing the presumption against conflict.Footnote 61 This, of course, squares well with the cumulative application of WTO rights and obligations that is demanded by the single-undertaking nature of the WTO Agreement.
3. Effective interpretation: How far is too far?
The principle of effectiveness may be helpful in resolving apparent conflicts between treaty norms.Footnote 62 However, the legitimacy of its application is undermined in cases where the boundaries that limit its application are transcended. Thus, a treaty interpreter applying the principle of effectiveness must be conscious of the fact that treaty norms may contradict each other to an extent beyond the reach of the most ardent treaty interpreter, employing the highest degree of interpretative finesse. As useful as the principle of effective interpretation might be, what it is not, is a magic wand that can be waved at a treaty provision to enable that provision to mean something which it simply does not. In other words, inasmuch as the principle of effectiveness calls for a harmonious reading of treaty norms, it neither privileges nor requires a contra legem interpretation of treaty provisions. The International Court of Justice has long warned against the over-extension of the principle of effectivenessFootnote 63 and, in the specific context of the interpretation of WTO covered agreements, systemic policy considerations should militate against according this principle too broad a scope of application. In this connection, one commentator has opined that an over-extension of the principle of effectiveness in the context of the interpretation of WTO agreements could mean ‘giving the treaty a “life of its own” guided neither by the subjective intent of negotiators nor the “expressed intent” of the text.’Footnote 64 This would appear to run counter to DSU Article 3.2 which can be construed as a warning to the WTO dispute settlement system against engaging in judicial activism.Footnote 65
While the principle of effective interpretation can be seen as operationalizing the presumption against conflict, it must also be seen as delimiting the outer boundary of that presumption.Footnote 66 A legitimate application of the principle of effectiveness calls for—so far as possible—a harmonious reading of treaty norms. The term ‘so far as possible’, expressed here as a cap on an interpretative exercise, means that if the treaty provisions are inherently contradictory, lacking terms that are broad and ambiguous enough to allow for interpretative flexibility, the presumption against conflict must be seen as rebutted and the adjudicative focus must shift from conflict avoidance to conflict resolution.
C. Of Conflicts and Solutions: What Rules?
As highlighted in section II, norm conflict between the GAT, GATS and TRIPS agreements is a special case, principally because of the absence of an explicit rule regulating their relationship, combined with the fact that the single-undertaking nature of the WTO Agreement renders the lex posterior rule virtually unemployable as a tool for resolving intra WTO norm conflict. Where do we turn in the event of a genuine conflict? It appears that the principle of lex specialis derogat legi generali would be the most relevant principle that is capable of resolving a real or genuine conflict between treaty norms. Pursuant to the lex specialis principle, if a matter is regulated by a general norm, as well as a more specific norm, then the latter should take precedence over the former.Footnote 67 The principle of lex specialis is, in this sense, inextricably linked to the notion of conflict.Footnote 68 When applied as a tool of conflict resolution, it resolves the conflict by, at least temporarily, placing norms in a hierarchy in which the specific norm takes precedence over the general norm.
The principle of lex specialis has been described as conceptually vagueFootnote 69 and its application will not have the same consequences in every case.Footnote 70 Generally, when the principle is applied as a tool of conflict resolution in a strict sense, ie, to resolve a conflict between treaty norms that cannot be streamlined through interpretation, the result is that the special norm disengages the application of the general norm. However, the principle of lex specialis can also be applied as a general rule of interpretation in situations in which a general norm and a specific norm are equally applicable, but there is no real conflict between these norms.Footnote 71 When applied in this sense, ‘the “special”, as it were, steps in to become applicable instead of the general. Such replacement remains, however, always only partial. The more general rule remains in the background providing interpretative direction to the special one.’Footnote 72
Yet, WTO adjudicating bodies apply the principle of lex specialis in a manner that, to a considerable degree, diverges from the understanding of that principle in general international law. When applied by WTO adjudicating bodies, the lex specialis principle is not applied as a conflict rule pursuant to which the special norm disengages the application of the conflicting general norm. Neither is the principle applied as a general rule of interpretation pursuant to which the special norm becomes applicable instead of the general norm but is, nevertheless, read and understood against the background of the general norm. Rather, in the WTO context, the lex specialis principle guides the treaty interpreter by controlling the sequence of analysis between a general and specific norm, but does not involve the specific norm disengaging the application of the general norm. In other words, the general norm remains applicable to the measure at issue in a given dispute. However, the measure at issue is scrutinized against the requirements of the special norm or agreement before it is scrutinized against the requirements of the general norm or agreement.Footnote 73 WTO adjudicating bodies have clearly favoured applying the lex specialis principle in this sense. In EC — Bananas III, the Appellate Body chided the Panel for not applying the Agreement on Import Licensing Procedures before Article X:3(a) of the GATT, since the Licensing Agreement ‘deals specifically, and in detail, with the administration of import licensing procedures’.Footnote 74 Similarly, the Panel in EC — Sardines cited the statement of the Appellate Body in EC — Bananas III in support of its decision to examine a claim under the Agreement on Technical Barriers to Trade prior to examining it under GATT Article III.Footnote 75
The International Law Commission has observed that the application of the principle of lex specialis is influenced by the particular institutional context in which it is applied.Footnote 76 It is acutely apparent that in the context of the WTO, the single-undertaking nature of WTO rights and obligations has shaped the approach of WTO adjudicating bodies to the application of the principle of lex specialis. To the extent that the lex specialis principle involves, at least temporarily, placing norms in a hierarchy—with the general norm giving way to the more specific norm—it challenges the single-undertaking nature of WTO rights and obligations. Thus, it is not surprising that Panels and the Appellate Body shy away from the principle that a special provision prevails over a general oneFootnote 77 but apply the presumption against conflict and the principle of effective interpretation in an effort to safeguard the unity of the WTO Agreement as a comprehensive regulatory framework governing international trade.Footnote 78 When WTO adjudicating bodies do apply the principle of lex specialis, a general norm is applied after the special norm but the special norm does not, even partially, disengage the application of the general norm. It appears that the single-undertaking nature of the WTO Agreement, and the consequential desire of WTO adjudicating bodies to safeguard the unity of that agreement, have created a peculiar normative and institutional environment that heavily influences the way in which the principle of lex specialis is applied.Footnote 79
D. Approach to Potential intra WTO Norm Conflict: The GATT/GATS and GATT/TRIPS Case Study
The effort to safeguard the unity of the WTO Agreement is necessary to secure the coherence of the multilateral trading system as an integrated system of trade rules. However, appropriate means must be employed to achieve that end. Interpretative tools and principles of law are not to be improperly stretched, strained or misapplied, to make real conflicts seem apparent or, to avoid conflicts that should be solved. Using WTO case law on the GATT/GATS and GATT/TRIPS relationships, the approach of WTO adjudicating bodies to potential conflict between the annexes of the WTO Agreement will now be assessed.
1. Canada — Certain Measures Concerning Periodicals
In Canada — Periodicals, the US challenged a ban on imports of split-run periodicals and an excise tax on locally printed issues of foreign magazines, claiming that these measures were inconsistent with Articles XI and III of the GATT. The US did not challenge the consistency of the measures with the GATS and one of the main issues to be determined was whether Article III of the GATT applied to the excise tax on locally printed issues of foreign magazines.Footnote 80 Canada's defence in respect of the excise tax brought into question the relationship between the GATT and the GATS. Canada argued before the Panel that the excise tax was a measure intended to regulate trade in advertising services, and that a WTO Member which had not made any specific commitments in the advertising sector could not be held responsible under the GATT for measures directly regulating that service sector, but indirectly affecting trade in goods. The challenged measure was, in Canada's view, a tax on advertising services to which the GATT did not apply. And since advertising services fell within the substantive scope of the GATS, and Canada had not made any commitments in respect of that service sector, Canada assumed no national treatment obligations under the GATS. In short, Canada's defence was that the GATT and the GATS should be interpreted in such a way as to avoid overlaps that could lead to conflict in their application.
Canada's defence that overlaps between the GATT and the GATS should be avoided was rejected by the Panel which rightly stated that overlaps were inevitable, and that there was no reason why obligations under both the GATT and the GATS could not apply to a measure at issue.Footnote 81 The Panel must be taken as correct since overlapping agreements will not necessarily raise serious legal issues as long as mutually exclusive rights and obligations are not at issue, ie, as long as there is no real conflict.
It is difficult, if not impossible, to discern the Panel's approach to conflict between the GATT and the GATS in Canada — Periodicals simply because the Panel analysed the issue only in terms of a potential overlap, and not in terms of a potential conflict between the agreements. The Panel did not seem to recognize the potential for conflict,Footnote 82 noting only, the inevitability of overlap. The conclusion of the Panel in respect of the GATT/GATS relationship was reached by reference to the structure of the WTO Agreement and its annexes which indicated an absence of ‘any hierarchical order’ between the GATT and the GATS. The Panel also made reference to the principle of effective interpretation to justify its view.Footnote 83 However, neither the absence of a hierarchical order between the agreements nor the fact that the two agreements are not mutually exclusive precludes the possibility of a conflict between the agreements. And, the limits of the principle of effective interpretation have been sufficiently highlighted. At best, it provides a starting point of analysis; that cumulative application of WTO agreements is favoured. However, the principle of effective interpretation itself cannot operate to nullify the possibility of conflict. If one pushes the Panel's reasoning to its logical extreme, what results is a proposition that as long as a measure falls within the substantive scope of the GATT, the measure falls to be scrutinized under the GATT irrespective of the existence of a conflicting provision in the GATS.Footnote 84
Admittedly, the US only challenged the consistency of the disputed measure with the GATT and, consequently, the Panel approached the issue merely as a question of whether the excise tax fell within the substantive scope of the GATT, and not as an issue of whether a conflict existed between the GATT and the GATS. However, implicit in the defence advanced by Canada was an issue of potential conflict of the rights versus obligations type: A conflict between the obligation imposed by Article III of the GATT, and a right under the GATS to impose the measure at issue (insofar as commitments had not been made in respect of the advertising sector). One would readily have to concede that Canada did not explicitly frame its defence in this way. However, the Panel could have approached the issue in terms of a potential conflict. This would not only have provided a more complete and deeper analysis of the GATT/GATS relationship, but would also have been valuable, from a systemic standpoint, as an indication of how WTO adjudicating bodies would deal with potential conflict between agreements contained in different annexes to the WTO Agreement. Moreover, had the Panel approached the issue as one of potential conflict, it could have reached the same result—that the measure was not excluded from the scope of GATT—by applying a conflict rule, namely, the principle of lex specialis. Given the Panel's finding—subsequently affirmed by the Appellate Body—that the measure was in fact expressed to be a tax on issues of periodicals (a good),Footnote 85 the GATT could have been deemed a special agreement that prevailed over the GATS in this case.
2. European Communities — Regime for the Importation, Sale and Distribution of Bananas
In EC — Bananas III, the European Communities (EC) preferential regime for the importation, sale and distribution of bananas from African, Caribbean and Pacific (ACP) countries was challenged as being inconsistent with WTO rules. In this case, a Panel and the Appellate Body addressed, at length, the relationship between the GATT and the GATS and, in particular, whether a measure could be simultaneously subject to obligations under both agreements. The EC argued that a measure taken by a Member to regulate trade in goods could not be inconsistent with obligations arising under the GATS. This argument was rejected by the Panel, as well as the Appellate Body.Footnote 86 The Panel found that there was no legal basis for an a priori exclusion of measures from the scope of the GATS.Footnote 87 The Appellate Body, in rejecting the EC's argument, went further by developing a tripartite typology of measures: (i) measures affecting only trade in goods to which the GATT would apply; (ii) measures affecting only trade in services to which the GATS would apply; and (iii) measures that involve a service relating to a particular good or a service supplied in conjunction with a particular good to which both the GATT and the GATS would apply.
It is also difficult to discern a judicial approach to conflict from the Panel and Appellate Body reports in EC — Bananas III. The measure at issue—the EC's regime for the importation, distribution and sale of bananas—was clearly subject to the GATT. However, it was also clearly capable of being scrutinized under the GATS. One agreement could be excluded only to the extent that a real conflict existed between provisions of the two agreements. The EC certainly did not frame its defence as an issue of conflicting provisions contained in the GATT and the GATS. Whereas in Canada — Periodicals, there was implicit in the defence advanced by Canada an issue of conflict, it is difficult to even imply an issue of conflict in the defence advanced by the EC in EC — Bananas III. The EC's defence was predicated entirely on a proposition that the GATT and the GATS are mutually exclusive and, consequently, a measure directly affecting trade in goods should necessarily be excluded from the scope of the GATS.Footnote 88 This defence ran counter to the basic structure of WTO rights and obligations as a single undertaking and, insofar as it sought to exclude overlaps between the two agreements, it had scant regard for the Panel's statement in Canada — Periodicals that ‘overlaps between the subject matter of disciplines in GATT 1994 and in GATS are inevitable, and will further increase with the progress of technology and the globalization of economic activities.’Footnote 89
In EC — Bananas III, the Panel and the Appellate Body approached the issue as one of overlapping agreements. This approach would appear to be correct in the circumstances. However, unqualified statements were made concerning the GATT/GATS relationship that seemed to tacitly establish a proposition that cumulative application of all rights and obligations contained in WTO covered agreements is possible in all cases. These statements ignored the fact that the possibility of conflict between the two agreements cannot be excluded. Moreover, although the Appellate Body emphasized that a case-by-case analysis would always be necessary in determining under which agreement a trade measure should be scrutinized, the Appellate Body, nevertheless, took on the role of taxonomist by defining, in the abstract, a tripartite typology of measures in unqualified terms. It is striking that none of the three types of measures identified by the Appellate Body recognize the potential for conflict between the GATT and the GATS. It is useful at this juncture to recall that, in EC — Bananas III, the Appellate Body developed a tripartite typology of measures in the course of discussing the GATT/GATS relationship: (i) measures affecting only trade in goods to which the GATT would apply; (ii) measures affecting only trade in services to which the GATS would apply; and (iii) measures that involve a service relating to a particular good or a service supplied in conjunction with a particular good to which both the GATT and the GATS would apply. ‘Type (i)’ and ‘type (ii)’ measures are scrutinized only under the GATT or under the GATS respectively, not because of the existence of conflicting norms, but because the measure falls within the substantive scope of only one of the agreements. And based on the unqualified manner in which the Appellate Body described ‘type (iii)’ measures, it would seem that such measures would always fall to be scrutinized under both the GATT and the GATS, regardless of whether a real conflict existed between provisions of the two agreements. It may be that by identifying the third category of measures, the Appellate Body was merely reinforcing the proposition that the substantive scopes of the GATT and of the GATS are not meant to delimit mutually exclusive regimes. It is submitted, however, that the Appellate Body may have set forth too unbending a taxonomy. This view is especially reinforced by the fact that, whereas the Appellate Body attempted to qualify its description of ‘type (iii)’ measures by stating that specific aspects of the measure examined under each of the agreements could be different,Footnote 90 it still ‘remains to be seen according to what principles the conflict between GATT and GATS would be resolved if the specific aspects of the measures examined under each agreement are different and cannot be reconciled’.Footnote 91
For the sake of completeness, and in order to properly qualify its views on the GATT/GATS relationship, the Appellate Body should have identified a fourth type of measure, namely, measures falling within the substantive scope of both agreements, triggering provisions in each agreement that are inherently contradictory. Failing the possibility of a harmonious interpretation between the two contradictory provisions, such measures could only be scrutinized against the requirements of one of the agreements, and the question of which agreement prevails would have to be determined on a case-by-case basis by applying the principle of lex specialis as a principle of conflict resolution. It is readily conceded that the Appellate Body need not have gone so far in order to resolve the issue of whether the GATT and the GATS are mutually exclusive. However, the question of whether the GATT and the GATS are mutually exclusive is, at least tangentially, related to the question of whether a real conflict can exist between the two agreements. Statements which overemphasize the fact that the GATT and the GATS are not mutually exclusive, if not properly qualified, can mislead by creating the impression that legal norms contained in both agreements must necessarily accumulateFootnote 92 in every case, regardless of the existence of a real conflict.
3. European Communities — Protection of Trademarks and Geographical Indications for Agricultural Products and Foodstuffs
In EC — Trademarks and Geographical Indications, the US challenged an EC Regulation related to the protection of geographical indications (GIs) and destinations of origin. The US argued that EC Regulation 2081/92 did not provide national treatment with respect to GIs, and did not provide sufficient protection to pre-existing trademarks that are similar or identical to a GI. The EC Regulation was challenged as being inconsistent with national treatment obligations both under the GATT (Article III:4) and the TRIPS (Article 3.1). The EC never contended that the national treatment obligations under the GATT and the TRIPS were in conflict and it was not explicitly argued that the GATT and the TRIPS were mutually exclusive agreements. The Panel, however, recognized that ‘the claims in this dispute are made under the TRIPS Agreement and GATT 1994 and certain claims under each agreement relate to the same aspects of the measure at issue.’Footnote 93 The Panel continued: ‘There is no hierarchy between these two agreements which appear in separate annexes to the WTO Agreement. The parties have addressed claims under the TRIPS Agreement first in their submissions, which appears logical. Therefore, the Panel will follow that order of analysis in this report.’Footnote 94
According to the Panel, analysing TRIPS claims before GATT claims is ‘logical’ but the Panel never explicitly identified precisely upon what this logic is based. It is submitted that the sequence of analysis which examines TRIPS claims before GATT claims could only be an application of the lex specialis principle, applied not as a conflict rule stricto sensu, but as a principle of interpretation according preference to a special regime (TRIPS) as the agreement to be analysed first, without disengaging the application of the general regime (GATT). To the extent that there was no issue of conflicting norms in this case, the Panel's order of analysis between TRIPS and GATT claims is unassailable. However, the Panel—in the first and only case to address the GATT/TRIPS relationship—appeared to be excluding the possibility that GATT and TRIPS could ever conflict in a real sense. The Panel appeared to base this on the fact that ‘there is no hierarchy between these two agreements which appear in separate annexes to the WTO Agreement.’Footnote 95 As already noted with respect to the GATT/GATS relationship, the absence of a hierarchy among the agreements can never exclude the possibility of conflicting norms but, at best, merely provides a starting point of analysis; that cumulative application of WTO agreements is favoured, in principle. The Panel failed to recognize the fact that GATT and TRIPS could possibly conflict in a real sense, and that such a conflict, if ever it arose, would have to be resolved by applying the principle of lex specialis, not as an interpretative principle controlling the sequence of analysis between competing claims, but rather, as a conflict rule stricto sensu.
E. Assessment of the WTO's Approach to Potential intra WTO Norm Conflict
The Panel and Appellate Body reports in Canada — Periodicals and EC — Bananas III reveal that WTO adjudicating bodies tend to address the issue of overlap and potential conflict between the GATT and the GATS by reference to the scope of the two agreements, and the structure of the WTO Agreement as a single undertaking.Footnote 96 In Canada — Periodicals, the defence advanced by Canada was an attempt to exclude the measure at issue from the substantive scope of the GATT, while in EC — Bananas III, the defence advanced by the EC was an attempt to exclude the measure at issue from the substantive scope of the GATS. In both cases, these attempts were defeated by examining the broad scope of application of the agreement which the responding party was seeking to exclude. In many cases—and the two GATT/GATS cases examined may fall easily within this bracket—this approach will be sufficient to dispose of the issue of overlapping agreements. However, as already noted, statements concerning the GATT/GATS/TRIPS relationship must be sufficiently qualified to recognize the fact that while the agreements will usually overlap without raising issues of conflict, they can also conflict in a real sense if a measure triggers norms under each agreement that are inherently contradictory.
As we have seen from the Panel and Appellate Body reports in Canada — Periodicals and EC — Bananas III, the cumulative application of norms contained in the GATT and the GATS is heavily favoured. This may be due, in part, to the fact that because the supply of goods and services is highly interrelated, it is typically difficult to objectively define the boundary between these two regimes (whether a measure's target is a good or a service).Footnote 97 With respect to the TRIPS agreement, it is, arguably, even more important that WTO adjudicating bodies recognize real conflict in a case dealing with the interaction of TRIPS norms on the one hand, and of GATT or GATS norms on the other hand. It has been noted that one factor which might have consequences for the interaction of the GATT, GATS and TRIPS agreements is the fact that ‘the basic rationales underlying the agreements differ’.Footnote 98 Each of these agreements adopts a similar regulatory approach to the regulation of trade measures affecting goods, services and trade-related aspects of intellectual property rights respectively. For example, each agreement contains non-discrimination principles that are fundamental cornerstones of the multilateral trading system, namely, most favoured nation (MFN) and national treatment obligations.Footnote 99 However, it would appear that the negotiators of the TRIPS agreement intended for it to differ, to some extent, in its approach to regulation. An over-zealous desire to protect the unity of the WTO Agreement even when faced with a real conflict could have the effect of unnecessarily altering the intended regulatory approach of the TRIPS agreement. This is explained further below.
The regulatory approach of the TRIPS agreement is different from that of other WTO agreements. Indeed, in India — Patents the Panel stated that the TRIPS agreement ‘occupies a relatively self-contained, sui generis status in the WTO Agreement’.Footnote 100 The TRIPS agreement does not, per se, establish substantive international standards for the protection of intellectual property rights. Rather, it establishes certain minimum standards in the area of intellectual property protection and enforcement and, therefore, in its regulatory approach, it is concerned with constructing a global regulatory floor and not a global regulatory ceiling.Footnote 101 Thus, WTO Members are afforded a measure of discretion to base their domestic intellectual property regimes on higher standards of protection and enforcement—so-called ‘TRIPS plus’—provided that such protection does not contravene the provisions of the TRIPS agreement. To the extent that contradictory TRIPS and GATT provisions can be streamlined through a legitimate employment of principles of interpretation, no serious legal issue arises from the cumulative application of these provisions. However, should the preference for cumulative application be maintained even in the face of real conflict, it may not be entirely accurate to speak of TRIPS constituting a global regulatory floor for intellectual property protection and enforcement. Pursuant to Article 1.1 of TRIPS, a WTO Member may exercise a discretion to implement ‘TRIPS plus’ standards provided that, in doing so, it does not contravene provisions of the TRIPS agreement.Footnote 102 Insisting on the cumulative application of TRIPS, GATT and GATS obligations in every case would mean that a WTO Member would not only have to comply with the TRIPS agreement if it wishes to implement ‘TRIPS plus’ standards, but would also have to simultaneously comply with obligations arising under GATT or even GATS, regardless of whether a real conflict existed between GATT, GATS and TRIPS provisions. In effect, the insistence on cumulative application could dilute the extent to which the TRIPS agreement can be considered as a global regulatory floor, particularly, in cases where a WTO Member may have to refrain from exercising an explicit right under the TRIPS agreement to implement higher standards of intellectual property protection because of a conflicting GATT or GATS obligation. If one is to pay more than lip service to the Panel's description of the TRIPS agreement as a ‘relatively self-contained, sui generis’ regime, then it would seem that in cases of a real conflict between the GATT, GATS and TRIPS agreements, one agreement will have to be applied in isolation from the other. In short, where a TRIPS provision constitutes lex specialis, its purpose of ensuring intellectual property protection should be accorded priority.
The common thread running through the Panel and Appellate Body reports examined in this section is that there is an absence of hierarchy among the GATT, GATS and TRIPS agreements. The agreements are not mutually exclusive and, thus, must be complied with cumulatively. Unqualified statements emphasizing the fact that the agreements are not mutually exclusive are, necessarily, premised on a proposition that no conflict can occur between the agreements. Thus, issues of conflict are separate to and, perhaps from a strictly legal perspective, more fundamental than the issue of overlap in the application of treaty norms.Footnote 103 However, notions of ‘conflict’ and of ‘overlap’ are tangentially related. Thus, statements concerning the overlapping nature of agreements deserve to be qualified by a recognition that overlapping agreements are, potentially, conflicting agreements. Conceptually, ‘conflict’ and ‘overlap’ should be seen as occupying opposite ends of the same spectrum. If norms contained in overlapping agreements are inherently contradictory, the concept of ‘overlap’ slides to the opposite end of the spectrum. At that point, conflict must be recognized as real and not apparent. Conflict must be resolved and not avoided.
V. CONCLUSION
A recurring theme throughout this article has been the single-undertaking nature of the WTO Agreement. Although the concept of a single undertaking was devised during the Uruguay Round to increase the coherence of multilateral trade rules, it had the paradoxical effect of increasing the potential for conflicting rights and obligations between WTO covered agreements. This is primarily because situations of conflict were not sufficiently foreseen and catered for at the negotiation stage. While this had the effect of transferring to the judicial organs of the WTO the competence to define the contours of the interrelationship of WTO covered agreements, the single-undertaking device has also heavily influenced the manner in which WTO adjudicating bodies approach situations of potential conflict and overlap between WTO covered agreements. As highlighted above, the single-undertaking nature of WTO rights and obligations presumes that WTO norms constitute an integrated and coherent system of multilateral rules; creates a heavy presumption against conflict; demands cumulative and simultaneous compliance with all WTO norms; disengages the application of conflict rules under international law such as the lex posterior rule codified in Article 30 of the VCLT; and appears to privilege an application of the principle of lex specialis that, to some degree, diverges from the understanding of that principle under general international law.
Uncertainty appears to surround the issue of norm conflict in general and intra WTO norm conflict in particular. The conceptual contours of the notion of treaty conflict have not been precisely defined, leaving foundational considerations like the very definition of ‘norm conflict’ in a state of uncertainty. This uncertainty provides a treaty interpreter with one means of avoiding treaty conflict by adopting a definition of conflict which has the result of avoiding conflict between the treaty provisions at issue. As shown in Section III of this article, there is still lingering within the quasi-judicial wing of the WTO a lack of consensus on the definition of norm conflict. While WTO adjudicating bodies have vacillated with regard to the definition of conflict, the Appellate Body in EC — Bananas III seemed to accept, albeit implicitly, the Panel's broad definition of conflict in that case.
The negotiators of the WTO Agreement failed to address the relationship between the GATT, GATS and TRIPS agreements at the negotiation stage. This omission will probably never be corrected at the political level as it is highly unlikely that WTO members will be able to reach a consensus as to what the approach to conflict should be. Consequently, the interaction of GATT, GATS and TRIPS must be regulated at the quasi-judicial level. This is not entirely undesirable since, in the absence of a conflict rule, the relationship between the agreements can be considered on a case-by-case basis. However, a first step in regulating that relationship is recognizing that conflict between the norms contained in these agreements is possible, if not, inevitable. As highlighted in Section IV, WTO adjudicating bodies tend to overemphasize the interrelationship of WTO agreements, thus, facilitating the accumulation of norms rather than conflict of norms in every case. This approach might be best explained by the institutional and normative environment within which the special regime of WTO law is situated. This environment appears to allow for, and potentially mandates a judicial approach to intra WTO conflict that accords with the telos of the single undertaking as an integrated framework regulating international trade. It could be that, thus far, a Panel has not really been faced with a ‘hard case’ in which it would be forced to pronounce itself unambiguously on the issue of intra WTO norm conflict. However, while there has arguably not been a case of real norm conflict before the WTO dispute settlement system, WTO adjudicating bodies have approached the question of overlap in the application of WTO agreements in a manner which, tacitly, excludes the possibility of intra WTO norm conflict. In the result, intra WTO conflict will possibly never be real; will often be deemed as merely apparent; and will sometimes be avoided.
