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CAN AUTHORITATIVE INTERPRETATION UNDER ARTICLE IX:2 OF THE AGREEMENT ESTABLISHING THE WTO MODIFY THE RIGHTS AND OBLIGATIONS OF MEMBERS?

Published online by Cambridge University Press:  13 February 2008

Tarcisio Gazzini
Tarcisio Gazzini
Affiliation:
Lecturer in International Law, University of Glasgow.
Rights & Permissions [Opens in a new window]

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Type
Shorter Articles, Comments and Notes
Information
International & Comparative Law Quarterly , Volume 57 , Issue 1 , January 2008 , pp. 169 - 181
Copyright
Copyright © 2008 British Institute of International and Comparative Law

I. Introduction

Article IX:2 of the Agreement Establishing the World Trade Organization is a provision of ‘high potential relevance’.Footnote 1 It gives the Ministerial Conference and the General Council the exclusive authority to adopt interpretations of the Agreement establishing the WTO, the General Agreement on Tariffs and Trade and the other Multilateral Trade Agreements.Footnote 2 It is undisputed that these interpretations are legally binding for all Members and the adjudicating bodies of the Organization.Footnote 3 This essay discusses the most important and controversial question concerning this provision, namely whether authoritative interpretations can modify the rights and obligations stemming from membership of the Organization.Footnote 4

Since this is essentially a question of treaty interpretation, the article follows the structure of Article 31 of the Vienna Convention on the Law of Treaties (VCLT), bearing in mind that ‘[i]nterpretation pursuant to the customary rules codified in Article 31 of the Vienna Convention is ultimately a holistic exercise that should not be mechanically subdivided into rigid components.’Footnote 5 First, however, the practice on Article IX:2 will be addressed briefly.

II. WTO practice on article IX:2

WTO practice on Article IX:2 is particularly scarce. Neither the Ministerial Conference nor the General Council have adopted any authoritative interpretation yet.Footnote 6 Only once has a Member—the European Communities—requested the General Council to adopt an authoritative interpretation. The request regarded the sequencing issueFootnote 7 and was opposed by the United States on the ground that it was seeking to amend the relevant provisions.Footnote 8 Ultimately it failed to produce any concrete results.

More recently, some MembersFootnote 9 and the WTO SecretariatFootnote 10 have proposed the adoption of an authoritative interpretation of Article 30 of the TRIPS Agreement with a view to implementing paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health. Eventually, Members opted for a decision on waiver and subsequently a formal amendment of the treaty.Footnote 11

Reports of adjudicating bodies contain only sporadic and incidental references to authoritative interpretations.Footnote 12 The most significant and yet controversial reference was made by the Appellate Body in a footnote in US–‘FSC’. Footnote 13 It has been argued that in this footnote the Appellate Body ‘implicitly endorsed’ the view that authoritative interpretations may add to or diminish Members' rights and obligations under the WTO Agreement.Footnote 14

The significance of this footnote is rather limited. In the first place, the very fact that the statement was relegated to a footnote induces prudence. Additionally, the footnote was inserted in the discussion on the 1981 Council Action which was adopted under rather peculiar circumstances and was, as admitted by the Appellate Body, ‘somewhat equivocal in tenor’.Footnote 15

It is also worth noting that for the Panel the expression ‘affecting the rights and obligations of Members’, which was used in the 1981 Council Action, did not necessarily imply any modification of these rights and obligations. In the words of the Panel,

[a]n interpretation which was legally binding on all contracting parties would … by its very binding nature ‘affect’ rights and obligations of contracting parties under the General Agreement, even if that interpretation simply served to ‘clarify’ the precise scope of those rights and obligations.Footnote 16

The footnote, therefore, does not amount in itself to conclusive proof that authoritative interpretations under Article IX:2 may not only clarify WTO law but also modify it. The implication that authoritative interpretations change existing law is not necessary. Nor would the opposite view make the footnote redundant or meaningless. Indeed, the distinction between an authoritative interpretation and an interpretation made by adjudicating bodies in dispute settlement proceedings would remain clear: only the former is legally binding upon all Members.

III. Ordinary meaning of article IX:2

As for any other treaty provision, Article IX:2 is to be interpreted in accordance with the relevant provisions of the VCLT, which have attained the status of customary law.Footnote 17 Under Article 31 (1), in particular, a treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose. The three elements referred to in Article 31 (1)—namely ‘ordinary meaning of the terms’, ‘their context’ and ‘the object and purpose of the treaty’—are ordered as ‘a logical progression’ not creating any hierarchy.Footnote 18

The ICJ has maintained—perhaps in too categorical terms—that

the first duty of a tribunal which is called upon to interpret and apply the provisions of a treaty, is to endeavour to give effect to them in their natural and ordinary meaning in the context in which they occur. If the relevant words in their natural and ordinary meaning make sense in their context, that is the end of the matter.Footnote 19

The key term of Article IX:2 is ‘interpretation’. Its ordinary meaning is quite clear: it is ‘the process of determining the meaning of a text’.Footnote 20 Interpretation aims at establishing the content of a given provision and in particular the existence and the extent of rights and obligations of the contracting parties. It must therefore be based on the acts concluded and behaviour taken by the contracting parties before interpretation is given.Footnote 21 This includes the subsequent practice of Members and does not prevent the interpreter from taking into account the contemporary concerns of the community of nations.Footnote 22

Hence, interpretation is not a law-creating exercise and must remain distinguished from modification of treaties.Footnote 23 In India–Patent, in particular, the Appellate Body observed that

[t]he principles of treaty interpretation set out in Article 31 of the Vienna Convention … neither require nor condone the imputation into a treaty of words that are not there or the importation into a treaty of concepts that were not intended. … Both panels and the Appellate Body must be guided by the rules of treaty interpretation set out in the Vienna Convention, and must not add to or diminish rights and obligations provided in the WTO Agreement.Footnote 24

No compelling reasons call for a departure from the ordinary meaning of the term ‘interpretation’ in Article IX:2. When adopting an interpretation under Article IX:2, therefore, the Ministerial Conference and the General Council determine the meaning of a given provision in accordance with the rules contained in the VCLT.

The argument that the application of the rules of interpretation contained in the VCLT ‘does not make much sense for a decision emanating from a non-judicial, political organ’Footnote 25 is not convincing. Contracting Parties can certainly bestow on a political body the power to adopt interpretations of a given treaty. They may even commit themselves to accept such interpretations as binding. A remarkable example is Article 1131 (2) of NAFTA according to which an interpretation by the Free Trade Commission (hereinafter FTC)—composed of a representative for each Member of the Organization—shall be binding on a Tribunal established under Chapter Eleven. The power of the Commission to adopt legally binding interpretations has never been challenged on the ground of the political character of the Commission.Footnote 26

The fact that authoritative interpretations are adopted by political bodies—instead of judicial bodiesFootnote 27—is not only permissible but also logically consequent with the purpose of Article IX:2.Footnote 28 In this sense, Article IX:2 gives the Ministerial Conference and the General Council the exclusive mandate to adopt legally binding interpretations and sets the procedure for the exercise of such a mandate. The nature and size of these organs may render the task particularly problematic but are not necessarily insurmountable obstacles.

Whereas the binding character clearly distinguishes these interpretations from those adopted by the adjudicating bodies,Footnote 29 admitting that authoritative interpretations may modify Members' rights and obligations would give to the term ‘interpretation’ a special meaning. Yet, there is no evidence that the contracting parties intended to give to such a term a special meaning.Footnote 30 Neither the adjective ‘authoritative’Footnote 31 nor the exclusive competence of the Ministerial Conference and the General Council to adopt authoritative interpretations requires attributing to the term ‘interpretation’ a special meaning.

Quite the contrary, the United States unequivocally declared that

[i]t should be clear to Members from the text and context of WTO Articles IX and X, and from their negotiating history, that interpretations pursuant to Article IX:2 are designed primarily to address situations where the precise meaning of a negotiated text may be considered unclear or where, in the process of translating text into another official language of the WTO, a word may have been used which conveys a slightly different meaning.Footnote 32

The practice related to Article 1131 of NAFTA confirms the aversion of the Members to modification of their rights and obligations through a decision adopted by a political body. When the FTC adopted the—rather controversial—interpretation of Article 1105,Footnote 33 all Members maintained that the interpretation did not amount to an amendment of the treaty.Footnote 34 This attitude cannot but be amplified in large multilateral treaties.

Furthermore, interpreting Article IX:2 as allowing the Ministerial Conference and the General Council to modify the rights and obligations of Members would have serious implications from the standpoint of the constitutional law of Members. It cannot be lightly presumed that bodies normally composed of Ministers or Ambassadors could legally commit Members without any involvement of the organs competent under the respective municipal laws to accept international trade obligations.

It is significant that amendments under Article X require the acceptance of all or a qualified majority of Members through the deposit of an instrument of acceptance within the period specified by the Ministerial Conference. This provision confirms the purely intergovernmental nature of the Organization and is intended to allow each Member to comply with its own rules and procedures related to the acceptance or modification of international obligations.

It is reassuring that the implementation of paragraph 6 of the Doha Declaration—which required the modification of the rights and obligations of Members—was pursued not as an agreed authoritative interpretation under Article IX:2 but rather through a decision on waivers under Article IX:3 of the Agreement Establishing the WTOFootnote 35 and subsequently through an amendment of Article 31 TRIPS.Footnote 36

Under Article 31 (f), in particular, compulsory licensing is permitted provided inter alia that the use of patent is authorized predominantly for the supply of the domestic market. This limitation has caused serious difficulties to Members with insufficient or no manufacturing capacities in the pharmaceutical sector from tackling public health problems. In order to address these difficulties, it has been necessary inter alia to suspend the application of the ‘predominantly’ requirement.Footnote 37 Irrespective of where the threshold of predominance is set, this clearly alters the rights and obligations of Members and cannot be obtained through authoritative interpretations.

IV. Context and relationship with article X

It is submitted that the ordinary meaning of Article IX:2 is sufficiently clear in the sense of excluding a modification of the Members rights and obligations through authoritative interpretations. In accordance with the holistic approach referred to aboveFootnote 38 and following the logical progression of Article 31 VCLT,Footnote 39 nevertheless, it is always a useful exercise to verify whether the ordinary meaning of the terms of a treaty is confirmed by or at least consistent with their context as well as the object and purpose of the treaty.Footnote 40 The notion of ‘context’ for the purpose of Article 31 (2) VCLT is particularly broadFootnote 41 and certainly includes the whole treaty to which the concerned provision belongs.Footnote 42 This is even more compelling with regard to Article IX:2, which according to its last sentence cannot be used in a manner that would undermine the amendment provisions of Article X.

In the first place, the very existence of a specific provision for the formal amendment of the covered treaties militates against the possibility of modifying the Member rights and obligations through an interpretation under Article IX:2.

The complexity of Article X, moreover, reveals the prudence and thoughtfulness of contracting parties when they considered how the covered treaties could be amended.Footnote 43 For the purpose of this paper and leaving aside the special arrangements for certain provisions of GATS and TRIPS, the following points need to be mentioned.

Article X:2 lists a number of provisions that can be amended only with the consent of all Members. The inclusion in this category of Article IX confirms the importance attached by Members to this provision as it deals with delicate constitutional questions, including the adoption of authoritative interpretations.

Under Article X:3, amendments that alter the rights and obligations of the Members not falling within Article X:2 must be accepted by two-thirds of the Members and shall be binding only upon those Members accepting them. However, the Ministerial Conference may decide by a three-fourths majority that the amendment is of such a nature that recalcitrant Members shall be free to withdraw from the Organization or to continue their membership with the consent of the Ministerial Conference.

Under Article X:4, conversely, amendments that do not alter the rights and obligations of the Members shall be binding upon all Members upon acceptance by two-thirds of them. The last paragraph is particularly interesting as it unequivocally means that amendments under Article X do not necessarily imply an alteration of the Members' rights and obligations.

Thus, Article X:4 and Article IX:2 offer Members two alternative options to define their legal relationships without altering their rights and obligations. The different qualified majorities required by Article X:4 and Article IX:2 may be explained by the different procedures leading to an amendment or an authoritative interpretation. The former is accepted through the deposit of an instrument of acceptance within the period fixed by the Ministerial Conference; the latter is directly adopted by the Ministerial Conference or the General Council.

Yet, accepting that authoritative interpretations adopted by a qualified majority can modify the rights and obligations of all members would make the guarantees offered by Article X ineffective and ultimately undermine this provision. The argument that the verb ‘undermine’ is relatively strong and permits minor revisions of trade rules, since otherwise Article IX:2 would be largely redundant and void of effect,Footnote 44 is not convincing. Nothing in Article IX or in Article X suggests that there exist different categories of amendments and even less different legal treatments for ‘substantial’ and ‘minor’ amendments. Conversely, reading Article IX:2 as allowing authoritative interpretations to modify existing rules—even within certain limits—is not compatible either with the text of this provision nor with the procedures for amendment carefully defined in Article X.

Finally, excluding that authoritative interpretations can modify the rights and obligations of Members does not affect at all the importance of Article IX:2. This provision establishes the exclusive authority of the Ministerial Conference and the General Council to adopt binding interpretations and the procedure for the adoption of such interpretations. Hence, Article IX:2 not only logically stands alone; it also perfectly completes the rules related to amendments established by Article X.

V. Object and purpose of article IX:2

The interpretation of Article IX:2 based on the ordinary meaning and supported by the contextual analysis of Article X may also be tested against the intention of the contracting parties. The meaning of the reference to the object and purpose of the treaty contained in Article 31(1) VCLT is far from clear.Footnote 45 Avoiding doctrinal disputes, the Appellate Body has pragmatically adopted the view that ‘[t]he purpose of treaty interpretation under Article 31 VCLT is to ascertain the common intention of the parties’.Footnote 46 Although Article 31(1) VCLT refers to the object and purpose of the treaty as a whole, nothing prevents the interpreter from considering also the object and purpose of specific provisions as part and parcel of the treaty itself.Footnote 47

The most obvious purpose of Article IX:2 is to provide a simple and effective mechanism to clarify the meaning of WTO rules when these rules are unclear or allow more than one interpretation.Footnote 48 Yet, through the adoption of an authoritative interpretation, the Ministerial Conference and the General Council may improve the uniformity and predictability not only of future decisions by adjudicating bodies, but also of the measures taken by Members in application of WTO law.

With Article IX:2, the parties also intended to introduce in the Organization a ‘necessary instrument of checks and balance’.Footnote 49 While accepting the (quasi)automatic adoption of the adjudicating bodies' reports, Members expressly gave the Ministerial Conference and the General Council the exclusive competence to adopt binding interpretations. This provision makes it possible to correct an interpretation of WTO rules given by adjudicating bodies when three-quarters of the MembersFootnote 50 consider it as inconsistent with their intentions and therefore erroneous.Footnote 51 Yet, as observed by the Appellate Body in India–Patent Protection, ‘[t]he duty of a treaty interpreter is to examine the words of the treaty to determine the intention of the parties’.Footnote 52

The Panel decision in Australia–Leather may exemplify the scenario for the corrective use of authoritative interpretations. For the Panel, the term ‘withdraw the subsidy’ employed in Article 4.7 of the Agreement on Subsidies and Countervailing Measures (SCM) is not limited to prospective action, namely the withdrawal of the WTO-inconsistent measures, and may encompass repayment of the prohibited subsidy.Footnote 53 This interpretation was strongly criticized by many Members,Footnote 54 including both parties to the dispute. Although a sufficiently broad consent seemed to exist, Members did not seek an authoritative interpretation under Article IX:2.

Thus, Article IX:2 introduces a mechanism to guarantee that the adjudicating bodies do not have the last word with regard to the interpretation of WTO agreements. It reserves to the Member States the right to adopt a binding interpretation aimed at confirming their intention when they accepted a given provision and their understanding as to its content.Footnote 55 It was therefore logical to confer on political bodies—the Ministerial Conference and the General Council—the exclusive authority to adopt such interpretations.

Moreover, since under Article IX:2 the Ministerial Conference and the General Council ensure the correct interpretation of the covered agreements, it is simply logical that they apply the relevant rules of customary international law as reflected in the VCLT. It is worth observing that the documents submitted by NAFTA Members States in relation to the binding interpretation adopted by the FTC mentioned above systematically referred to the VCLT and postulated the application of its rules by the FTC.Footnote 56

The effects of authoritative interpretations are confined to pending and future disputes. Admitting that they can have retroactive effects, in the sense that a party to an adjudicated dispute could request the establishment of a new panel ruling on the basis of a subsequent authoritative interpretation, would be at odds with the res judicata principle and the independence of adjudicating bodies, and would ultimately undermine the credibility of the whole dispute settlement system.Footnote 57

Article IX:2 raises another important and delicate question, namely whether adjudicating bodies may exercise judicial review of authoritative interpretations adopted by the Ministerial Conference and the General Council. Judicial review should be admissible precisely because the power to adopt authoritative interpretation is strictly limited to the clarification of existing rules, not their development.Footnote 58 The very existence of this limit implies the risk of violating it. It is therefore necessary to guarantee Members—especially those opposing the adoption of the authoritative interpretation—a remedy against abuses of Article IX:2.

It may be argued that, in the context of a dispute between Members involving a provision that has been interpreted under Article IX:2, each party may challenge the validity of the authoritative interpretation on the ground that it amounted to an amendment. Panels and the Appellate Body might review the authoritative interpretation for the sole purpose of assessing whether it has altered the rights and obligations of the Members. Should this be the case, they may declare it invalid.Footnote 59

In support to this approach in a different context, Jennings has observed that an interpretation adopted by the FTC under Article 1131 of NAFTA that cannot be reconciled with the text of the provision interpreted nor with any canon of interpretation, should be treated by NAFTA Tribunal as ‘an attempted amendment that has no binding effect’.Footnote 60

Regardless of the admissibility of judicial review, a question which has an important ‘constitutional’ yet untested dimension, it is clear that interpreting Article IX:2 in the sense of allowing the Ministerial Conference and the General Council to clarify the meaning of WTO law—and not to add or diminish the rights and obligations of the Members—fully reflects the common intention of the parties.

VI. Subsequent practice of members with regard to article IX:2

It is generally accepted in international law and expressly provided for in Article 31 (3) (b) of the VCLT that the interpreter shall take into account subsequent practice of MembersFootnote 61 in the application of the treaty.Footnote 62

On several occasions WTO adjudicating bodies have insisted that subsequent practice for the purpose of interpreting a treaty is ‘a “concordant, common and consistent” sequence of acts or pronouncements which is sufficient to establish a discernable pattern implying the agreement of the parties regarding its interpretation’.Footnote 63 The essence of subsequent practice, therefore, is the ‘agreement’ or ‘common understanding among Members’Footnote 64 as to the meaning of the provision.

Not all Members must necessarily participate in this practice:Footnote 65 acceptance of the relevant practice may be deduced from Members' behaviour.Footnote 66 Reversing the finding of the Panel on this point,Footnote 67 the Appellate Body has recently declared that unqualified lack of reaction by Members may not be sufficient to establish their acceptance of subsequent practice. It pointed out that

in specific situations, the ‘lack of reaction’ or silence by a particular treaty party may, in the light of attendant circumstances, be understood as acceptance of the practice of other treaty parties. Such situations may occur when a party that has not engaged in a practice has become or has been made aware of the practice of other parties (for example, by means of notification or by virtue of participation in a forum where it is discussed), but does not react to it.Footnote 68

What is needed, therefore, is acquiescence by the Members not actively involved in the subsequent practice. Hence, their intentional decision not to react implies that they share the interpretation given to the treaty by other Members.

The paucity of Members' practice already mentioned aboveFootnote 69 hardly allows considering subsequent practice when interpreting Article IX:2. However, it is worth pointing out ad abundantiam that nothing in the only request for an authoritative interpretation put forward so far suggests that the requesting Member was deliberately seeking a modification of the relevant treatiesFootnote 70 and that the at least another Member strongly opposed any reading of Article IX:2 in the sense of allowing the modification of the Members' rights and obligations through authoritative interpretations.Footnote 71

VII. Conclusions

The ordinary meaning of Article IX:2 is quite clear: the Ministerial Conference and the General Council can clarify but not modify the rights and obligations of Members of WTO rules through authoritative interpretations. This conclusion is supported by the context of this provision and the common intention of Members. Furthermore, modifications of WTO law without the involvement of the organs competent under municipal law to accept international trade obligations would be a rather surprising departure from normal practice and was certainly not the intention of the contracting parties in relation to Article IX:2. Significantly, Article X, which remains the only avenue to amend WTO law, requires the acceptance of the amendment by all or a qualified majority of Members through the deposit of an instrument of acceptance. It also carefully defines how WTO law can be amended—with or without alteration of Members' rights and obligations—and equally carefully protects recalcitrant Members against undertaking trade obligations they are not prepared to accept.

Article IX:2, nevertheless, remains an important—albeit often neglected—provision of WTO law for at least two reasons. On the one hand, authoritative interpretations are a simple and effective mechanism to clarify the meaning of WTO rules when these rules are unclear or allow more than one interpretation. On the other hand, authoritative interpretations are a necessary instrument of checks and balances. Adjudicating bodies do not have the last word with regard to the interpretation of WTO rules. The main political bodies of the Organization have been conferred the exclusive authority to adopt binding interpretation in order to ensure that WTO rules are interpreted correctly and in accordance with the intention of the Members.

References

1 C-D Ehlermann and L Ehring, ‘The Authoritative Interpretation Under Article IX:2 of the Agreement establishing the World Trade Organization: Current Law, Practice and Possible Improvements’ (2005) 8 JIEL 803, 812.

2 In Japan–Taxes on Alcoholic Beverages, AB Report (4 Oct 1996) WT/DS11/AB/R [1996] 1 DSR, 107, the Appellate Body concluded that ‘[t]he fact that such an “exclusive authority” in interpreting the treaty has been established so specifically in the WTO Agreement is reason enough to conclude that such authority does not exists by implication or by inadvertence elsewhere.’

3 The French text, which employs the expression ‘interprétation faisant autorité’, is equally clear. In US–Tax Treatment for ‘Foreign Sale Corporations’, AB Report, (24 Feb 2000) WT/DS108/AB/R, para 112, the Appellate Body described authoritative interpretations as ‘generally binding’ where ‘generally’ means with regard to all Members. See Ehlermann and Ehring (n 1) 807.

4 In the affirmative, see Ehlermann and Ehring (n 1) 808–12; J Pauwelyn, Conflict of Norms in Public International Law (CUP, Cambridge, 2003) 112. Contra, F Biermann, ‘The Rising Tide of Green Unilateralism in World Trade Law’ (2001) 35 J World Trade 421, 436; FA Abbott, ‘The Doha Declaration on the TRIPS Agreement and Public Health: Lighting a Dark Corner at the WTO’ (2002) 5 JIEL 469, 492–3; H Nottage and T Sebastian, ‘Giving Legal Effect to the Results of WTO Trade Negotiations: An Analysis of the Methods of Changing WTO Law’ (2006) 9 JIEL 989, 1003.

5 EC–Customs Classification of Frozen Boneless Chicken Cuts, AB Report (12 Sept 2005) WT/DS269/AB/R, para 176. See also US–Section 301–310 of the Trade Act of 1974, Panel Report (22 Dec 1999) WT/DS152/R, para 7.22. According to I Sinclair, The Vienna Convention on the Law of Treaties (2nd edn, MUP, Manchester, 1984) 153, ‘[i]nterpretation is a process involving the deployment of analytical and other skills: it cannot be reduced to a few propositions capable of purely automatic application in all circumstances’. See also M Fitzmaurice, ‘Canons of Treaty Interpretation under the 1969 VCLT as Applied by the WTO and the NAFTA—Selected Case Studies’ (2005) 10 Austrian Rev Intl Eur L 49 F Ortino, ‘Treaty Interpretation and the WTO Appellate Body Report in US–Gambling: A Critique’ (2006) 9 JIEL 117.

6 For example, Ehlermann and Ehring (n 1) 818, ‘the non-use to date of the authoritative interpretation is to be deplored’.

7 Request of an Authoritative Interpretation pursuant to Article IX:2 of the Treaty Establishing the WTO (25 Jan 1999) WT/GC/W/133. The sequencing issue concerns the relationships between Arts 21.5 and 22.2 DSU, and in particular the question whether the Dispute Settlement Body (DSB) is empowered to authorize Member A to suspend concessions or other obligations with regard to Member B, in the absence of a decision by a panel or the Appellate Body on non-compliance by Member B with recommendations or rulings by the DSB.

8 Procedures for Amendment and Interpretation of the DSU (5 Feb 1999) WT/GC/W/144. See below text n 32.

9 See, in particular, the documents prepared by the EC and by a group of developing countries, respectively, Concept Paper Relating to Paragraph 6 of the Doha Declaration (4 Mar 2002) IP/C/W/339, and Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (24 June 2002) IP/C/W/355.

10 Proposals on Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health: Thematic Compilation (11 July 2002) IP/C/W/363.

11 See below, Part III.

12 See, in particular, Japan–Alcoholic Beverages (n 2) 107; and US–Wool Shirts and Blouses, AB Report (WT/DS33/AB/R) [1997] 1 DSR, 340–41.

13 US–‘FSC’, AB Report (n 3) WT/DS108/R, footnote 127. The footnote reads: ‘The distinction between an authoritative interpretation and an interpretation made in dispute settlement proceedings is made clear in the WTO Agreement. Under the WTO Agreement, an authoritative interpretation by the Members of the WTO, under Article IX:2 of that Agreement, is to be distinguished from the rulings and recommendations of the DSB, made on the basis of panel and Appellate Body Reports. In terms of Article 3.2 of the DSU, the rulings and recommendations of the DSB serve only ‘to clarify the existing provisions of those agreements’ and ‘cannot add to or diminish the rights and obligations provided in the covered agreements’.

14 Ehlermann and Ehring (n 1) 808–12.

15 Above n 13, para 109. Through the 1981 Council Action, the Members involved in four cases concerning tax legislation eventually agreed on the adoption of the panel reports issued in 1976. At that time, any Member could prevent the adoption of a report. The Council Action was adopted under GATT 1947, subject to an understanding and accompanied by a statement from the Chairman of the Council.

16 US–‘FSC’, Panel Report (8 Oct 1999) WT/DS108/R, para 7.68.

17 In US–Standards for Reformulated and Conventional Gasoline, AB Report (10 Apr 1996) WT/DS4/AB/R, p 16, the Appellate Body held that Article 31 VCLT ‘forms part of the “customary rules of interpretation of public international law” which the Appellate Body has been directed, by Article 3 (2) of the DSU, to apply …’. See also, more recently, US–Measures Affecting the Cross-Border Supply of Gambling and Betting Services (7 April 2005) WT/DS285/AB/R, para 159. As observed by Fitzmaurice (n 5) 92, ‘[i]n general, it must be said that the recent case law of the WTO (especially that of the Appellate Body), indicates that the rules on treaty interpretation as enshrined in the 1969 VCLT are fully acknowledged and adhered to.’ The view that Art 31 VCLT reflects customary law has constantly been held also by the ICJ. For a recent decision, see Sovereignty over Pulau Litigan and Pulau Sipadan (Merits) [2002] ICJ Rep, para 37.

18 A Aust, Modern Treaty Law and Practice (2nd edn, CUP, Cambridge, 2000) 234.

19 Competence of Assembly regarding Admission to the United Nations (Advisory Opinion) [1950] ICJ Rep 4, 8. More recently, in Sovereignty over Pulau (n 17), it confirmed that ‘[i]nterpretation must be based above all upon the text of the treaty.’ The ILC, in turn, pointed out that ‘the starting point of interpretation is the elucidation of the meaning of the text, not an investigation ab initio into the intention of the parties’ (1966-II) 18 Yearbook ILC 221. In US–Import Prohibition of Certain Shrimp and Shrimp Products, AB Report (12 Oct 1998) WT/DS58/AB/R, para 114, the Appellate Body observed that ‘[a] treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted’. In EC–Measures Concerning Meat and Meat Products (Hormones) (16 Jan 1998) WT/DS26/AB/R, para 181, it further noted that ‘[t]he fundamental rule of treaty interpretation requires a treaty interpreter to read and interpret the words actually used by the agreement under examination, not words the interpreter may feel should have been used.’

20 Harvard Law School, ‘Draft Convention on the Law of Treaty, Comment to Article 19’ (1935/Suppl) 29 AJIL 938. See also R Jennings and A Watts, Oppenheim's International Law (9th edn, Longman, London, 1991) 1267.

21 As observed by T-C Yü, The Interpretation of Treaties (Columbia University Press, New York, 1927) 136, ‘the essence of the principle of interpretation … is to ascertain through all sources of evidence what is the standard agreed upon, namely what is the sense which the contracting parties mutually attached to the terms of the agreement’ (italics added).

22 See, for instance, US–Shrimp (n 19) para 129. In Japan–Alcoholic Beverages (n 2) 122, the Appellate Body held that WTO rules ‘are not so rigid or so inflexible as not to leave room for reasoned judgements in confronting the endless and ever-changing ebb and flow of real facts in real cases in the real world’. As pointed out by RY Jennings, ‘What is International Law and How do We Tell It when We see it’ (1981) 37 Ann Suisse Droit Intl 59, 75, the interpreter may perceive that ‘familiar, existing materials form a pattern, when looked at in a right or just novel, perspective, which has not hitherto been fully appreciated.’

23 A parallel may be drawn between an interpretative declaration and a reservation to a treaty, the former defined in the United Nations Office of Legal Affairs, Treaty Handbook <http://untreaty.un.org/English/TreatyHandbook/hbframeset.htm>(last accessed 30 June 2007) as ‘a declaration by a State as to its understanding of some matter covered by a treaty or its interpretation of a particular provision. Unlike reservations, declarations merely clarify a State's position and do not purport to exclude or modify the legal effect of a treaty.’

24 India–Patent Protection for Pharmaceutical and Agricultural Chemical Products WT/DS50/AB/R, paras 45–6. See also US–Shrimp (n 19) para 114.

25 Ehlermann and Ehring (n 1) 808.

26 ‘North American Free Trade Agreement, 17 December 1992’ (1993) 32 ILM 612. The significant differences between NAFTA and WTO notwithstanding, practice on Art 1131 of NAFTA may offer interesting indications as to the meaning and function of Art IX:2.

27 As, for instance, the preliminary rulings of the European Court of Justice under Art 234 of the Treaty Establishing the European Communities.

28 See below Part IV.

29 However, nothing prevents the Ministerial Conference and the General Council from adopting non-binding declarations on the interpretation of WTO provisions. See, for instance, Ministerial Conference, Declaration on the TRIPS Agreement and Public Health (Doha 14 Nov 2001) WT/MIN(01)/DEC/2.

30 In Conditions for Admission (n 19) 63, the ICJ made it clear that in order to ‘warrant an interpretation other than which ensues from the natural meaning of the words, a decisive reason would be required’. The ILC, in turn, declared that ‘the parties are to be presumed to have that intention which appears from the ordinary meaning of the terms used by them’, (1966-II) 18 Yearbook ILC 221.

31 Although it does not appear in the text of Art IX:2, interpretations adopted under this provision are generally qualified as ‘authoritative’. It is important to note that ‘interpretations’ are expressly qualified as ‘authoritative’ for the purpose of Art 3.9 of the DSU.

32 See the document above n 8, p 3.

33 Free Trade Commission, Notes of Interpretation of Certain Chapter 11 Provisions (31 July 2001) <http://www.naftaclaims.com/files/NAFTA_Comm_1105_Transparency.pdf>. For a sharp critique of the Commission interpretation see Second Opinion of Professor R. Jennings in Methanex Corporation v United States, UNCITRAL (NAFTA), available at <http://www.naftaclaims.com/disputes_us_methanex.htm>.

34 See the following documents submitted in relation to Methanex Corporation v United States: United States, First Submission re: FTC Statement on Article 1105 (26 Oct 2001) and Second Submission re: FTC Statement on Article 1105 (17 Dec 2001); Canada, Article 1128 Submission re: FTC Statement on Article 1105 (8 Feb 2002); Mexico, Article 1128 Submission re: FTC Statement on Article 1105 (11 Feb 2002) (all documents available at <http://www.naftaclaims.com/disputes_us_methanex.htm>).

35 General Council, Implementation of Paragraph 6 of the Doha Declaration on the TRIPS Agreement and Public Health (30 Aug 2003) WT/L/540.

36 General Council, Amendment of the TRIPS Agreement (8 Dec 2005) WT/L/641. At the end of September 2007, only 11 Members out of 151 have accepted the amendment.

37 The ‘predominantly’ requirement will be definitely removed if the amendment enters into force.

38 Above n 5.

39 According to Sinclair (n 5) 130, ‘reference to the object and purpose of the treaty is, as it were, a secondary or ancillary process in the application of the general rule of interpretation. The initial search is for the “ordinary meaning” to be given to the terms of the treaty in their “context”; it is in the light of the object and purpose of the treaty that the initial and preliminary conclusion must be tested and either confirmed or modified.’

40 Such an exercise is necessary when it is impossible to interpret a provision on the basis of the ordinary meaning, see, for instance, EC–Customs Classification of Certain Computer Equipment (5 June 1998) WT/DS62/AB/R, para 88; or when more than one interpretation is acceptable, see EC–Conditions for the Granting of Tariffs Preferences to Developing Countries (7 April 2004) WT/DS246/AB/R, para 152.

41 It includes (a) any agreement relating to the treaty which was made between all the parties in connection with the conclusion of the treaty and (b) any instrument which was made by one or more parties in connection with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty. In EC–Chicken (n 5) para 199, the Appellate Body considered the Harmonized System as context for the purpose of interpreting WTO agreements. In US–Gambling (n 17) para 175, it stressed that Art 31 (2) refers to agreement or acceptance of the parties.

42 Chile–Price Band System and Safeguard Measures Relating to Certain Agricultural Products WT/DS207/AB/R, para 255.

43 In the document referred to above n 8, p 5, the United States insisted that ‘the drafters of the WTO Agreement's amendment provisions were particularly sensitive to the possibility that a future Member of the WTO might someday seek to subvert the intention of the agreement through interpretations of agreements or amendments which were not seen by all Members as being in their interests. For this reason, the drafters clearly specified in the final sentence of Article IX:2 that it cannot be used to undermine the amendment provisions of Article X. The drafters also made amendments of the DSU subject to a consensus rule.’

44 See Ehlermann and Ehring (n 1) 810–11.

45 See generally J Klabbers, ‘Some Problems Regarding the Object and Purpose of Treaties’ (1997) 8 Finn YIL 138. For M Fitzmaurice, ‘The Practical Working of the Law of Treaties’ in M Evans (ed), International Law (OUP, Oxford, 2003) 189, the expression is ‘vague and ill-defined, making it an unreliable tool for interpretation’.

46 See, in particular, EC–Equipment (n 40) paras 84 and 93 (italics as in original). More recently, see EC–Chicken (n 5) para 239; US–Gambling (n 17) para 159 and 250.

47 In EC–Chicken (n 5) para 238, the Appellate Body observed that it is not necessary ‘to divorce a treaty's object and purpose from the object and purpose of specific treaty provisions, or vice versa. To the extent that one can speak of the “object and purpose of a treaty provision”, it will be informed by, and will be in consonance with, the object and purpose of the entire treaty of which it is but a component.’

48 In EC–Conditions for the Granting of Tariff Preferences to Developing Countries WT/DS246/AB/R, para 152, for instance, the Appellate Body conceded that both interpretations of ‘discriminate’ for the purpose of n 3 to para 2 (a) of the so-called Enabling Clause provided by the EC and India could be considered as reflecting ordinary meanings of the term.

49 Ehlermann and Ehring (n 1) 812.

50 The view that authoritative interpretation may be adopted by consensus, as maintained by Ehlermann and Ehring (n 1) 806, can be shared provided that at least three-quarters of the Members attend the meeting.

51 It is worth noting that in Mondev International Limited v United States, ICSID Case ARB(AF)/99/2, Hearing Transcript (22 May 2002) 670, the United States described Art 1131 of NAFTA as ‘a rule designed just so that the parties could assure that what they meant by NAFTA's terms could be made known whenever there were misinterpretations’ (quoted also in the Award, 11 Oct 2002, para 103).

52 Above n 24, para 83.

53 Australia–Subsidies Provided to Producers and Exporters of Automotive Leather—Recourse to Art 21.5 (21 Jan 2000) WT/DS126/RW, para 6.39.

54 See Minutes of the DSB Meeting (11 Feb 2000) WT/DSB/M/75.

55 With regard to binding interpretation adopted by FTC, in ADF Group Inc v United States, ICSID Case ARB(AF)/00/1, Award (9 Jan 2003) para 177, the Tribunal noted that ‘[n]o more authentic and authoritative source of instruction on what the Parties intended to convey in a particular provision of NAFTA, is possible.’

56 See for instance the documents listed above n 34.

57 In the document referred to above n 8, p 4, the United States took a stricter position and pointed out that ‘any “authoritative interpretation” of the WTO must apply only with respect to disputes initiated after the interpretation takes effects, that is, disputes for which a request for consultations is made on or after the adoption of that interpretation’ (italic as in original).

58 According to WTO Secretariat, ‘the validity of interpretation decisions that go so far as to amend provisions of WTO Agreements could be challenged on this basis’, IP/C/W/363/Add.1 (23 July 2002) 2. The choice of ‘authoritative’ instead of ‘authentic’ interpretations may further support this view.

59 Ehlermann and Ehring (n 1) 811, admit that the adjudicating bodies may review an authoritative interpretation challenged by a party to a dispute. In their opinion, however, the review determines whether the interpretation amounts to more than a ‘minor’ amendment and therefore is inconsistent with Art IX:2. On the rather unconvincing argument that authoritative interpretations may amount to minor amendments, see below Part III above.

60 Second Opinion (n 33). See also Methanex First Submission re: NAFTA FTC Statement on Art 1105 (18 Sept 2001) available at <http://naftaclaims.com/Disputes/USA/Methanex/MethanexInvestorFirstSubRe1105.pdf>. NAFTA Tribunals, however, have taken the opposite view, see, for instance, Mondev International Ltd v United States, ICSID Case ARB/99/2, Award (11 Oct 2002) para 103. It must nonetheless be stressed that Jennings argument is more compelling when interpretations are adopted by majority and with regard to a large multilateral treaty.

61 In Japan–Alcoholic Beverages (n 2) 106, the Appellate Body rightly disagreed with the Panel's finding that panel reports adopted by the DSB constitute ‘subsequent practice’ within the meaning of Art 31 VCLT.

62 See Case Concerning Kasikili/Sedudu Island (Botswana/Namibia) (Judgment) [1999] ICJ Rep, and the case-law referred to in para 50 of the decision. As noted by the ILC, (1966-II) 18 Yearbook ILC 221, ‘[t]he importance of such subsequent practice in the application of the treaty, as an element of interpretation, is obvious; for it constitutes objective evidence of the understanding of the parties as to the meaning of the treaty. Recourse to it as a means of interpretation is well-established in the jurisprudence of international tribunals.’

63 Japan–Alcoholic Beverages (n 2) 106; Chile–Price Band System (n 42) para 214; EC–Computer Equipment (n 40) para 90; US–Gambling (n 17) para 190; EC–Chicken (n 5) para 272.

64 US–Gambling (n 17) para 190 and 194 (italic as in original). The expression ‘common understanding’ was also used by the ILC (1966-II) 18 Yearbook ILC 222.

65 The text of the article related to subsequent practice provisionally adopted by the ILC in 1964 contained the expression ‘understanding of all the parties’. The word ‘all’ was subsequently abandoned to ‘avoid any possible misconception that every party must individually have engaged in the practice where is suffices that it should have accepted the practice’ (1966-II) 18 Yearbook ILC 222. As pointed out by RY Jennings, ‘Treaties’ in M Bedjaoui (ed), International Law: Achievements and Prospects (Nijhoff, Dordrecht, 1993) 145, what is needed for the purpose of Article 31 (3) (b) is agreement of ‘the parties as a whole’.

66 EC–Chicken (n 5) para 272.

67 ibid, Panel Report, 7.253.

68 ibid, para 272.

69 See Part II.

70 See above n 7.

71 See above n 8 and text n 32.