A Failed Attempt to Pursue a Correct Contextual Interpretation

The interpretation approach taken by the Panel and AB in China – Raw Materials is not much different from the AB report of China – Publications and Audiovisual Products.

Even though the Panel and AB of China – Raw Materials intended to bring in relevant contexts to support its textual interpretation, their reports are still largely dominated by a narrow textual interpretation. This is rather disappointing because in the beginning of its

414 Gu, supra note 47, at 22.

415 Spiegel-Feld & Switzer, supra note 62, at 27.

416 China – Raw Materials AB Report, ¶ 304

417 Spiegel-Feld & Switzer, supra note 62, at 27.

418 Id.; Tyagi, supra note 18, at 408.

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report the Panel correctly identified the crux of the issue.⁴¹⁹ The Panel pointed out that this issue involves the legal status of the AP within the WTO Agreement and the relationship between different legal instruments within the WTO legal and institutional framework, in particular paragraph 11.3 of the AP and other provisions of the WTO Agreement.⁴²⁰ After asking the right questions, the Panel identified the interpretative method applied by the AB of China – Publications and Audiovisual Products. The Panel observed that the AB of China – Publications and Audiovisual Products did not discuss the systemic relationship between provisions of the AP and GATT, but rather focused on the text of paragraph 5.1 and its surrounding context.⁴²¹ This flow of reasoning seems to suggest that the Panel have recognized the flaw in the previous case and planned to take a different route. Disappointingly, the Panel did not take a different approach and did not clearly address these questions, either.

Rather, the Panel applied a narrow textual interpretation, as the AB of China – Publications and Audiovisual Products did, with a limited analysis of context. This textual approach was later confirmed by the AB. Accordingly, the WTO judiciary misses a chance to supplement its prior decisions and future adjudicators are likely to resort to textual analysis when dealing with cross-agreement application in the WTO.⁴²²

The Panel and AB conducted a limited contextual analysis, which is insufficient to solve this cross-agreement-application predicament. The Panel and AB only assessed a few paragraph in the AP and China’s Working Party Report as context.⁴²³ Moreover, while examining relevant context in the WTO Agreements, they both performed a narrow contextual analysis without taking account of the broad systemic structure of the WTO Agreements.

419 Tyagi, supra note 18, at 405.

420 China – Raw Materials AB Report, ¶ 7.116.

421 Id. ¶ 7.117.

422 Spiegel-Feld & Switzer, supra note 62, at 27.

423 Julia Ya Qin, The Predicament of China’s “WTO-Plus” Obligation to Eliminate Export Duties: A Commentary on the China-Raw Materials Case, 11 CHIN.J.INT.LAW 237, 241 (2012).

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They found that some WTO Agreements contain their own exceptions and TRIMs Art. III specifically makes reference to GATT Art. XX. Under this contextual finding, they ruled that GATT Art. XX is not a general exception for a non-GATT violation in principle unless it is incorporated by the text of the infringed provision. This contextual interpretation is too narrow to solve a systemic issue like this. The present issue requires a broad assessment of the WTO Agreements and reading the WTO Agreements as a whole because it concerns cross-agreement application. The WTO judiciary should address the systemic relationship between the AP and the GATT, GATT Art. XX in particular. Specifically, a close scrutiny should be directed to the systemic position of paragraph 11.3 of the AP. Thus, the Panel and AB’s contextual approach is too narrow and limited to correctly handle this issue.

i. Context in Paragraph 11.3 of China’s Accession Protocol

The contextual interpretation made by the Panel and AB is flawed with ill-grounded reasoning.⁴²⁴ The Panel and AB first looked into the context provided in paragraph 11.3 and found that the paragraph contains its own specific exceptions, i.e. Annex 6 and GATT Art.

VIII. More importantly, they observed that paragraph 11.3 explicitly mentions GATT Art. VIII but leaves out GATT Art. XX.⁴²⁵ In assessing the applicability of GATT Art. XX, the Panel employed the general legal canon of construction, i.e. expressio unius est exclusio alterius, which means that the expression or inclusion of one thing implies the exclusion of another.⁴²⁶ Thus, the Panel and AB attached significant importance to this omission and considered the

424 Liu, supra note 47; Gu, supra note 47; Qin, The Predicament of China’s “WTO-Plus” Obligation to Eliminate Export Duties, supra note 423.

425 China – Raw Materials Panel Report, ¶ 7.129; China – Raw Materials AB Report, ¶¶ 291, 303.

426 China – Raw Materials Panel Report, ¶ 7.129 n.178.

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omission a deliberate choice of China and WTO Members to exclude invocation of GATT Art.

XX.⁴²⁷

This absence-equates-waiver approach is problematic, especially for the applicability issue. The absence of a treaty term does not necessarily mean that such term is unequivocally excluded. The absence might be because that achieving non-trade policy objectives under the AP never crossed the mind of the negotiators and therefore paragraph 11.3 only includes directly related exceptions, i.e. 84 items listed in Annex 6 and payment for service rendered under GATT Art. VIII. Or, the absence may still imply something and this concept is confirmed by the AB in U.S. – Carbon Steel. The AB in U.S. – Carbon Steel observed that

“the task of ascertaining the meaning of a treaty provision with respect to a specific requirement does not end once it has been determined that the text is silent on that requirement. Such silence does not exclude the possibility that the requirement was intended to be included by implication.”⁴²⁸ At least, the silence should not be interpreted in a way that makes China’s export duties commitments the most stringent and scared obligation in the WTO.⁴²⁹ Applying the doctrine of expressio unius est exclusio alterius in the present issue is likely to bind China with judicial-made obligations that it did not expressly accept and might not have been willing to accept.⁴³⁰ Besides, the Panel and AB did not provide any reasonable explanation for adopting the absence-equates-waiver approach.⁴³¹ Accordingly, interpreting treaty silence in the present case via the doctrine expressio unius est exclusio alterius is debatable.

427 Id. ¶ 7.129; China – Raw Materials AB Report, ¶ 303.

428 Appellate Body Report, United States – Countervailing Duties on Certain Corrosion-Resistant Carbon Steel Flat Products from Germany, ¶65, WT/DS213/AB/R (Nov. 28, 2003) [hereinafter U.S. – Carbon Steel AB Report].

429 Baroncini, supra note 388, at 18.

430 Qin, The Predicament of China’s “WTO-Plus” Obligation to Eliminate Export Duties, supra note 423, at 241;

RICHARD K.GARDINER, TREATY INTERPRETATION 145, 147 (2008).

431 The reasons provided by the Panel and AB are unsustainable, which will be explained later.

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Furthermore, scholars pointed out that the absence-equates-waiver interpretation seems to disconnect obligations under the AP from those under the GATT.⁴³² The Panel’s and AB’s reasoning appears to suggest that only the obligations expressed in the paragraph 11.3 will govern China. This reading will lead to an absurd result that fundamental obligations in the GATT, such as most-favored-nation treatment and national treatment, will not apply because they are not expressed in paragraph 11.3. This is not in line with the concept that the WTO obligations constitute a single undertaking and nor is it compatible with paragraph 1.2 of the AP, which provides that China’s AP is an integral part of the WTO Agreement.

In addition, scholars observed that the interpretation in China – Raw Materials seems to contradict with that in China – Publications and Audiovisual Products. In China – Publications and Audiovisual Products, China intended to invoke GATT Art. XX to justify violation of paragraph 5.1 of the AP. Paragraph 5.1 of the AP also provides a specific set of exceptions, i.e. Annex 2A and 2B. The U.S. in that case proposed that China could only resort to the self-contained exceptions, instead of GATT Art. XX and this allegation was rejected by the AB back then. However, in China – Raw Materials, a specific set of exceptions leads the Panel and AB to conclude that China can only invoke the expressed exceptions, i.e. Annex 6 and GATT Art VIII, but not GATT Art. XX. The AB’s reasoning in these two cases appears to contradict each other.⁴³³

ii. Context in Paragraph 11.1 and 11.2 of China’s Accession Protocol

The Panel and AB then examined the immediate context of paragraph 11.3, i.e.

paragraph 11.1 and 11.2. They observed that paragraph 11.1 and 11.2 both contain the phrase

“in conformity with the GATT 1994” and in contrast such phrase does not appear in paragraph

432 Gu, supra note 47, at 18–19.

433 Id. at 19.

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11.3. Based on the interpretative principle of effectiveness, which requires interpreters should give meaning to each word of a treaty, comparing with paragraph 11.1 and 11.2, the Panel and AB read the omission of “in conformity with the GATT 1994” in paragraph 11.3 as a deliberate choice of China and WTO Members.⁴³⁴

However, this reasoning is incorrect. The omission cannot infer that China and WTO Members decided to renounce the right under GATT Art. XX. It is only normal that such phrase is not written into paragraph 11.3 because there is no general obligation under the GATT regulating export duties.⁴³⁵ The Panel and AB also recognized that China’s export-duty commitments exclusively arise from China’s AP.⁴³⁶ While on the contrary, paragraph 11.1 and 11.2 built upon the general obligations under the GATT and thus paragraph 11.1 and 11.2 make reference to the GATT to reassure the general obligations under the GATT are respected and followed. Hence, the absence of a textual reference to the GATT in paragraph 11.3 does not mean that GATT Art XX is deliberately denied. Furthermore, Section 5 of the AP also supports this reading. Paragraph 5.1 begins with an introductory clause “without prejudice to China’s right to regulate trade in a manner consistent with the WTO Agreement,” whereas such clause does not exist in paragraph 5.2. It would be absurd to conclude that GATT Art.

XX is only available to paragraph 5.1 but not 5.2 because paragraph 5.2 is an extended obligation from paragraph 5.1.⁴³⁷ Accordingly, the absence of a reference to the GATT does not necessarily mean GATT Art. XX is deliberately rejected.

The Panel further reasoned that if China and WTO Members had wanted GATT Art.

XX to be an available defense in the paragraph 11.3, they could have made China’s export

434 China – Raw Materials Panel Report, ¶ 7.138; China – Raw Materials AB Report, ¶ 293.

435 LESTER ET AL., supra note 56, at 258; Baroncini, supra note 388, at 22.

436 China – Raw Materials Panel Report ¶ 7.142; China – Raw Materials AB Report, ¶ 293.

437 This argument is discussed in B, Section 3, Chapter 5. Gu, supra note 47, at 17.

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duties commitments an integral part of the GATT.⁴³⁸ For instance, the Panel suggested that WTO Members could have incorporated China’s export duties obligations into China’s GATT Schedule and in that case, GATT Art. XX is an available defense.⁴³⁹ This reasoning was not mentioned by the AB on appeal.

Liu opposes to the Panel’s suggestion because Liu observes that GATT Schedule is comprised of import-related obligations, instead of exports.⁴⁴⁰ Liu explains that in general, Members’ Schedules contain a list of commitments on market access, such as bound tariff rates and access to services markets. It is pertinent to imports and not exports. Each Member’s Schedule consists of four parts: 1. most-favoured-nation concessions, maximum tariffs to goods from other WTO members; 2. preferential concessions (tariffs relating to trade arrangements listed in GATT Article I); 3. concessions on non-tariff measures; and 4. specific commitments on domestic support and export subsidies on agricultural products.⁴⁴¹ Liu does not think China’s export duties commitments belong to any of these categories and thus cannot be included in the GATT Schedule.⁴⁴²

Differently, Qin comments that China should have incorporated its export duties commitments into its GATT Schedule.⁴⁴³ Qin considers that commitments on tariff reduction should be included in the Schedule.⁴⁴⁴ Yet, Qin does not reject the applicability of GATT Art.

XX because China’s export duties commitments are not listed in its GATT Schedule. Qin observes that in practice, export-duty commitments have not been incorporated into Members’

438 China – Raw Materials Panel Report, ¶ 7.140.

439 Id.

440 Liu, supra note 47, at 154.

441 Schedules of Concessions on Goods, WORLD TRADE ORG.,http://www.wto.org/english/tratop_e/schedules_

e/goods_schedules_e.htm (last visited June 26, 2013).

442 Liu, supra note 47, at 154.

443 Qin, The Predicament of China’s “WTO-Plus” Obligation to Eliminate Export Duties, supra note 423, at 245.

444 Id.

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GATT Schedule.⁴⁴⁵ Until recently, Russia breaks this practice and creates a new precedent. In Russia’s GATT Schedule, there are extensive commitments on export-duty. Thus, following the Panel’s reasoning, Qin concludes that Russia is entitled to GATT Art. XX defense if violation of its export-duty obligations occurs.⁴⁴⁶

This thesis finds it hard to conclude that because China’s export-duty commitments are not included in its GATT Schedule, it can be inferred that WTO Members intended to exclude the applicability of GATT Art. XX. It seems more likely that, as proposed by Liu, export-duty commitments do not fit into any of those categories in the GATT Schedule and thus China and WTO Members placed them under the AP. The reason that Russia’s export-duty obligations are situated under Russia’s GATT Schedule is neither because of an established practice in the WTO nor an understanding that obligations included in the GATT Schedule enjoy GATT Art. XX defense whereas others do not. Rather, it is because of ruling of China – Raw Materials and Russia tries to secure its access to GATT Art. XX. It cannot be concluded that China’s placement of export duties commitments is an express intent of WTO Members to exclude the application of GATT Art. XX, especially given that China is the first acceding Member that agrees to so many unprecedented obligations. This thesis also notices that Members’ schedules of concessions are either annexed to the Marrakesh Protocol to the GATT or annexed to a Protocol of Accession.⁴⁴⁷ Thus, the Panel’s reasoning will lead to an unreasonable result that Members who annex their schedules of concessions to the GATT are entitled to GATT Art. XX defense while Member who annex their schedule of concessions to their AP are not. Accordingly, whether GATT Art. XX is an applicable defense should not

445 Id.

446 Id.

447 Schedules of Concessions on Goods, WORLD TRADE ORG.,http://www.wto.org/english/tratop_e/schedules_

e/goods_schedules_e.htm (last visited June 26, 2013).

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depend on the placement of the obligations, but the nature and characteristics of the obligations.

iii. Context in China’s Working Party Report

After reviewing the immediate context of paragraph 11.3 of the AP, the Panel and AB turned to the context in China’s Working Party Report. China asserted that paragraph 170 of the Working Party Report and paragraph 11.3 of the AP fall under the same subtitle, “Taxes and Charges Levied on Imports and Exports” and therefore paragraph 170 should cumulatively apply to China’s export duties obligations.⁴⁴⁸ As paragraph 170 stipulates that all Chinese laws and regulations relating to all fees, charges or taxes levied on imports and exports would be in full conformity with its WTO obligations, China contended that it can invoke GATT Art. XX for inconsistency with export duties commitments under paragraph 11.3.⁴⁴⁹

Nevertheless, the Panel and AB rejected this allegation. The Panel and AB reasoned that the subject matter governed under paragraph 170 of the Working Party Report is different from that under paragraph 11.3 of the AP.⁴⁵⁰ The Panel and AB reports seem to suggest that China’s export duties commitments under paragraph 11.3 of the AP are exclusively governed by paragraph 155 and 156 of the Working Party Report, not paragraph 170.⁴⁵¹ The Panel and AB found support from the systemic position of paragraph 155 and 156 and paragraph 170.

Paragraph 155 and 156 is placed under 1. “Customs Tariffs, Fees and Charges for Services Rendered, Application of Internal Taxes to Exports” of subsection C “Export Regulations,”

while paragraph 170 is situated under 1. “Taxes and Charges Levied on Imports and Exports”

448 China – Raw Materials AB Report, ¶ 296.

449 Id.

450 Id. ¶¶ 112-113; China – Raw Materials Panel Report, ¶¶ 7.141-7.143.

451 Gu, supra note 47, at 12.

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of subsection D “Internal Policies Affecting Foreign Trade in Goods.” Hence, in the viewpoint of the Panel and AB, export duties commitments fall under paragraph 155 and 156 and therefore paragraph 170 is not applicable. This reasoning appears to suggest that the scope of paragraph 155 and 156 and that of paragraph 170 are mutually exclusive.⁴⁵² Following this line of thought, once a measure is defined as an export regulation under subsection C, it cannot constitute an internal policy affecting foreign trade in goods under subsection D at the same time.

Yet, this mutually exclusive theory seems untenable as it is hard to reconcile with the fact that when drafting the AP, China and WTO Members decided to place export duties commitments under the title of “Taxes and Charges Levied on Imports and Exports.” They might have recognized that export duties commitments share a common ground with paragraph 170 and constitute a part of “Taxes and Charges Levied on Imports and Exports.”⁴⁵³ In addition, a subject matter may be governed under two sections simultaneously due to different regulatory aspects and this does not mean they are two different things.⁴⁵⁴ As suggested by the titles, it is more likely that subsection C aims to center on export regulations while subsection D means to deal with internal policies affecting both imports and exports.

The scope of subsection C may overlap that of subsection D.⁴⁵⁵ In the present case, both paragraph 155 and 156 and paragraph 170 should apply to measures on export duties.⁴⁵⁶

The AB further observed that the subject matter of paragraph 170 is informed by paragraph 169.⁴⁵⁷ Paragraph 169 expresses Members’ concerns about the application of the

452 Id.

453 Id.

454 Liu, supra note 47, at 154.

455 Gu, supra note 47, at 12.

456 Id. at 20.

457 China – Raw Materials AB Report, ¶ 298.

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value-added taxes and additional charges levied by sub-national governments on imports. The AB thus tried to confine the scope of paragraph 170 to the concerns in paragraph 169.⁴⁵⁸ The AB report seems to suggest that paragraph 170 actually governs internal policies affecting the application of value-added tax and additional charges levied by sub-national government on imports. Obviously, this reading is at odd with the inclusive language of paragraph 170.

Paragraph 170 clear sets out the subject matters, i.e. all fees, charges or taxes levied on imports and exports. It does not limit its application to value-added tax and additional charges levied by sub-national government on imports. Rather, noting the concerns in paragraph 169, paragraph 170 aims to reinforce that the GATT should have effect throughout China’s laws and regulations relating to all fees, charges or taxes levied on imports and exports.⁴⁵⁹

The Panel also examined paragraph 164 and 165 of the Working Party Report and found that these two paragraphs specifically refers to justification under the GATT when regulating the use of quantitative restrictions on exports. From this context, the Panel concluded that GATT Art. XX is not an available defense for export duties commitments due to the absence of such reference.⁴⁶⁰ The Panel’s contextual reading is likely to lead to an undesired result. This reading seems to suggest that China should have employed export quotas or licenses, instead of export duties. At least, China would still retain the right to

The Panel also examined paragraph 164 and 165 of the Working Party Report and found that these two paragraphs specifically refers to justification under the GATT when regulating the use of quantitative restrictions on exports. From this context, the Panel concluded that GATT Art. XX is not an available defense for export duties commitments due to the absence of such reference.⁴⁶⁰ The Panel’s contextual reading is likely to lead to an undesired result. This reading seems to suggest that China should have employed export quotas or licenses, instead of export duties. At least, China would still retain the right to

在文檔中 GATT一般例外條款於WTO入會議定書之適用可能性 (頁 97-109)