Those interested in how WTO law interacts with the rest of international law may know that in 2002 the UN International Law Commission (ILC) set up a Study Group to examine the “fragmentation” of international law. Well, the final report and conclusions of this Study Group are now published. In July-August of this year, the entire ILC “took note” of these conclusions and “commended” them to the UN General Assembly.
As Panels and the WTO Appellate Body have frequently referred to the ILC in their past decisions (remember the ILC Articles on State Responsibility and the ILC preparatory work on the Vienna Convention on the Law of Treaties), this report might find its way in Appellate Body case law. This is all the more likely as the report deals extensively with the WTO.
There are really two documents. First, a 250 page analytical study “finalized” by the Chairman of the ILC Study Group (Prof. Martti Koskenniemi of Finland). Second, a set of 42 conclusions collectively adopted by the Study Group and “taken note of” and “commended” by the entire ILC. The Study Group “emphasized that these conclusions had to be read in connection with the analytical study … on which they are based”.
For WTO purposes, several findings are interesting and all go in the direction of more, rather than less, international law in WTO dispute settlement.
First, the ILC confirms a distinction that some of us have long advocated, namely that between jurisdiction and applicable law, and explicitly applies it to the WTO:
“A limited jurisdiction does not, however, imply a limitation of the scope of the law applicable in the interpretation and application of those treaties … While the WTO Dispute Settlement Understanding limits the jurisdiction to claims which arise under the WTO covered agreements only, there is no explicit provision identifying the scope of applicable law”. (para. 45)
“Even as it is clear that the competence of WTO bodies is limited to consideration of claims under the covered agreements (and not, for example, under environmental or human rights treaties), when elucidating the content of the relevant rights and obligations, WTO bodies must situate those rights and obligations within the overall context of general international law (including the relevant environmental and human rights treaties)”. (para. 170)
Second, the ILC addresses a long-standing debate of whether international law is “in” unless contracted out from in the WTO, or whether international law is “in” only if explicitly incorporated by the WTO treaty. It concludes as follows:
“There seems, thus, little reason of principle to depart from the view that general international law supplements WTO law unless it has been specifically excluded and that so do other treaties which should, preferably, be read in harmony with the WTO covered treaties”. (para. 169)
“It is in the nature of ‘general law to apply generally’ - namely inasmuch as it has not been specifically excluded”. (para. 185)
“It is sometimes suggested that international tribunals or law-applying (treaty) bodies are not entitled to apply the law that goes “beyond” the four corners of the constituting instrument or that when arbitral bodies deliberate the award, they ought not to take into account rules or principles that are not incorporated in the treaty under dispute or the relevant compromis. But if … all international law exists in systemic relationship with other law, no such application can take place without situating the relevant jurisdiction endowing instrument in its normative environment. This means that although a tribunal may only have jurisdiction in regard to a particular instrument, it must always interpret and apply that instrument in its relationship to its normative environment - that is to say “other” international”. (para. 423, emphasis in the original)
Third, the ILC accepts the legality of inter se agreements restricting trade as between some WTO members only, in deviation of WTO rules, for as long as third party rights are respected:
“the GATT treaty contains no rules that would apply should two or more members wish to conclude an inter se agreement to restrict trade between themselves. In the absence of such rules, there appears to be nothing to prevent members from concluding an inter se agreement to the effect that in their dealings with each other they will not invoke, say, articles III and XI of the GATT with respect to what they feel to be justified trade restrictions. Such an agreement would affect the rights and obligations of the other members of WTO but as it would do so beneficially, the condition set in article 41 [Vienna Convention] would be satisfied”. (para. 306)
Fourth, when it comes to treaty interpretation that takes account of “any relevant rules of international law applicable in the relations between the parties” (as directed in Article 31.3(c) of the Vienna Convention), the ILC openly disagrees with the Panel on EC – Biotech. In what is quite a remarkable critique (remember, this is only an interim report, supposed to be confidential), the ILC does not think that such outside treaties need to be adopted by, or express the common intentions of, all WTO members:
“A better solution is to permit reference to another treaty provided that the parties in dispute are also parties to that other treaty. Although this creates the possibility of eventually divergent interpretations (depending on which States parties are also parties to the dispute), that would simply reflect the need to respect (inherently divergent) party will as elucidated by reference to those other treaties as well as the bilateralist character of most treaties underpinned by the practices regarding reservations, inter se modification and successive treaties, for example”. (para. 472)
The ILC Conclusions (nr. 22) are more ambiguous:
“Article 31 (3) (c) also requires the interpreter to consider other treaty-based rules so as to arrive at a consistent meaning. Such other rules are of particular relevance where parties to the treaty under interpretation are also parties to the other treaty, where the treaty rule has passed into or expresses customary international law or where they provide evidence of the common understanding of the parties as to the object and purpose of the treaty under interpretation or as to the meaning of a particular term”. (emphasis added)
Finally, the ILC defines “conflict” between norms broadly. Unlike some WTO decisions (Indonesia – Autos and, to some extent, US – Cotton), it holds that the criterion of “same subject matter” leads to a reductio ad absurdum (para. 22). To hold that there is no conflict between, say, Article III and the SCM Agreement or between a trade and an environmental agreement because the two do not exactly deal with the same subject matter is unsatisfactory. Rather, what the ILC calls for is to see, more specifically, whether the two rules in question “seem to point to different directions in their application by a party” (para. 23). The ILC “adopts a wide notion of conflict as a situation where two rules or principles suggest different ways of dealing with a problem” (para. 25).
ILC Conclusion Nr. 2 defines conflict as follows:
“Relationships of conflict. This is the case where two norms that are both valid and applicable point to incompatible decisions so that a choice must be made between them. The basic rules concerning the resolution of normative conflicts are to be found in the VCLT”.
