Gatt To Wto

The Decisions Bridging the GATT 1947 and the WTO Agreement
Author(s): Patrick M. Moore

Source: The American Journal of International Law, Vol. 90, No. 2 (Apr., 1996), pp. 317-328
Published by: American Society of International Law; Cambridge University Press
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1996] CURRENT DEVELOPMENTS 317
THE DECISIONS BRIDGING THE GAT T 1947

AND THE WTO AGREEMENT
I. INTRODUCTION
On September 20, 1986, the contracting parties to the General Agreement on Tariffs
and Trade of 1947 (GATT 1947) agreed to launch an eighth round of multilateral trade
negotiations known as the Uruguay Round. More than seven years later they concluded
the round, not with an amended version of the GATT 1947, but with an entirely new
treaty, the Agreement Establishing the World Trade Organization.'
The decision to conclude a new treaty created two major transitional issues. One
issue was determining the legal consequences of adherence to the GATT 1947 and
the WTO Agreement. Temporary adherence to both Agreements was desirable because
contracting parties to the GATT 1947 were not required to give effect to the WTO
Agreement at the same time; they could become members of the WTO Agreement at
any time for a period of two years after the date of its entry into force.2 Hence, a
seamless transition from the old regime to the new was achievable only if WTO mem-
bers remained GATT 1947 contracting parties until all GATT 1947 contracting parties
became WTO members.
Another transitional issue was determining the legal consequences of withdrawal from
the GATT 1947. The most important question was whether a country that withdrew
from the GATT 1947 would have to complete dispute settlement procedures initiated
before its withdrawal. This question promised to be particularly consequential with re-
spect to the Anti-Dumping Code3 and the Subsidies Code4 adopted at the conclusion of
the Tokyo Round because a dispute abandoned under these codes could not be reini-
tiated under the WTO Agreement.
To resolve these issues, the GATT 1947 contracting parties and the parties to the
above-mentioned Tokyo Round codes concluded a series of transitional decisions. This
paper first examines the problems that arose in attempting to apply the Vienna Conven-
tion on the Law of Treaties to the transition from the GATT 1947 to the WTO
Agreement. It then analyzes the problems posed by the interaction of the old and the
new treaties that the decisions attempted to resolve. Finally, this paper considers whether
the transitional decisions were necessary to ensure an orderly transition. Perhaps this
case study will be useful to other international organizations that decide to replace their
founding treaties with agreements reflecting the needs of today's world.
II. THE PROBLEMS
Successive treaties relating to the same subject matter can generate a variety of
incidental conflicts. The overriding problem is to determine which treaty provisions
'The Uruguay Round was concluded on December 15, 1993. Instruments resulting from the negotiations
included the Final Act Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations,
openedfor signatureApr. 15, 1994, GATT Doc. MTN/FA (1993), reprinted in 33 ILM 1125, 1143 (1994) (whereby
signatories agreed "to submit, as appropriate, the WTO Agreement for the consideration of their respective
competent authorities with a view to seeking approval . . . and . . . to adopt the Ministerial Declarations and
Decisions"); this embodied the Agreement Establishing the World Trade Organization, opened for signature
Apr. 15, 1994, reprinted in 33 ILM at 1144 (entered into force Jan. 1, 1995) [hereinafter WTO Agreement].
2WTO Agreement, supra note 1, Art. XIV:1.
' Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade, opened f
signatureApr. 12, 1979, GATT, BASIc INtSTRUMENTS AND SELECTED DOCUMENTS [BISD], 26th Supp. 171 (1979),
31 UST 4919.
'Agreement on Interpretation and Application of Articles VI, XVI, and XXIII of the General Agreement
on Tariffs and Trade, opened for signature Apr. 12, 1979, GATT, BISD, 26th Supp. 56 (1979), 31 UST 513.
318 THE AMERICAN JOURNAL OF INTERNATIONAL LAW [Vol. 90
to apply to a dispute between any combination of parties to the former treaty, the
successor treaty, or both treaties.5 Several provisions of the Vienna Convention on the
Law of Treaties of 19696 are designed to resolve this problem. As discussed below,
however, these provisions proved inadequate to clarify certain key legal relationships
created by the transition from the GATT 1947 to the WTO Agreement; namely, the
relationship between (1) a WTO member that remained a GATT 1947 contracting
party and a GATT 1947 contracting party that was not a WTO member, and (2) a
WTO member that withdrew from the GATT 1947 and a GATT 1947 contracting party
that was not a WTO member.7
Adherence to the Old and New Regimes
Article 30 of the Vienna Convention provides in part:
1. . . . [T] he rights and obligations of States Parties to successive treaties relating

to the same subject-matter shall be determined in accordance with the following
paragraphs:
4. When the parties to the later treaty do not include all the parties to the earlier
one:
(b) as between a State Party to both treaties and a State Party to only one of the
treaties, the treaty to which both States are parties governs their mutual rights and
obligations.
5. Paragraph 4 is without prejudice . . . to any question of responsibility that

may arise for a State from the conclusion or application of a treaty, the provisions
of which are incompatible with its obligations towards another State under another
treaty.
Article 30 seems to indicate that the GATT 1947 would govern trade relations between
a WTO member that remained a GATT 1947 contracting party and a GATT 1947
contracting party that was not a WTO member, to the extent that the two treaties were
compatible.8 Rules of state responsibility might relieve WTO members that remained
GATT 1947 contracting parties of obligations under the GATT 1947 that were incompati-
ble with the WTO Agreement.
The critical question was whether or not any provisions of the GATT 1947 and the
WTO Agreement were incompatible, a question that Article 30 of the Vienna Convention
does not resolve. Several relevant provisions are discussed in detail below.9 For present
purposes, suffice it to say that certain provisions of the GATT 1947 restrict conduct that
See IAN SINCLAIR, THE VIENNA CONVENTION ON THE LAW OF TREATIES 93-98 (1984).
6Vienna Convention on the Law of Treaties, opened for signature May 23, 1969, 1155 UNTS 331, repinted in
8 ILM 679 (1969).
7For a discussion of the entire gamut of legal relationships created by the transition, see Gabrielle Marceau,
Transition from GATT to WTO: A Most Pragmatic Operation, 29J. WORLD TRADE 147 (1995), an article that came
to this author's attention shortly before publication.
8 It is questionable whether Article 30 is applicable to the transition from the GATT 1947 to the WTO
Agreement at all. Article II:4 of the WTO Agreement, which provides that the GATT 1994 is "legally distinct"
from the GATT 1947; may have been intended to ensure that the WTO Agreement would not be viewed as
a successor treaty to the GATT 1947. On the one hand, "legally distinct" would seem to suggest the severance
of any juridical link between the GATT 1947 and the WTO Agreement. On the other hand, a successor treaty
is legally distinct from the predecessor treaty, not only by virtue of textual differences, but also because it is
accepted separately. Hence, it is not evident that the definition of the GATT 1994 as "legally distinct" from
the GATT 1947 necessarily meant that Article 30 of the Vienna Convention would not apply.
9 See "The Coexistence Decisions," infra p. 319.
the WTO Agreement permits but does not require. Hence, certain provisions seemed
incompatible insofar as the GATT 1947 prohibits permissible conduct under the WTO
Agreement. However, they seemed compatible to the extent that a WTO member can
satisfy its GATT 1947 commitments without contravening the WTO Agreement. In brief,
the consistency of the GATT 1947 and the WTO Agreement-and hence the application
of Article 70 of the Vienna Convention-was debatable.
Withdrawalfrom the Old Regime
The legal consequences of withdrawal from a treaty are the subject of Article 70 of
the Vienna Convention. It states:
1. Unless the treaty otherwise provides or the parties otherwise agree, the termina-
tion of a treaty under its provisions in accordance with the present Convention
(a) releases the parties from any obligation further to perform the treaty;
(b) does not affect any right, obligation or legal situation of the parties created
through the execution of the treaty prior to its termination.
2. If a State denounces or withdraws from a multilateral treaty, paragraph 1

applies in the relations between that State and each of the other parties to the treaty
from the date when such denunciation or withdrawal takes effect.
Article 70 seems to indicate that, although a withdrawing party no longer has to perform
a treaty, it must satisfy certain rights, obligations and legal situations that arose through
execution of the treaty prior to its withdrawal.
With respect to dispute settlement proceedings under GATT 1947 that were pending
when a party to the dispute withdrew from the GATT 1947, the scope of the unaffected
rights and obligations was difficult to determine. On the one hand, it could be argued
that "execution of the treaty" referred to the invocation of dispute settlement proce-
dures. Therefore, the right or obligation to complete dispute settlement would remain
unaffected. On the other hand, it could be argued that "execution of the treaty" meant
compliance with the findings of a dispute settlement panel. Since findings cannot be
executed prior to withdrawal if the dispute is pending at the time of withdrawal, no
rights or obligations with respect to pending disputes would "remain unaffected" by
withdrawal. Furthermore, even if there were a procedural obligation to complete the
resolution of pending disputes, such an exercise would be pointless because a withdraw-
ing party would have no obligation to "execute" panel recommendations that were
issued after withdrawal.
Like Article 30, Article 70 of the Vienna Convention was difficult to apply in the
context of the GATT 1947 and the WTO Agreement. However, the goal of the parties'
negotiations was not to predict how the issues might be resolved if and when WTO
members withdrew from or remained in the GATT 1947. The goal was to preempt
uncertain application of the Vienna Convention by negotiating a resolution to the transi-
tional issues in advance.
III. THE SOLUTIONS
The Coexistence Decisions
The parties to the GATT 1947, the Anti-Dumping Code and the Subsidies Code
reached separate arrangements defining the terms by which countries could remain
parties to these treaties for a transitional period once they became WTO members.'0
0" Decision on Transitional Co-Existence of the GATT 1947 and the WTO Agreement, adopted Dec. 8,
1994, GATT Doc. PC/ 12-L/7583 (final), reprinted in GATT, Focus (Information and Media Relations, Geneva,
Switzerland), Dec. 1994, at 4, and in draft form in 11 Int'l Trade Rep. (BNA) 1992 (Dec. 21, 1994); Decision
This section examines the substantive provisions of the GATT 1947-WTO Agreement
coexistence decision. The analysis explains the interaction of specific provisions in the
GATT 1947 and the WTO Agreement that the coexistence decision addressed, and it
evaluates the adequacy of the decision. Unless otherwise noted, the provisions of the
coexistence decisions regarding the two codes and the WTO Agreement were substan-
tively identical to those of the GATT 1947-WTO Agreement coexistence decision,
paragraph 1 of which reads as follows:
1. The contracting parties that are Members of the WTO may, notwithstanding
the provisions of the GATT 1947,
(a) accord to products originating in or destined for a Member of the WTO the
benefits to be accorded to such products solely as a result of concessions, commit-
ments or other obligations assumed under the WTO Agreement without according
such benefits to products originating in or destined for a contracting party that has
not yet become a Member of the WTO; and
(b) maintain or adopt any measure consistent with the provisions of the WTO
Agreement.
Paragraph 1(a) addressed the problems created by the most-favored-nation (MFN)

provisions of the GATT 1947."1 In particular, GATT 1947 Article I requires a contracting
party to extend to other contracting parties MFN treatment with respect to goods that
it offers to other countries, whether or not such treatment arises out of GATT 1947
obligations.'2 Hence, if a WTO member remained a GATT 1947 contracting party for
a transitional period, it might have to extend to other GATT 1947 contracting parties
any WTO benefit with respect to goods that was more favorable than the benefit it had
conferred pursuant to the GATT 1947, even if other GATT 1947 contracting parties
were not yet WTO members.
As discussed above,'3 Article 30 of the Vienna Convention calls for such a result if it
would be consistent with the GATT 1947 and the WTO Agreement. This result was
clearly compatible with the MFN treatment required by the GATT 1947. Extension of
WTO benefits to non-WTO members also seemed consistent with the WTO Agreement
insofar as the latter does not prohibit such a result. But it seemed incompatible to the
extent that it would impose obligations on WTO members that are not required by the
WTO Agreement.
Paragraph 1(a) resolved the uncertain application of Article 30. By allowing WTO
members that remained in the GATT 1947 to extend WTO benefits to WTO members
without extending such benefits to GATT 1947 contracting parties, paragraph 1(a)
on Transitional Co-Existence of the Agreement on Implementation of Article VI of the General Agreement

on Tariffs and Trade and the Marrakesh Agreement Establishing the World Trade Organization, adopted
Dec. 8, 1994, GATT Doc. PC/13-L/7584 (final), reprinted in draftform in 11 Int'l Trade Rep., supra, at 1992;
and Decision on the Transitional Co-Existence of the Agreement on Interpretation and Application of Articles
VI, XVI, and XXIII of the General Agreement on Tariffs and Trade and the Marrakesh Agreement Establishing
the World Trade Organization, adopted Dec. 8, 1994, GATT Doc. PC/16-L/7587 (final).
" Because the codes do not have MFN provisions, the coexistence decisions regarding the codes and the
WTO Agreement do not have a provision similar to paragraph 1 (a).
12 GATT 1947 Article I:1 provides in part:
With respect to customs duties and charges of any kind . . , any advantage, favour, privilege or immunity
granted by any contracting party to any product originating in or destined for any other country shall be
accorded immediately and unconditionally to the like product originating in or destined for the territories
of all other contracting parties.
General Agreement on Tariffs and Trade, Oct. 30, 1947, TIAS No. 1700, 55 UNTS 188. For subsequent
amendments, see JOHN H. JACKSON & WILLIAM J. DAVEY, LEGAL PROBLEMS OF INTERNATIONAL ECONOMIC
RELATIONS: DOCUMENTS SUPPLEMENT 1 (1989).
13 See text at notes 8-9 supra.
prevented GATT 1947 contracting parties that had not become WTO members from
invoking MFN provisions of the GATT 1947 to claim WTO benefits from GATT 1947
contracting parties that had become WTO members. The most important consequence
of this provision was that WTO members that remained GATT 1947 contracting parties
would not have to extend the lower tariff rates negotiated at the Uruguay Round to
GATT 1947 contracting parties that had not become WTO members.
Paragraph 1 (b) addressed the problems created by provisions of the WTO Agreement
that were facially more protectionist than their counterparts in the GATT 1947. For
example, GATT 1947 Article XI, subject to certain exceptions, called for the elimination
of quantitative restrictions. However, the Multi-Fibre Agreement of 197314 had separated
trade in textiles from the GATT 1947 framework, largely because certain net importers
of textiles had determined that the exceptions to Article XI, particularly the safeguard
provisions of Article XIX, were inadequate to protect their domestic interests.15
The Multi-Fibre Agreement was due to expire at the end of 1994 when the WTO
Agreement on Textiles and Clothing (WTO Textiles Agreement) was expected to enter
into force. The WTO Textiles Agreement was a transitional arrangement that would
gradually bring textiles under the disciplines of the GATT 1994.16 Textiles that were not
yet integrated into the GATT 1994 were subject to a safeguard test that was more akin
to the laxer test under Article 3 of the Multi-Fibre Agreement than the stricter test under
Article XIX of the GATT 1947.'7
However, once the Multi-Fibre Agreement ceased to exist, the GATT 1947 would
again govern trade in textiles between a WTO member that remained a GATT 1947
contracting party and a GATT 1947 contracting party that had not become a WTO
member. Therefore, WTO members that remained GATT 1947 contracting parties
would have to abide by the GATT 1947 safeguard test if they imposed quantitative
restrictions on textiles from GATT 1947 contracting parties that were not WTO mem-
bers, even though the transitional safeguard test of the WTO Textiles Agreement was
more permissive in that regard. This result would largely defeat the idea underlying the
WTO Textiles Agreement of a gradual progression to the GATT 1994.
Certain tariff rates on agricultural products negotiated during the Uruguay Round
also appeared more protectionist than preexisting rates. Unlike the provisions on textiles,
GATT 1947 Article XI:2 (c) expressly permitted many quantitative restrictions on agricul-
tural products. During the Uruguay Round, participants agreed to eliminate this excep-
tion to the norm by translating those restrictions into their tariff equivalents, a process
referred to as "tariffication." After negotiating tariff equivalents, delegations could pro-
ceed to negotiate lower tariffs.'8 Nevertheless, because of tariffication, the new tariff rate
under the WTO Agreement might be higher than the old rate under the GATT 1947.
Therefore, a GATT 1947 contracting party could argue that, pursuant to GATT 1947
Article IL,19 the new tariff could not be applied to it. To compound the problem, a WTO
14 Arrangement Regarding International Trade in Textiles, Dec. 20, 1973, GATT, BISD, 21st Supp. 3 (1975),
25 UST 1001 [hereinafter MFA].
5 HENRY R. ZHENG, LEGAL STRUCTURE OF INTERNATIONAL TEXTILE TRADE 1-5, 103 (1988).
6 Agreement on Textiles and Clothing, Annex IA to WTO Agreement, supra note 1, Art. I:1 [hereinafter
WTO Textiles Agreement].
17 Two of the criteria forjustifying quantitative restrictions under the GATT 1947 Article XIX "serious i
test are that an increase in imports occurred and that this increase resulted from unforeseen circumstances. In
contrast, under the "market disruption" test of MFA Article 3 and Article 6:4 of the WTO Textiles Agreement,
an 'imminent increase" in imports is sufficient, and this increase need not result from unforeseen circum-
stances.
18 Success! The Most Comprehensive Round Ever Is Concluded, GATT Focus, Dec. 1993, at 6.
'9 GATT 1947, supra note 12, Article II:1(b) provides in part:
The products described in Part I of the Schedule relating to any contracting party, which are the products
of territories of other contracting parties, shall, on their importation into the territory to which the
member might then argue that, pursuant to GATT 1994 Article 1,20 it would be entitled
to the lower (pretariffication) rate that a WTO member that remained a GATT 1947
contracting party would extend to GATT 1947 contracting parties that were not WTO
members.
Paragraph 1 (b) was designed to prevent GATT 1947 contracting parties from chal-
lenging WTO measures such as those described above that were inconsistent with the
GATT 1947. By allowing WTO members to maintain such measures "notwithstanding
the provisions of the GATT 1947," paragraph 1 (b) prohibited GATT 1947 contracting
parties that had not become WTO members from challenging such measures pursuant
to the GATT 1947.
Paragraph 2 of the GATT 1947-WTO Agreement coexistence decision provides:
2. The provisions of Article XXIII of the GATT 1947 shall not apply:
(a) to disputes brought against a contracting party which is a Member of the

WTO if the dispute concerns a measure that is identified as a specific measure at
issue in a request for the establishment of a panel made in accordance with Article
6 of the Understanding on Rules and Procedures Governing the Settlement of
Disputes in Annex 2 of the WTO Agreement [Dispute Settlement Understanding]
and the dispute settlement proceedings following that request are being pursued
or are completed; and
(b) in respect of measures covered by paragraph 1 above.
Since the GATT 1947 is both a stand-alone treaty and an integral part of the WTO
Agreement, any provision of the GATT 1947 can be invoked pursuant to that treaty or
as a provision of the GATT 1994 in the WTO Agreement.2' Therefore, it was possible
that a GATT 1947 dispute settlement panel (pursuant to GATT 1947 Article XXIII)
and a WTO dispute settlement panel (pursuant to Article 6 of the Dispute Settlement
Understanding22) might consider the same measure. Paragraph 2(a) was supposed to
prevent this possibility, not only because the establishment of two panels to consider the
same measure would be a waste of resources, but also because the panels might arrive
at inconsistent conclusions.
Paragraph 2(a) essentially provided that, once a measure became subject to WTO
dispute settlement procedures, that measure could not be disputed pursuant to the
GATT 1947; or, if a GATT 1947 panel had been established to consider the measure
before the request was made to establish a WTO panel, the GATT 1947 panel would
be discontinued. In either case, the complaining GATT 1947 contracting party would
have to live with the findings reached by the WTO panel.
Paragraph 2(a) did not answer certain operational questions. Most important, who
would decide whether a dispute brought under the GATT 1947 concerned a measure
identified in a request for the establishment of a WTO panel? Would identification of
a measure by the complaining WTO member be enough to prevent a GATT 1947 panel
from considering the same measure, or would some body have to agree that the same
measure was at issue? Paragraph 2(a) was silent on this matter.
The purpose of paragraph 2(b) is not entirely clear. Since a measure that arose
solely from the WTO Agreement or that was consistent with the WTO Agreement was
Schedule relates, and subject to the terms, conditions or qualifications set forth in that Schedule, be
exempt from ordinary customs duties in excess of those set forth and provided therein.
20 General Agreement on Tariffs and Trade 1994, in Annex IA to WTO Agreement, supra note 1, reprinted
in 33 ILM at 1154.
21 Id., Art. 1 (a).
22 Understanding on Rules and Procedures Governing the Settlement of Disputes, Annex 2 to W
Agreement, supra note 1, reprinted in 33 ILM at 1226.
permissible "notwithstanding the GATT 1947" under paragraph 1, such a measure

could not be disputed pursuant to the GATT 1947, whether or not paragraph 2(b)
existed. Paragraph 2(b) may have been meant to prevent a GATT 1947 panel from
considering whether or not a measure by a WTO member that remained a GATT 1947
contracting party was within the scope of paragraph 1. However, it is questionable
whether paragraph 2(b) accomplishes this goal, as it provides that GATT 1947 dispute
settlement shall not apply to measures covered by paragraph 1. Measures covered
by paragraph 1 either arise solely from the WTO Agreement or are consistent with
the WTO Agreement. If not, presumably they could be challenged pursuant to the
GATT 1947.
Ultimately, the ambiguities of paragraph 2(a) and (b) were not critical because their
invocation could be avoided altogether. In 1989, the GATT 1947 had adopted dispute
settlement rules (the Montreal Rules)23 to prevent defendants from dragging their feet
at every stage of dispute settlement. These rules ensured that a GATT 1947 contracting
party whose measure was challenged could block the establishment of a panel only at
the first meeting at which the request was made.24 Prior to the adoption of this rule,
parties could block requests indefinitely.25 Hence, when the Montreal Rules expired
upon entry into force of the WTO Agreement without having been renewed, GATT
1947 contracting parties could once again postpone the establishment of panels indefi-
nitely. As a result, GATT 1947 panels might never have occasion to interpret paragraph
2, or any other provision, of the coexistence decision.
Paragraph 3 of the coexistence decision states:
3. The legal instruments through which the contracting parties apply the GATT
1947 are herewith terminated one year after the date of entry into force of the
WTO Agreement. In the light of unforeseen circumstances, the CONTRACTING
PARTIES may decide to postpone the date of termination by no more than one year.
By setting a date for the termination of the GATT 1947, paragraph 3 ensured that the
period of coexistence between the GATT 1947 and the WTO Agreement would come
to a definitive end. The termination date would also encourage all WTO signatories to
complete domestic procedures for acceptance of the WTO Agreement before the old
multilateral trading regime ceased to exist. One year after the date of entry into force
of the WTO Agreement (or perhaps two years if unforeseen circumstances arose), any
GATT 1947 contracting party that had not become a WTO member would lack GATT
rights and obligations in the multilateral trading order.
The call for termination of the GATT 1947 potentially one year after entry into force
of the WTO Agreement might appear inconsistent with Article XVI:1 of the WTO
Agreement, which provides that eligible GATT 1947 contracting parties could become
original WTO members for a period of two years after the date of entry into force. From
this provision it might be implied that the GATT 1947 should have continued to exist
23 Improvements to the GATT Dispute Settlement Rules and Procedures, GATT, BISD, 36th Supp. 61
(1989).
24 Paragraph F(a) of the Montreal Rules, id. at 63, provides in part: "a decision to establish a panel . . .
[must] be taken at the latest at the Council meeting following that at which the request first appeared as an
item on the Council's regular agenda, unless at that meeting the Council decides otherwise."
25 Although GATT 1947 Article XXV:4 ostensibly permitted the contracting parties to reach decisions pursu-
ant to Article XXIII by majority vote, the GATT Council, which acted on behalf of the contracting parties,
had to authorize the establishment of a panel. Agreed Description of the Customary Practice of the GATT
in the Field of Dispute Settlement, annexed to Understanding regarding Notification, Consultation, Dispute
Settlement and Surveillance, GATT, BISD, 26th Supp. 210 (1979). The normal practice of the Council was
to act by consensus, which required the consent of the defendant government. GATT SECRETARIAT, GUIDE
TO GATT LAW AND PRACTICE: ANALYTICAL INDEX 1022-23 (1994); see ROBERT E. HUDEC, ENFORCING INTERNA-
TIONAL TRADE LAW: THE EVOLUTION OF THE MODERN GATT LEGAL SYSTEM 54 (1993).
for at least the same period of time; otherwise, countries might be temporarily left out
of the multilateral trading order.
On the other hand, it can be argued that the purpose of the two-year window for
becoming an original WTO member had nothing to do with ensuring a two-year period
of coexistence. The purpose was to give original signatories a grace period during which
they could accept the WTO without having to renegotiate the concessions they had
concluded during the Uruguay Round. After two years, original signatories would lose
this special status; like countries that were not original signatories, they would have to
accede on terms reflecting current trade realities. In other words, Article XVI:1 of the
WTO Agreement only concerned the terms by which original signatories became WTO
members. It was not intended to determine the fate of the GATT 1947.
The Withdrawal Decisions
As discussed above,26 the consequences of withdrawal from the GATT 1947, particu-
larly with respect to pending disputes, were difficult to derive from Article 70 of the
Vienna Convention. Therefore, the parties to the Anti-Dumping Code and the Subsidies
Code, but not the GATT 1947, concluded separate arrangements27 defining the legal
consequences of withdrawal from those treaties.28 The substantive language of these
decisions is identical. This section comments on the substantive provisions of the Anti-
Dumping Code withdrawal decision and explains the code-specific problems that the
decision addressed. The analysis is equally applicable to the Subsidies Code withdrawal
decision.
Paragraph 1 (a) of the Anti-Dumping Code withdrawal decision provides:
The Parties to the Agreement on Implementation of Article VI of the General

Agreement on Tariffs and Trade (hereinafter "the Agreement"). . . [a]gree that,
in the event of withdrawal by any Party from the Agreement taking effect on or
after the date of entry into force for it of the . . . WTO Agreement, or in the case
of termination of the Agreement while this decision is in effect:
(a) the Agreement shall continue to apply with respect to any anti-dumping
investigation or review which is not subject to application of the Agreement on
Implementation of Article VI of the General Agreement on Tariffs and Trade 1994
pursuant to the terms of Article 18:3 of that Agreement.
Paragraph 1(a) made clear that the focus of the withdrawal decision was dispute
settlement. By providing that the Anti-Dumping Code would continue to apply to any
investigation or review that was not subject to the WTO Anti-Dumping Agreement, it
26 See "Withdrawal from the Old Regime," supra p. 319.

27 Decision of the Committee on Anti-Dumping Practices on Transitional Arrangements, adopted Dec. 8,
1994, GATT Doc. PC/14-L/7585 (final), reprinted in draftform in 11 Int'l Trade Rep. (BNA) 1993 (Dec. 21,
1994); Decision of the Committee on Subsidies and Countervailing Measures on Transitional Arrangements,
adopted Dec. 8, 1994, GATT Doc. PC/15-L/7586 (final), reprinted in draftform in 11 Int'l Trade Rep.,
at 1993.
28 A decision on the consequences of withdrawal from the GATT 1947 was presumably unnecessary because
a GATT 1947 contracting party that had initiated a dispute against a party that withdrew from the GATT
1947 before the dispute was resolved could always reinitiate the dispute once both parties became WTO
members. However, Article 18.3 of the WTO Anti-Dumping Agreement, Agreement on Implementation of
Article VI of GATT 1994, Annex IA to WTO Agreement, supra note 1, and Article 32.3 of the WTO Subsidies
Agreement, Agreement on Subsidies and Countervailing Measures, id., stipulate that their rules are applicable
only to investigations and reviews initiated pursuant to applications made after their entry into force for a
WTO member. Hence, if a country initiated a domestic investigation or review (or an application by the
affected industry had been made but no investigation had been initiated) before that country withdrew from
the Anti-Dumping or Subsidies Code, another country could not dispute the findings of the investigation
under the WTO Anti-Dumping or Subsidies Agreement. It was therefore important to ensure that such disputes
would be completed under the old regime.
ensured that any dispute that might arise from the findings of such an investigation or
review would proceed pursuant to the Anti-Dumping Code, even if one of the parties
to the dispute had withdrawn from the code or the code had been collectively terminated.
According to paragraph 1 (b):
(b) Parties that withdraw from the Agreement shall remain Members of the
Committee on Anti-Dumping Practices exclusively for the purpose of dealing with
any dispute arising out of any anti-dumping investigation or review identified in
paragraph (a).
Paragraph 1 (b) was necessary to ensure that any withdrawing country that continued
dispute settlement pursuant to paragraph 1(a) could also continue to participate in
the committee's consideration of the dispute. Most important, because the committee
followed the GATT Council's practice of adopting panel reports by consensus,29 para-
graph 1 (b) preserved the withdrawing party's right to veto adoption of a report relating
to a dispute to which it was a party.
Paragraph 1 continues as follows:
(c) In case of termination of the Agreement during the period of validity of this
Decision the Committee on Anti-Dumping Practices shall remain in operation for
the purpose of dealing with any dispute arising out of any anti-dumping investigation
or review identified in paragraph (a).
Paragraph 1 (a) already ensured that the Anti-Dumping Code would apply to disputes
that could not be initiated under the WTO Agreement for the duration of the withdrawal
decision. It might therefore be implied that the Anti-Dumping Committee would have
tQ remain in operation to consider such disputes. Paragraph 1 (c) made this implication
explicit.
The withdrawal decision states in paragraph 1 (d):
(d) The rules and procedures for the settlement of disputes arising under the
Agreement applicable immediately prior to the date of entry into force of the WTO
Agreement shall apply to disputes arising out of any investigation or review identified
in paragraph (a). With respect to such disputes for which consultations are requested
after the date of this Decision, Parties and panels will be guided by Article 19 of
the Understanding on Rules and Procedures Governing the Settlement of Disputes
in Annex 2 of the WTO Agreement.
Paragraph (d) was consistent with Article 3:11 of the Dispute Settlement Understand-
ing in clarifying that pre-WTO dispute settlement rules would apply to disputes captured
by the withdrawal decision. However, the second sentence of paragraph 1 (d) carved out
a category of disputes that would be "guided" by Article 19 of that Understanding.
Article 19 provides in part that a WTO panel or the Appellate Body shall recommend
that a party "bring [a WTO-inconsistent] measure into conformity" with the WTO
Agreement. The effect of the reference to the Dispute Settlement Understanding hinged
on the meaning of the quoted phrase. If the phrase were interpreted to imply a prospec-
tive act, it might follow that a panel could not recommend retroactive remedies. Hence,
if a panel found that a domestic antidumping finding was inconsistent with the Anti-
Dumping Code, it could recommend that the government in question remove any
sanction imposed pursuant to the finding, but it should not recommend that the govern-
ment reimburse the complaining party for the pecuniary injury sustained while the
29Article 15:7 of the Anti-Dumping Codp, supra note 3, provides in part: "Further to paragraphs
settlement of disputes shall mutatis mutandis be governed by the provisions of the Understanding regarding
Notification, Consultation, Dispute Settlement and Surveillance." This Understanding, see note 25 supra, did
not depart from the GATT Council's long-standing practice of consensus decision making.
sanction was in effect. On the other hand, it could be argued that "bringing a measure
into conformity" with an agreement did not preclude the possibility of retroactive reme-
dies. If Article 19 was intended to prevent panels from recommending compensation
for damage, it would have employed explicit language to that effect. Paragraph 1 (d) did
not attempt to resolve this issue; it merely provided that panels and parties should take
Article 19 into account.
Finally, paragraph 1 (e) provides:
(e) Parties will make their best efforts to expedite to the extent possible under
their domestic legislation investigations and reviews referred to in paragraph (a),
and to expedite procedures for the settlement of disputes so as to permit Committee
consideration of such disputes within the period of validity of this Decision.
Thus, in paragraph 1(e) the parties pledged to make their "best efforts" to expedite
domestic investigations and dispute settlement procedures so that disputes would not
be left unresolved when the decision expired. Presumably, an "obligation" to expedite
the domestic and treaty process would have been unworkable in this context since it is
never difficult to formulate an administrative justification for delay.30 It could only be
hoped that governments would not fall back on administrative excuses.
The final paragraph of the withdrawal decision states:
This Decision shall remain in effect for a period of two years after the date of entry
into force of the WTO Agreement. Any Party to the Agreement as of the date of
this Decision may renounce this Decision. The renunciation shall take effect upon
the expiration of sixty days from the day on which written notice of renunciation
is received by the person who performs the depository function of the Director-
General to the CONTRACTING PARTIES to the GATT 1947.
Since the decision was to remain in effect for two years after the entry into force of
the WTO Agreement, any disputes that are not completed by that date will end unre-
solved. In light of the potential length of domestic antidumping investigations and
dispute settlement procedures under the Anti-Dumping Code, some cases might indeed
fall in the cracks between the Anti-Dumping Code and the WTO Agreement.3' Never-
theless, by establishing a definitive termination date, the parties ensured that the full
committee would not have to convene indefinitely to consider perhaps only a few
intractable cases.
IV. WERE THE TRANSITIONAL DECISIONS NECESSARY?
As early as the issuance of the Ministerial Decision on the Establishment of the Prepara-
tory Committee for the World Trade Organization on April 14, 1994, the WTO signato-
ries determined that foreseeable problems resulting from the transition from the GATT
1947 to the WTO Agreement should be resolved in advance. They chose a preventive
approach, but a corrective approach was not inconceivable. The Ministers could have
3" See Robert E. Hudec, GATT Dispute Settlement After the Tokyo Round, 13 CORNELL INT'L L.J. 145, 172 (1980)
(discussing typical pretexts for delay, such as lack of notice, linkage to other trade problems, and conflicting
jurisdiction of other GATT committees).
3'For example, in the most complex cases, U.S. domestic law permits authorities as much as 420 days from
the date of application for an investigation until final determination. Robert W. McGee, The Case to Repeal the
Antidumping Laws, 13J. INT'L L. & Bus. 491, 496 n.31 (1993). The duration of dispute settlement proceedings
under the Anti-Dumping Code varies according to the complexity of the case; however, the average duration
from the request for consultation to adoption of a panel report has been about 20 months in recent years.
Hence, if an application for an investigation were initiated the day before entry into force of the WTO
Agreement, a panel report relating to the matter raised in the application might not be adopted until nearly
three years after the date of entry into force of the WTO Agreement. Since the withdrawal decision would
remain in effect for only two years, such a case would have to be discontinued.
delayed consideration of the legal issues until the transition period so that only those
issues that actually became problems would have to be addressed.
Under this scenario, a GATT 1947 contracting party that was not yet a WTO member
could have challenged measures by WTO members that remained GATT 1947 con-
tracting parties if those measures were not made consistent with obligations under the
GATT 1947. This possibility by itself, however, might not have been enough to prompt
WTO members to withdraw from the GATT 1947. First of all, it is highly questionable
whether any GATT 1947 contracting party that was expecting to become a WTO member
would meanwhile claim that a measure taken by a WTO member that remained in the
GATT 1947 must be squared with its obligations under the GATT 1947. Even if such a
claim were made, the challenging country would have to request the establishment of
a GATT 1947 panel to consider its validity. As discussed above,32 the challenged country
could have blocked such a request since the Montreal Rules were not renewed. In other
words, a corrective approach may have been more appropriate insofar as parties could
probably have prevented dispute settlement of the transitional issues, even without the
transitional decisions.
The ability to prevent dispute settlement, however, did not justify ignoring the issues.
To proceed in this manner would have been to disregard a fundamental principle of
international law, pacta sunt servanda.33 At the heart of this rule is the obligation to
abstain from acts that would frustrate the object and purpose of a treaty.34 Hence, if a
WTO member implemented a measure in a manner that might be at odds with the
MFN principle or any other provision of the GATT 1947 simply because that measure
could not be challenged by a GATT 1947 contracting party, the WTO member would
be undermining the principle that underpins laws between nations.35 They would be
suggesting that treaties can be breached if the parties cannot prevent the breach. In
other words, a wait-and-see approach, although practicable and perhaps more efficient,
bore the risk of undermining the credibility of the new world trading order.
V. CONCLUSION
Perhaps the clearest sign of the Uruguay Round's success was that the resulting
agreements were too extensive to incorporate into the old multilateral trading system.
By concluding a new treaty, however, concerned governments had to contend with
certain transitional issues, namely, the consequences of adherence to the new and old
regimes and the consequences of withdrawal from the old regime. Because the broadly
tailored rules of the Vienna Convention proved inadequate to address special considera-
tions generated by the GATT 1947 and the WTO Agreement, parties to the GATT 1947,
the Anti-Dumping Code and the Subsidies Code resorted instead to a series of transitional
decisions. These decisions did not resolve every legal intricacy pertaining to the transi-
tional problems. Ultimately, parties had to maintain the ability to prevent dispute settle-
ment of the issues. However, the decisions were a good-faith effort to ensure that coun-
tries could withdraw from the old treaties or remain parties to the old and new treaties
on terms that were acceptable to all concerned governments. Countries would have
contravened the principle of pacta sunt servanda had they disregarded the transitional
issues simply because they could prevent dispute settlement. The transitional decisions
32 See text at notes 23-25 supra.

33 Article 26 of the Vienna Convention, supra note 6, translates this principle as follows: "Every treaty in
force is binding upon the parties to it and must be performed by them in good faith."
31 SHABTAI ROSENNE, DEVELOPMENTS IN THE LAW OF TREATIES: 1945-1986, at 140-41 (1989).
35 See 1 LASSA OPPENHEIM, INTERNATIONAL LAW: A TREATISE 704-05 (4th ed. 1928).
were testimony that, whether or not commitments were enforceable, governments in-
tended to take them seriously.
PATRICK M. MOORE*
THE 1995 JUDICIAL ACTIVITY OF THE

INTERNATIONAL COURT OF JUSTICE
This Note briefly analyzes the judicial work of the International Court of Justice from
November 1994 until December 1995,1 deriving the Court's current record from the
updated General List, pleadings filed, orders and judgments given, and hearings held
at the Peace Palace.
During November-December 1994, the following instances were recorded. On No-
vember 1, 1994, Qatar filed an "Act to comply with paragraphs (3) and (4) of the
operative paragraph 41 of the Judgment of the Court dated 1 July 1994" in Maritime
Delimitation and Territorial Questions between Qatar and Bahrain.2 On the same date, the
Court received from Bahrain a document entitled "Report of the State of Bahrain to
the International Court ofJustice on the Attempt by the Parties to Implement the Court's
Judgment of lstJuly, 1994." On December 23, the Court announced that it had received
a request for an advisory opinion from the United Nations General Assembly relating
to the legality of the threat or use of nuclear weapons.3 The President of the Court
issued an Order on December 20, fixing time limits for a second round of written
pleadings in Gabdkovo-Nagymaros Project (Hungary/Slovakia).
During the calendar year 1995,4 the Court was seized of one new contentious case:
FisheriesjJurisdiction (Spain v. Canada) .5 In addition, the Court considered New Z
Request for an Examination of the Situation in Accordance with Paragraph 63 of the Court's
Judgment of 20 December 1974 in the Nuclear Tests (New Zealand v. France) Case.6 In 1995
a total of thirteen cases appeared on the General List at any particular time. Besides the
new case referred to, the contentious proceedings before the full Court were: Aerial
Incident of 3July 1988 (Iran v. United States), Maritime Delimitation and Territorial Qu
* Of the California Bar. I wish to thank Andrew Shoyer, Legal Adviser to the Office of the United States
Trade Representative in Geneva, Switzerland, who guided me through the issues discussed in this paper during
-ni"trsi lise is; tim-eA-im ;in thek, -fall o%f I QQ.
'A summary of the judicial work of the ICJ during 1991-1992 may be found in 87 AJIL 429 (1993). The
period 1993-November 1994 was covered in my note in 89 AJIL 213 (1995). For a description of all of the
cases pending before the Court as of March 1995, see my note in ASIL NEWSLETTER, Mar.-May 1995, at 1.
2According to paragraph (3) of the operative clause, the Court " [d] ecides to afford the Parties the opportun
to submit to the Court the whole of the dispute," and in paragraph (4), the Court "[fV ixes 30 Novem
1994 as the time-limit within which the Parties are, jointly or separately, to take action to this end." See 1994
ICJ REP. 112, 127 (July 1).
3 See ICJ Communique No. 94/24 (Dec. 23, 1994). The request is embodied in General Assembly Resolution
49/75K, adopted on December 15, 1994, and was transmitted to the Court by the UN Secretary-General in
a letter dated December 19, 1994. In Resolution 49/75K, the General Assembly decided, acting on the basis
of Article 96, paragraph 1 of the UN Charter, to ask the ICJ "urgently to render its advisory opinion on
the following question: 'Is the threat or use of nuclear weapons in any circumstance permitted under
international law?' "
4The Court is marking its 50th judicial year in 1996, the inaugural public sitting having taken place on
April 18, 1946. In 1995 the Court celebrated the 50th anniversary of its creation as the principal judicial organ
of the United Nations with the entry into force of the Charter and the ICJ Statute annexed to it on October
24, 1945.
5Application of March 28, 1995. For a summary of the Application, see my note in ASIL NEwsLErrER,June-
Aug. 1995, at 3, 4.
6 Request of August 21, 1995, accompanied by a request from New Zealand for the indication of provisional
measures. Australia filed an Application for Permission to Intervene on August 23, followed by Applications
for Permission to Intervene, under Article 62 of the ICJ Statute, and Declarations of Intervention, under
Article 63 of the ICJ Statute, by Samoa, the Solomon Islands, the Marshall Islands and the Federated States
of Micronesia, on August 24 and 25.

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The Decisions Bridging the GATT 1947 and the WTO Agreement

Author(s): Patrick M. Moore

Cambridge University Press, American Society of International Law are collaborating

THE DECISIONS BRIDGING THE GAT T 1947

II. THE PROBLEMS

Adherence to the Old and New Regimes

Article 30 of the Vienna Convention provides in part:

1. . . . [T] he rights and obligations of States Parties to successive treaties relating

5. Paragraph 4 is without prejudice . . . to any question of responsibility that

Withdrawalfrom the Old Regime

2. If a State denounces or withdraws from a multilateral treaty, paragraph 1

III. THE SOLUTIONS

The Coexistence Decisions

Paragraph 1(a) addressed the problems created by the most-favored-nation (MFN)

on Transitional Co-Existence of the Agreement on Implementation of Article VI of the General Agreement

(a) to disputes brought against a contracting party which is a Member of the

permissible "notwithstanding the GATT 1947" under paragraph 1, such a measure

The Withdrawal Decisions

The Parties to the Agreement on Implementation of Article VI of the General

26 See "Withdrawal from the Old Regime," supra p. 319.

IV. WERE THE TRANSITIONAL DECISIONS NECESSARY?

32 See text at notes 23-25 supra.

THE 1995 JUDICIAL ACTIVITY OF THE

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