Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
The extent to which the WTO Agreements have legal effect before EU and Member
States’ courts, creating rights for individuals and the possibility of testing the
compatibility of EU secondary legislation with these Agreements
Claire O’Leary
07772785
07772785
Introduction
The European Court of Justice (ECJ) has always rejected the notion that the laws of the
General Agreement on Tariffs and Trade (GATT) and the World Trade Organisation (WTO)
have direct effect and that Community legislation could be challenged on the basis that it
contravened WTO law. While much academic analysis and speculation has surrounded the
lack of willingness on behalf of the ECJ to enter into a thorough discussion of the issue in any
one of the number of cases where its use has been unsuccessfully attempted, a step back must
be taken in order to consider the possible reasons for both the decision itself and for the
This paper first gives a brief overview of the history of the WTO, followed by a review of the
case law examining the issue of direct effect of WTO law in Community law challenges and
a discussion of academic analysis in the area. Finally, it concludes that, though seeming to
reflect conflicting sides, there is a balance required between maintaining the autonomy of the
Community and ensuring compliance to maintain a healthy relationship with the WTO.
History
The WTO did not come into being overnight. Rather, it developed through various
incarnations from the seedling of the International Trade Organisation (ITO), touted at
Bretton Woods in 1944, through the purported interim measure of GATT 1945, overseen by
the United Nations, the formation of a GATT secretariat at the Havana Conference in 1948 to
fill the void of the non-starting ITO, before its establishment, at the Uruguay Round of GATT
talks by the Marrakech Agreement in 1994. Annexed to this Agreement was the Dispute
2
07772785
Settlement Understanding (DSU) which has been vital in initiating a change in attitude of the
ECJ.
The EC was one of the original members of the WTO when it came into being on January 1 st
1995. Today, the WTO provides a means of regulating trade between members, a framework
for negotiation and formalising of trade agreements and a dispute resolution process aimed at
Case Law
Prior to the establishment of the WTO in 1994, there were a number of clashes between EC
law and the rules of GATT. In International Fruit Company,2 a case was taken by a number
whether the GATT rules could be invoked by the applicants for this purpose. The ‘spirit, the
general scheme and the terms’4 of the Agreement and of Article XI were reviewed. It was
noted that GATT, as a system, was flexible and imprecise and thus it was incapable of
conferring rights on citizens and so could not be used to challenge Community law. A similar
situation arose in Germany v Council,5 and the same reasoning was displayed by the ECJ,
who cited the ‘great flexibility of its provisions, in particular those conferring the possibility
of derogation’,6 as issues preventing direct effect from arising. It concluded that those
features of GATT which prevent a citizen of the Community from invoking it in a court to
1
http://www.wto.org/english/thewto_e/whatis_e/tif_e/fact1_e.htm
2
Cases 21- 24/72, International Fruit Company NV, Kooy Rotterdam NV, Velleman en Tas NV and Jan Van den Brink's Im- en
Exporthandel NV v Produktschap voor Groenten en Fruit, [1972] ECR 1219
3
Regulations No. 459/70, 565/70 and 686/70 - (OJ L 59, 14.3.1970, p. 32, OJ L 69, 26.3.1970, p. 33–35and OJ L 84, 16.4.1970, p. 21–23
respectively)
4
Cases 21- 24/72, International Fruit Company NV v Produktschap voor Groenten en Fruit, [1972] ECR para 20
5
Case C- 280/93, Germany v Council [1994] ECR I-4973
6
Case C- 280/93, Germany v Council [1994] ECR I-4973 para 106
3
07772785
challenge the lawfulness of a Community act also preclude the Court from taking provisions
Member State. The Court did concede, however, that a Community measure is reviewable in
the light of the GATT rules where the Community intended to implement a particular
obligation assumed in the context of the GATT,7 or where the measure refers expressly to the
This trend for rejecting challenges to Community law on the grounds of contravention of
GATT/WTO law continued in the landmark case of Portuguese Republic v Council,9 where
the ECJ extended its previous reasoning to the WTO, stating that, ‘ ... (WTO) agreements are not
in principle among the rules in the light of which the Court is to review the legality of measures
Van Parys,11 a preliminary reference from the Belgian domestic courts, allowed the ECJ to
expand on the issue of direct effect in addressing a situation in which the WTO Dispute
Settlement Body (DSB) had ruled that EC Banana regulations12 were contrary to WTO law.
First, the Court noted that the WTO emphasises negotiation between parties but said that to
require the courts to refrain from applying rules of domestic law that run contrary to WTO
law would deprive the legislative and executive powers of contracting nations of participation
in such negotiation. Secondly, to suggest that Community Courts have responsibility for
ensuring Community compliance with WTO law deprives legislative or executive limbs of
the Community of the powers and discretion that those of other contracting parties enjoy.
Finally, it was necessary to consider again the direct effect of WTO law where the DSB had
7
This is known as the Nakajima exception, see Case C-69/89 Nakajima All Precision Co. Ltd v Council [1991] ECR I 2069, para 31
8
This is known as the Fediol exception, see Case 70/87, Fédération de l’industrie de la CEE (Fediol) v Commission, [1989] ECR1781
paras 19 - 22
9
Case C-149/96, Portuguese Republic v Council, [1999] ECR I-8395
10
Case C-149/96, Portuguese Republic v Council, [1999] ECR I-8395 para 47
11
Case C-377/02, Léon Van Parys NV v BIRB
12
Regulations No. 404/93, 2362/98, 2806/98, 102/1999 and 608/1999 - (OJ L 47, 25.2.1993, p. 1–11, OJ L 293, 31.10.1998, p. 32–45, OJ
L 349, 24.12.1998, p. 32–33, OJ L 011 , 16/01/1999 p. 0016 – 0016 and OJ L 075 , 20/03/1999 p. 0018 – 0019 respectively)
4
07772785
held that both initial legislation and subsequent legislation adopted by the Community to
comply with the relevant WTO rules were incompatible with those rules. After reiterating the
fact that Community law is not, in general, reviewable by reference to WTO law, it asserted
that, as main competitors did not have direct effect as part of their legal systems, a unilateral
comparison with competitors. This is clearly a point with which it is difficult to disagree.
Covert changes
Though the ECJ has been quite blatant and unapologetic in its rebuff of all those who attempt
to use WTO law to challenge Community action, there has been a rather understated
Commission v Germany,13 the ECJ noted that Decision 80/271 which approved the
International Dairy Arrangement could be interpreted in a number of ways and that where
this happens,
...preference should be given as far as possible to the interpretation which renders the
provision consistent with the Treaty ... the primacy of international agreements ... over
provisions of secondary Community legislation means that such provisions must, so far
This harmonious interpretation was seen once again in the case of Hermés International,15
where the Court sought to apply the law on intellectual property protection in line with the
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS). The applicant sought
a three month time limit to be placed on challenges to the relief they were seeking. There was no such
13
Case C-61/94, Commission v Germany, [1996] ECR I-3989, relating to breach of obligations under the International Dairy Agreement.
14
Case C-61/94, Commission v Germany, [1996] ECR I-3989 at para 52
15
Case C- 53/96, Hermés International, v FHT Marketing Choice BV. [1998] ECR I-2069
5
07772785
provision in the TRIPS agreement but it existed under domestic law so the question was whether
domestic law was compatible with TRIPS. The Court noted Commission v Germany and the
principle of harmonious interpretation and pointed out that Article 50 of TRIPS authorises the
provision of additional measures to protect right-holders so long as any such measures are
prompt and effective. Thus, the additional domestic rules were found to be compatible with
In Christian Dior,16 the Court began by stating once again that provisions of the TRIPS
Agreement as annexed to the Agreement establishing the WTO, are not such as to create
rights upon which individuals may rely directly before the courts by virtue of Community
law.17 However, they said, where the TRIPS Agreement applies and in respect of which the
Community has already legislated, domestic courts are obligated, when requested to apply
national rules ordering provisional measures for the protection of rights falling within such a
field, to do so as far as possible in the light of the wording and purpose of Article 50 of the
TRIPS Agreement.18
In a field in which the Community has not yet legislated and which consequently falls within
the competence of the Member States, there appears to be no such onus on Member States to
Analysis
There has been much debate over whether the stance taken by the ECJ over the past number
of years was the correct one. Proponents consider the stance to be a display of strength,
16
Cases 300-302/98, Christian Dior SA v TUK Consultancy BV and Assco Gerüste GmbH and Rob van Dijk v Wilhelm Layher GmbH &
Co. KG and Layher BV.[2000] ECR I-11307, preliminary reference regarding the placement of counterfeit products bearing the Dior
trademark on the market in the Netherlands,
17
Cases 300-302/98, Christian Dior SA [2000] ECR I-11307at para 44
18
Cases 300-302/98, Christian Dior SA [2000] ECR I-11307at para 47
19
Cases 300-302/98, Christian Dior SA [2000] ECR I-11307at para 48
6
07772785
ensuring that the Community is not left in a position of disadvantage relative to other
contracting parties. Opponents,20 consider that the ECJ has been dragging its feet, reluctant to
clear the muddy waters surrounding the rights of individuals to challenge Community law
contravening WTO rules. The change in attitude of the ECJ when the power–based system of
GATT converted to the rule-based system of the WTO was miniscule. The same themes of
conditionality, flexibility and reciprocity were hauled out time and time again as the Court
found against those hoping to challenge Community law on the grounds of contravention of
WTO provisions.
There have been efforts by the ECJ to clarify the situation somewhat since the development
of the Dispute Settlement Body. Rulings from the DSB, as discussed in Van Parys and
developed upon in Christian Dior, have removed some of the flexibility put forward by the
ECJ as the reason for the lack of direct effect of WTO law and have somewhat facilitated
greater clarity in decision-making. According to the ECJ in Christian Dior, if the Community
has legislated in regard to the TRIPS agreement, domestic courts must interpret legislation in
light of the Agreement. Does this now apply to all aspects of WTO law?
There is also the question of the differentiation by the ECJ between WTO law and other
20
Di Gianni and Antonini, “DSB Decisions and Direct Effect of WTO Law: Should the EC Courts be More Flexible when the Flexibility of
the WTO System has Come to an End?” (2006) 40(4) Journal of World Trade p777-793,
7
07772785
Commission v Germany, regarding the International Dairy Agreement, led the way for
Hermes, Christian Dior and others but why in this order? It is possible that, as a solitary
agreement is far less threatening than a global body, the ECJ was more inclined to concede to
requirements thereunder. Once the waters had been tested in this manner, the concession
Conclusion
According to de Búrca and Scott,21 there is no question of the binding nature of WTO law in
the EC legal order. The choice is in the manner of implementation. The ECJ has proven itself
contravening WTO law. However, this will hopefully change little by little as the demands
for greater clarity and transparency grow louder. A balance between parity of negotiation
power with other contracting parties on the one hand and rights of individuals to challenge
the EC laws detrimentally affecting them on the other is vital in order for the situation to
evolve again.
21
De Búrca and Scott, “The Impact of the WTO on EU Decision-making” (2000) 06 Harvard Jean Monnet Working Paper
8
07772785