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Lorand Bartels
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The AB does not like to change its mind. Not openly at least.
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Simon, as someone with a longstanding interest in matters of applicable law, I would agree with you. The AB got it wrong. For the purposes of applying international law, a conclusion derived from the application of domestic law to a fact is a fact. So also, for more obvious reasons, is an act of a state by means of its domestic law. That does not mean that the AB cannot look at a panel’s determination of domestic law, but it is not because a panel’s determination is a legal finding. It is that a panel’s determination might constitute a failure to determine the facts objectively, which requires a different and much higher standard.
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I like Andrew’s refinement of Steve’s argument: both the purpose of a measure (to remedy serious injury due to imports) and, as per the panel, its form (suspension of concessions or other obligations) defines it as a safeguard. This would be the same approach as used to define an SPS measure. The other procedural and substantive conditions for adopting a safeguard (thus defined) then go to its legality. Purpose could be determined by reference to domestic legislation (cf Simon) but also, if the form is a presidential proclamation, a presidential tweet. And dual purposes should be permitted: protecting a critically important industry might well also be essential for a Member’s national security. If this is right, then on the facts I think we have an illegal safeguard not justified on national security grounds permitting immediate rebalancing action.
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Ah, ok, well I think that question is for the Chapeau, in the event of an exception otherwise applying. The key question is what to do about measures with multiple purposes, one of which is protectionist. Does that nullify the legitimate purpose? It’s important for eg climate change measures that are also designed to help domestic industry. A necessity test might knock these out, but under xx(g) such dual purpose measures would probably survive that stage of the analysis.
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Simon, I basically agree with you, with some minor variation. I think structurally one the order of analysis for any purpose-based rule is this (and this applies, eg, to the subparas of Art XX, justification in the chapeau of Art XX, the policy exception in Art 2.1 TBT and Art 2.2 TBT): - is the purpose legitimate? (applies to all) - is the measure minimally effective? (the standard varies; does not apply to precautionary principle; causation test varies) - does the measure go too far? ie is there is a reasonably available less harmful measure that achieves the same objective to the same degree as the measure at issue (ie necessity; also 'even handedness' under the TBT agreement).'Reasonable availability' depends inter alia on cost, other international obligations, administrative complexity; also, causation test varies (sometimes treated under the odd terminology of 'design, revealing structure, architecture etc). Does not apply to all rules, eg not applicable to Art XX(g). - even if a measure is necessary, is it worth it, on a cost benefit analysis (strict proportionality)? In WTO nlaw, only used in Art 2.2 TBT for 'gravity' (and maybe once in Korea - Beef). I see no role for 'weighing and balancing' in this scheme, except for at the stage of strict proportionality, where it is not used. I wish the AB would drop this useless concept. It would, for example, avoid the need to say that every conceivable state interest is 'vital'. It adds nothing, and comes too early in any proper analysis. Because these tests are so good at dealing with intention, I see no need (other than burden of proof) for dealing with intention at the stage of the obligation, so I'm perfectly happy with obligations being purely effects-based.
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Yes, but both are essentially PPMs rather than product standards, no? Lorand
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It is, as far as I know, only ever harmonisation (sometimes with the domestic rules of the more powerful partner) in practice. Has there ever been a case of equivalence in reality? I don't know of an example, outside the EU (albeit there is some with SPS PPMs, which is conceptually more akin to ex ante conformity assessment than a substantive standard, in my view). Sometimes equivalence is pretended, but it turns out not to be equivalence at all (e.g. EU-Israel association agreement). I'd be grateful to be pointed to a counter-example.
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Aaron, you raise an interesting point. If there is (as almost certainly) discrimination this would need separate justification under the Chapeau. And at present the test for such justification is necessity. The question is whether this should be relaxed according to the test for the purpose of the measure. I'd say there is a good contextual argument to say it should. But this leaves open the question what the test should be where there is no analogue in the subparas, as in EC - Seal Products (indigenous rights, essentially, albeit a bit fudged).
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Simon, good points. It is in my view infelicitous to describe a right to adopt measures in the form of the descriptive assertion 'nothing prevents' for the reasons you mention. It would be better drafted as 'nothing shall prevent' to make it clear that the provision establishes a right. On the other hand, it is also in my view infelicitous to use the 'shall be contrued' language of Art XX GATT, becuase technically speaking that means that Art XX is an interpretive provision (as construe means interpret). Fortunately, in my view, nobody has read Art XX that way, but it does give succour to those who like to read exceptions into GATT obligations.
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Why would the Europeans (btw EU MS VAT levels differ) have to justify what their VAT BTAs are spent on at all? Didn't you just say these are different from the US proposal? Did I miss something?
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I'm actually a fan of nonviolation complaints. They target conduct that undermines the factual conditions (or assumptions) on which obligations are based, even if that conduct does not violate those obligations themselves. Such conduct may is rare, but it can exist. (One could make an analogy with Arts 60(3)(a) (express and implied repudiation) and 62 (fundamental change of circumstance) VCLT.) Having said this, I think you might be a little over-extending the concept here, at least according to past GATT and WTO jurisprudence. In my view, WTO 'benefits' are not 'increased' trade; they are not even volumes of trade at all. I think these 'benefits' are access, on agreed terms, to a non-discriminatory market (usually in the importing country), unless an exception applies (on which point I think the AB in Asbestos had it in reverse). Accompanying losses, eg for downstream (COOL) or upstream (cf Bananas) product markets/trade do not count. Nor, in my view, does damage to investment in another country. But what about threats? In Colombia - Ports of Entry the Panel interpreted 'other [prohibited quantitative] measures' in Art XI:1 GATT to include measures that affected investment (I think this was wrong, as above) but also measures that made it difficult to predict the nature of an import regime. And we know that the 'security and predictability' of the trading regime has legal value in the WTO system. So I think it is possible, albeit, for me, on slightly narrower grounds, that a threat to withdraw reasonably expected market access could constitute a non-violation nullification or impairment of WTO benefits. In fact, one could perhaps make another analogy here: the prohibition on the threat of use of force in Art 2(4) UN Charter, particularly if the point of the threat is to influence the conduct of the affected state (and I am not saying that this is the case with your hypothetical).
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Simon, thanks for spotting this. The sin is not new, as you say. The AB cites its Report in Section 211 (WT/DS176/AB/R), which says this: 105. Our rulings in these previous appeals are clear: the municipal law of WTO Members may serve not only as evidence of facts, but also as evidence of compliance or non-compliance with international obligations. Under the DSU, a panel may examine the municipal law of a WTO Member for the purpose of determining whether that Member has complied with its obligations under the WTO Agreement. Such an assessment is a legal characterization by a panel. And, therefore, a panel's assessment of municipal law as to its consistency with WTO obligations is subject to appellate review under Article 17.6 of the DSU. This is complete and utter nonsense. How is an 'assessment' of the conduct of a WTO Member - which is to say, what it did - a legal characterisation? It would be harder to find a clearer example of a fact for the purposes of the law/fact distinction. And I say that as someone who is highly critical of the idea that municipal law is/should be always treated as fact by international tribunals (viz, when the question is not what a municipal law means in the abstract, but rather how it applies to a downstream fact (eg, was there 'property' or 'nationality'), then the legal operation undertaken by a tribunal is, properly seen, the application of that municipal law, as law, to that downstream fact, the conclusion of which then constitutes a fact for the purposes of the international rule. In short, the AB has it jurisprudentially incoherent and jurisdictionally incorrect, and this not for the first time. Of course, that does not mean that the AB can never review factual determinations. It can - but only under Art 11 DSU by considering whether a panel in making factual findings exceeded its jurisdiction. To your question: well, the best we can hope for is a sidestepping of this line of jurisprudence; and for once, given just how wrong this is, that might be the best course of action.
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Christian, I agree. And this is supported by the fact that the relevant caselaw prohibits negotiations not because they have something unspecified to do with an area of EU competence, but specficially because they undermine the exercise of that competence (Case C-266/03 Commission v Luxembourg [2005] ECR I-4805; Case C-433/03 Commission v Germany [2005] ECR I-6985). This is now specified in Art 4(3)(3) TEU, which states that '[t]he Member States shall ... refrain from any measure which could jeopardise the attainment of the Union's objectives.' So at the very least one needs to identify how UK trade negotiations pre-Brexit leading to the conclusion of an agreement post-Brexit might jeopardise the CCP. I cannot really see this, myself. Certainly, there is a conflict of interest problem in that Art 50 does not automatically exclude the UK, during the two year divorce period, from participating in EU decisions on matters that will affect it as a post-EU member (I think this earns Art 50 a fail grade on its own). But this goes beyond the CCP, and will have to be sorted out in a generic way. And a conflict of interest is in any case not the same as undermining an exercise of EU competence.
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The ECtHR upheld a French ban on wearing the burqa and niqab in public places in SAS v France in 2014 (summary here: http://hudoc.echr.coe.int/app/conversion/pdf/?library=ECHR&id=003-4809142-5861661&filename=003-4809142-5861661.pdf). The ban was justified because France was able to decide that in public people should be able to see each others' faces. Of course this rationale does not easily transpose to the burqini ban. But the level of scrutiny in the WTO on public morals is also relatively light. So I'm not sure the outcome would be so certain. In addition, the ban is justified by its mayors by referencing France being at war with Islamic terrorists. Does this mean it could be justified under the subjective test (which is not the same as 'self-judging') test in Article XXI?
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Thanks, Fernando. The problem with this approach is that, ordinarily, members of organisations are not responsible for the acts of those organisations. The ILC Commentary to Art 62 of the Articles on Responsibility of International Organisations states: 'It is clear that ... membership does not as such entail for member States international responsibility when the organization commits an internationally wrongful act’. One needs more for responsibility, like circumvention as set out in Art 61. That might be done, but there are all sorts of other aspects to consider, including perhaps good faith. Lorand
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David, you put the argument well, but in one sense, I think, the example you cite can be played from the other side of the court. If the EU can delegate its exclusive competence to negotiate and conclude treaties, does that not undermine the idea that there is something 'core' and untouchable about exclusive competences? To Art 50, it seems to me that it has two important consequences. First, as I said, the reference to 'taking account of the framework for [the UK's] future relationship with the union' implies that the trade relationship between the UK and EU need not be unknowable until divorce proceedings are concluded. True, this reference does not refer to UK-third country trade negotiations. But here the other consequence of Art 50 comes into play, in my view, which is that it changes the duty of loyal (or sincere or genuine) cooperation between the MS and the EU, which is at the basis of the (negative) jurisprudence on MS negotiations in areas of EU competence. Sure, the UK should not be able to undermine the EU's CCP while it is still a member. But that would only happen if it concluded an FTA, not merely because it negotiates one to take effect when it is no longer an EU member. One sticking point remains: in such an event, it seems odd that the UK would still have a seat at the EU table, the EU being a competitor to some degree. Perhaps the duty of loyal cooperation might lead to an 'empty chair' in this scenario. Certainly some creativity will be required to deal with this problem, which is much more general anyway. In sum, this comes down to two points: First, Art 50 expressly assumes that the 'relationship' between the UK and the EU is knowable, and this presumably means a trade relationship. Second, Art 50 can affect the interpretation of other provisions of the EU treaties, by implication, but also because an Art 50 notification affects the duty of loyal cooperation on which existing interpretations are based. Practically, I think this means that the EU can sulk if it wants, and refuse to negotiate a trade agreement with the UK, but the UK is free to negotiate (but not conclude) third country FTAs within the two year period.
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Malstrom's approach may make sense as a matter of political choice. But your interpretation makes that a legal necessity. What if the EU decided that actually it would quite like business as much as usual as possible? Should such a possibility be excluded? Should the TEU really force the EU to cut off its nose to spite its face? In this sense, far from undermining the core of the CCP, pre-exit negotiations in fact give the EU more, and in terms of disruption much better, options. One could see this as supporting the CCP rather than undermining it. You also haven't explained what the reference to the 'framework' might mean, if not that such a framework can exist, in some form, pre-exit.
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Art 50(2) states: 'In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. If that 'framework' includes trade relations, does this not imply that those trade relations can be known, which would then imply that there is no bar to negotiations within the two year withdrawal period. On this basis, I would - contrary to David - think that Art 50 does imply a carveout from the usual rule. This also makes political sense. Otherwise economic disruption is guaranteed - on both sides. The problem remains that the UK appears to be able to vote on EU matters during this period. This is an oversight, I would say. Perhaps it should be excluded from particularly sensitive matters, perhaps along the lines of Art 354 TEU applicable to suspensions of voting rights for violations of democratic principles etc.
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Why would a MS that wants mixity vote in favour of a pure EU agreement in Council? Is there something that I'm missing? Some gap between MS governments and parliaments?
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Holger, I'm not so sure that this is an objection to Simon's point. Obviously so long as EU law applies the UK has to apply the CCP as well. But what is to stop the UK negotiating a non-CCP agreement that takes effect when EU law (and the CCP) cease to apply? Negotiating is not applying. Actually, I see the problem the other way around: should the UK be able to vote on EU matters knowing that it will be on the other negotiating side (or a competitor) soon? This is obvious post Art 50 notification, but I think it is a problem even today. No wonder the UK's European Commissioner resigned.
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Thanks, Joost, for this superb set of questions. I would divide the issues as follows: A. AB jurisdiction 1. The AB has decided that applying the law to the facts is a legal question within its jurisdiction (Simon wrote nicely about this in 4(1) TRADE L. & DEV. 125 (2012)). 2. Whether the facts have been established is a question that can only be determined by a panel (absent AB consideration of Art 11). This means: 2.1. when the AB states that the facts were not established, it must simply be recording such a determination by a panel. 2.2 The AB can only refer to such a determination in the context of determining whether it can apply the law to facts. If the facts are missing, then the AB cannot exercise its jurisdiction. (Moreover, an appeal limited to such a question would be beyond the AB's jurisdiction). This should lead to a determination that the AB cannot 'complete the analysis'. 3. It follows that the AB determination in Colombia - Textiles that the facts were not established, without also concluding that it could not complete the analysis, was infra petita (or equivalent). (I think it is similar under Art 36(2)(c) of the ICJ Statute, and also that the ICJ should decline jurisdiction under Art 38 in such cases, which would avoid Nuclear Weapons and, to some extent, Kosovo results; the CJEU, faced with the identical of missing facts, would do this). B. Relationship between claims and defences 1. You make the interesting assumption that a finding of a violation is only provisional until it is determined whether a defence applies. I would agree, provided that the defence is raised by the (following US - Gambling), or, as other tribunals would think, as a result of jura novit curia. 2. If the facts supporting a claim are not established, the AB cannot exercise its jurisdiction. As you say, the respondent wins by default. 3. Your question raises the possibility that the same should be true of a defence. I think yes: if the law (in toto: see 1. above) cannot be applied to the facts, the appeal should fail for want of jurisdiction. It follows that the AB acted beyond jurisdiction in Colombia - Textiles. 4. But now we have a problem. What if the respondent raises a defence and offers few or no facts in support? Does this mean there can never be a successful appeal? I think it probably does. But this would be for want of jurisdiction (on this point, at least). And, importantly, it can be presumed that the claimant won before the panel. So one outcome could be that this result is the adopted result: i.e. the complainant wins overall, which is as it should be in this situation on the merits. One might object that this view of the situation shoehorns merits issues into a jurisdictional framework, but maybe that is simply how it has to be.
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Fascinating. Given the fact that EU/EEA law takes a restrictions approach, can Swexit be far behind?
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No, quite the opposite. It is obviously discriminatory. But not justified.
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Well, on my reading of the cases at least, we can just wait and see, because that's what we've got.
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But why would the public dislike a rule - wherever administered - that keeps government on its toes? And you say this from the US where even CBA (and time spent filling in forms) is mandated! As for the empirical study, just look at 60 years of EU jurisprudence. It happens a lot. (I don't have the stats but I read the cases).
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