The WTO and other non-tax treaties

For the purpose of the examination of the two most fundamental principles embraced by the WTO agreements, most-favored nation and national treatment, only the text of the GATT will be drawn on for now. The subject matter of the subsequent chapter of this study will be an in-depth elaboration on the equivalent provisions laid down in the GATS. In this manner, a comprehensive analysis can be provided and will contribute to a better understanding of the WTO’s most cherished concepts. The main focus of this thesis will be pursued by consistently keeping in mind the general interrelations of WTO provisions with tax issues. Before the WTO came into being the international framework for trading activities was not very extensive and principles on this matter were not properly developed. Originally, only the issue of trade in goods was addressed through the creation of the GATT in 1947. This agreement did not equal the status of an intergovernmental organization as its successor, the WTO, did. Moreover, in the course of the Uruguay Round and the establishment of the WTO, the original GATT 1947 was not only updated to the GATT 1994, it became one component of a set of new agreements that not only directly refer to the trade in goods, but also embrace other areas like services and intellectual property rights. In fact, with regard to trade in goods, the GATT evolved to an umbrella agreement being supplemented by various other agreements. All together they are the Multilateral Agreements on Trade in Goods73. These other agreements typically relate to specific sectors or issues and therefore take prevalence over the GATT if there is a conflict.74 However, the provisions which will be of interest in the following are to be found in the GATT text itself. [...]

As already outlined in a foregoing section27, matters where the applicable provisions of the GATS or the TRIPS Agreement can be invoked fall within the shared competence of the EC and the Member States. However, it is the ECJ’s settled case law that it has jurisdiction to interpret WTO law. WTO law contains many more agreements than the GATT. The evidence for the ECJ’s attitude in this respect is provided by a glance at the relevant cases. These will be mentioned briefly in order to give an idea of the justifications put forward by the ECJ. In Hermès28 as well as in Dior29 the interpretation of Article 50 TRIPS was at stake and the ECJ claimed to have the authority to construe it. The ECJ relied on the argument that the necessity for a standardized interpretation for the sake of the Community is decisive by holding that where a provision can apply both to situations falling within the scope of national law and to situations falling within the scope of Community law, it is clearly in the Community interest that, in order to forestall future differences of interpretation, that provision should be interpreted uniformly, whatever the circumstances in which it is to apply.30 The principle of consistent interpretation of international and domestic law may support the ECJ’s claim for its right to construe WTO law. In other words, in cases where there is room for different possible approaches of interpretation, domestic legislation is to be interpreted in line with international agreements.31 Providing for a uniform and consistent evaluation of the respective laws, which presumably could be effectively fulfilled by the ECJ, would guarantee the required framework for the compliance of domestic legislation with international obligations or at least reduce the probability of a clash between the two legal systems. In addition, the non-existence of the possibility for domestic courts to request a preliminary ruling on the contents of WTO law comparable to the EC’s preliminary rulings procedures32 may also foster independent and different ways of interpretation, again qualifying the ECJ as the interpreter of WTO law. [...]

2.2.2 The Allocation of Competencies and the Effect on the Right of Interpretation In an attempt to survey the procedure of interpreting WTO law in respect of EC law the difficulty discussed above that arises from the division of competence between the EC and the respective Member States has to be acknowledged once again. Actually, one would expect that the right to interpret WTO law depends on the respective allocation of competencies between the EC and the Member States. As a matter of fact, this is not always the case, since areas in which the EC and its Member States are jointly responsible for complying with the WTO provisions provoke more controversies concerning the right to interpret WTO law compared with matters where the EC has exclusive responsibility.25 Despite the existence of areas of shared competence, the ECJ claims the right to exclusively construe WTO law in any WTO matter. The fact that the EC is authorized to exert exclusive competence pertaining to matters associated with the GATT is beyond dispute. The ECJ’s decision on the competencies battle with respect to the conclusion of the WTO Agreement provides the necessary evidence.26 As a consequence, the ECJ is entitled to interpret the provisions laid down in the GATT. In contrast, stretching this right to interpret to cover the entire WTO Agreement as the ECJ claims is a much more difficult issue and is worth a more detailed examination. [...]