Discussion On The Protocol Of Accession To The World Trade Organization

The protocol of accession to the World Trade Organization(hereinafter referred to as AP), is a legal document that should be concluded and submitted by an applicant during the accession process. There are a lot of research on the document from different perspective, such as the political factors and economic factors from non WTO members into the process of Accession Protocol concluded, the influence after joining WTO, and the study a single clause of Aps. In "China- auto parts ", China lost the case which involved China’s AP. The research on the dispute of AP gradually became hot thereafter. Not only because WTO-PLUS obligations of the new members caused a certain degree of unfairness, but also because WTO lacks specified definition of legal status of AP, and the fact that DSB in practice did not make clear explanation also contributes the space to further study. As a contract, each AP is impossible to forsee all future events, and it can’t design a rule system covering all events. In the process of concluding AP, due to the economic, political and other reasons, there may exist some provisions that go beyond the new Member’s expectation. And due to changed situation, the member might not want to or can not follow some of the original commitments. However, WTO rule did not leave the space to renegotiate the AP, then there may be some special policies applicable as a substitute, at the same time, the dispute settlement might be raised by other party in order to make sure the former fulfills its obligations according to its comments of AP. But from the existing domestic and foreign literatures, there is no academic papers discussing the question of jurisdiction over such kind of dispute, or has clearly put forward the question of standrd about the relation between APs and various agreements under WTO. Therefore, the main purpose of this paper is to discuss the source, present situation, existing problems of the dispute on Aps, and then proposes some resolution on the basis of then practice of DSB regarding the existing problems.The research uses three kinds of methods: First, case analyzing. To March 2015, there are eight cases involving AP: China- Auto Parts(DS339/340/342), China-Publications and Audiovisual Products(DS363), U.S.- Anti-Dumping and Countervailing Duties(DS379), China- Exportation of Raw Materials(DS395), EC Fasteners(DS397), U.S. Tyres(DS399), EU- Footwear(DS405), China- Rare Earths(DS431/432/433). Since this article is from the perspective of the practice of DSB, the analysis and comparison will not be derogated. This article will analyze the above cases, the existing problems in the disputes and analyze them one by one. There are two trends in social science research: one is the construction of universal pattern for different types, the other is valuing difference of individual type. As the first comprehensive study on the APs, the nature of the AP, the problems and the core point on the practice of DSB, the nature of the AP clause, the jurisdiction problem in protocol on the accession of the dispute, the analysis of relationship between WTO protocol and WTO the agreement would all be involved. Secondly, literature research method. Access to research papers related to this thesis, especially the newest research. The research includes the classic textbooks, legislative commentary, etc. Thirdly, historical research method. It is also known as the longitudinal research method. History research method in this study is mainly embodied in tracing back of the accession procedures, research on construction and properties of the history of the “package commitment". Fourthly. Comparative study. This method runs through the whole article. Comparison in this paper includes comparison of theory, such as the comparison between international treaties conflict with APs conflict, comparison of practices, especially on the core issues relating to the comparison the DSB’s explanation between prior practice and subsequent practice. By this way, the cause of dispute on APs, and the existing problems in AP’s disputes would be clarified, and a foundation and framework for further analyze be established.This paper is divided into five Chapters. The first chapter is about the AP’s conflict, which is the origin of AP’s dispute. Because of AP’s conflicts, WTO dispute on AP is inevitable. "Treaty Conflict" can be defined in "narrow sense" and "general theory", the former insists that conflict between treaty only exists in obligatory rules, while the latter believes that substantive provisions or procedural provisions should been regarded as the category of treaty conflict. This author believes that the former definition is too narrow. Because limiting treaty conflict to obligatory rules, or substantive obligation clauses, and excluding the rights provisions, the parties will not be able to apply the interpretation rule which is relevant to treaty conflict when there is a new treaty extending or reducing the rights. Secondly, in addition to the substantive treaty, there are international treaties which are procedural rules and are not directly relating to substantive right or obligations. In addition, the relevant practice of the International Court of Justice also supports the "general theory" definition. Therefore, this article applies the "general theory", dividing the AP conflict into: conflict between the orders, conflict between order and prohibitions, conflict btween prohibitions authoriation, conflict between prohibitions and exemption clauses. Despite differences in specific content and presentation of treaty conflict, its cause is quite the same: fragmentation of international law and incomplete contracts. Since international law has never been in a complete system, conflict between treaties is inevitable. The content of a treaty is limited by reality of the objective and subjective factors, and can only be concluded on prediction of the future, therefore fuzzy and blank are inevitable. Due to the existing treaty conflict, and the lack of corresponding explanation, the solution of a dispute is sort following the conflict. Beside, WTO rules also contribute to AP’s conflicts. In accordance with the provisions of the "Marrakech Agreement", treaty implementation, management, operation, and the specific power to negotiate a protocol power, should belong to the Ministerial Conference, the General Council, the Council and the relevant special committee. However, each AP shall be an integral part of the WTO Agreement. Therefore, in the process of concluding the protocol, all participants in the accession negotiations construct a legislative body which is outside the "Marrakech Agreement". The current practice also shows that once the final content of an accession protocol is determined, the legislative body constructed by the "Marrakech Agreement" would not veto the AP. The conflict between AP and treaties in WTO system is foreseeable. In addition, Article 11(founding member) and Article 12 of the Marrakech Agreement, have set forth a three level system for members, the rule applicable for founding members, that applicable to member who acceded early and that applicable to later acceding members. The coexisting of the three kinds of rules are bound to cause AP conflict.Chapter Two is the summary of the DSB practice on APs. Upto February 30, 2015, there are 28 cases relating to AP, involving 17 measures, accounts for 5.7% of DSB cases. Disputes regarding AP envolves China and Vietnam only, the terms and contents are highly concentrated as well. These cases involve 13 substance articles, concentrated in the Chinese Aps: article 2.1(Article 2.1of "Vietnam Accession Protocol has the same content), Article 5.1, Article 5.2, article 7.2, article 7.3, Article 8.2, Article 10.3, Article 11.3, Article 12.1, Article1, Article 16.1, Article 16.3, Article 16.4, Article 16.6. These 13 terms, involving three kinds of conflicts: conflict between orders, such as Article 15 of China’s AP(Price Comparability in Determining Subsidies and Dumping). In determining price comparability the importing WTO Member could use a methodology that is not based on a strict comparison with domestic prices or costs in China, which conflicts with Article 9.5 of Anti-dumping Agreement which contains the rule of using the exporting member’s prices or costs for the industry under investigation.2. Conflicts between orders and prohibitions, such as TRIMs’ prohibitions between Article 7.3 of Chinese AP and TRIMS. Article 5 of TRIMS is about “Notification and Transitional Arrangements”, which informs the members prescribed measures and transition period, and the first sentence in Article 7.3 of China’s AP directly stipulates: China shall, upon accession, comply with the TRIMs Agreement, without recourse to the provisions of Article 5 of the TRIMs Agreement.”3. Conflict between prohibition and authorization. Article 7.2 of Chinese AP requires China to eliminate and shall not introduce, re-introduce or apply non-tariff measures that cannot be justified under the provisions of the WTO Agreement, while Article 20 of GATT which is generally referred to as the exception clause, awarded to members in certain circumstances to deviate from certain obligations. Because the terms and types of conflicts involved are highly concentrated, the focus of AP dispute is very clear, it is mainly related to three aspects of AP: the nature of the AP clause, jurisdiction on AP dispute, the relationship between the APs and WTO Agreement. In the practice of DSB, " EU-- fasteners "(DS397), "US-- double reverse measures "(DS379), "US- shrimp "(DS404),the nature of AP clause has been mentioned but was not given a clear explanation, which led to an unclear situation of AP’s status and the effect in WTO system. Regarding the issue of jurisdiction, DSB adopted an explanation inconsistent with quasi-judicial jurisdiction, confirm its jurisdiction on mutual consent and AP is an integral part of the WTO Agreement. As for the relationship between the AP and WTO Agreement, the DSB rulings is going through a process of avoiding-explanation- avoiding. On explanation of “an integral part of the WTO Agreement”, the Appellate Body in China- Publications(DS363) and the panel of China Rare Earth(DS431/DS432/DS433), clearly pointed out that the "WTO Agreement" refers to the entire WTO system. And the Appellate Body of the later directly ruled that “the coverage of WTO Agreement to solve the problems in dispute is moot.” The ruling has two effect, denying all the ruling in the cases, and leaving a confusion definition of AP clause. On the issue of how AP clause relates to WTO Agreement, it mainly concentrated on the applicability of the Article 20 of GATT1994. DSB explicitly pointed out that Article 5.1 of China’s AP, provides a guidline to the issue of whether the accession protocol terms is subject to other WTO agreement provisions: if there is no clear reference, it is not subject to other WTO agreements. As for the explanation of "silence”, silence means giving up, which is not in consist with the interpretation in "US-Carbon Steel "(DS213), "US Underwear "(DS24), "Canada-- Automobile"(DS139). In these cases, the Appellate Body recognized that "silent" must have certain meaning to explain the presence of conflict. But because of the avoiding and unclear attitude of DSB, as much as the legal interpretation with contradictions of logical, there leave blank to be fulfilled in the next three chapers.Chapter Three is about the first core issue on AP dispute. The conclusion of this chaper is that the AP articles in these cases are reservation made by the existing members of WTO during the negotiation of the AP. Although many scholars have published numerous article regarding the provisions of AP, the previous research mainly focuses on the classification of the protocol provisions by comparing WTO rules with AP provisions. The research comes to a conclusion that some provisions are consistent with WTO rules, some are above and some are below. The classification is one presenting the diference on the content, rather than the nature. What is more, the classification is not based on all terms of AP but selected part of it, which is incomplete. Therefore, this paper divides all of the AP provisions into procedural terms and substantive provisions, and further indicates that the substantive provisions contain provisions that are the same with the WTO basic rules as well as those different from the general terms. It is the different provisions that should be the key to the research. In accordance with the provisions of international law, rules and regulations of WTO, these different provisions do not meet the requirement of modification, subsequent agreements or estoppel commitment. But they satisfied the three element of reservation in international law: the element of form-- unilateral declarations; the element of time – made when a state or international organization expressed its intention to be be bond by a treaty constraints; element of object – to exclude or modify the legel effect of certain provisions of the treaty. The different provisions of an AP meet the above three elements. Considering the Marrakech Agreement does not allow new members joining WTO with reservation which has not relevant rule in WTO agreements, so this paper classifies the different provisions as reservations made by the existing members of the WTO.Chapter Four is about the jurisdiction in AP disputes. To determine the jurisdiction of DSB contains a horizontal and vertical standard. The horizontal standard refer to the conditions for a dispute to meet to be satisfied as within the jurisdiction of DSB. There are three conditions: A. Parties to the dispute shall be members of WTO. B. The legal bases relied on by the parties shall be either a covered agreement or the DSU itself. C. The parties to a dispute should have had a consultation.As for the vertical standard, it is about the standard of DSB’s authority. The jurisdiction of DSB has its limitations. The DSB should provide security and predictability to the multilateral trading system, clarify the existing provisions of those agreements in accordance with customary rules of interpretation of public international law, and make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability of and conformity with the relevant covered agreements. A DSB ruling should neither increase nor redcue the obligation of a member. Due to the above requirement to DSB, one can see that the jurisdiction of DSB has a quasi-judicial nature. In the two major standards, the most vagure part is the "covered agreements". Whether AP dispute can fall in the DSB jurisdiction is actually determined by the answer to the question whether or not DSU "covered agreements" includes the WTO protocol. The conclusion of this article is that, AP dispute is not able to be incorporated into the jurisdiction of DSB, because one of the horizontal standards of DSB jurisdiction is that only dispute regarding the "covered agreements" can be incorporated into the DSB’s jurisdiction. The practice of specific disputes sets up an objective standard to determine whether a dispute relates to "covered agreements" : "stipulated". Therefore, no matter AP is a part of Marrakech Agreement, or WTO system, it does not meet the standard of “stipulated”. The author thinks that the "stipulated" standard can be breakthrough- by the amendment process of WTO. The latest legal documents “Agreement on Trade Facilitation” is a typical one to show that when a new treaty containing a dispute clause, it could be incorporated into the jurisdiction of DSB. Therefore, AP could be incorporated into the Marrakech agreement in Annex 1, or add to the Accession Protocol dispute settlement provisions(new members apply to join program, the existing non original members of the modification protocol). Since DSB has not jurisdiction over AP dispute, according to Marrakech agreement, AP disputes should be referred to the Ministerial Conference of the WTO or the General Council. If parties choose to apply procedure of arbitration, they shall conclude the arbitration agreement containing the necessary terms, to ensure the effectiveness of arbitration does not affect the DSB procedure and judgment, and cannot be influenced by the DSB’s decision.Chapter Five is to analyze the relationship between the Accession Protocol and WTO agreements and this issue should be connected to "a package of commitments." Starting from the history, the development and the specific contents of a package of commitments, this auther comes to the conclusion that "a package of commitments" is a rule for the basic negotiation establishing WTO, gradually evolved into the principle rule of WTO. According to " a package of commitments ", “integral part” in WTO system has its special rules: 1. Integral part of Marrakech agreement, except the procedure rule, such as accept and modification, has different substantive rule; 2 The multilateral agreement, clearly belong to their respective areas of content(such as tariff under GATT1994, commitment of GATS) is part of it. The effect of "integral part" is that the rules of a treaty will be applied when part of its provisions are referred to or being explained if that treaty is that the provision of a treaty is referred. The general way of expression is: A is part of B; B is the principal agreement, A is the component to be incorporated into the principal agreement; the terms shall be explicitly provided for in B. As for the "WTO agreement" incorporated as integral part, according to the existing WTO rules and Aps of different members, it can mean three situation: the Marrakech Agreement only, the multilateral trade agreements annexed to the Marrakech Agreement and the WTO agreements as a system. This authornthinks that while the WTO protocol provisions may intent to be incorporated as part of the Marrakech Agreement, but because the terms provided does not conform to the application rule of WTO "integral part ", the desired effect does not occur. As for the effect of Accession Protocol and other agreements, this paper takes DSB practice involving "package of commitments" cases as the starting point. According to the existing practice of DSB, "a package of commitments" applied as negotiation method should be interpreted in this way: If an agreement does not specify a particular conditions or procedures, as long as the agreement is pointing to the other related content of the agreement, it should be recognized that the other related agreement must also apply to the former agreement. When it is used as the basic principle, general explanation of the DSB contains the following contents: unless expressly presented as package of commitments and the accession protocol specified, members have no obligations in accordance with additional conditions to claim. Accession Protocol dispute is beyond DSB jurisdiction, as it sets additional rules to new members: if members want to apply some rule of WTO agreements, it needs to be stipulateed in AP. No doubt, it is the inconsistent with the dual nature of "the package of commitments". Finally, to overrule the content of a ruling, members should follow a rule which was born in DSB practice-- "compelling reasons". According to the practice of DSB, China, as the respondant of most protocol dispute, in accordance with the "US—Countervailing and Antdumping"(DS449), one can apply the fourth "compelling reasons" therein-- "the explaination of the Appellate relied on factual errors". Because according to the connotation of "package of commitments", the connection between each agreement should be determined in accordance with the content.The DSB ruling, based on Article 5.1 of China’s protocol, contains a standard that if the Accession Protocol does not point to a WTO agreement or a provision thereof, there are no applicable provisions of WTO. The fact of this ruling is wrong. At the same time, from the committee’s decision on "export tax", the author finds the evidence to support the statement that "export tax" of China’s protocol is in GATT1994’s coverage. This would provide more sufficient evidence to prove "compelling reasons" in the further.