Project Summary: The WTO Marrakesh Agreement

This is a short public summary of a paper produced for the University of Barcelona’s international economic law clinic. The full paper develops a legal analysis on the international legal consequences of possible irregularities in the adherence of a country (“X”) to the WTO Marrakesh Agreement.
 

 

INEXISTENCE OR INVALIDITY OF THE ADHERENCE OF COUNTRY X TO THE WTO MARRAKESH AGREEMENT

 

This text is a short public summary of a paper produced for the University of Barcelona’s international economic law clinic. The full paper develops a legal analysis on the international legal consequences of possible irregularities in the adherence of a country (“X”) to the WTO Marrakesh Agreement. This country X was a contracting party to the GATT 1947, it has always been considered as one of the original WTO Members and it has regularly participated in the WTO, but the beneficiary of the paper identified possible problems with its adherence to the WTO Marrakesh Agreement. The analysis undertook in the paper includes an examination of the case in light of WTO law, general international rules on the law of treaties, currently codified in the Vienna Convention of 1969 on the Law of Treaties (VCLT), and relevant domestic law of country X.

 

This text is a brief summary of the main questions analyzed in the full paper, in particular: (i) whether the adherence of country X to the WTO Marrakesh Agreement exists and (ii) whether such adherence (if any) is invalid because of the violation of an important internal rule of country X regarding its competence to conclude treaties.

 

1.   Existence of adherence

 

Regarding the first question, country X signed the Final Act Embodying the Results of the Uruguay Round by definitive signature and the WTO Marrakesh Agreement by simple signature subject to ratification, but the instrument of ratification for this agreement was not sent and there is no registration thereof in the public documents of the WTO Secretariat. Despite the absence of this instrument of ratification, the WTO Secretariat included country X in the list of original WTO Members, probably considering that the signature of country X was, in any case, definitive. After the publication of the official list of the original WTO Members, country X did not protest alleging its lack of ratification and this country has been actively participating in the WTO. Moreover, country X affirmed, in its first report under the WTO Trade Policy Review Mechanism, that it ratified the WTO Marrakesh Agreement in December 1994, although, in the official records of the WTO and of this country X, we saw no trace of its instrument of ratification.

 

Since country X signed the WTO Marrakesh Agreement subject to ratification but a subsequent ratification was never made, it seemed that it never adhered to that agreement. Indeed, under the VCLT, a country may adhere to a treaty by definitive signature, by simple signature and ratification or by other methods determined by a specific treaty. The WTO Marrakesh Agreement Establishing the WTO provides (in Article XI:1, on “Original Membership”, and Article XIV:1, on “Acceptance, Entry into Force and Deposit”), that the contracting parties to GATT 1947 could “accept” such agreement without imposing a specific method. Then, in accordance with the VCLT, such countries could freely choose to accept the WTO Marrakesh Agreement by definitive signature, by simple signature followed by ratification or by other possible methods (for example acceptance or approval). Taking into consideration that 81 Members signed the WTO Marrakesh Agreement subject to ratification while only 6 signed the Final Act subject to ratification,[1] it is possible to consider that it is sufficient to sign the WTO Marrakesh Agreement subject to ratification to choose that method of adherence. Therefore, country X signed the WTO Marrakesh Agreement subject to ratification and the lack of the expression “subject to ratification” in its signature of the Final Act had no impact on the right of country X to adhere in this manner because of its indication in the Marrakesh Agreement. There is, in principle, “inexistence” of country X’s adherence to the WTO Marrakesh Agreement because it never formally submitted the instrument of ratification to the WTO Secretariat.

 

However, it seems that the publication by the WTO Secretariat in January 1995 of the list of the original WTO Members including country X and the concurrent omission by both country X and other WTO Members to raise this issue resulted in a de facto adherence of country X to the WTO.

 

Indeed, acquiescence operates in the sphere where a vindication of a claim depends on the consent of the States affected.[2] As a result, it is possible to argue that the omissions of both other WTO Members and country X in objecting the obligations arising between each other from the status as Member of this country gave legal basis to this situation.

 

2.   Invalidity of the adherence

 

The second question discussed in the paper is the possible invalidity of country X’s acceptance of the WTO Marrakesh Agreement (assuming that such adherence exists) because of the violation of an important internal rule regarding its competence to conclude treaties. The WTO Marrakesh Agreement was accepted by the executive of country X without previous authorization of its legislature, in contravention of a domestic law of country X. In order for such breach to invalidate the acceptance of country X at the international level, it is necessary to meet the conditions of Art. 46 of the VCLT: (i) there must be a violation of an important internal rule, (ii) regarding the competence to conclude treaties and (iii) this violation must be manifest. As mentioned, country X has a law on the ratification of treaties that was likely breached when this country adhered to the WTO Marrakesh Agreement without parliamentary approval. This was an important rule because it referred to the distribution of a constitutional power and refers to the competence to conclude treaties, but this violation was not manifest.

 

Regarding the notion of manifest, there is no general legal obligation of States to keep themselves informed of legislative and constitutional developments in other States which are or may become important for the international relations of these States. [3] Moreover, the notification to other parties of internal rules on competence to conclude treaties or a judicial declaration on the unconstitutionality of the treaty may have an impact on the extent to which the violation of these rules would be manifest.  [4] In the present case, the legislation of country X was a new law for which there is no record of notification to the other parties, nor a judicial decision declaring the unconstitutionality or illegality of the adherence of country X to the WTO Agreement.

Finally, a violation is manifest when it is evident to every State analyzing the situation with due diligence and in this case the number of original Members adhering at the same time made unfeasible for every diligent Government to follow potential violations of the domestic law of other parties.

 

If the adherence of country X to the WTO Marrakesh Agreement was invalid under Art. 46 of the VCLT, only country X would have the right to invoke this ground of invalidity at the international level. Moreover, by virtue of Art. 45 of the VCLT, country X could have lost the right to invoke such invalidity. We were not able to determine with certainty whether country X was aware of the violation of its internal law. If this was the case, country X lost the right to invoke the invalidity because the four criteria of acquiescence (intention to be bound, obligation to react, clear and consistent acceptance and consent to be vitiated) were present.

 

Assuming that this was still an option, in order to invoke the invalidity of its adherence to the WTO Marrakesh Agreement, country X would have to follow the procedure under Art. 65 of the VCLT, which requires the notification of this claim to the other parties to the treaty. If, after the expiry of a period which, except in cases of special urgency, shall not be less than three months after the receipt of the notification, no party has raised any objection, the party making the notification may carry out in the manner provided in Art. 67 of the VCLT the measure that it has proposed. Then, if there were no objections from other WTO Members, country X would stop being considered a WTO Member.

 

If, however, an objection has been raised by any other party, the parties shall seek a solution through peaceful means as indicated in Art. 33 of the Charter of the United Nations, thus taking into account any provisions in force binding the parties with regard to the settlement of disputes. The matter could possibly be settled in the International Court of Justice, if the disputing parties so consent.

 

The paper also examines the possibility that a WTO Member brings a claim under the WTO Dispute Settlement System against country X alleging that it is violating a covered agreement and that country X invokes as a defence that its adherence to the WTO Marrakesh Agreement was invalid. In order for this defence not to be disregarded for being contrary to the general principles of good faith and estoppel, country X would have to initiate a procedure to “exit” the WTO, making the indicated notification of the ground of invalidity under Art. 65 of the VCLT to all parties[5], which could be more detrimental than losing a WTO dispute.

 

If country X successfully claims that its adherence to the WTO Marrakesh Agreement is invalid, it would stop being a WTO Member. This would have significant legal and economic effects for country X and other WTO Members.

 

Until country X decides to exercise this right, its adherence to the WTO Marrakesh Agreement is fully valid and it remains being a WTO Member. Arguably, no Member has an interest in invoking an invalidity of its adherence to the WTO. Also, no Member would dedicate efforts in correcting its adhesion to the WTO Marrakesh Agreement since the only legal effect this would create is to prevent it from exercising the right to invoke invalidity of its adherence to the WTO Marrakesh Agreement in the future.
 

Moreover, any country interested in quitting membership of the WTO can make use of the specific and simple procedure of "Withdrawal" set out in Art. XV of the Marrakesh Agreement establishing the WTO, without the need of raising the most controversial question of whether its adherence was invalid.

 

 

[1] Algeria, Bahrain, Belgium, Germany, Sweden and Tunisia.

[2] McGibbon, I.C., “The Scope of Acquiescence in International Law” (1954) BYBIL.

[3] Cameroon v. Nigeria, 2002, [2002] I.C.J. Reports (852) 303 at para. 265-266 [Land and Maritime Boundary between Cameroon and Nigeria]. See also: Duncan B. Hollis, The Oxford Guide to Treaties (Oxford: Oxford University Press, 2012) p. 563.

[4] Remiro Brotóns, A. et al., Derecho Internacional (Madrid: Mc. Graw Hill, 1997) p. 275.

[5] According to Article 65.5 of the VCLT: “Without prejudice to article 45, the fact that a State has not previously made the notification prescribed in paragraph 1 shall not prevent it from making such notification in answer to another party claiming performance of the treaty or alleging its violation.

 

 

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