Subsequent Practice as a Means of Interpretation in the Jurisprudence of the WTO Appellate Body *
Subsequent Practice as a Means of Interpretation in the Jurisprudence of the WTO Appellate Body *
Abstract and Keywords
While the general interpretative approach of the WTO Appellate Body has been much discussed, its use of ‘subsequent practice’ as a means of interpretation has so far been less focused on. This chapter gives an overview of the pertinent pronouncements by the Appellate Body, relates them to the jurisprudence of the ICJ, and discusses the possible relevance of subsequent practice as an element of interpretation within the WTO system in the future.
1.1. While interpretation is the main task of the Appellate Body under the WTO Dispute Settlement Understanding, the same is not true for the ILC. The ILC mostly acts as a body which formulates and articulates rules. But, of course, the formulation and articulation of rules often implies interpretation. And sometimes the ILC even selects topics which directly address the question of how to interpret international rules. The best-known example is the preparation by the ILC of the Vienna Convention of the Law of Treaties and in particular its provisions on interpretation.
In 2009, the Commission decided to include the topic ‘Treaties over time’ in its active programme of work.1 Elucidating the role of ‘subsequent agreement and subsequent practice’ as a means of interpretation will be part of the work of the Commission under this topic. The ILC works on ‘subsequent agreements’ and ‘subsequent practice’ because the question of how to use these means of interpretation may become more relevant as major treaties age and their context changes.2 International treaties cannot be amended easily, but they must remain capable of fulfilling their purposes. Subsequent agreements and subsequent practice are means of interpretation which are characteristic for international law. The way in (p.139) which they are to be used, in particular in relation to other means of interpretation, has not been sufficiently explored, and they are used differently by different dispute settlement bodies.
1.2. The Appellate Body of the WTO has dealt on several occasions with invocations of ‘subsequent agreements’ and ‘subsequent practice’ by different parties and panels. The most relevant cases are:
• In Japan—Alcoholic Beverages the Appellate Body rejected the finding of the Panel according to which an adopted Panel report constituted a determinative ‘subsequent practice’ with respect to the provisions which were interpreted in the report.3
• In EC—Computer Equipment the Appellate Body rejected the finding of the Panel according to which the classification practice of a few main importers constituted a determinative ‘subsequent practice’, despite the fact that certain other importers and the main exporter did not follow the same practice.4In Chile—Price Band System the Appellate Body rejected the finding of the Panel according to which the lack of objection against a specific form of determination of customs duties was sufficient to constitute relevant ‘subsequent practice’.5
• In US—Gambling the Appellate Body rejected the finding of the Panel that certain Scheduling Guidelines constituted ‘subsequent practice’ for the purpose of interpreting the commitment of the US regarding ‘other recreational services’.6
• In EC—Chicken Cuts the Appellate Body rejected the finding of the Panel according to which a classification of certain chicken parts by the EC which had remained unopposed for six years constituted relevant ‘subsequent practice’.7
• In EC—Bananas III the Appellate Body rejected the finding of the Panel according to which a waiver could constitute relevant ‘subsequent practice’ for the purposes of prolonging a related agreement by way of interpretation.8
These cases seem to suggest that the Appellate Body seeks to limit or even largely to exclude subsequent agreement and subsequent practice as means of (p.140) interpretation within the WTO system. However, a closer look at the reasoning of the Reports of the Appellate Body, in particular the one in EC—Chicken Cuts,9 and at unopposed Panel Reports10 suggests that the question of the role of subsequent agreement and subsequent practice as means of interpretation remains a relevant issue within the WTO system.11
Why should this aspect of the process of interpretation be a worthwhile question for the ILC, and why should it be significant for the WTO dispute settlement system?
For the ILC, the jurisprudence of the WTO Dispute Settlement Body is not merely one of many different regimes. This jurisprudence makes an influential contribution to the methods of interpretation of international norms. Indeed, the Appellate Body claims to faithfully follow and to articulate the rules of interpretation as they are formulated in the Vienna Convention on the Law of Treaties.12 This invites the question of whether the jurisprudence of the Appellate Body is in line with that of other dispute settlement bodies, in particular with that of the International Court of Justice.
Articles 31–33 VCLT do not set up a rigid system, or method, of interpretation, but rather offer a range of means of interpretation whose relative importance must be assessed in a holistic fashion in the light of the particular circumstances of the case and of the treaty concerned.13 The style of reasoning of different dispute settlement bodies may differ depending on their respective environments and in particular the expectations of their audiences.14 But these insights should not lead to an excessively critical, relativistic ‘anything goes’ approach. Reasoning and openly acknowledged methods of interpretation are important, not least because they impose pressure on the interpreters to be consistent and because they reveal much about their self-understanding.
The best-known example for the importance, and the revelatory nature, of the respective interpretative styles, is the difference between the jurisprudence of the European Court of Justice and European Court of Human Rights on the one hand, and of the WTO Dispute Settlement Body on the other. In Europe we can observe an emphasis on object and purpose as means of interpretation, or if (p.141) you will, on effet utile, and on the topos of the ‘living instrument’,15 while in the WTO world it is the textual meaning which is the professed guiding star.16 Here, I only want to tentatively explore whether the use of ‘subsequent agreement’ and ‘subsequent practice’ as means of interpretation sheds any light on the different approaches.
1.3. The Appellate Body underpins its use of subsequent agreement and subsequent practice as means of interpretation with references to general international law. It has sometimes quoted the ILC Commentary on Article 31(3)(a) and (b) VCLT,17 and since Japan—Alcoholic Beverages it uses like a mantra a definition of subsequent practice which is taken from the context of the VCLT. According to this definition, subsequent practice requires a ‘?“concordant, common and consistent” sequence of acts and pronouncements which is sufficient to establish a discernable pattern implying the agreement of the parties regarding its implementation’.18
While this approach sounds intuitively plausible, it is in fact somewhat less authoritative than it appears at first sight. The adopted definition of ‘subsequent practice’ has been formulated by Sir Ian Sinclair,19 who represented the United Kingdom at the Vienna Conference on the Law of Treaties and who drew on a similar formulation in French by Mustafa Kamil Yasseen,20 using elements from the work of the ILC and the jurisprudence of the International Court of Justice (ICJ).
Also, in substance, the approach of the ICJ is rather more liberal and less rigorous than the one so far adopted by the Appellate Body. The ICJ quite often considers whether a treaty provision must be interpreted in the light of a subsequent agreement or of a subsequent practice between the parties. Its jurisprudence is rich and subtle. The Court does not limit itself to considering what may be seen as subsequent practice in the narrower consensual sense, but it also recasts practice of one side as an element of context, as in its 1999 judgment in the Kasikili/Sedudu Island dispute between Namibia and (p.142) Botswana.21 The Court also does not limit its use of subsequent practice to serving as a means of interpretation, but also as a way of recognizing modifications of treaty obligations over time. This has happened not only in cases which involved the delimitation of borders, as in the well-known Temple at Preah Vihear case of 1962,22 but also in cases concerning the functions and powers of international organizations and their organs, in particular with respect to the United Nations, such as in the Wall Opinion of 2004,23 or in the Certain Expenses case of 1962.24
There are different possible explanations for the difference between the approaches of the WTO Appellate Body and of the ICJ concerning the use of the subsequent practice element of interpretation. The most obvious is the fact that the ICJ, as a body of general jurisdiction with the first and final say, should remain more flexible concerning its methods of interpretation, while the WTO Appellate Body, as a body of special jurisdiction, may have a stronger interest in developing a jurisprudence which serves legal certainty and systemic coherence.25 Another possible explanation is that the subject-matter of the WTO treaty system lends itself more easily to more formal methods of interpretation.
Be this as it may, the picture changes if the jurisprudence of the Appellate Body is compared to that of the European Courts. The ECJ, although it administers a body of rules which is in some ways similar to that of the WTO, rarely refers to the subsequent practice of the parties to the treaties, but uses its all-encompassing purposive interpretation to take account of changing contexts and subsequent developments.26 The European Court of Human Rights in Strasbourg more explicitly refers to changing circumstances, but these circumstances are not usually the subsequent practice of the parties to the Convention, but rather the changing conditions in the different European societies which require an evolving interpretation.27
Sure enough, both the Appellate Body and the ICJ have on occasion recognized that certain terms have an evolutive meaning. In US—Shrimp, the (p.143) Appellate Body has famously recognized that the expression ‘natural resources’ in Article XX(g) GATT is ‘by definition, evolutionary’ so as to also cover living resources,28 and the ICJ, in a judgment concerning a dispute between Costa Rica and Nicaragua, has recently done the same with respect to the words ‘articles of trade’ (objetos de comercio) to cover not only goods but also services.29 But such ‘evolutionary interpretations’ are (still?) comparatively rare both for the Appellate Body and for the ICJ.
And they can be contested. In the Costa Rica v Nicaragua case, two judges dissented from the evolutionary interpretation given to the term ‘objetos de comercio’. While they did not contest the result, Judge Skotnikov expressly suggested that the Court should rather have based its reasoning on the ‘subsequent practice’ of the parties which in his opinion showed that the agreed freedom of commerce covered not only goods but also services.30 Judge Guillaume seems to have implied such reasoning. I do not want to argue whether one or the other approach was correct. What is interesting is the choice of reasoning and the choice of the means of interpretation which are considered to be most relevant for the legitimacy of the decision. The agreement of the parties, as evidenced by their subsequent practice, can sometimes provide a higher legitimacy than the invocation of an inherently evolutionary meaning.
1.4. The question is whether the comparison of the jurisprudence of the Appellate Body with that of the ICJ on the one hand, and with that of the European Courts on the other, suggests that the WTO Appellate Body is least open to any forms of evolutionary interpretation, be it on the basis of the object and purpose of the treaty, or on the basis of subsequent agreement and practice of the parties. While it is understandable that the Appellate Body is reluctant to engage in purposive interpretation which is not warranted by the stated intentions of the parties,31 the same reluctance is intuitively less plausible with respect to interpretations which are based on the actual practice of the parties themselves.
The reluctance of the Appellate Body to engage in more openly purposive interpretation may have to do with the attitude of a young institution which must establish its authority and with the reciprocal nature of the undertakings. Both reasons do not, however, affect subsequent agreement and subsequent practice as means of interpretation. Subsequent practice is based on the authority of the parties to the treaty. The reciprocal nature of the obligations remains the same whether or not the parties engage in what is ultimately a reciprocal practice. Therefore the restrictive attitude of the Appellate Body with respect to subsequent (p.144) agreement and subsequent practice as means of interpretation must have other reasons. Perhaps the following two reasons play a role.
The first reason may be the specific nature of certain undertakings within the WTO system. This would seem to be true in particular for Schedules of commitments. It is unclear whose practice and whose agreement in which form would be sufficient to establish agreement about them. Only those states between whom trade in a particular product actually takes place, or also states with a potential trading interest? Such questions deserve to be explored and the EC—Chicken Cuts case is perhaps just a point of departure for a coming line of cases.
The second reason may be just inertia. Perhaps the restrictive attitude of the Appellate Body to subsequent agreement and practice as a means of interpretation is a consequence of its generally restrictive attitude towards interpretation which does not go significantly beyond the common intention of the parties as derived from the textual meaning of a provision or a treaty. Should the Appellate Body one day consider that the time has come to move from a rather exegetic approach to a more liberal approach to interpretation, without however yet taking interpretative liberties which the European Courts permit themselves, the Appellate Body might want to consider making greater use of a means of interpretation which continues to rest on the will of the parties and still permits some flexibility. Such a means of interpretation would obviously be the subsequent agreement and subsequent practice of the parties.
(*) Giorgio Gaja is not only an eminent and gracious colleague, he is also a leading member of the International Law Commission (ILC). One could even say that he embodies certain aspects of the Commission. Being sensitive to institutional identities, he may be interested to read about how one of the major quasi-judicial international bodies conceives and applies an important element of the ILC-inspired Vienna Convention on the Law of Treaties (VCLT).
(1) An earlier version of this contribution was delivered in the presence of Giorgio Gaja in July 2009 to the members of the WTO Appellate Body at a ‘retreat session’ to which members of the ILC were invited to discuss ‘Approaches to Treaty Interpretation’. I thank Robert Howse, NYU, for constructive comments and Christian Djeffal, Humboldt University, for technical help.
GAOR, Sixty-fourth Session, Supplement No. 10 (A/64/10), at 360, para. 217.
(3) Japan—Alcoholic Beverages, Report of the Appellate Body, WT/DS8/AB/R, WT/DS10/AB/R and WT/DS11/AB/R.
(4) EC—Computer Equipment, Report of the Appellate Body, WT/DS62/AB/R, WT/DS67/AB/R, WT/DS68/AB/R, para. 92.
(5) Chile—Price Band System, Report of the Appellate Body, WT/DS207/AB/R, para. 212.
(6) US—Gambling, Report of the Appellate Body, WT/DS285/AB/R, para. 193.
(7) EC—Chicken Cuts, Report of the Appellate Body, WT/DS269/AB/R, WT/DS286/AB/R, paras 272 and 276.
(8) EC—Bananas III, Report of the Appellate Body, WT/DS27/AB/RW2/ECU, WT/DS27/AB/RW/USA, para. 389.
(9) EC—Chicken Cuts, supra note 7, para. 251.
(10) United States—Section 110(5) of the US Copyright Act, Panel Report, WT/DS160/R, para. 6.55; Brazil—Measures affecting desiccated Coconut, Panel Report, WT/DS22/R, para. 255; United States—Zeroing, Panel Report, WT/DS294/R, para. 7.218.
(11) See I. Van Damme, infra n. 16, at 338–50, A.M. Feldman, ‘Evolving Treaty Obligations: A Proposal for A, at nalyzing Subsequent Practice Derived from WTO Dispute Settlement’, 41 NYUJ of Int'l L & Pol. (2009) 655–706, at 676 et seq.
(12) United States—Gasoline, Report of the Appellate Body, WT/DS2/AB/R, at 16; Japan—Alcoholic Beverages, supra note 3, at 10.
(13) YILC (1966), vol. II, at 218, para. 4 and 219, para. 8.
(14) G. Abi-Saab, The Appellate Body and Treaty Interpretation’, in M. Fitzmaurice, O. Elias, and P. Merkouris (eds), Treaty Interpretation and the Vienna Convention on the Law of Treaties: Thirty Years On (Leiden: Martinus Nijhoff, 2010) at 105–7.
(15) An early example of the principle of effet utile is provided by European Court of Justice, Case No. C-9/70 Grad v Finanzamt Traunstein  ECR 825, para. 5; for an example for the topic of living instrument see European Court of Human Rights, Tyrer v United Kingdom, Judgment of 25 April 1978, Series A, No. 26, para. 31.
(16) C.-D. Ehlermann, ‘Six Years on the Bench of the World Trade Court’, 36 Journal of World Trade Law (2002) at 615; I. Van Damme, Treaty Interpretation by the WTO Appellate Body (Oxford: Oxford University Press, 2009) at 221; G. Abi-Saab, supra note 14, at 106–107.
(17) See, eg, Report of the Appellate Body, WT/DS269/AB/R, WT/DS286/AB/R, 12 September 2005, paras 255 and 390. Report of the Appellate Body, WT/DS27/AB/RW2/ECU, WT/DS27/AB/RW/USA, 26 November 2008.
(18) Japan—Alcoholic Beverages, supra note 3, para. 2.
(19) I. Sinclair, The Vienna Convention on the Law of Treaties (Manchester: Manchester University Press, 2nd edn, 1984) at 137.
(20) M.K. Yasseen, ‘L'interprétation des traités d'après la Convention de Vienne sur le droit des traités’, 151 Recueil des Cours (1976-III) at 48.
(21) ICJ, Kasikili/Sedudu Island (Botswana/Namibia), Judgment of 13 December 1999, ICJ Reports (1999) at 1045–76, para. 50.
(22) ICJ, Temple of Preah Vihear (Cambodia v Thailand), Judgment of 15 June 1962, ICJ Reports (1962) at 6 and 22.
(23) ICJ, Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory, Advisory Opinion of 9 July 2004, ICJ Reports (2004) at 136 and 148, para. 24.
(24) ICJ, Certain Expenses of the United Nations (Article 17, paragraph 2, of the Charter), Advisory Opinion of 20 July 1962, ICJ Reports (1962) at 151 and 160.
(25) G. Abi-Saab, supra note 14, at 106–7.
(26) Case No. C-6/90 and C-9/90 Francovich and Others v Italy  ECR I-5357, para. 32; Case No. C-213/89 Factortame and Others  ECR I-2433, para. 20.
(27) Tyrer v United Kingdom, supra note 15; R. Bernhardt, ‘Evolutive Treaty Interpretation, Especially of the European Convention on Human Rights’, 42 GYIL (1999) 11 et seq.; M. Fitzmaurice, ‘Dynamic Evolutive Interpretation of Treaties’, 21 Hague Yearbook of International Law (2008) 101 et seq.
(28) United States—Importation of Certain Shrimp and Shrimp Products, Report of the Appellate Body, WT/DS58/AB/R, para. 130.
(30) Separate Opinion of Judge Skotnikov, para. 8; Déclaration de M. le Juge ad hoc Guillaume, para. 16.
(31) G. Abi-Saab, supra note 14, at 106–7.