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(a)In GATT jurisprudence, to give one example, legislation providing for tax discrimination against imported products was found to be GATT inconsistent even before it had actually been applied to specific products and thus before any given product had actually been discriminated against.
(b)Article XVI:4 of the WTO Agreement explicitly confirms that legislation as such falls within the scope of possible WTO violations. It provides as follows: ‘Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.’
The three types of measures explicitly made subject to the obligations imposed in the WTO agreements – ‘laws, regulations and administrative procedures’ - are measures that are applicable generally; not measures taken necessarily in a specific case or dispute. Article XVI:4, though not expanding the material obligations under WTO agreements, expands the type of measures made subject to these obligations.
(c)Recent WTO panel reports confirm, too, that legislation as such, independently from its application in a specific case, can be inconsistent with WTO rules.”
Clearly, it is established that legislation as such, independently from its application in a specific case, can be inconsistent with WTO rules and therefore can be brought before the DSB. However, what role panels may play when called upon to resolve settlement concerning legislation as such?
As noted above, panels may have jurisdiction as to domestic law once brought before them appropriately. In practice, panels often have to address domestic laws, In respect of the examination of domestic or municipal law by WTO panels, in some circumstances, it is clear that an examination of the relevant aspects of municipal law is essential to determining whether Members to a dispute have complied with their obligations under the covered agreements.
However, as stressed in the DSB practice, panels’ mandate is to examine municipal law solely for the purpose of determining whether Members meet their WTO obligations. In doing so, panels do not interpret municipal law “as such”, the way they would, say, interpret provisions of the covered agreements. Panels are, instead, called upon by the DSB to the meaning of domestic law as factual elements and to check whether these factual elements constitute conduct by the Members contrary to their WTO obligations. The rules on burden of proof for the establishment of facts also apply in this respect. There may be various differences between domestic law and the covered agreements, e.g., some terms such as “determination” used both in domestic law and in WTO provisions, do not necessarily have the same meaning. It follows that in making factual findings concerning the meaning of domestic law panels are not bound to accept the interpretation presented by parties to a particular dispute. That said, any Member can reasonably expect that considerable deference be given to its views on the meaning of its own law. 5
“While it is clear from the terms of Article 3.2 of the DSU that it falls within the competence of the Panel to ‘clarify the existing provisions of
in accordance with customary rules of interpretation of public international law’, the DSU does not expressly provide how panels should address domestic legislation. Article 11 of the DSU only specifies that panels ‘should make
an objective assessment of the facts of the case’. However, both Article 3.2 of the DSU and the practice of the Appellate Body make it clear that we have, whenever appropriate, to develop our approach on the basis of that of international courts in similar circumstances. We will consequently take into consideration the practice of international tribunals in this respect.” 6
Furthermore, the understanding of a law the WTO-compatibility of which has to be assessed begins with an analysis of the terms of that law. However, panels have never considered that they should limit themselves to an analysis of the text of municipal law in isolation from its interpretation by domestic courts or other authorities, even if they were to find that text to be clear on its face. Panels think if they were to do so, they might develop an understanding of that law different from the way it is actually understood and applied by the domestic authorities. This would be contrary to panels’ obligation to make an objective assessment of the facts of the case, pursuant to Article 11 of the DSU. Therefore, panels rule that they must look at all the aspects of the domestic legislation that are relevant for their understanding of the disputed municipal law. However, looking at all the relevant aspects of the domestic law of a Member may raise some methodological difficulties, such as how much deference must be paid to that Member''s characterization of its legislation. In that context, panels think they will determine first how to deal with that aspect of the examination of a domestic law and how they should consider the case-law related to it, where courts are, inter alia, responsible for interpreting the law. 7
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