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Unclogging WTO Decision-Making with the Provisions on Amendments in Article X of the WTO Agreement

Document Cited in Related
Vincent
Author
Published date01 May 2018
Date01 May 2018
Pages227-241
DOI10.3366/ajicl.2018.0229
THE SINGLE UNDERTAKING REQUIREMENT IN WTO LAW

Article II:2 of the Marrakesh Agreement establishing the World Trade Organisation1 (WTO Agreement) states that ‘[T]he agreements and associated legal instruments included in Annexes 1, 2 and 3 (hereinafter referred to as “Multilateral Trade Agreements”) are integral parts of this Agreement, binding on all Members.’ The stated provision establishes the principle that has become known as the single undertaking (or single package) requirement. The WTO legal system establishes two main groups of agreements – multilateral trade agreements2 and plurilateral trade agreements.3 While multilateral trade agreements are binding on all WTO members, including newly admitted members, plurilateral trade agreements are binding only on the members who have acceded to such agreements. Per the stated provision in Article II:2 of the WTO Agreement, any new agreements that are incorporated under Annexes 1, 2 or 3 will automatically come under the single undertaking principle and thus become binding on all members.

The importance of the single undertaking requirement is further buttressed by the fact that decisions with multilateral implications or effect will be binding on all WTO members. The decision-making system of the WTO is thus of fundamental relevance to the discussion on the single undertaking principle. The WTO Agreement provides for various forms of decisions. Notable among them are decisions on interpretations,4 waivers,5 amendments6 and accession.7 Regarding general decision-making in the WTO, Article IX:1 provides that:

The WTO shall continue the practice of decision-making by consensus followed under GATT 1947. Except as otherwise provided, where a decision cannot be arrived at by consensus, the matter at issue shall be decided by voting. At meetings of the Ministerial Conference and the General Council, each Member of the WTO shall have one vote. […] Decisions of the Ministerial Conference and the General Council shall be taken by a majority of the votes cast, unless otherwise provided in this Agreement or in the relevant Multilateral Trade Agreement.

While there are provisions on specific decisions in the WTO (for example, interpretations, waivers, amendments and accession), the provision in Article IX:1 does not specify the type of decision-making that elicits the procedure of consensus or resort to a simple majority vote if consensus fails. Thus for decisions that do not fall under any of the specified procedures in the WTO Agreement, they would, by default, fall under the above quoted Article IX:1 format. For the discussion on the single undertaking requirement, Article IX:1 is significant due to the fact that decisions taken under this procedure that affect the WTO Agreement and the multilateral trade agreements in Annexes 1, 2 and 3 will, per the construction of Article II:2, come under the single undertaking requirement. Considering the fact that Article IX:1 establishes the normal procedure of decision-making in the WTO, the participatory implications for WTO members, especially developing countries, is of vital importance.8

Quite apart from the single undertaking requirement provided for under Article II:2 of the WTO Agreement, the negotiation mandate of the Doha Round established the single undertaking/single package as one of its core principles.9 Within the specific context of the Doha Round trade negotiations, the single undertaking principle is stated with the effect that ‘every item of the negotiation is part of a whole and indivisible package and cannot be agreed separately. ‘Nothing is agreed until everything is agreed.’10 Per this peculiar form of single undertaking in the Doha Round, even if a conclusion has been reached on, for example, amendments to the Anti-Dumping Agreement, such amendments will only take effect after conclusion of negotiations on all other matters on the negotiations agenda.

The ostensible rationale for establishing this evidently rigid negotiation principle is to ensure that all interests of WTO members are given equal attention and importance. If decisions on some issues proceed ahead of others, it could result in the situation where the economic superpowers of the international trade system can drive their agendas more speedily while the interests of developing countries lag behind.11 However, the obvious flaw in the use of the single undertaking principle in the Doha Round negotiations is that, even where all or a significantly high number of WTO members agree on a negotiation issue, it would not take effect until all other subject matters have been agreed upon.12 It appears WTO members have recognised the unnecessary rigidity of the Doha Round single undertaking requirement as evidenced by the Ministerial Conference Decision of 7 December 2013 to draw up a Protocol of Amendment to insert the Agreement on Trade Facilitation into Annex 1A of the WTO Agreement. Having satisfied the provisions in Article X of the WTO Agreement, the General Council, on 27 November 2014, adopted the Protocol Amending the Marrakesh Agreement Establishing the World Trade Organisation. This General Council decision resulted in the insertion of the Agreement on Trade Facilitation into Annex 1A of the WTO Agreement. The section on ‘decision on amendments’ below discusses in some detail this landmark in WTO decision-making, especially the importance of incorporating flexibilities into the single undertaking principle.

The discussion above on the single undertaking principle shows that, on its own, it is a very rigid requirement. This rigidity is further exacerbated by the consensus procedure in WTO decision-making. As quoted above, Article IX:1, which establishes the normal procedure of decision-making in the WTO, requires that decisions must be taken by consensus. It is only when an attempt to decide by consensus fails that there would be a resort to the simple majority vote procedure. However, WTO practice shows that members have resorted to the use of consensus as the de facto decision-making procedure.13 Regarding decision-making by consensus, footnote 1 of the WTO Agreement provides that ‘[T]he body concerned shall be deemed to have decided by consensus on a matter submitted for its consideration, if no Member, present at the meeting when the decision is taken, formally objects to the proposed decision.’ Consequently, in the WTO decision-making process, silence means consent. Finding consensus among 164 WTO members on a matter that, per the single undertaking principle, will be binding on all members is a Herculean task. Of note is the fact that this is a self-imposed rigidity of practice and not a necessary requirement of the WTO Agreement as there can be resort to voting if consensus fails.

The history of decision-making in the GATT 1947 era shows that, due to the relative ability to pick and choose binding rules, developing countries did not exhibit as much interest in decision-making on issues that they had secured waivers or that proceeded on a plurilateral basis.14 During the GATT era, developing countries showed greater interest in securing special and differential treatment concessions that derogated from key multilateral obligations like the Most Favoured Nation treatment (MFN) provision in Article I:1 of the GATT.15 For example, most developing countries did not accede to the Tokyo Round Codes that were signed by some GATT members in 1979.16 The ability to secure opt-outs from new trade rules and binding concessions in trade negotiations did not negate the benefits that they could still procure from the lowering of tariffs conceded by developed countries under the MFN and bound tariffs obligations under Articles I and II of the GATT.17 The flexibilities offered in the GATT era meant that developing countries could participate in the international trade system at speeds they deemed consistent with their developmental...

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