February 03, 2018

台大法研所104國際經貿法考古題解題

Question 1 

Country A and Country B are both Members of WTO and Convention of Climate Change. In order to develop renewable energy to cope with climate change and enhance sustainable development, the government of country A passes a law "Renewable and Clean Energy Act"(RCEA). Under the RCEA, the government would purchase electricity generated by solar power firms with guaranteed prices, but on the condition that the firms use solar cells and modules of domestic origin. Practically, the preferential rate of electricity purchased by the government goes to only those solar power rims that use at least specific percentage (such as 60%)of domestic content. Country B believes the RCEA and its application is in breach of the WTO rules and thus file at the WTO. Country A argues that any dispute relating to climate change shall be exclusively resolved through dispute settlement mechanisms under the Convention of Climate Change, as agreed by all members. 

1. What could be the relevant WTO rules and requirements regarding the RCEA? (20%)

1. The SCM Agreement disciplines the use of subsidies by the Members and regulates the actions members can take to counter the effects of other member's subsidies. The SCM Agreement does not prohibit Members from granting most forms of subsidies, only. prohibited subsidies which cause adverse effects would be subject to the provisions of this Agreement. Firstly, in determining whether the RCEA would be subject to the provisions of this Agreement, it must fulfil the requirements to constitute a subsidy. 

(a) Financial Contribution by the government

According to Article 1.1(a) of the SCM Agreement, there must be a financial contribution by the government. In this case, under the RCEA, the government would "purchase electricity generated by solar power firms with guaranteed prices". This would constitute as a 'financial contribution under SCM Article 1.1(a)(1)(iii).

(b) A benefit is conferred

The AB has ruled that the existence of a benefit is to be determined by comparison with the market-place. In the case of government procurement of goods,  benefit is said to be conferred if the price paid by the government is too high compared with the prevailing terms and conditions of the market. Under the RCEA, a benefit is said to be conferred as the government would purchase electricity by solar power firms at a preferential rate. 

(c) The subsidy is specific

According to SCM Article 2.3, a prohibited subsidy is deemed to be specific. A prohibited subsidy, as defined in Part II of the SCM Agreement , is either an export subsidy or an import substitution subsidy. An import substitution subsidy is a subsidy contingent upon, or dependant, or conditioned upon the use of domestic goods over domestic goods. In this case, as provided by the RCEA, the preferential rate of electricity purchases by the government only goes to these solar firms that use at least specific percentage of domestic content. In other words, eligibility of the subsidy depends on the use of domestic goods, therefore the RCEA is a prohibited subsidy, and therefore specific. To conclude, the RCEA is subject to the SCM Agreement. 

2. GATT III:4 requires that all members are not to discriminate between domestic products and imported products in respect of regulations, laws and requirements affecting the internal sale or offering of sale. According to this article, Member governments are not to discriminate between imported products so as to provide equality of competition between imported products and domestic products. 

In this case, the RCEA is sets down requirements regarding the conditions for the buying of electricity at a preferential rate, thus, the RCEA is a law affecting the sale of solar cells. To conclude, the RCEA is subject GATT Article III:4. 

2. Whether country A violates these rules? (10%)
1. SCM Article 3.1(b) provides that subsidies that are contingent upon the use of domestic over imported goods are to be prohibited. In this case, as aforementioned,  the RCEA is a subsidy that falls within the ambit of SCM Agreements, and thus have to comply with SCM Agreement rules. Thus, since RCEA prescribes the use of domestic solar cells over imported solar cells, it is a prohibited subsidy, and thus violates SCM Article 3.1(b).

2. To constitute as an infringement of GATT III:4, the following requirements must be fulfilled: (1)the measures at issue is a regulation,requirement, and law; (2) the products are like products; (3) the imported products are accorded less favourable treatment. In this case, the RCEA is sets down requirements regarding the conditions for the buying of electricity at a preferential rate, thus, the RCEA is a law affecting the sale of solar cells.The issue of 'like products' are not debatable in this case, since 'domestic solar cells' and 'imported solar cells' are like products. In this case, the RCEA is a law that stipulates that the preferential rate of electricity purchased by the government goes to only those solar firms which use at least specific percentage of domestic content, thus, the RCEA is a law prescribing the use of domestic solar cells and modules over imported solar cells and modules. To conclude, the RCEA is an infringement upon of GATT Art. III:4. 

Read more »

February 01, 2018

台大法研所103國際經貿法考古題解題

Question 2

Article 3.2 of the Understanding on Rules and Procedures Governing the Settlement of Disputes( DSU) provides in part that "The Members recognise that it serves to preserve the right and obligations of Members under the covered agreements, and to clarify the existing provisions of those agreements in accordance wit customary rules of interpretation of public international law." ( Emphasis added)

1. What does the phrase "customary rules of interpretation of public international law" refer to? (10%)

Example answer:

While customary international law is usually unwritten, the VCLT has codified, in Articles 31, 32, and 33 some of these customary rules of interpretation. Although Article 3.2 of the DSU does not directly refer to such provisions, relevant WTO jurisprudence has  has recognised the status of the VCLT as"customary or general international law." 

For example, the Appellate Body report in the case US-Gasoline has stated that: The general rule of interpretation as set out in VCLT Article 31 has attained the general or customary international law. As such, it forms part of the 'customary rules of interpretation of public international law' which the Appellate Body has been directed to by Article 3.2 of the DSU, to apply in seeking to clarify the provisions of the General Agreement and the other covered agreements of the WTO. Thus this direction reflects  measure of recognition that he General Agreement is not to be read in direct isolation from public international law. 

Furthermore, according to the Appellate Body Report in the case Japan-Alcoholic Beverages, the fundamental rule of treat interpretation set out in VCLT Article 31 has attained the status of general or customary international law. There can be no doubt that Article 32 of the VCLT that deals with the rule of supplementary means of interpretation has also attained the same status. 

2. What are these interpretation rules? (20%)

Example answer:

Article 31 of the VCLT sets out the general rules of interpretation as follows:

1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.

2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) Any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) Any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.

3. There shall be taken into account, together with the context:

(a) Any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) Any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) Any relevant rules of international law applicable in the relations between the parties.

4. A special meaning shall be given to a term if it is established that the parties so intended.

3. Based on these interpretation rules, do you think that a panel or the Appellate Body can "apply" or "rely on" an international agreement (such as an international agreement or the Framework Convention on Tobacco Control) to "interpret these WTO provisions? If yes, can you provide examples? (20%)

Example answer:

The panel in the case EC-Biotech has stated that Article 31.3(c) mandates a treaty interpreter to take into account other rules of international law. They also stated that this reference seems sufficiently broad to encompass all the general accepted sources of public international law, that is to say: (i) international conventions, (ii)customary international law, and (iii) recognised principles of international law. 

However, the panel in the case US-Shrimp has also added so limitations to this broad interpretation of  international rules. Pursuant to this report, there is an important limitation, namely that only these rules of international law 'applicable in the relations between the parties' are to be taken into account. It held 'the parties' to mean those states that have consented to be bound by the treaty being interpreted (ie. all WTO Members). According to the panel, a treaty interpreter is not required to have regard to treaties signed only by some WTO Members as context under Article 31.3(c) of the VCLT, but would have discretion to use some treaties as informative tools in establishing the ordinary meaning of the words used. 

Read more »