The Challenge of Interpreting 'WTO-Plus' Provisions

Abstract

This paper seeks to identify the special interpretive issues raised by the China Accession Protocol (the "Protocol"), focusing on its provisions that impose on China obligations more stringent than those imposed by general WTO disciplines. These so-called "WTO-plus" obligations have already become involved in several pending WTO disputes. Yet, how to interpret them remains uncharted territory.

Interpretation of the China-specific provisions presents a special challenge to the panels and the Appellate Body for at least two reasons. First, it is often unclear how a particular China-specific provision relates to the generally applicable WTO rules. Because the Protocol has been made an integral part of the WTO Agreement, as a matter of treaty law, it needs to be interpreted consistently and coherently with all other WTO agreements despite its China-specific provisions. Unfortunately, the text of the Protocol is not a model of clarity. It seldom articulates the relationship between a particular China-specific provision and the generally applicable WTO provisions, and provides no explicit rationale for the China-specific terms. Furthermore, the negotiating history of the Protocol has not been made public. As a result, it can be difficult to identify the intentions of the parties with respect to a specific provision of the Protocol at issue.

Second, unlike the generally applicable rules of the WTO, the China-specific provisions include some broad undertakings that go to the heart of China's economic and legal systems. These systematic obligations penetrate into the domestic policy domain of a sovereign nation deeper than any other WTO agreement ever has. Consequently, how to interpret the scope of such provisions becomes a politically highly sensitive matter. The goal, of course, is to give full effect to each of the Protocol provisions without improperly intruding into the legitimate domestic policy space of China. However, given the uniqueness of the Protocol, achieving that goal is not an easy task.

In this paper, I will illustrate the challenge of interpreting WTO-plus obligations faced by WTO tribunals in certain pending disputes. I will then propose three principles to be considered in the interpretation of WTO-plus obligations: (1) Identifying the baseline. For each WTO-plus provision at issue, to the extent possible, the treaty interpreter should endeavor to identify the corresponding provisions in the WTO multilateral agreements as the baseline rule. Locating the baseline rule can help ascertain the purpose and rationale of the plus obligation. (2) Distinguishing commercial commitments from systemic or domestic policy commitments. Some of the WTO-plus obligations are commercial commitments in nature, whereas others pertain to the reform of China's domestic system. To avoid improper intrusions into the domestic policy space of China, the level of WTO scrutiny should be less strict with respect to systemic commitments than to commercial commitments. (3) Giving proper weight to the intention of China. Although the Protocol has been made an integral part of the WTO Agreement, it differs from WTO multilateral agreements in that all of the Protocol obligations are China's only. Given the de facto unilateral character of the Protocol obligations, the treaty interpreter should pay special attention to the intention of China in interpreting its WTO-plus commitments.

The paper consists of three principal parts. Part One provides a general introduction to the WTO-plus obligations of China. It identifies five different types of such obligations in light of their impact on the Chinese system, and discusses the legal nature and enforceability of the Protocol, as well as its relationship to the multilateral WTO agreements. Part Two introduces three particular WTO-plus obligations that have become the object of WTO disputes. It demonstrates the different natures of these obligations and identifies some major legal issues involved in their interpretations. Part Three sets forth the three principles mentioned above for the interpretation of the WTO-plus obligations, and explains how using these principles can help to address the interpretive issues raised by the pending disputes.

Keywords: WTO, Dispute settlement, Treaty interpretation, International law, China, Accession

JEL Classification: F02, F10, F13, F14, F15