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Forum Paper Title: Interpreting “Interconnection”: Hermeneutics of the WTO Mexico-Telecommunications Case
This paper discusses the hermeneutics of the first GATS panel report, Mexico- Telecommunications Case (DS204), with particular reference to its interpretation of the meaning of the word “interconnection” in the Telecommunications Reference Paper.
Until this panel decision, the international interconnection principles under the WTO GATS Telecommunications Annex and the Agreement on Basic Telecommunications were understood in diverse ways. On the one end of the spectrum, there was a view that saw no normative change in the traditional accounting rate system as there was an understanding on the continuing existence of the accounting rate system among the Negotiating Group on Basic Telecommunications. On the other end, there was a view that the traditional accounting rate system is not compatible with the GATS commitments and thus dead.
After analyzing the panel report of this case, this paper sympathizes with the panel that it made a right choice to uphold the latter view as it results in socially more desirable consequences which are up to the object and purpose of the GATS commitments. Having noted, however, that the panel could not explicitly take this reasoning because of the tradition of strict literal interpretation and thus exposed weakness in persuasion, this paper argues for loosening of the WTO interpretational tradition in order to take into account more comprehensive elements of interpretation in a holistic way.
This paper recommends that the WTO tribunal to develop a structured way to consider the object and purpose of a treaty to a meaningful degree even within the ambit of Article 31 of the Vienna Convention. This paper goes further to recommend that it is time for the tribunal to openly go beyond the interpretation rules of the Vienna Convention to take into account factual contexts at the time of interpretation. That would provide reasoning to the recognition of evolution of the concept of a term. The WTO panel in the Mexico-Telecommunications case made a judicial confirmation of this factual development: a shift from cooperative joint provision to competitive provision of international telecommunication services, and from accounting rates based on revenue sharing to interconnection rates based on actual costs.
This paper also suggests that the WTO tribunal should be prepared to embrace a more purposeful interpretation of the WTO agreements in a dynamic economy which often involves appearance of new gaps in the web of regulation.
Finally, this paper notes that the GATS Agreement set various objectives which are sometimes difficult to be reconciled within the WTO system. It is suggested that the WTO decision making bodies to develop a structure to carry out some of treaty objectives in cooperation with neighboring institutions, the ITU in this case, and that the WTO tribunal take into account the achievement through the cooperative relations in balancing the conflicting objectives.
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