Harvard Law School

Jean Monnet Chair

The Jean Monnet Seminar and Workshop on the European Union, NAFTA and the WTO
Advanced Issues in Law and Policy

Professor J.H.H. Weiler

Harvard Jean Monnet Working Paper 06/00

Gráinne de Búrca and Joanne Scott

The Impact of the WTO on EU Decision-making

Harvard Law School    Cambridge, MA 02138

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No part of this paper may be reproduced in any form
Without permission of the author.

© Gráinne de Búrca and Joanne Scott 2000
Harvard Law School
Cambridge, MA 02138 
USA

The Impact of the WTO on EU Decision-making
Gráinne de Búrca*
Joanne Scott**

Introduction:

EU lawyers are long used to reflecting on the fundamental ways in which the legal systems and governance of its component States have been affected by their membership of the European Union.  In more recent times, however, and in particular since the conclusion of the Uruguay round and the signing of the World Trade Organisation Agreements in 1994, lawyers are confronting an ever more complex set of questions concerning the relationship between the norms of the different systems, and the impact of the strengthened system of international trade law not only on the states individually but also on the EU and its institutions. There are numerous aspects to the question of how, in substantive and procedural terms, the process of political and legal decision-making in the European Union is affected by the EC’s membership of the WTO.  Most obviously, there are a number of hotly debated legal issues, which are addressed elsewhere in this book, dealing with the exact legal status and effect of WTO norms within the European legal order. Secondly, there are sector-specific questions concerning how particular EC policies are affected by provisions the provisions of the relevant agreements. Thirdly, there is a need to examine the extent to which and the way in which the EU institutions and organs seek to integrate the substantive obligations contained in the various agreements into their political and legislative processes. A fourth and significant dimension which is not often explored concerns the likely impact not of the actual provisions of the WTO Agreements, but of the general principles and due process norms being developed by the dispute settlement bodies, not only on the adjudicative methods of the Court of Justice, but also more generally in the interpretation of provisions of the EC Treaties and EC law in particular when the scrutiny of trade restrictions arises.  

This chapter concentrates primarily on the third and fourth categories outlined above, and it is divided into three parts.  The first part considers briefly some of the points of comparison and contrast between the EU and the WTO, and the relevance of these similarities and differences for the interpretation and effect of the respective norms of each system.  The second part takes two case studies in order to examine in more concrete detail some of the ways in which WTO norms and provisions are likely to influence and be integrated into the EC decision-making processes. The first of these examines the recently proposed amendment to the EC Cosmetics Directive and the second the ramifications of a pending legal challenge to a recent Regulation on aircraft noise.   The final part of the paper considers the general principles and procedural norms evolving and being developed at WTO level, and at how these are likely to be relevant for the ECJ and  EC decision-making bodies more generally.

Part One

The EU and the WTO share a number of obvious features: both are organisations established primarily to promote trade between states. They are also distinctively different in many respects: the WTO is a very broad multilateral organisation while the EU is a geographically limited regional entity. Further, even in the early stages when it was primarily a common market, the EEC has always been a more closely integrated collection of states than the GATT or the WTO.  Nonetheless, the EEC’s common market was modelled partly on the GATT, and many of the EC Treaty provisions clearly reflect this.  Interesting comparisons can be drawn between the similar EC and GATT rules on matters such as internal taxation, discriminatory and non-discriminatory trade restrictions.  It might be expected that given the EC’s experience in dealing internally with many of these same issues, such as the removal of discriminatory barriers to trade, and of disproportionate regulatory restrictions between states, it would be well equipped to respond to such issues arising in the context of a multilateral trade organisation of which it is a member.  

However, the situation is rather different where it is not a case of the EC enforcing the rules of the internal market against one of its own member states, but instead the EC confronting a WTO-based challenge to one of its own regulatory measures.  This is not only because of the tighter supranational legal and constitutional framework of the EC as compared with the looser international legal nature of the WTO and its agreements, but also because of the development of the EU into an entity which, in the scope of its aims and its policies, is much more than a trade organisation. Whatever the significance of the developments which emerged from the Uruguay round, with the move from GATT 1947 to GATT 1994 and the establishment of the WTO, it remains a fundamentally different entity from the European Union.  Its aims and objectives, its political institutions, its dispute resolution bodies, its instruments, although sharing common features, are profoundly different in key respects from those of the EU.  Two fundamental differences between the EC/EU and the WTO – in the legal-institutional dimension and the policy-substantive dimension – lie at the heart of many of the tensions created by the application of the rules and norms of the latter to the former.  These are the dimensions which need to be borne in mind when examining the impact of the WTO on EC decision-making.  Yet at the same time, a degree of convergence can be seen, and at the very least some degree of mutual influence between the two systems, in particular as the WTO Appellate Body, with its rather more juridical nature than the previous GATT panels, begins to develop its jurisprudence through the disputes coming before it.  

The EEC began life, along with the other two Communities, primarily as a common market; an area which, although going beyond a free trade zone having established fairly strong legal and political institutions to achieve its goals, was not at the time the kind of ambitious political and constitutional entity which it undoubtedly is today.  It has since that time expanded not the scope of its policies from those such as trade, agriculture and competition to a whole range of others including environmental, consumer and social policy. Secondly, its institutions have also evolved, with an increasingly evident desire for greater constitutional legitimacy to underpin the extent and nature of its powers and functions. Despite the argument that its key or core priorities remain those of the promotion of trade, the multiple aspirations and tasks of the EU as a closely integrated regional organisation are unquestionable.  Its role and functions are wide and general and the balance sought between the imperative of free trade and its many other policy goals is complex.  Even if the EU’s identity as a “polity” continues to be contested, the WTO, despite the institutional and substantive changes brought about by the Marrakesh agreements, falls well short of being described as such.  It is an international organization which shares many of the core aims and tasks set for itself by the EEC – primarily those of  promoting trade and raising the standard of living – albeit not a regional but on a worldwide basis, and it currently lacks both the aims and the instruments to become a more general organ of world governance.  To use the terminology familiar in the EC context, its methods and instruments are those of negative rather than positive economic integration (if integration is not too loaded or too strong a word for the establishment between states of a high level of open trade and market access).  

At the same time, it is true to say that the very success of the WTO in establishing a rule-of-law-based system for promoting multilateral trade/commerce has led to arguments for its development of more democratic institutions and more positive instruments, partly to build on the success of a cooperative international organisation which has allowed for the peaceful resolution of disputes between states, but more particularly in order to build respect for other values and policies more strongly into its framework. The centrality and strength of the MFN, non-discrimination and other rules on trade effectively consign all other important policies – not only those such as environmental, health, social and cultural policies, but even the position of developing countries - to the status of exceptions which must be argued for within relatively strict constraints, rather than important competing or even co-equal policies in their own right. 

Nevertheless, while there may be no parallel at WTO level to the mixture of negative rules and positive policies seen in the EC’s combination of Treaty-based trade-restriction prohibitions on the one hand and legislative harmonisation/co-ordination measures on the other, there is nonetheless a strong emphasis on the need to agree and to develop positive international standards through acceptable and legitimate processes as one crucial way of addressing the tension between the goals of trade liberalisation and legitimate regulation. The WTO does not have its own standard-setting processes and its own political institutions for developing such norms, but other international bodies such as the WHO, ISO, the Codex Alimentarius and the OECD are indicated as a source of guidelines and norms for Member States. 

It is interesting to observe how the EC, long used to grappling within its own borders with the problem of how to reconcile free trade provisions with national regulatory interests, has responded when it has found itself in the position of the member whose regulatory policies - such as those on beef hormones, eco-labelling or aircraft noise - are open to challenge for compatibility with the rules of the trade organisation. This may be an analogy which has its limits, but it is not inapt to compare the response of the ECJ, in confronting the rules of this international organisation which are potentially in conflict with the rules and policies of the EC, with that of various national constitutional courts to the conflicts which have arisen between fundamental national norms and EC law. In denying the direct effect of the GATT and insisting on the effectiveness of its provisions within the EC legal order only insofar as the institutions of that order have expressed or implied that it should have such effect, the ECJ’s response is not dissimilar in certain ways from the assertion of various national courts that EC law does not take effect unconditionally and supremely within the national legal order, but must always be channeled through national constitutional provisions, which will themselves limit its applicability where it comes into potential conflict with basic norms of the national order.  In each case there is an apparent desire on the part of the judicial authority on the one hand to respect the legal obligations of membership of the organisation – in the case of national courts by acknowledging the prima facie requirement to give primacy to EC law, albeit in their own way, and in the case of the ECJ by acknowledging the binding nature of WTO law – but equally an intention to impose limits on the way in which those obligations take effect, so as to protect the integrity of aspects of their own legal order and the perceived distinctiveness of the values and norms constituting their political order.

This judicial response is not of course open to the political institutions, to whom the direct effectiveness or otherwise of the WTO agreements has less immediate relevance.   A fundamental, if rather obvious point to emphasise is that whatever controversy there may be over the exact legal status of WTO law within the EC legal order, there is no question about the binding nature of the former.  The EC, as a signatory and party along with its Member States, to the WTO, clearly accepts that the obligations contained in the WTO agreements are legally binding upon it.  How those obligations are to be given effect may be a matter of dispute, but their binding nature is not, and it is primarily the political institutions which must give effect to WTO law. If an EC action or measure is found to conflict with the provisions of the GATT, for example, it is up to the Commission and the other institutions to find a solution which is compliant.  

The European Commission found itself in relation to the beef hormones dispute, for example, in the position vis-à-vis the WTO bodies which various EC Member States have found themselves vis-à-vis the EC, being sanctioned for introducing a public health and consumer protection policy which was apparently not sufficiently supported by scientific evidence. Whereas the ECJ had rejected a challenge to the ban on hormones in beef in the earlier FEDESA case, the Appellate Body of the WTO reached a different conclusion in response to the complaints brought by Canada and the US in finding that the measure was not based upon an assessment of risk. This dispute, and the difference between the balance struck, the method for striking the balance, and indeed the result reached in the respective adjudicative tribunals of the EU and the WTO, raises obvious questions about the likelihood of the Appellate Body’s approach influencing the ECJ’s methods of interpretation and approach to judicial review. It does not necessarily raise the question whether the ECJ would or should treat WTO provisions as being directly or indirectly effective within the EC legal order. Rather the question is whether, when confronting a similar set of questions about the justifiability of a ban on hormone-treated beef in the context of the EC Treaty’s prohibition on trade restrictions with its exception for legitimate public health measures, the ECJ might adapt its approach so as to make more likely a congruence between the two. However, as suggested above, this is not a one-dimensional legal question of whether the ECJ as an adjudicative body should be influenced by or should adopt the reasoning of the Appellate Body in relation to a similarly structured set of legal provisions governing trade. It is a more complex question precisely because the values which underpin the assessment made by the Appellate Body and the ECJ respectively are likely to reflect both the institutional differences (for example in terms of the possible reasons for judicial deference to the lawmaking bodies) and the substantive normative differences (e.g. in terms of the particular balance struck at EU level between trade liberalisation and public health/consumer concerns) between those two organisations.  

Part Two: Two Case Studies

We will now look briefly at two topical case studies, each of which exemplifies different aspects of the way in which WTO norms and provisions may affect EC decision-making, and at different stages of the decision-making process. 

Case Study One: The Cosmetics Directive

Our first case study examines the attempt by the Commission, in drafting the latest proposed amendment to Council Directive 76/768, to ensure that the measure is WTO-compliant, indeed arguably over-compliant.

Council Directive 76/768 set out to approximate Member States laws relating to the marketing and sale of cosmetics.  Amongst other things it requires Member States to prohibit the marketing of cosmetics which contain any of the substances listed in the various annexes to the Directive.  Article 4(1) of the Directive also provided for a ban on the marketing of cosmetics containing ingredients or combinations of ingredients tested on animals.  The original date for the coming into force of the ban was after 1 January 1998, but this was postponed until after 30 June 2000 by the Commission.  The basis for this postponement was the insufficiency of progress in developing satisfactory methods to replace animal testing which are scientifically validated as offering an equivalent level of protection for the consumer.  By March 2000, at the time of the Commission’s proposals for an amendment to the basic Directive, only three alternative methods had been validated, of which two are available.  For this reason the Commission proposed a further postponement pending adoption and transposition of its additional far-reaching proposals for amendment of the Directive, amounting to a substantial modification of the original Directive. 

The Commission explains in the explanatory memorandum to its proposal that the two overriding objectives of the proposed amendment are consumer safety and the reduction and the eventual elimination of animal suffering.  It also highlights the WTO as a restrictive context within which these aims have to be pursued: “However, for any measures to be effective and enforceable it is also necessary to take account of the constraints arising from compliance with international trade rules, in particular those of the WTO.”  Four more precise objectives are then set out in the memorandum.  The first is to introduce a definitive prohibition on the performance of experiments on animals for finished cosmetic products in territory of the Member States of the EU.  The second is to replace the previously envisaged ban on the marketing of substances containing ingredients tested on animals by a combination of the proposed prohibition on the performance of such experiments, and a requirement making mandatory the use of validated alternative methods, when they become available, for testing chemicals used in cosmetics.  The third aim is to revise the Directive so as to make it WTO-compliant.  One stage in this process seems to be to again postpone the entry into force of the ban on the marketing of cosmetics containing ingredients tested on animals, and which would have applied to all products including those from third countries, and not just those originating within the EU.  At the same time the Commission has declared its intention to seek the mutual recognition, in cooperation with third countries, of test data from in vitro/in vivo studies.  The fourth and final aim is said to be the improvement of information provided to the consumer, to allow the use, subject to EC guidelines, of claims indicating that animal testing has not been performed.  The bottom line of the proposed amendment is expressed by the Commission in the following terms:

To take account of the need to comply with international law, the proposed amendment prohibits the performance of tests on animals on the territory of the Member States for the purpose of complying with Directive 76/768/EEC, but not the marketing of products which have been tested on animals.  This represents an advancement for animal protection in the European Union.  Moreover, the prohibition in its revised form cannot be challenged under WTO rules.  

This sentiment has been reflected in answers which the Commission has given to Members of the European Parliament on this subject.  The main concern expressed by the Commission in its current proposal in relation to the compatibility of the ban envisaged in the earlier Article 4(1)(i) of the Directive with WTO rules is that it is likely to contravene Article III.4 of the GATT, as constituting discriminatory treatment between like products originating within the EU and those originating outside.  According to the Commission, since “the test method does not have any physical effect on the product, discrimination on this basis could be considered to be contrary to WTO rules”.  The assumption here is that products physically constituted in the same way remain ‘alike’ regardless of differences in their method of production or harvesting.  Consequently differences in treatment predicated upon differences in production or harvesting techniques, will represent discriminatory treatment under the GATT.  Thus, to prohibit the importation of cosmetics from third countries which have been tested on animals while permitting the marketing and sale of EC-originating cosmetics which are alike, other than for the fact they were not tested on animals, would be unlawful under Article III.4.  It was this kind of reasoning which underpinned the panel reports in the (in)famous Tuna/Dolphin ‘cases’.

The Commission goes on to say that it is “doubtful whether Article XX of the GATT could provide sufficient justification of this measure”, the implication being that it is unlikely that the measures in question could be justified as being necessary to protect animal life or health pursuant to Article XX(b). 

This seems a cautious analysis on the Commission’s part.  Had it been committed to introducing a general ban on products which have been tested on animals, it could have pursued this more convincingly.  It is, after all, far from settled that such a ban would contravene GATT (or other WTO agreements such as the Agreement on Technical Barriers to Trade).  As regards the conclusion that non-animal tested and animal-tested products are necessarily ‘like products’ within the meaning of Article III.4, it should be pointed out that the panel reports in the tuna/dolphin ‘cases’ were never adopted, and that this issue has not been addressed by the more recently established Appellate Body.  The case for treating certain process-based product bans of this kind as capable of being compliant with GATT, Article III has recently been made – both on doctrinal/jurisprudential grounds and on policy grounds – by Howse and Regan.  In the subsequent Shrimps/Turtles ‘case’ brought against the US in relation to a process ban on ‘turtle-unfriendly shrimp’, no attempt was made to argue the ‘like’ product point under GATT, Article III, and the case instead focussed upon the scope of the Article XX exceptions and the ‘chapeau’ thereof.  

Equally, in the case of an EU cosmetics ban, there seems to be no clear reason to conclude at the outset that, even if Article III did catch the ban in the first instance, that it is “very doubtful” that it could be saved under the GATT, Article XX(b) exception, concerning the protection of the life and health of humans, animals and plants.  The requirements of Article XX(b) and of the ‘chapeau’ of Article XX do not seem insurmountable in a case such as this, and the EU’s behaviour would not seem comparable to the impugned behaviour of the United States in tuna/dolphin or shrimp/turtle.  Two points in particular point in the EU’s favour.  First, the ban would be on a ‘batch by batch’ basis and not a country-wide basis.  That is to say that only such cosmetic products tested on animals would be prohibited, regardless of the overall regulatory policy of the exporting state.  Market access to the EU would not be contingent upon a change of policy on the part of the government/legislature of the state of export, but merely upon the practices of the manufacturer in question.  Second, the EC’s position could be strengthened by the fact that it has been working on the development of alternative methods of scientific testing, in particular through the European Centre for the Validation of Alternative Methods and the application of those methods by the Scientific Committee on Cosmetic Products and non-Food Products, and apparently ‘stepping up negotiations within the OECD’ to have these accepted at on a more global scale.  The circumstances are not necessarily comparable to those condemned in shrimp/turtle, where the US was held to have failed to negotiate adequately with the various countries involved, or to pursue more actively the attempt to agree international standards – behaviour which resulted ultimately in the non-fulfilment of the requirements of the ‘chapeau’ to Article XX.  The EU’s apparent efforts to develop internationally  acceptable alternatives to testing on animals, in addition to the fact that the coming into force of the ban was postponed pending the development of such methods, provides further evidence of caution before resorting to what the Appellate Body has called a ‘heavy weapon’ of international trade.  

There are a number of possible explanations for the Commission’s retreat from a general ban in the EU on cosmetic products tested on animals.  It is certainly possible that the Commission genuinely considers that such a ban could not be WTO compliant, and has been influenced to take a cautious view of the possibility for legally maintaining a process based restriction on trade under those agreements.  In this case the fear of the WTO may loom larger than the WTO itself.  In view of the context to the EU’s proposed ban, and the more nuanced approach of the Appellate Body in shrimp/turtle, where it focuses upon the circumstances of application of specific measures rather than drawing crude distinctions between entire categories of measures which may or may not be allowed, it is not improbable that the EU could apply such a ban in a manner which is WTO-compliant.  At the very least the EU has a strongly arguable case.   In this respect it is interesting to note that the EU has on its books other examples of import bans which would be less readily justifiable before the WTO dispute settlement bodies.  To take just one example, Council Directive 91/629 provides that animals coming from outside of the EU must be accompanied by a certificate issued by the competent authority of that country, certifying that they have received treatment at least equivalent to that granted to animals of Community origin as provided for by the Directive.  Thus, veal calves which have been raised in conditions which are not certified to be equivalent to those of the EU may not be imported into the EU; this regardless of whether the standard which has been breached could be said to be such to impinge upon the quality of the product itself, or merely upon the ‘quality’ of the circumstances in which it is produced or reared.  It is, however, perhaps significant from the point of view of the GATT/WTO that this equivalence is demanded only in the case of live calves being imported into the EU, and not in the case of dead calves (i.e. veal) being imported into the EU.  In view of this and other examples, and their dubious but uncertain legality, and in view of the fact that the Community finds itself on both sides of the process/product distinction debate, it could be that ambiguity serves the Community well.  It may be reluctant to seek clarification of the parameters of Articles III and XX in this respect for fear of the repercussions that might ensue beyond the sphere of animal testing in the cosmetics industry.   On the other hand, attesting perhaps more to the fragmented or at least imperfectly coordinated institutional nature of the Commission rather than to a deliberate strategy of ambiguity or contradictoriness on the issue, the Commission’s communication to the Council and Parliament on “Integrating environment and sustainable development into economic and development co-operation policy” indicates a bolder approach to the product/process distinction and, by implication, to the possible WTO-compatibility of a measure such as the cosmetics ban or related labelling requirements.
One thing that is clear is that whatever the final outcome in terms of the construction of the relevant GATT norms, in the case of the cosmetics ban, this further (indefinite) delay, accompanied by a statement of intention to initiate bilateral talks with third countries on the mutual recognition of tests establishing alternative measures, would represent an additional important element in terms of likely WTO compatibility.  Only time will tell, but it is not impossible that the Commission is preparing the ground for an eventual ban more carefully, in the light of the lessons of the shrimp/turtle dispute. 

On the other hand, since there is room for argument on the legal point, it may be that the Commission’s latest proposal reflects its own policy preferences (or at least the policy preferences of some of its directorates general), and that just as Member States often point to the constraints imposed by EC membership to justify an unpopular measure adopted at home, the Commission may choose to do so vis-à-vis the WTO.  This is particularly relevant in view of the European Parliament’s strong and vocal preference – most recently voiced during the committee debates on the Commission’s proposal - for the adoption of a ban on cosmetics tested on animals.  

Perhaps most interesting, however, is the possibility suggested by this case study that the effect of the WTO on EC decision-making will not always be obvious or clear-cut. The question of the direct applicability or effectiveness of GATT norms within EC law on the one hand, or the nature of the response of the EC to a ruling of a panel or the Appellate Body against it on the other, are very clear instances of the impact of the WTO on EC decision-making.  But the more indirect forms of impact, whereby some of the general and ambiguous norms in the WTO agreements, and the complex or inconclusive decisions of the Dispute Resolution Bodies, are interpreted and applied by the EC political institutions in their formulation of legislative measures, are equally significant.  It is very likely that those institutions will, as is arguably true of the Commission in its proposal to amend the cosmetics Directive, add their own gloss or dimension to the rules within that interpretative process, which may lead, if not necessarily to over-compliance, at least to results which do not seem to flow inexorably from the text or jurisprudence of the WTO

Case Study Two:  The Regulation on civil subsonic jet aeroplanes.

The second case study focuses upon a different stage of the decision-making process; not a pre-legislative attempt to “WTO-proof” the legislative measure, nor an ex post facto response to a finding of violation by the WTO dispute settlement bodies, but a challenge to an EC Regulation brought by a private party before a national court in the UK.  The challenge was brought by Omega Air Ltd., a company trading in aircraft, to Council Regulation 925/1999 on re-certified civil subsonic jet aeroplanes, and the English High Court has referred a number of questions to the European Court under Article 234 TEC.

In simplified terms, the Regulation provides that re-certified civil subsonic jet aeroplanes could no longer be registered or operated within the EU after a certain date.  Effectively, planes of this kind which meet the noise standards of Chapter 2 of the Chicago Convention on International Civil Aviation, but not the higher standards of Chapter 3 of that Convention, would no longer be permitted to be registered or operated in the EU. However, certain planes of this kind which, although not initially compliant with Chapter 3 standards, but subsequently modified to meet those standards, would not be covered by the prohibition.  According to Article 2 of the Regulation, “civil subsonic jet aeroplanes which have been modified to meet Chapter 3 standards by being completely re-engined with engines having a bypass ratio of three or more” would not be covered by the prohibition.  Much of Omega’s fleet of aeroplanes had been re-engined with a bypass ratio of less than three, and therefore would be caught by the Regulation.  However, Omega’s claim was that despite the lower bypass ratio, the re-engined aircraft nonetheless met the noise standards established by Chapter 3 of the Chicago Convention.  

The English High Court identified three grounds of invalidity of the Regulation, these being reflected in the question referred:

Is Article 2(2) of Council Regulation (EC) No 925/1999 invalid insofar as it defines “recertificated civil subsonic jet aeroplanes” so that re-engined aeroplanes “with engines having a by-pass ratio of three or more” are not subject to prohibitions imposed by the Regulation but aeroplanes wholly re-engined with engines having a by-pass ratio of less than three are subject to prohibitions, having regard in particular to:

(i)	the duty to give reasons under Article 253 of the EC Treaty;
(ii)	the general principle of proportionality;
(iii)	such rights as private parties may derive from the General Agreement on Tariffs and Trade and/or the Agreement on Technical Barriers to Trade?

The third ground for invalidity concerned Article 2 of the Agreement on Technical Barriers to Trade (TBT) which provides, amongst other things, that WTO members must ensure that technical regulations are not adopted or applied with the aim or effect of creating unnecessary obstacles to international trade.  The Article provides also that such regulations should not be maintained if the objectives can be addressed in a less trade-restrictive manner, and further that where relevant international standards exist, members must use them as a basis for technical regulations, and that such regulations are where appropriate to be based on product requirements based on performance rather than design.  The use of bypass ratio (BPR) as a criterion of noise is a design feature rather than a performance standard, as indicated in Article 2 TBT, and the accepted “international standards”, as included in the Chicago Convention, were expressed in terms of decibel levels rather than BPR.

Significantly, Omega did not pursue this third head of invalidity in its submissions to the European Court.  This is stated to be due to the judgment of the European Court in Portugal v. Council, albeit that Omega observes that were the European Court  to take a different position in the future regarding to the status of the WTO Agreement (or specifically the TBT Agreement) in Community law, then Omega will rely on such a ground.  Crucially, however, Omega contends that the TBT Agreement remains highly relevant to the first two grounds of invalidity.

On the issue of reasoning Omega points to the failure in the Regulation to give reasons as to why a by-pass ratio criterion is used, and why this by-pass ratio was set at three. They argue that recourse to such criteria is arbitrary and unjustifiable, and incapable of rational justification, and that the criteria are not on any reasonable view relevant to achieving the declared objectives of the Regulation.  In submitting that it was incumbent on the Community institutions to put forward reasons in respect of these criteria, Omega point to a number of factors.  These include the fact that the Regulation departs from internationally agreed noise certification criteria under the Chicago Convention, and that they impose design (not performance) standards, allegedly in contravention of the TBT  Agreement.  Omega asserts that in the case of a departure from the accepted norm, it is necessary to have “a particularly thorough and convincing statement of reasons”.  This reflects their further contention that, “at least in the normal case”, EC law requires the Community to adopt internationally recognized standards where they are available, and that it similarly imposes a requirement that technical standards be set by reference to performance and not design criteria, and hence that the TBT Agreement merely reflects Community law in this latter respect. On the issue of reasoning, Omega’s arguments were resoundingly accepted by the High Court, which held that the Regulation “appears to be wholly defective in its reasons”.

The High Court’s own provisional conclusion on the adequacy of the reasons was clearly directly influenced by the provisions of the TBT Agreement, in the sense that the need for the EC legislature to give more satisfactory reasons to explain the use of BPR as a criterion for determining acceptable noise levels seems to have been based precisely on the failure to follow the indications in Art 2 of the TBT. The move from the use of decibel level, which had been used in international agreements and established in the Chicago Convention on International Civil Aviation, to the use of BPR therefore needed explanation, and in the English court’s view, had not adequately been explained.  The implication of this part of the judgment is that whether or not the provisions of the TBT are directly effective, their existence imposes a procedural obligation on the EC institutions to provide an adequate explanation for the departure from the norms or guidelines laid down therein.  This is evident from the judgment where the national judge began by accepting the respondent’s presentation of the jurisprudence of the ECJ concerning the degree of specificity required when reasons are being given for the adoption of a Regulation – i.e. that where a Regulation is concerned, the reasons may be confined to indicating the general objectives and the general situation which led to its adoption, and that it is not necessary to require a specific statement of reasons for each of the technical choices made by the institution, and yet he goes on later to conclude that the Regulation is defective in its reasoning for not explaining why a BPR standard was used.

Another interesting feature of the case is the fact that whereas the judge rejected the attempt to make the standards in the Chicago Convention relevant by means of an argument based on Article 307 EC, he clearly treated them as being of indirect relevance via the combination of the provisions of the TBT Agreement on the one hand, and the Community requirement of giving reasons on the other hand:  

It is the Chicago Convention and the International Civil Aviation Organisation ICAO which have set international standards based on decibel measurement….

The judgment then set out the relevant provisions of Article 2 of the TBT, including the stipulation that members shall use relevant international standards as a basis for technical regulations, and continued:  

I am quite satisfied that the relevant international standards are the Chicago Convention.  It seems to me that if it is decided to move from the decibel related method to a BPR method, some sort of explanation is required… the Regulation seems to be wholly inadequate in its reasons.

While this clearly falls short of giving effect either to the aircraft noise standards contained in the Chicago Convention, or to the provisions of the TBT on technical regulations, the imposition, through the reasoning requirement, of an obligation on the EC institutions to explain why the standards established in the main international agreement on aircraft noise have not been used, when the TBT agreement by which the Community is bound actually specifies that appropriate international standards of this kind should be used,  clearly makes the provisions of both agreements highly relevant for the Community’s decision-making process, in particular if the English court’s approach is followed by the ECJ.

Omega’s arguments in respect of breach of the general principle of proportionality are not entirely dissimilar from those outlined above in respect of the reasoning requirement.  Their fundamental contention is that there is no rational relationship between the means deployed by the Regulation and the main aim which it pursues; namely the control of noise emissions at Community airports.  They argue moreover in favour of a stricter standard of proportionality review in a case such as this where the Community has departed from internationally agreed standards and from the terms of the TBT Agreement. Thus, the TBT Agreement, although acknowledged not to be of direct effect nor to constitute a standard against which the European Court will assess the legality of Community acts, is invoked as a means of  increasing the rigour with which established grounds of review will be applied, and of constraining the degree of discretion which these permit the Community institutions.  In the event that the European Court accepts Omega’s arguments, and indeed the conclusions of the English High Court, it will be apparent that an absence of direct effect on the part of the WTO Agreement should not necessarily be equated with an absence of relevance or effect within the European and national courts.   Particularly important in this respect, as noted above, is the manner in which substantive obligations which inhere in the WTO package may be translated by courts and transformed into procedural requirements; notably but perhaps not only a duty to give reasons.  It is with this issue of procedural requirements and the WTO Agreements that this next section is concerned. 

Part Three: Origins and Impact of Procedural Due Process Norms deriving from GATT/WTO

This part of the paper considers the decision of the Appellate Body (AB) in the shrimp/turtle dispute, and considers the way in which procedural due process norms were invoked by it in condemning the manner in which the relevant U.S. import restrictions had been applied.  The intention is to examine both how these norms were developed within the specific doctrinal context of the GATT agreement, and what their relevance is likely to be for the EC decision-making process.

Put briefly, the Shrimp/Turtle case concerned US prohibitions on the importation of shrimp or shrimp products from countries which had not been certified pursuant to so-called Section 609 which forms part of the domestic public law of the US.  This provided that certification was to be granted to countries with a fishing environment which did not pose a threat to the incidental taking of sea turtles in the course of shrimp harvesting, and hence in which there was no risk, or only a negligible risk, that sea turtles would be harmed by shrimp trawling.  It provided further that certification could be granted to harvesting nations which provided documentary evidence of the adoption of a regulatory programme governing the incidental taking of sea turtles in the course of shrimp trawling that was comparable to the United States programme, and where the average rate of incidental taking of sea turtles by their vessels was comparable to that of the United States.  

The AB accepted that the above regime was of a kind which is capable of falling within the GATT, Article XX(g) exception.  It related to the conservation of exhaustible natural resources, and was made effective in conjunction with restrictions on domestic production or consumption.  Nonetheless, the AB went on to find that the manner in which the measures had been applied was such as to render them incompatible with the ‘chapeau’ to Article XX.  This requires that such measures not be applied in a manner which would constitute a means of arbitrary or unjustified discrimination between countries where the same conditions prevail, or a disguised restriction on trade.  A wide range of factors contributed to its findings in this respect including, for example:

•	the failure of the United States to engage in serious across-the-board negotiations with third countries, with a view to concluding bilateral or multilateral agreements.  Thus the measures were applied in a manner which was unilateral and non-consensual;

•	the rigidity with which officials made certification determinations, and the existence of little or no flexibility regardless of how appropriate the US model harvesting programme was for the conditions prevailing in the exporting state:

•	the failure of the United States to respect standards of basic fairness and due process in the application of Section 609.  Particularly important in this respect were the absence of any opportunity for the applicant to be heard or to respond to arguments before a certification decision was adopted, the failure to render a formal reasoned decision and to notify the party of it, the absence of any procedure for appeal or review of a decision to deny certification, and overall the ‘singularly informal and casual’ nature of the procedure, making it impossible for applicants to know whether Section 609 was being applied in a manner which is fair and just.

This paper will turn first to a preliminary issue in respect of the AB’s findings in this respect.  This relates to the link between the procedural defects identified by the AB and the concepts of unjustified and arbitrary discrimination which underpin the Article XX chapeau. 

The AB findings are somewhat ambivalent as regards the role played by the concept of unjustified or arbitrary discrimination.  Its language is such on occasion as to suggest the emergence of standards for the application of import restrictions which operate independently of any discrimination threshold.  Thus, the AB speaks of the principle of good faith, and the requirement which flows from this that the right to invoke GATT exceptions be exercised ‘reasonably’.  Elsewhere, it speaks of abuse or misuse of the provisional justification made available by Article XX(g), observing that a measure may amount to such ‘not only where the detailed operating provisions of the measure prescribe the arbitrary or unjustifiable activity, but also where a measure, otherwise fair and just on its face, is actually applied in an arbitrary and unjustifiable manner’.  It is self-evident that measures may be applied in a manner which is arbitrary or unjustified, or indeed in a manner which is not reasonable, while not giving rise to discrimination which is arbitrary or unjustified.  There is a clear difference between measures which are arbitrary and/or unjustifiable, and those which discriminate arbitrarily and/or unjustifiably.

Elsewhere, however, the AB is more careful to assert the existence of a link between the behaviour in question and the (unjustifiably or arbitrarily) discriminatory outcome.  Hence the AB cites differing treatment as regards ‘phase-in’ periods for compliance, and technology transfer efforts, as factors contributing to a finding of unjustifiable discrimination.   The rigid and unbending standards according to which the possibility of certification is assessed are conceived as discriminatory because they imply the same treatment for countries characterized by diverse conditions, and do 'not allow for any inquiry into the appropriateness of the regulatory program for the conditions prevailing in those exporting countries’.  Also important to the assessment of the AB is the failure of the United States to engage in ‘serious, across-the-board negotiations’ before instituting the regime in question.  This ‘failure to have prior consistent recourse to diplomacy…produces discriminatory impacts on countries…with which no international agreements are reached or even seriously attempted’.  The fact that the United States ‘negotiated seriously with some, but not with other Members is found to be discriminatory in effect and unjustifiable.  Finally the AB, in focussing upon the lack of basic fairness and due process accorded to those whose applications for certification are rejected, concludes that these countries are (arbitrarily) discriminated against vis-à-vis those Members which are granted certification.  

It is clear that there is a tension inherent in the AB report.  It shifts somewhat uneasily between recourse to standards which are not predicated upon an assessment of comparative treatment – basic fairness, just treatment, reasonableness – to notions of discrimination which by definition require a comparative perspective.  In so far as the  AB, straining to remain within a certain interpretation of the text of the Article XX chapeau, focuses upon a different kind of discrimination from the discrimination inherent in the breach of the substantive GATT article, this emerges at times as a less than adequate or convincing peg upon which to hang its various wide-ranging due process concerns.  Not only is it not always clear what the factual basis of the discriminatory conduct is (notably as regards the comparison between the fairness and due process treatment of those whose applications are successful and those whose are not), but in normative terms one is left with the feeling that in many respects it is not the discrimination as conceived by the AB which renders the US behaviour objectionable, but the behaviour itself.  

Thus, for example, the failure of the United States to negotiate seriously with some of the parties concerned is surely objectionable in and of itself, rather than on the basis that it did pursue serious and effective negotiations with some parties.  Had the US treated all Members with the same high-handed disrespect, negotiating with none rather than some, its behaviour would, if anything, have been worse rather than better.  The various international law instruments which the AB cites in order to highlight the importance attached to  multilateral solutions to environmental problems, especially where the resources in question are situated outside of the territory of the importing states, are not predicated upon the logic of discrimination, but upon the need for international cooperation and consensus.  Even-handedness in respect of a failure to negotiate would not in any sense mitigate the wrong-doing. Similarly, had the US denied basic due process to all applicants, including those who were by chance successful (and in certain respects this does indeed seem to have been the case in the Shrimp/Turtle dispute), thus pursuing an entirely consistent, though fundamentally procedurally flawed, approach, few would argue that this ought to attenuate as opposed to exacerbate the legal position of the US.  

It is interesting to observe in this respect that the AB notes that GATT, Article X.3  bears upon the matter at hand.  This lays down certain due process requirements relating to the uniformity, impartiality and reasonableness with which the relevant measures are to be administered, and to judicial, arbitral or administrative review and correction of the administrative action concerned.  This is conceived as the AB as establishing minimum standards for transparency and procedural fairness, and although the AB does not purport to apply this provision specifically in the context of the case at hand it notes that:

Inasmuch as there are due process requirements generally for measures that are otherwise imposed in compliance with WTO obligations, it is only reasonable that rigorous compliance with the fundamental requirements of due process should be required in the application and administration of a measure which purports to be an exception to the treaty obligations of the Member imposing the measure and which effectively results in a suspension pro hac vice of the treaty rights of other Members.

This, like the previous arguments, militates strongly in the direction of an approach to standards of procedural fairness and due process which goes beyond the non-discrimination premise.  After all, as noted, Article X.3 is predicated, inter alia, upon the concept of reasonableness which operates without reference to considerations of discrimination.

What is clear, then,  is that procedural factors played an important, perhaps crucial, role in the AB’s report.  The failure of the United States to engage in serious, comprehensive, negotiations emerges as one such factor, alongside a more general conception of procedural fairness and due process.  What is less clear is the basis upon which they did so, and in particular the issue of whether their relevance was confined to contributing to a finding of unlawful discrimination within the meaning of the Article XX chapeau,  or whether they might be regarded as having assumed an independent life of their own.  As noted above, the AB’s report is somewhat ambivalent in this respect.  Moreover, in so far as it does posit a link between procedural deficiencies and discrimination, due partly to its conviction that the reference to discrimination in the chapeau must be something different and separate from the discrimination inherent in the breach of the substantive GATT obligation, its reasoning is at times somewhat strained, particularly as regards basic fairness and due process considerations.  Yet, whatever the specific intention of the AB in this report, and regardless of the AB’s not always entirely convincing insistence that it is through the lens of discrimination that such procedural values find expression in GATT Article XX, the report serves to highlight the broader issue of the proper place of process considerations in assessing the legality of Member restrictions on trade.  This is a debate with important implications for the EU – which can be illustrated, for example, if we apply it to the context of the cosmetics Directive discussed above, and to the need for the EC to pursue in a fair and comprehensive way the search for consensus on scientifically validated alternatives to animal testing before introducing a ban - and also for the premises and legitimacy of the evolving WTO system. The relevance of the debate for the aircraft noise case is also clear.  There, in the context of a legal system which denies the WTO direct effect, it is proposed that the WTO, and the internationally agreed standards to which general reference is made in the WTO and on which derogations are often required to be based, enter that same legal system by means of a procedural route, especially in the guise of the reasoning requirements.

Before turning to consider these issues more generally, a preliminary observation may be made.  The AB does not offer a convincing basis in law for the specific values which it emphasises.   In terms of the duty to negotiate, it points to the ‘very policy objective’ of the measure in question, and to a range of international environmental instruments which offer sustenance in this respect in view of the factual background of the case at hand.  More generally, in construing the Article XX chapeau, the AB invokes the principle of good faith, one expression of which it considers the chapeau to constitute. It notes that this principle is both a principle of law and a general principle of international law, and that it conceives its task as being to interpret the chapeau, ‘seeking additional interpretative guidance, as appropriate, from the general principles of international law’. It offers, in a footnote, some suggestions for further reading on this general principle, including references to cases before the International Court, and a specific quotation from from an academic work on this subject.  This quotation is suitably vague, equating bona fide with ‘appropriate and necessary’ and ‘fair and equitable’. Thus, almost from nowhere the AB is articulating a range of standards, in this case procedural standards, compliance with which is to be regarded as a  prerequisite for lawful derogation from a GATT obligation.  It remains uncertain as to what extent these standards remain specific to the circumstances of the case at hand, and to what it extent they may be generalizable to additional categories of cases. 

It is thus clear that there is considerable uncertainty as to the origin and scope of the due process norms invoked by the AB in the shrimp/turtle ruling.  It is this very flexibility which renders the development potentially so important.  Such is the malleable nature of the concepts employed (basic fairness and due process for example) that the creative potential which underpins them is vast.  One only need look to the jurisprudence of the US Supreme Court, and other transnational regimes such as the ECHR, and to witness their expansion of the scope and application of due process and procedural constraints, to appreciate the degree of authority that this development implies for the AB in its interpretative role.  

It is interesting to observe, as does Marise Cremona in her chapter in this book that a parallel development has to some extent taken place in the EU.  The European Court in developing general principles of Community law has looked both to process and to substance.  Thus, for example, it has developed general principles pertaining to the protection of legitimate expectations, legal certainty, and to the concept of a fair hearing and rights of the defence.  The duty to give reasons is already inherent in the EC Treaty in so far as it concerns Community institutions, but has been construed by the European Court as binding also on the Member States when they are acting within the scope of Community law.  Not only have these general principles been developed on a legal basis which is textually insecure, as in the WTO example, but there are similarities too in terms of their scope of application.  Thus, the general principles are not only binding upon the Community’s own institutions, but also upon the Member States when they act to implement Community law or, significantly for our purposes, to derogate from one of the fundamental freedoms guaranteed by the Treaty.  Thus, where a Member State seeks to depart from the principle of free movement, in the name of one or other societal interest recognized by Community law, it may only do in a manner which is consistent with  the general principles of Community law.  And in fact the proportionality test, encompassing notions of rational connection, necessity, and non-arbitrariness, was developed in a number of early ECJ cases in relation to the EC Treaty’s version of the Article XX chapeau, i.e. the provision in Article 30 (ex 36) that the exceptional measures permitted by that provision “shall not, however, constitute a means of arbitrary discrimination or a disguised restriction on trade between Member States”. 

That said, although it is clear that parallel developments have taken shape in the EU and WTO in this respect, important differences have already emerged in the nature of the norms which are deemed to underpin attempts to derogate from rules in one or other of the two systems.  Thus, for example, while the concept of legitimate expectations is one of the most important and most often invoked general principles of Community law, the AB has shown a marked reluctance thus far to accord it a role in the interpretation and application of the WTO Agreement.  Thus, for example, in EC Classification of Certain Computer Equipment the panel invoked the concept of (substantive) legitimate expectations in assessing whether the EC, in classifying LAN equipment as telecommunications equipment rather than ADP machines, had acted inconsistently with GATT Article II.1 by according LAN equipment treatment less favourable than that laid down in a tariff concession.  The United States argued, on the basis of the negotiating history and the actual tariff treatment accorded to LAN equipment during the relevant negotiations that it reasonably expected the EC to treatment this equipment as ADP machines.  The panel accepted that legitimate expectations are a ‘vital element in the interpretation of Article II and tariff schedules’.  While accepting that the circumstances of the conclusion of a treaty may be a supplementary means of interpretation of that Treaty,  and that the subsequent classification practice of the EC is a relevant factor, the AB on the contrary found that the (subjective) legitimate expectations of an exporting Member are not relevant in assessing whether a violation of Article II.1 has occurred.  It did so on the basis of its interpretation of the GATT and of the Vienna Convention, observing that:

The purpose of treaty interpretation under Article 31 of the Vienna Convention is to ascertain the common intentions of the parties.  These common intentions cannot be ascertained on the basis of the subjective and unilaterally determined “expectations” of one of the parties to a treaty.

That differences in approach will emerge is in a sense inevitable given the very different conceptual basis of the EC development, relative to that in the WTO.  Many of the procedural norms in question arise in the context of the European Court’s jurisprudence on the protection of fundamental human rights; a conceptual basis which thus far is lacking in the AB, and which took shape in the EU in very particular circumstances concerned with reinforcing the supremacy of Community law.  Without engaging here in a detailed analysis of the different process norms protected in the two legal orders under discussion, it is nonetheless important to highlight the legal issues which arise in the EU as a result of differences in conception in this respect. 

If we are not entirely misconceived in our reading of the GATT/WTO there would appear to be a number of situations in which these procedural type norms developed by the AB would be of relevance before the European Court, if the European Court is to play a role in ensuring the GATT/WTO compatibility of Community law and/or national law.  

First, and most obviously, in the assessment of the legality of Community measures restricting third country trade;

 Second, in the context of the Community’s common import regulation, and specifically Article 19(2) thereof.  This provides, or is construed as providing, specific authorization to the Member States in the context of the operation of the common commercial policy for the maintenance of such national measures which are necessary to ensure protection of one of the societal interests laid down.   The list of such interests is identical to that in Article 30, though the final sentence to Article 30 is not replicated in the context of the common import regulation.  It has been argued that ‘for reasons of consistency’, ‘mandatory requirements in the meaning of the Cassis de Dijon case law should be added’ to this list;  Thus here the European Court is placed in the position of assessing the legality of Member State restrictions on third country trade.  It does so on the basis of the common imports regulation which is, in turn, closely related to the EC Treaty free movement rules and to its internal market objectives.  In construing the common import regulation (and by implication the free movement rules more generally if these two regimes are not to diverge) the European Court must, from a WTO perspective, do so in a manner which is WTO compliant.

Third, in the application of Articles 28-30 TEC.  In so far as a Member State restriction on intra-Community trade applies to all goods in free circulation, it will also restrict the entry of third country goods.  Any derogation from the principle of free movement within the internal market must be GATT/WTO compliant in so far as it relates to third country goods.  As the notion of a customs union demands, the same rules are in practice applied to all goods in free circulation regardless of their origin.  Thus if the Article 30 derogation is not to be applied in such a way as to breach GATT/WTO norms it will have to be read in a manner which is consistent with the obligations this imposes, including the due process obligations articulated in the shrimp/turtle ruling. Of course this point takes us well beyond the single issue of the nature of the Community’s general principles and the question of whether these might be anticipated to evolve in the light of developments in the WTO.  It raises the much broader issue of the capacity of WTO law to ‘spillover’ to the Community’s legal order, not merely in respect of its formulation of external trade policy, but in respect of its single market objectives.  It does, however, serve to highlight that in so far as such spillover does occur, it may be anticipated to be wide-ranging and to affect Community norms with a relevance well beyond the free movement sphere.  This is an issue which arises also in the case studies outlined above.

Leaving aside for the time being the specific question of the implications of the Shrimp/Turtle report for the EU, it is necessary to consider more generally the issues raised by the due process dimension of this report for the international trading order. The report of the AB is politically astute.  The subject matter of the dispute is sensitive and pertains to environmental protection, and in this respect was viewed very much as a ‘test case’.  The US measures are of a kind which are particularly controversial.  Not only do they seek to promote the protection of resources (sometimes) situated outside of their territory, but more importantly they seek to do so on the basis of country based (rather than batch-by-batch based) trade restrictions pertaining to compliance with production process standards.  The AB was in a difficult position.  And yet it succeeded through recourse to the ‘chapeau’, and to the distinction between the nature of national restrictions, and the circumstances of their application, to walk a fine line between the demands of the environmentalists and those of the free trade lobby.  Nonetheless, though expedient in the case at hand, the approach adopted by the AB raises a number of problems.  

Most obviously the creativity of the AB, in formulating due process requirements on a textual basis which is, at best, rather weak, gives rise to important questions concerning the legitimacy of its decision-making role.  This is exacerbated by the very considerable uncertainty surrounding both the legal basis and the content of its findings.  Moreover, it is not at all clear how constructive a development this due process turn will prove to be more generally in distinguishing legitimate from illegitimate measures in the context of GATT rules and exceptions. It was at its most effective in the Shrimp/Turtle dispute, accompanied as it was by the element of surprise.  The US had not taken steps to wrap up its measures in the colours of due process, because it had not anticipated its legal obligation to do so.  In future, with states on their 'due process' guard, clear cut cases of due process abuses are less likely to arise.  In so far, therefore, as the decision of the AB might be seen as having served ‘basic fairness’ and procedural due process in the conduct of trade relations, that should be conceived as a positive development, especially in so far as the duty to negotiate serves to prevent such disputes from arising in the future. However, absent the element of surprise it is not at all clear that procedural norms can succeed in serving as a workable or effective ‘bright-line’ according to which the legality of measures may be assessed.  On the other hand, the requirement of giving reasons to explain why internationally agreed standards were not followed in cases like the Omega hushkits dispute above, may serve as a more effective means of revealing protectionist motives or other unconvincing explanations for trade restraint.

There are those who assert a potentially important role for procedural type rules in this respect.  Thus, in the context of Articles 28-30 TEC, Maduro argues that ‘the Court of Justice should not second-guess national regulatory choices, but should instead ensure that there is no under-representation of the interests of nationals of other Member States in the national political process’.  One can see elements of this too in the thinking of AG van Gerven in Gourmetterie van den Burg, a case before the European Court which is not entirely dissimilar in terms of the issues it raises to the shrimp/turtle dispute.  The Advocate General, in assessing the proportionality of the measure at hand, observes that it was adopted on the basis of a unilateral appraisal of the interests involved, and without taking into account interests which may warrant or justify the prohibited activity in question.  

In this sense, the kind of procedural values highlighted by the AB in the shrimp/turtle report may be viewed as operating to promote more ‘inclusive’ political processes, whereby ‘outsiders’ in national or other terms may secure access to previously closed sites of political authority within states.  Thus, in that regulatory choices (and many other kinds of decisions) adopted within a single state have important consequences outside of the territory of that state, the state no longer represents the uniquely appropriate site for democratic decision-making.  In the same way as the capacity of state-based government for effective rule may be diminished by virtue of a disjunction between the levels at which political and economic power operate, so too democracy may be undermined where the demos is territorially defined on the basis of pre-existing allegiances, rather than on the basis of actual interdependence; physical and economic.  

Thus, it may be argued that the WTO, through the constitution of due process requirements, promotes transnational political engagement which may serve to attenuate the gap between atomistic political community, and multiple, over-lapping communities defined by inter-dependence rather than splendid isolation.  In so far as these due process requirements seek to promote the audibility of the voices not merely of ‘foreign’ governments, but also of  individual traders (for example exporters of shrimp refused certification under Section 609), there has been a tendency to view the emerging democracy according to deliberative rather than representative models and, in keeping with such models, to lay emphasis upon the open-ended and adaptable nature of actors’ preferences and the value of experimentation and mutual learning in the adjustment of such preferences.  In this sense the challenge for the WTO would be to ensure that states (and the EU itself) do more than cynically construct the trappings of due process, and that they listen, explain, respond and, where appropriate, revise.  It is for this reason that the previously mentioned ‘element of surprise’ is all important, and that the due process standards according to which they will be assessed capture the ‘essence’ of the deliberative ideal; an essence which depends in part upon its very elusiveness, and upon its capacity to resist translation into fixed rules which may routinely and cynically applied.

There is of course a strange irony inherent in what is being described above.  The Appellate Body, against a backdrop of radical value pluralism, is adopting a ‘lighter’ touch in terms of substantive review.  In addition, however, it  is scrutinizing and evaluating the decision-making processes underpinning the contested measures adopted within the Member States.  In invoking exceptions to the GATT the Appellate Body insists that certain procedural standards be complied with; this notwithstanding the procedural deficiencies which underpin the functioning of the WTO, including the activities of its Appellate Body.  Yet this is perhaps an irony which we can enjoy.  In the first place, as Walker also observes, hypocrisy may have a civilising effect.  The EU, for many years, endorsed a form of human rights conditionality vis-à-vis its own members and its trading partners, the standards underpinning which were not binding upon itself.  The hypocrisy did not go unobserved and over time the EU accepted that it too was bound to comply with the relevant standards of protection.    Equally, it is by no means uncommon that a non-state polity (notably the EU) challenges us to look more closely and more critically at the functioning of the state, thus inducing a form of critical reflexivity.  Talk of subsidiarity in the EU focussed attention upon the premises underpinning the distribution of authority within the Member States, and in particular the place of sub-state authorities therein.  Talk of transparency in the EU served to highlight the secretive nature of many government functions within the Member States.  Talk of comitology reminded us to study more closely, and more critically, the functioning of committees at the national level.  Bad practices at a level of governance susceptible to criticism due to its disassociation from the state with its traditionally ‘thick’, territorially bounded legitimacy, have served to induce a self-consciousness about the premises underpinning the exercise of power even  at a level (within the state) where traditionally such premises lay beyond the critical gaze.  

The irony of the WTO preaching due process and basic fairness to the Member States aside, it is readily apparent that there is something interesting and important happening here.  At the same time as one non state polity – the EU – is looking increasingly to procedural techniques as a means of circumscribing Member State autonomy in governance, against a backdrop of growing substantive flexibility, another (the WTO) is looking to procedural techniques to define the scope of residual Member State autonomy in a framework of market integration.  Thus in the context of both ‘negative’ and ‘positive’ integration, the non state polity is using procedural techniques both to guide Member State intervention in the market, and similarly to define the limits to that intervention.  Particularly important in this respect are rules pertaining to participation, consultation, and ‘due process’ concerns.   Against a backdrop of radical value pluralism, in integrating markets, such procedural techniques are increasingly deployed in the management of transnational markets.  They do not represent a panacea.  Nonetheless they offer one way of assessing the legality of Member State restraints on trade, and the additional prospect that their application might serve to enhance the quality of decision making within states, in particular by enhancing the audibility of voices from outside the territory of the state concerned.  

Concluding Comments

This chapter has sought to trace the ways in which WTO norms – both the provisions of its constituent treaties and more generally the principles and procedural norms being developed by its dispute settlement bodies - are increasingly affecting and being taken into account in EU governance, including by its legislative and judicial bodies.   The ways in which Member States and EU institutional actors consider themselves bound to observe the provisions of WTO agreements, and the standards and norms to which those instruments refer, are more complex and subtle than the debates on direct effect and justiciability can capture. The reciprocal influence of the processes taking place in the context of the WTO, in particular encouragement for the multilateral negotiation and development of internationally agreed standards and for practices of dialogue and consultation before the adoption of trade-restrictive action, may provide some (albeit slight) cause for optimism in the face of fears about the growth of a free trade leviathan which increasingly restricts the policy choices not only of individual states, but also of the European Union itself.