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The impact of the World Trade Organisation Agreements upon the Laws and Legal Systems of the World Trade Organisation Member States.

The impact of the World Trade Organisation Agreements upon the Laws and Legal Systems of the World Trade Organisation Member States.

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An essay for the 2012 Undergraduate Awards Competition by Laura Cawley. Originally submitted for LLB Law at Trinity College Dublin, with lecturer Caoimhin Mac Maolan in the category of Law
An essay for the 2012 Undergraduate Awards Competition by Laura Cawley. Originally submitted for LLB Law at Trinity College Dublin, with lecturer Caoimhin Mac Maolan in the category of Law

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Published by: Undergraduate Awards on Aug 31, 2012
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12/26/2013

 
The impact of the World Trade Organisation Agreements upon the Laws and LegalSystems of the World Trade Organisation Member States.Introduction
The World Trade Organisation
(„WTO‟)
is a multilateral system which operates with a viewto eliminating undue restrictions to trade and within in that raising the standard of livingacross the globe. This paper will look at the effect of the rule of WTO law on domestic lawand the individual within the European Union. The EU
1
and the WTO have a complexrelationship which has been the subject of extensive academic commentary. This paper willlook at the approach the EU and its judicial arm have taken to the WTO Agreements andDispute Settlement Body Rulings. Although attitudes have been somewhat consistent andpredictable, there are questions which have arisen but explanations forfeited in favour of legalcertainty. Initially, the direct effect of the Trade Related Aspects of Intellectual Property
Rights Agreement („TRIPs‟)
, was an anomalous position due to the status of intellectualproperty protection within the EU. An examination of the Lisbon Treaty provisions explainsthe impact it has had on this question. We will then study the commentary and reasoningbehind the direct effect debate.
The position of Dispute Settlement Body („DSB‟) rulings will
be viewed in light of the individual actor. And finally, the overall influence of world tradelaw on the European Union will be discussed. It is the purpose of this essay to criticallyanalyse the courts
‟ jurisprudence
and the commentary to identify gaps in the reasoning. Theprevious analysis on this topic is vast and complex and a synopsis of the position is longoverdue.
Outline of the Relationship between the WTO and the European Union
The WTO, the EU and the individual operate in a three-tiered system of international tradewhereby there is limited communication between groups. The World Trade Organisationcame into being in 1995 pursuant to the Uruguay Round of negotiations. This is a multilateraltreaty signed by one hundred and fifty three states. It has been found that the GeneralAgreement on Tariffs and Trade nor the WTO created a new legal order of which thecontracting parties and their nationals are subjects.
2
It is worth noting that both the WTO and
1
The Treaty of Lisbon came into effect in December 2009. The EC ceased to exist and the EU became a legalpersonality to replace the EC in accordance with Article 1(2) of the Treaty of Lisbon
2
Sections 301-310 of the
Trade Act of 1974
, United States
 – 
WT/DS152/R paragraph 7.72.
 
the EEC were organisations established with the purpose of promoting trade betweenacceding states. The EEC Common Market was modelled partly on GATT 1924 and anumber of provisions reflect this.
3
The EC took a dualist approach to the implementation of the WTO agreement in that the international agreement and the domestic community law areseparate systems of law and each is supreme in its own sphere. Although they may havesimilar backgrounds, the EC and the WTO have moved in different directions. The EC is asupranational legal and constitutional framework whereas the WTO is of a looser nature. TheEU is now much more than a trade organisation; it has expanded the scope of its policiesenormously,
4
however both are ultimately concerned with promoting trade and raising thestandard of living. It is important to note that both international trade law and the EuropeanUnion are organisations which are in their infancy. The EU, as a signatory, accepts that theobligations in the WTO agreements are binding on it and therefore if an EC action or measureis found to conflict with the provisions of the WTO, the EU Commission and the otherinstitutions must remedy this.
5
 
Shared Competency and the TRIPs Agreement
Although there are a number of multilateral treaties to which the European member states aresignatories, the status of the WTO is unique as both the individual member states and theEuropean Community acceded to the Agreement. Given the significance of the EC commoncommercial policy, this was a natural development. Initially it was thought that the EC wouldreplace the EC member states as WTO members, but this did not happen due to politicalsensitivities.
6
It is likely that EC member states would not have been comfortable with thissurrender of sovereignty. However, this was an arrangement which would prove morecomplex than envisaged. External relations of the EU are shared between central governmentand member states. The European Court of Justice interpreted Article 207 TFEU (ex 113TEC) on the common commercial policy as giving wide powers to the community;
“each time the community with a view to implementing a common policy envisaged
by the EEC Treaty, adopts provisions laying down common rules, whatever form
3
For example, internal taxation; see J.H.H Weiler,
The constitution of the Common Market 
” in
Paul Craig andGráinne De Búrca,
The Evolution of EU Law,
(2
nd
ed., Oxford: Oxford University Press, 2011).
4
See Gráinne De Búrca and Joanne Scott,
The Impact of the WTO on EU Decision Making
” in
The EU and theWTO: Legal and Constitutional Issues,
(Oxford: Hart, 2001)
5
WTO Article II.2, WTO Article II.2
6
J.J.H Weiler,
The EU, the WTO and the NAFTA,
(Oxford University Press, 2001) at pages 72-73.
 
these may take, the member state no longer has the right, acting individually or evencollectively, to undertake obligations with third countries which affect those rules.
7
 
Opinion 1/94 on the Competence of the EC in signing International Agreements
In signing an international agreement, careful consideration of its terms and subject matterwill be required in order to determine the apportionment of competence between the EC andmember states and the nature of that competence.
8
 
Opinion 1/94
addressed the question of thecompetence of the Community to conclude the General Agreement on Trade in Services
(„GATS‟)
and the TRIPs Agreements.
9
The conclusion of the ECJ was that the EC and itsmembers are
 jointly competent to conclude the TRIPS agreement.
In the determiningopinion of the court, the Commission were adamant that the Community were to haveexclusive competence in relation to the WTO Agreements. The member states feared that thiswas a move to gradually empower the EC in relation to external affairs and argued that thiswould be contrary to the established limitations of implied powers of the EC.
10
Sharedcompetence would raise many institutional questions as to implementation and participation.There are a number of preponderant considerations in this context. On a pragmatic front,there must be uniform and consistent application of the provisions of the mixed Agreements
ie
a common position. This is supplemented by the duty of the EC and its member states toco-operate. The EC legal system must represent itself to the outside world as a unifiedsystem.
11
Any loss of confidence in the functioning of the Community on an internationalfront could prove damaging to trade relations. The absence of uniform interpretation wouldtherefore be
“undesirable, artificial and perhaps unworkable.”
12
Additional clarification of the
7
Case 22/70
Commission v. Council
[1971] ECR 263,at 274; clarification of external competences.
8
Dominic Mc Goldrick,
 International Relations Law of the European Union,
(London: Longman, 1997) atpages 78-79.
9
 
Opinion 1/94
(15 November 1994) [1994] ECR I - 5267
10
Thomas Cottier and Matthias Oesch,
 International Trade Regulation: Law and Policy in the WTO, the European Union and Switzerland: Cases, Materials and Comments,
(London: Cameron May, 2005) at page239.
11
Advocate General Tesauro, Case C- 53/96,
 Hermes International,
13
th
November 1997 [1998] ECR I
 – 
3603,3606 at paragraph 20-21. See also
Opinion 1/78 
on International Agreement on National Rubber paragraph 34-36.
12
Piet Eekhout,
“The Domestic Legal Status of the WTO Agreement: Interconnecting Legal Systems”
, (1997) 34(1)
Common Market Law Review
11, at page 20.

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