Case C-149/96, Portugal v Council [1999] ECR I-8395
- 36.
- While it is true that the WTO agreements,
as the Portuguese Government observes, differ significantly from the
provisions of GATT 1947, in particular by reason of the strengthening of the
system of safeguards and the mechanism for resolving disputes, the system
resulting from those agreements nevertheless accords considerable importance
to negotiation between the parties.
- 37.
- Although the main purpose of the mechanism
for resolving disputes is in principle, according to Article 3(7) of the
Understanding on Rules and Procedures Governing the Settlement of Disputes
(Annex 2 to the WTO), to secure the withdrawal of the measures in question
if they are found to be inconsistent with the WTO rules, that understanding
provides that where the immediate withdrawal of the measures is
impracticable compensation may be granted on an interim basis pending the
withdrawal of the inconsistent measure.
- 38.
- According to Article 22(1) of that
Understanding, compensation is a temporary measure available in the event
that the recommendations and rulings of the dispute settlement body provided
for in Article 2(1) of that Understanding are not implemented within a
reasonable period of time, and Article 22(1) shows a preference for full
implementation of a recommendation to bring a measure into conformity with
the WTO agreements in question.
- 39.
- However, Article 22(2) provides that if the
member concerned fails to fulfil its obligation to implement the said
recommendations and rulings within a reasonable period of time, it is, if so
requested, and on the expiry of a reasonable period at the latest, to enter
into negotiations with any party having invoked the dispute settlement
procedures, with a view to finding mutually acceptable compensation.
- 40.
- Consequently, to require the judicial
organs to refrain from applying the rules of domestic law which are
inconsistent with the WTO agreements would have the consequence of depriving
the legislative or executive organs of the contractingparties of the
possibility afforded by Article 22 of that memorandum of entering into
negotiated arrangements even on a temporary basis.
- 41.
- It follows that the WTO agreements,
interpreted in the light of their subject-matter and purpose, do not
determine the appropriate legal means of ensuring that they are applied in
good faith in the legal order of the contracting parties.
- 42.
- As regards, more particularly, the
application of the WTO agreements in the Community legal order, it must be
noted that, according to its preamble, the agreement establishing the WTO,
including the annexes, is still founded, like GATT 1947, on the principle of
negotiations with a view to 'entering into reciprocal and mutually
advantageous arrangements' and is thus distinguished, from the viewpoint of
the Community, from the agreements concluded between the Community and
non-member countries which introduce a certain asymmetry of obligations, or
create special relations of integration with the Community, such as the
agreement which the Court was required to interpret in Kupferberg.
- 43.
- It is common ground, moreover, that some of
the contracting parties, which are among the most important commercial
partners of the Community, have concluded from the subject-matter and
purpose of the WTO agreements that they are not among the rules applicable
by their judicial organs when reviewing the legality of their rules of
domestic law.
- 44.
- Admittedly, the fact that the courts of one
of the parties consider that some of the provisions of the agreement
concluded by the Community are of direct application whereas the courts of
the other party do not recognise such direct application is not in itself
such as to constitute a lack of reciprocity in the implementation of the
agreement (Kupferberg, paragraph 18).
- 45.
- However, the lack of reciprocity in that
regard on the part of the Community's trading partners, in relation to the
WTO agreements which are based on 'reciprocal and mutually advantageous
arrangements' and which must ipso facto be distinguished from
agreements concluded by the Community, referred to in paragraph 42 of the
present judgment, may lead to disuniform application of the WTO rules.
- 46.
- To accept that the role of ensuring that
those rules comply with Community law devolves directly on the Community
judicature would deprive the legislative or executive organs of the
Community of the scope for manoeuvre enjoyed by their counterparts in the
Community's trading partners.
- 47.
- It follows from all those considerations
that, having regard to their nature and structure, the WTO agreements are
not in principle among the rules in the light of which the Court is to
review the legality of measures adopted by the Community institutions.
- 48.
- That interpretation corresponds, moreover,
to what is stated in the final recital in the preamble to Decision 94/800,
according to which 'by its nature, the Agreement establishing the World
Trade Organisation, including the Annexes thereto, is not susceptible to
being directly invoked in Community or Member State courts'
- 49.
- It is only where the Community intended to
implement a particular obligation assumed in the context of the WTO, or
where the Community measure refers expressly to the precise provisions of
the WTO agreements, that it is for the Court to review the legality of the
Community measure in question in the light of the WTO rules (see, as regards
GATT 1947, Fediol, paragraphs 19 to 22, and Nakajima,
paragraph 31).
- 50.
- It is therefore necessary to examine
whether, as the Portuguese Government claims, that is so in the present
case.
- 51.
- The answer must be in the negative. The
contested decision is not designed to ensure the implementation in the
Community legal order of a particular obligation assumed in the context of
the [32703mWTO, nor does it make express reference to any specific
provisions of the WTO agreements. Its purpose is merely to approve the
Memoranda of Understanding negotiated by the Community with Pakistan and
India.
- 52.
- It follows from all the foregoing that the
claim of the Portuguese Republic that the contested decision was adopted in
breach of certain rules and fundamental principles of the WTO is unfounded.
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