The Binding Nature Paradox of Ministerial Decisions: A Grey Area

[By Krishna Ravishankar ]

The author is a student of National Law University, Jodhpur.

 

INTRODUCTION

With the wheels of the 13th Ministerial Conference (hereinafter, “MC”) bus gearing up speed to be held at Abu Dhabi, MC-12 still remains an important talking point in the realm of international trade. The most significant face of the Geneva Ministerial Conference is the adoption of the 2022 Ministerial Decision on the TRIPS Agreement (hereinafter, “MD”) which provides clarifications to the existing patent waiver provisions in order to make vaccines and associated technologies more accessible to the developing world in the face of the COVID-19 pandemic. [1]While however laudatory the policy intent of the MD might be, there still remains the question of the legal enforceability of the same. This article tries to discuss this recurrent issue in a succinct manner.

MINISTERIAL DECISIONS AS SOFT LAW INSTRUMENTS

The “Covered Agreement” Argument

As Peter Van De Bosche highlights, the role of the Dispute Settlement Understanding (hereinafter, “DSU”) is “prompt settlement of disputes between WTO members concerning their respective rights and obligations under WTO law.”[2] This observation is further enshrined under Article 3.2 which makes the functioning of the DSU strictly applicable only to WTO Covered Agreements.[3]

Article 1.1 provides the contours of a “covered agreement” as those expressly provided for in Appendix 1 of the DSU as reiterated in Panel Report of Brazil- Desiccated Coconuts.[4]The Appellate Body in the report of Guatemala- Cement 1 while interpreting Article 7.2 and Article 23.1 further states that a legal recourse for a member state shall lie under the DSU only when it arises from an alleged violation of a provision of an “explicitly mentioned covered agreement.”[5] Thus, as a result, ministerial decisions not being explicitly mentioned in Appendix 1 which doesn’t allow member states to bring alleged violations of the same within the DSU Adjudication Mechanism lack legal enforceability. [6]

The Marrakesh Agreement Perspectives

Considered the highest decision-making body of the WTO, the WTO Ministerial Conference under Article IV:1 has the authority to adopt decisions in furtherance of any of the mentioned multilateral trade agreements provided for in the Appendixes of the Marrakesh Agreement.[7] This decision making authority must be read with Article IX which qualifies the subject matter on which an MC can adopt such decisions with regard to covered agreements. Decisions regarding official interpretations under Article IX:2 and waivers and concessions in exceptional circumstances under Article IX:3 along with amendments to WTO Covered Agreements under Article X are the subject matters of most MDs.[8] However, decisions normally taken Article IX as recognised by the Appellate Body in EC-Chicken Cuts merely constitute official interpretations under Article IX:2 and thereby no claim for specific legal enforcement can be made because MDs don’t generally generate specific rights or obligations on Member States. [9] Mainly considered by scholars as decisions showcasing the political will of the Ministerial Conference, they have been considered to lack the legally binding nature a covered agreement has making them non-binding soft law instruments. [10]

PROBLEMS WITH THE “SOFT LAW” APPROACH

A major problem that has arisen with this blanket “covered agreement” and “soft-law” approach with MDs is that many ministerial decisions enacted necessarily didn’t take the colour of merely official interpretations under Article IX:2. Some of the most consequential MDs pertained to important waivers and concessions under Article IX:3 and Article IX:4 be it the Doha Ministerial Decision of 2001, the Nairobi Export Decision of 2017 as well the current TRIPS Ministerial Decision of 2022. [11]Many Ministerial Decisions which have been taken, have a hue of waivers and concessions that create specific rights and obligations under WTO Covered Agreements, making us want to re-look the approach EC-Chicken Cuts has taken. Sometimes, MDs merely dealing with interpretations or clarifications under Article IX:2 also require legal enforceability when there are specific rights and obligations created by them.  [12]

Part V of the Agreement of Subsidies and Countervailing Measures which is the Dispute Settlement Part was itself incorporated through a ministerial decision. Questions, when arisen regarding its enforceability, required The Panel to step in US-Lead and Bismuth-II to clear the ambiguity.[13] It held while differentiating between a Ministerial Declaration and a Ministerial Decision that a Ministerial Declaration merely recognises the need to take certain actions hence it cannot be mandatorily enforced. [14]A ministerial decision, on the other hand, specifies a scheme on how these actions are to be given effect. These gaps that the soft-law approach has taken only open more pandora boxes than it closes.

THE VIENNA CONVENTION ON LAW OF THE TREATIES: A POSSIBLE ANTIDOTE

While the principle of stare decisis is not followed largely in WTO law with previous panel and appellate body reports merely having a persuasive value, tracing the jurisprudence was important to understand the sense of the grey area one is traversing. Before discussing a possible solution to how these gaps can be addressed, it is important to look at how the Vienna Convention (hereinafter, “VCLT”) has been used by Panels and the Appellate Body.[15]Article 31(3)(a) and Article 31(3)(b) which lay down the parameters for a subsequent agreement and subsequent practices supplementing that agreement have been used as an important source of interpretation of WTO law under the “customary principles of international law” of Article 3.2 of the DSU. [16] When read with Article 2 of the VCLT which defines a treaty, these two provisions act as instruments part of the same transaction thereby mandating equal legal enforcement.[17]

A very important interpretation of the “subsequent agreement” arises from the Appellate Body’s decision in Japan-Taxes on Alcoholic Beverages wherein the Appellate Body held that if a subsequent agreement dealt with an interpretation or clarification of a covered agreement provision, then it must be given the same level of legal enforcement as a covered agreement itself.[18]Though it didn’t specify ministerial decisions to fall within this description of a subsequent agreement, it did surely provide some room for introspection. The next important finding comes in the Appellate Body Report in US- Clove Cigarettes wherein for the first time a ministerial decision (in this case paragraph 5.2 of the Doha Declaration) was considered as a subsequent agreement having the same legal enforcement threshold as the covered agreement provisions. [19]Thus, in cases where rights and obligations are created by MDs under Article IX:2, the jurisprudence has given them legal enforceability as subsequent agreements.

When we come to waivers, it is important to refer to the Appellate Body Report of EC-Bananas III. While considering all ministerial decisions taken under Article IX to be subsequent agreements and state practices taken in furtherance of that agreement to be subsequent practices, it went on to classify these decisions and their binding nature based on the subject matter.[20] While the door was left open for a case-to-case basis to decide whether an official interpretation or clarification decision under Article IX:2, waivers and concessions in exceptional circumstances and decisions taken in furtherance of the same under Article IX:3 were considered to be rights and obligations creating instruments thereby requiring enforceability. This is further emboldened when the Doha Development Agenda was held to be a subsequent agreement and a specialised waiver making it binding on member states in the Panel Report of the Australian-Plain Paper Packaging Case.[21]

This approach was first envisioned by Professor James Gathii in the context of the Doha declaration wherein along with the subsequent agreement conception, state practices like executive orders, legislations and diplomatic correspondences with regards to that particular subsequent agreement were considered to be seen as legitimising the legal enforceability of such decisions.[22]

CONCLUSION

While the 2022 Ministerial Decision is still nascent in its operations, it does play an important role by creating rights and obligations especially for eligible developing countries to avail vaccine and vaccine related technology benefits in order to combat the pandemic. This could lead to a number of commercial, intellectual property rights as well as trade disputes. Therefore, it is incumbent upon the World Trade Organization’s adjudication mechanism in order to take a more balanced approach with regard to the enforceability of ministerial decisions and not merely discard them as soft law instruments. Moreover, an amendment under Article X is a tall order which requires 2/3rd to unanimous consensus of all members of the MC which could always be derailed due to national interests at stake. Thus, the only pragmatic correcting mechanism is through the ministerial decision mechanism which would be seriously complied with only when legal enforceability in case of disputes comes hand in hand with regards to the same. A departure is thereby required in the current jurisprudence with regard to the enforceability of MDs so as to resolve the greyness it brings to the international trade law realm.

 

[1]‘Scope of Compulsory License and Government Use of Patented Medicines in the Context of the COVID-19 Pandemic’ (South Centre 2021) <https:// www.southcentre.int/wp-content/uploads/2021/03/ Compulsory-licenses-table-Covid-19-2-March.pdf> accessed 22 January 2023.

[2]Van Den Bossche P. & Zdouc W., The Law and Policy of the World Trade Organisation, (Cambridge University Press 2013), 171.

[3]Understanding on Rules and Procedures Concerning the Settlement of Disputes, 1869 U.N.T.S. 401 (1994), art. 3.2 (hereinafter, DSU).

[4]Id., art. 1; Panel Report, Brazil – Desiccated Coconuts, (20 March 1997) WT/DS22/11/Rev.2, 13.

[5]DSU, art. 7.2; DSU, art. 23.1; Appellate Body Report, Guatemala – Anti-Dumping Investigation Regarding Portland Cement From Mexico, (25 November 1998) WT/DS60/AB/R, para. 64.

[6]D. Palmeter and PC Mavroidis ‘The WTO Legal System: Sources of Law’, 1998 92(3) American Journal of International Law, 399.

[7]WTO Agreement: Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154, art. IV:1 (hereinafter “Marrakesh Agreement”).

[8]Id., art. IX; Aditya Satpute, ‘Legal Status Of Ministerial Declarations And Decisions: Can They Be Enforced Through WTO Dispute Settlement’ (Trade Law Analyst, 10 September, 2014) https://tradelawanalyst.wordpress.com/2014/09/10/legal-status-of-ministerial-declarations-and-decisions-can-they-be-enforced-through-wto-dispute-settlement/ accessed 03 March 2023.

[9]Appellate Body Report,  European Communities — Customs Classification of Frozen Boneless Chicken Cuts, (27 September 2005) WT/DS269/AB/R.

[10]Supra note 2, 173.

[11]WTO Legal Texts, Ministerial Decisions and Declarations <https://www.wto.org/english/thewto_e/minist_e/min_declaration_e.htm> accessed 03 March 2023.

[12]R. Hilty, D. Kim, C. Correa, P.H.D. Batista, M. Lamping, ‘Position Statement of 5 July 2022 on the Decision of the WTO Ministerial Conference on the TRIPS Agreement adopted on 17 June 2022’ (2022) 22(14) Max Planck Institute for Innovation & Competition Research, 5-6.

[13]Panel Report, United StatesImposition of Countervailing Duties on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United Kingdom, (7 June 2000) WT/DS138/R, para. 6.17.

[14]Id.

[15]World Trade Organization, “Dispute Settlement Training Module: Chapter 7.2 – Legal effect of panel and appellate body reports and DSB recommendations and rulings” (World Trade Organization) <https://www.wto.org/english/tratop_e/dispu_e/disp_settlement_cbt_e/c7s2p1_e.htm> accessed 28 April 2023.

[16]Vienna Convention on the Law of Treaties (22 May 1969, entered into force 27 January 1980) 1155 UNTS 331, art. 31.

[17]Kirsten Schmalenbach and Oliver Dörr, Vienna Convention on the Law of Treaties: A Commentary (Springer, 2012).

[18]Appellate Body Report, Japan – Taxes on Alcoholic Beverages  , (1 November 1996)  WT/DS8/AB/R,  para. 24.

[19]Appellate Body Report, United States — Measures Affecting the Production and Sale of Clove Cigarettes, ( 24 April 2012)  WT/DS406/AB/R, para. 7.573.

[20]Appellate Body Report, European Communities – Regime for the Importation, Sale, and Distribution of Bananas, (9 September 1997) WT/DS27/AB/R, para. 7.107.

[21]Panel Report, Certain Measures Concerning Trademarks, Geographical Indications and Other Plain Packaging Requirements Applicable to Tobacco Products and Packaging (27 August, 2018) WT/DS467/23.

[22]James Thuo Gathii, ‘The Legal Status of the Doha Declaration on TRIPS and Public Health under the Vienna Convention on the Law of Treaties’ (2002) 15(2) Harvard Journal of Law & Technology.

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *

Contact Us

Kerwa Dam Road., 
National Law Institute University, Bhopal
Madhya Pradesh, India. 462044​.

write to us at – cbcl@nliu.ac.in