Last Train to Catch Before the Brexit Transition
Period Expires: Allocation of International
Responsibility Arising from WTO Disputes
Between the EU and the UK
MA THESIS
Xiaoou Song
Student No. 12512230
songxiaou97@outlook.com
TABLE OF CONTENTS
ABSTRACT ... 3
I. INTRODUCTION ... 4
II. ALLOCATION OF RESPONSIBILITY BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES IN WTO DISPUTES ... 6
A. Development of Principles of International Responsibility of International Organizations Intertwining with the EU ... 7
B. The Competence of the EU and its Member States in WTO ... 10
i. Opinion 1/94 of the European Court of justice ... 10
ii. Treaty on the Functioning of the European Union (amended by Treaty of Lisbon) ... 13
C. Practices of WTO cases on Allocating Responsibility Between the EU and its members ... 15
III. RESPONSIBILITY TAKEN BY THE UNITED KINGDOM AS A PRE-MEMBER OF THE EU IN POST-BREXIT ERA ... 21
A．Attribution Based on Territoriality: A Double-Side Application of Turkey – Textile Case ... 21
B. Lessons Taken from State Succession Related to International Responsibilities ... 24
i. Vienna Convention on Succession of States in Respect of Treaties ... 25
ii. Draft Articles on State Succession to International Responsibility. ... 26
IV. POSSIBLE SOLUTIONS FOR UNRESOLVED PRE-TRANSITION WTO DISPUTES THAT MAY ENDS IN THE POST- TRANSITION ERA ... 29
A. Actions Taken by Non-EU WTO members ... 29
i. Challenging Again Against the EU’s Exclusive External Competence ... 29
ii. Negotiating a Trilateral Mechanism on Unsolved Disputes... 29
iii. Make use of the Internal Dispute Settlement Mechanism of the EU ... 30
B. Actions Taken by WTO Dispute Settlement Body ... 32
i. Clarifying the Dynamic Implementation of the Panel Report/Appellate Body Report 32 ii. Negotiating and Establishing Special Timeline for the Settlement of Pre-Transition Dispute ... 32
iii. Clarifying the Allocation of Responsibility Between the International Organization and Its Member for Future Events ... 33
V. CONCLUSION ... 33
ABSTRACT
This article discusses the allocation of responsibility between the UK and the EU concerning WTO disputes that last across the transition period of Brexit. In order to assess this, two steps are taken. Firstly, clarifying the allocation of the responsibility between the EU and its Member States by examining general international principles, EU Law as lex specialis and case practices in WTO. Secondly, identifying possibilities for the UK to undertake pre-EU responsibility after the expiration of the transition period by finding useful rules in general attribution rules of the WTO and parallel rules in sussession of States. Suggestions on reducing the uncertainty of the allocation of the responsibility between international organizations and member states are given as conclusion of this Article.
I. INTRODUCTION
On February 1 2020, the “Brexit Agreement”1 came into force, marking that Brexit - this four-year campaign – has now entered the next stage. A transition period will last until the end of 2020 before the United Kingdom is ready to complete its independence from the European Union. While the UK ended its membership of the EU politically, it is still bound by EU law,2 and it is still a member of the EU customs union and single market.3 For non-EU WTO members, this will be the last chance to conclude their disputes with the UK because of its application to EU law.
The Brexit Agreement is considerate in some aspects of dispute settlement during and after the transition period. Not only did the UK and the EU design a special procedure of dispute settlement for any disputes arising from Brexit, but the Agreement also spent its concern on CJEU’s pending case and new cases brought against the UK before the transition period expires.4 However, the Agreement keeps silent on the pending or new
1 Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the
European Union and the European Atomic Energy Community [2019] OJ C384/1 (Brexit Agreement)
2 Brexit Agreement (supra note 1)
[…] Article 2 Definitions
For the purposes of this Agreement, the following definitions shall apply: (a) "Union law" means:
(i) the Treaty on European Union ("TEU"), the Treaty on the Functioning of the European Union ("TFEU") and the Treaty establishing the European Atomic Energy Community ("Euratom Treaty"), as amended or supplemented, as well as the Treaties of Accession and the Charter of Fundamental Rights of the European Union, together referred to as "the Treaties";
(ii) the general principles of the Union's law;
(iii) the acts adopted by the institutions, bodies, offices or agencies of the Union;
(iv) the international agreements to which the Union is party and the international agreements concluded by the Member States acting on behalf of the Union;
(v) the agreements between Member States entered into in their capacity as Member States of the Union;
(vi) acts of the Representatives of the Governments of the Member States meeting within the European Council or the Council of the European Union ("Council");
(vii) the declarations made in the context of intergovernmental conferences which adopted the Treaties; […]
Article 127 Scope of the transition
1. Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.
[…]
3 The United Kingdom’s Withdraw from the European Union, Communication from the United
Kingdom, WT/GC/206, 1 February 2020
cases brought from external parties, for example, disputes in WTO.5
Due to the time-costing nature of the WTO’s dispute settlement mechanism, as well as the Appellate Body crisis, it seems impossible that any disputes brought against the EU before Brexit in WTO (hereinafter “pre-Brexit disputes”), in which the UK is still involved, could be settled safely before the transition period comes to an end in the last five months of 2020, not to mention disputes that might arise during the transition period.6 As a result, while the settlement of disputes is sure to conclude after the end of the transition period, non-EU members of WTO may hesitate when they intend to claim against the EU (especially in the occasions where the conduct of the UK is at issue). Consequently, there comes a concern on whether the settlement of those pre-transition disputes in the post-pre-transition era can affect the UK when it is no longer an EU member. Is it already impossible for non-EU WTO members to defend their interests against the UK who is still temporarily within the EU? Or there is a last train to catch?
Two problems need to be solved in order to answer this question. The first problem should be the allocation of the responsibility between the EU and its Member States. Since none of the WTO agreements have ever distinguished between the competence of international organizations and members of those organizations, the second Chapter would turn to look at the primary source, which is the principle of international responsibility of international organizations codified by the International Law Commission (ILC). The author will also examine the EU law that regulates the exclusive or joint competence of the Union as lex specialis, and see how practically the EU and its Member States allocate the responsibility under WTO’s framework by
5 There are five pending WTO disputes in which the EU is Respondent. Four disputes were established
before the transition period, which are EU — Cost Adjustment Methodologies II (Russia)(DS494), EU — Cold-Rolled Steel (Russia)(DS521), EU – Additional Duties (DS559), and EU — Certain measures concerning palm oil and oil palm crop-based biofuels (DS593).One dispute was established during the transition period, that is European Union — Safeguard Measures on Certain Steel Products (DS595).
6 Brexit Agreement (supra note 1), according to Article 132 of the Agreement, an extension of 1 or 2
years of the transition period is possible if such decision is made before July 1 2020. However, the UK and the EU decided not to extent the transition period. See Euronews, “Brexit: UK and EU agree not to extend transition period beyond December 2020” https://www.euronews.com/2020/06/15/brexit-boris-johnson-and-ursula-von-der-leyen-to-hold-high-level-talks-next-week
analyzing cases where certain EU Members were especially affected.
The second problem will be if the UK can be exempted from those responsibilities by withdrawing from the EU or not. There is not much to talk about concerning the responsibility taken individually by the UK no matter when it is an EU Member or not. The main issue of this problem is whether and how the responsibility will be separated if the UK copied the conducts at issue (particularly rules and regulations on trade) in the pre-transition disputes into its own domestic system. In the third Chapter, the author will try to parallel the opinions of the ILC in its new topic “succession of States in respect of State responsibility” into the situation of a Member withdrawing from International Organizations to see if the UK should also automatically have the same responsibility which is undertaken by the EU when the UK takes that controversial part from EU Law.
Based on the answer to these two problems, some tentative ideas will be displayed in the fourth Chapter concerning how non-EU WTO Members can prevent low cost-effective dispute settlement on pre-transition disputes which will be settled in the post-transition era. The author will also put forward suggestions on how WTO should replenish its dispute settlement mechanism when facing a State renouncing its dual represent as an individual WTO Member and a member of international organizations.
II. ALLOCATION OF RESPONSIBILITY BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES IN WTO DISPUTES
Being a member of the WTO essentially means becoming a Party of a series of international treaties concerning trade. By exercising its competence to reach various agreements with others, a member of WTO is hence bound by international obligations created therefrom and undertakes matching international responsibility if it violates any obligations. In this Chapter, the author will follow the line that is created by the ILC in its process of drafting the Articles on the responsibility of international organizations – from general law to lex specialis, and identify the allocation responsibility arising from
WTO obligations between the EU and its Member States.
A. Development of Principles of International Responsibility of International Organizations Intertwining with the EU
The primary reference for allocating the competence between the EU and its Member States would be principles codified by the ILC in DARIO.7 The clarification on the occasions where responsibility is undertaken by international organizations will automatically draw the scope of responsibility taken by the Members as individual States since these two types of international responsibility are exclusive to each other.8
Responsibility of international organizations generates when the act or omission of the organization fulfills two requirements: a breach of the organization’s international obligation, and attribution of the wrongful conduct to the organization.9 The establishment of attribution will be the most important mission in identifying the responsibility of international organizations. According to Article 6 of DARIO and the following commentaries, the conduct of an organ or agent of an international organization in the performance of functions of that organ or agent shall be considered an act of that organization under international law if the organization is exercising “effective control”.10 This Article, according to its commentaries, was “mainly written
to codify the rule relating to the international responsibility of the United Nations (or regional organizations) for a military operation using the forces of its member states”.11 However, not like what the ILC has considered when designing the Draft Articles (for example, clarifying the responsibility of international organizations and preventing
7 International Law Commission, Draft articles on the responsibility of international organizations,
with commentaries [2011] Yearbook of the International Law Commission vol.II (DARIO with commentaries)
8 DARIO with commentaries (supra note 7) p.81; Nikolaos Voulgaris, Allocating International
Responsibility Between Member States and International Organizations [2019] Oxford Hart Publishing.
9 DARIO with commentaries (supra note 7) 10 Ibid
11 Frank Hoffmeister, ‘Litigating against the European Union and Its Member States – Who Responds
under the ILC's Draft Articles on International Responsibility of International Organizations?’ [2010] EJIL vio.21 723-747 (Hoffmeister)
them from escaping their responsibility by passing on its obligations to its members or other entities), the EU has a positive attitude on its responsibility. It asked the ILC if any special rules of attribution could be made that the organization could solely undertake the responsibility even if it is the performance of its member States that is wrongful.12 When responding to such concern on the “normative control”, the Special Rapporteur answered that it is not necessary to rely on the attribution. An organization may well undertake an obligation whose performance is up to its member States. If the member State does not perform, the obligation will be violated and the organization will be held responsible. He did not see it necessary to devise special rules on attribution in order to assert the organization’s responsibility in this type of case.13
In the alternative, the ILC brought forward another type of relationship between an international organization and wrongful performance by its members. Chapter IV of DARIO contains another series of conditions where international organizations should be held responsible. Compared to the direct attribution that will pose the responsibility to either the organization or its members, Chapter IV describes a triggered responsibility of international organizations when other States/International organizations carry out the conduct.14 The ILC introduced three cases - the Melchior case15 the Bosphorus Case16 from the European Commission on Human Rights, and the Geographical Indications case from a WTO panel.17 The Commission affirmed
12 EU Presidency Statement on the ILC Report 2004, New York, 5 Nov. 2004, available at:
www.europa-eu-un.org/articles/en/article_4020_en.htm.
13 Georgio Gaja, Second Report on Responsibility of International Organisations, UN Doc
A/CN.4/541, 2 Apr. 2004, at para. 11.
14 DARIO with commentaries (supra note 7) Article 14-18
15 ECHR, M. & Co. v. Germany, Decision of 8 April 1987, Communication No. 217/1986, Official
Records of the General Assembly, Forty-second Session, Supplement No. 40 (A/42/40), p. 185, “This does not mean, however, that by granting executory power to a judgment of the European Court of Justice the competent German authorities acted quasi as Community organs and are to that extent beyond the scope of control exercised by the conventional organs”
16 ECHR, Bosphorus Hava Yollari Turizm ve Ticaret AS v. Ireland, Decision of 13 September 2001
(unpublished), “In the present case […] the detention of the aircraft leased by it for a period of time, was implemented by the authorities of the respondent State on its territory following a decision to impound of the Irish Minister for Transport. In such circumstances the applicant company, as the addressee of the impugned act fell within the ‘jurisdiction’ of the Irish State, with the consequence that its complaint about that act is compatible ratione loci, personae and materiae with the provision of the Convention.”
17 European Communities - Protection of Trademarks and Geographical Indications for Agricultural
again that there is no need on the current stage to create a special rule that will attribute the responsibility of every wrongful act conducted by the members to the organization.18 This opinion of the Commission lasted. In his seventh report, by introducing the Kadi Case,19 the Special Rapporteur addressed his attitude again that “[T]hese judicial decisions, both of which examined the implementation of a binding act that left no discretion, clearly do not lend support to the proposal of considering that conduct implementing an act of an international organization should be attributed to that organization”, and stated that such special attribution rule for international organizations will be in conflict with the attribution of conducts of State organs to the State under the ARSIWA.20
ILC was not too crucial to the EC. Instead of accepting the proposal of a special attribution rule, the Commission introduced a new draft Article 63 (currently Article 64) on lex specialis. The negative attitude towards creating a special rule itself did not stop the Commission from allowing international organizations to create special rules on their own internally. In the commentaries of Article 64 of DARIO, ILC clarified that “[S]pecial rules relating to international responsibility may supplement more general rules or may replace them, in whole or in part.”21 It is lucky for the EU that DARIO leaves this Article so that the EU laws discussed in the subsequent parts will not stand against the general principle of international responsibility.
Community laws are generally not executed through authorities at Community level but rather through recourse to the authorities of its member States which, in such a situation, ‘act de facto as organs of the Community, for which the Community would be responsible under WTO law and international law in general’.”
18 International Law Commission, Report of the fifty-seventh session (2005), A/60/10, Responsibility
of international organisations, Commentary on Part One, Chapter IV, p.95
19 ECJ, Kadi, Al Barakaat International Foundation v. Council and Commission, Judgment (Grand
Chamber) of 3 September 2008, joined cases C-402/05 P and C-415/05 P, para. 314, European Court Reports 2008, p. I-06351, “the contested regulation cannot be considered to be an act directly
attributable to the United Nations as an action of one of its subsidiary organs created under Chapter VII of the Charter of the United Nations or an action falling within the exercise of powers lawfully
delegated by the Security Council pursuant to that Chapter”
20 Giorgio Gaja, Seventh report on Responsibility of International Organisations, 27 Mar. 2009, UN
Doc A/CN.4/2009, para.33
B. The Competence of the EU and its Member States in WTO
The relationship between “responsibility” and “competence” should be stated before any analysis on the allocation of competence. It is often suggested that the allocation of international responsibility between an international organization and its members should follow the distribution of competence between them.22
Therefore, it is necessary to look into EU law to find if an internal division of external competence of reaching trade agreements with a third country has been made within the EU system. This part will be based on two documents – Opinion 1/49 of the ECJ and Treaty on the Functioning of the European Union (TFEU) to identify in which fields under the WTO framework the EU have exclusive competence, or otherwise a joint competence with its Member States.
i. Opinion 1/94 of the European Court of justice
It has to be pointed out that the EU and its Member States have realized the importance of the appointment of its obligations in WTO even before they establish it through the Marrakesh Agreement. The general attitude of the EU towards its exclusive competence is also reflected in the Marrakesh Agreement. Article XII is the Regional Economic International Organization (REIO) clause of the Marrakesh Agreement.23 It allows the participation of “separate customs territory possessing full autonomy in the conduct of its external commercial relations and of the other matters provided for in this Agreement and the Multilateral Trade Agreements”. The EU, however, needs not to prove itself under this Article, since it has already been recognized as a member in the previous
22 Frank Hoffmeister, ‘The Contribution of EU Practice to International Law’, in Marise CREMONA
(ed.), Developments in EU External Relations Law [2008] Oxford University Press; however, some scholars also question this principle, since the wording of “competence” and “responsibility” are applied in two different “conventional” atmospheres: the EU laws and ILC’s codification on
responsibility of States and international obligations, and results in nuance between the two concepts. See Joni Heliskoski, 'EU Declarations of Competence and International Responsibility', in M Evans and P Koutrakos (eds), The International Responsibility of the European Union. European and
International Perspectives [2013] Oxford, Hart Publishing 189 (Heliskoski)
23 Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, 1867 U.N.T.S. 154
Article XI.24 The EU is therefore not asked for a declaration of the competence of either its Members or the Union as early as 1994.25
However, the Union (then European Communities) still had divergence on an exclusive external competence with its Member States under WTO framework, and they turned to ECJ for its opinion. The famous Opinion 1/94 of the ECJ answered three questions put up by the commission:
“As regards the results of the Uruguay Round GATT trade talks contained in the Final Act of 15 December 1993:
1. Does the European Community have the competence to conclude all parts of the Agreement establishing the WTO concerning trade in Services (GATS) and the trade-related aspects of intellectual property rights including trade in counterfeit goods (TRIPS) on the basis of the EC Treaty, more particularly on the basis of Article 133 EC alone, or in combination with Article 95 EC and/or Article 308 EC?
2. Does the European Community have the competence to conclude alone also those parts of the WTO Agreement which concern products and/or services falling exclusively within the scope of application of the ECSC and EAEC Treaties?
3. If the answer to the above two questions is in the affirmative, does this affect the ability of the Member States to conclude the WTO Agreement, in the light of the agreement already reached that they will be original
24 Ibid
Article XI Original Membership
1. The contracting parties to GATT 1947 as of the date of entry into force of this Agreement, and the European Communities, which accept this Agreement and the Multilateral Trade Agreements and for which Schedules of Concessions and Commitments are annexed to GATT 1994 and for which Schedules of Specific Commitments are annexed to GATS shall become original Members of the WTO.
[…]
25 Delgado Casteleiro A, ‘The EU's Normative Control and International Responsibility: The WTO
Dispute Settlement System’ The International Responsibility of the European Union: From
Competence to Normative Control [2016] Cambridge University Press (Casteleiro); Cf. Alicia Cebada Romero, La Organizaci´on Mundial del Comercio y la Uni´on Europea (La Ley 2002) 136
Members of the WTO?”26
Since Article 133 of the EC Treaty clearly states that “the common commercial policy (CCP) shall be based on uniform principles”,27 the ECJ did not hesitate on acknowledging the exclusive competence of the Community concerning Multilateral Agreement on Trade in Goods. The Court also addressed that, agreements concerning agriculture, sanitary and phytosanitary measures and technical barriers to trade are also covered by Article 133.28
The ECJ moved on towards the GATS and the TRIPs Agreement. It referred to its Opinion 1/78, saying that the interpretation of Article 113 shall not be limited within the scope of “traditional aspects of external trade”, but “must be governed from a wide point of view”.29 Therefore, the Court did not refuse to apply Article 133 of the ECT on trade without goods. For the GATS, the ECJ introduced Article I(2) and divided four types or means of supply of service: cross-border supply, consumption abroad, commercial presence, and movement of persons.30 In its view, cross-frontier supply can be seen as transportation of service from one country to another without movement of either suppliers or consumers, which is identical to trade in goods. Thus, the Court recognized this type of supply of service as being consistent with the CCP while three others are not.31 The Court also excluded international agreements in the field of transport because it is subject to another Title other than the CCP.32 As for the TRIPs, the Court generally denied the Community’s exclusive competence based on Article 133 of the ECT, but noted that “inasmuch as that regulation concerns the prohibition of the release into free circulation of counterfeit goods, it was rightly based on Article 113 of the Treaty”.33
26 Opinion 1/94, Opinion of the Court of 15 November 1994, ECLI:EU:C:1994:384, [1994] ECR
I-5276 (Opinion 1/94)
27 Treaty establishing the European Community [2002] OJ C 352/24 28 Opinion 1/94 (supra note 26) para.27-31
29 Ibid, para.39 30 Ibid, para.43 31 Ibid, para.44-45 32 Ibid, para.53 33 Ibid, para.71
The ECJ then started to analyze the implied externals powers of the Community. The Court cited three possible sources concerning both the GATS and the TRIPs: the powers conferred on the Community institutions by the Treaty at internal level, the need to conclude the agreement in order to achieve a Community objective, and, lastly, Articles 100a and 235.34 The Court rejected the Commission’s argument strictly by finding that “the Community's exclusive external competence does not automatically flow from its power to lay down rules at internal level”, and that “the Member States, whether acting individually or collectively, only lose their right to assume obligations with non-member countries as and when common rules which could be affected by those obligations come into being”.35 Concerning Article 100a and Article 235, as well as its Opinion 1/76 put up by the Commission, the Court finds that the non-exercise of internal competence by the Member States does not necessarily lead to an exclusive external competence by the Community and that it is not conflicting for both the Community and its Member States to exercise their competence at the same time.36
The ECJ finally concluded that besides the Multilateral Agreement on Trade in Goods that is under the competence of the Community exclusively, both Community and its Member States are jointly competent to the GATS and the TRIPs. The Court made its Opinion carefully by focusing on the meaning of “common commercial policy” and a narrow interpretation of EC’s external exclusive competence. The Opinion might receive criticism for cautions interpretation, but it is an irreplaceable reference for subsequent development in EU law.
ii. Treaty on the Functioning of the European Union (amended by Treaty of Lisbon)
The above-mentioned Treaty Establishing the European Community was renamed by the Treaty of Lisbon in 2009. This amendment is a landmark of the development of EU
34 Ibid, para.73
35 Ibid, para.77; Wolfrum, Rüdiger. The Max Planck Encyclopedia of Public International Law [2012]
Oxford University Press (Max Planck)
trade policy, especially concerning the competence of the Union and its Member States.
Treaty of Lisbon clarified the scope of the EU’s external competence. Compared with the previous Article 133 of the TEC and what the ECJ has found in its Opinion 1/49, the newly inserted Article 188C has extended the scope of the CCP to further cover trade in services, the commercial aspects of intellectual property and foreign direct investment.37 This concludes the long debate on the competence started even before the Maastricht Treaty and continued through its two amendments and Constitutional Convention.38 Although many aspects of service and intellectual property had already fallen within the EU’s competence, this Article takes a step forward that the unanimity of all Member States is no longer needed. The broad scope of the EU’s exclusive competence was unsurprisingly challenged by some of the Member States. Under the pressure, Treaty of Lisbon left the right to seek unanimity in the aspects that is “politically sensitive” including audiovisual, health, education, and social services.39
Combining with Article 64 of DARIO, this development on the scope of the CCP has granted the Union the capacity of solely undertaking all kinds of responsibility under WTO. The modification has obviously affected the activity of the EU and its Member States on participating WTO dispute settlement (emphasized in part C). However, there are still areas that cannot be perfectly covered by the new CCP.40 In these “grey areas”, for example, the taxation of products, while externally falling within the scope of EU’s exclusive competence, is not fully harmonized even at the Union’s level.41 When Member States pose tax on products through domestic legislation, it is hard to say that
37 Treaty of Lisbon, Amending the Treaty on European Union and the Treaty Establishing the European
Community [2007] OJ C304/1; Article 188C in Treaty of Lisbon is currently Article 207 of TFEU, see Treaty on the Functioning of the European Union (consolidate version) [2016] OJ C202/47 (TFEU)
38 Stephen Woolcock, ‘The Treaty of Lisbon and the European Union as an actor in international trade’
[2010] ECIPE Working Paper No. 01/2010 p.9
39 Ibid; TEFU (supra note 37) Article 207(4)
40 Gracia Marín Durán, ‘Untangling the International Responsibility of the European Union and Its
Member States in the World Trade Organization Post-Lisbon: A Competence/Remedy Model’ [2017] EJIL vol.28 697-729 (Duran)
41 Ibid; see also Eeckhout Piet, ‘The EU and Its Member States in the WTO: Issues of Responsibility’,
in L. Bartels and F. Ortino (eds), Regional Trade Agreements and the WTO Legal System (2006) 449, at 456–457
the State authority is functioning as an organ of the Union.
C. Practices of WTO cases on Allocating Responsibility Between the EU and its members
After theoretically emphasizing the distribution of the external competence (which indicates the allocation of responsibility) between the EU and its Member States, practices by WTO should be listed to see if the actual situation is consistent with the previous findings.
EC – Asbestos
In 1996, France designed a Decree banning the production, sale, and import of asbestos and products containing asbestos due to the health risks associated with these goods which later came into force in 1997. Canada sought to import products containing asbestos into France and stated that the Decree violated several WTO regulations.42 According to the Panel Report, the EC pointed out that, with a view to ensuring a high level of health protection in the European Community and preserving the unity of the single market, numerous legislative acts have been adopted at the Community level since 1980, and on 4 May 1999, it was decided to introduce a total ban on all types of asbestos with effect from 1 January 2005.43 Accompanied by evidencing the dependence of the French Decree to the EC legislation, the EC was appointed to be the sole defendant in the case and will be solely responsible if the Frech Decree violates any obligations claimed by Canada.
EC – Commercial Vessels
In this case, Korea identified five subsidy measures adopted by EC Member States. With the point of view that all EC member States are independently WTO Members, and that internal EC constitutional issues cannot adversely affect the rights of any
42 Max Planck (supra note 35)
43 WTO, European Communities – Measures Affecting Asbestos and Products Containing Asbestos,
other WTO Member, it disagreed with the European Communities’ statement that the only respondent in this dispute is the European Communities as such and not its member States.44 The Panel understood Korea's concern “to be that any ruling or
recommendation should cover the EC member State measures as well as the TDM Regulation”, and also noted that all the measures carried out by the Member States were based on the TDM Regulation, which is part of the EC law. Based on these understandings, the Panel announced that the EC is the sole Respondent of this dispute.45
EC — Computer Equipment
In this case, the Irish and British customs authorities withdraw the settled bound tariff and increased the applicable rate according to the newly-adopted ‘Reclassification Regulation’ by the EC on certain computer equipment. While the United States challenged that both the EC and the two EC Members should be held responsible, the EC pointed out that the sovereign right in the are of customs tariff has transformed from individual Members to the EC. It is a WTO member in its own right and had taken sole responsibility.46 The United States also counter-argued that the two EC Members are also WTO members and the internal transformation should not affect the external obligations of the EC Members.47
The Panel decided as follows:
“The respondents in these documents48 are the European Communities, the United Kingdom and Ireland, respectively. However, as we stated earlier, what is at issue in this dispute is tariff treatment of LAN equipment and multimedia PCs by customs authorities in the European Communities. Since the European Communities, Ireland and the United Kingdom are all bound by their tariff commitments under Schedule LXXX, our examination will focus, in the first instance, on whether customs authorities in the European
44 WTO, European Communities – Measures Affecting Trade in Commercial Vessels, Panel Report,
WT/DS301/R, adopted 20 June 2005, para 2.3
45 Ibid, para 7.33
46 WTO, European Communities – Customs Classification of Certain Computer Equipment, Panel
Report,WT/DS62/R, WT/DS67/R, WT/DS68/R, adopted 22 June 1998 (EC – Computer Equipment) para 4.10
47 Ibid, para 4.14
Communities, including those located in Ireland and the United Kingdom, have or have not deviated from the obligations assumed under that
Schedule.”49
The Panel clarified that the Irish and British administrations were acting within a broader system, namely the Community system. But it did not find that only the EC would bear responsibility for any breaches of the Schedule LXXX. The Panel Stated that the EC, Ireland, and the UK are all bound as members.50 The case can be seen as an example where joint responsibility is taken by both the EU and its Members.
EC – Biotech
The measures at issue of this case included nine distinct “safeguard” measures taken by six Member States that are permitted under the EC legislation regime.51 These measures, neither approved nor held illegal under relevant legislation, are arguably free from the Community’s control.52 However, by referring to the previous EC – Asbestos
case, the Panel still declared as follows:
“It is important to note that even though the member State safeguard measures were introduced by the relevant member States and are applicable only in the territory of the Member States concerned, the European Communities as a whole is the responding party in respect of the member State safeguard measures. This is a direct consequence of the fact that the Complaining Parties have directed their complaints against the European Communities, and not individual EC member States. The European Communities never contested that, for the purposes of this dispute, the challenged member State measures are attributable to it under international law and hence can be considered EC measures. Indeed, it was the European Communities – and it alone – that
49 EC – Computer Equipment (supra note 46) para 8.16 50 Hoffmeister (supra note 11)
51 WTO, European Communities – Measures Affecting the Approval and Marketing of Biotech
Products, Panel Report, WT/DS291/DS/292/DS293/R, adopted 21 November 2006, (EC - Biotech) para 2.5
defended the contested member State safeguard measures before the Panel.”53
EC – Selected Customs Matters
The dispute concerns the implementation of the Customs Code by EC Member States. In this case, the United States challenged the inconsistent application the ‘Union Customs Code’, the ‘Implementing Regulation’, the ‘Common Customs Tariff’, the ‘Taric’ and other measures by EC members, and a consequent violation of ArticleX:3 (a) of the GATT.54
In the dispute, the United States claimed that “[A]s administration is the responsibility of each member State, questions of classification and valuation may be subject to as many as 25 different interpretations, and traders are subject to 25 different procedural regimes for bringing goods into free circulation in the EC. The net result is an administration that distorts rather than facilitates trade and that imposes transaction costs that should not exist where administration is uniform.”55 Apart from challenging any particular measure implemented by EU Member States, the US brought a claim against the whole system of customs administration.56 The Panel did not accept this claim, but it upheld the idea, by referring to the jurisprudence of the ECJ that “customs union and the common commercial policy, which includes administration of customs matters, fall within the exclusive competence of the European Communities.”57 The Panel also clarified that “[C]ommunity customs law is executed by the national authorities of the member States. This arrangement is referred to as ‘executive
53 EC – Biotech (supra note 51) para 7.101
54 General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194 (GATT)
Article X Publication and Administration of Trade Regulations […]
3. (a) Each contracting party shall administer in a uniform, impartial and reasonable manner all its laws, regulations, decisions and rulings of the kind described in paragraph 1 of this Article.
[…]
55 WTO, European Communities – Selected Customs Matters, Panel Report, WT/DS315/R, adopted 16
June 2006 (EC – Selected Customs Matters) para 4.3
56 Casteleiro (supra note 25)
federalism’.”58
EC and Certain Member States – Large Civil Aircraft
In this case, the United States challenged that measures by the EC and the member States provide subsidies that are inconsistent with their obligations under the SCM Agreement and GATT 1994. Concerning the role of EC Member States in this dispute, the ECJ responded that it “has never said that it ‘represents’ its member States but takes full responsibility in these proceedings for the actions of its member States” again requested that the term "and certain member states" be dropped from the name of the case.59 This time the panel rejected the EU’s request, endorsing that “The fact that four of those Members are member States of the European Communities, which is itself a Member of the WTO, does not affect their individual status as Members of the WTO against whom another Member, the United States, has brought claims of violation of various provisions of the WTO Agreements. Whether these four WTO Members choose to appear and actively defend their interests before the Panel separate from the actions of the European Communities is a matter entirely within their discretion, subject to the obligations of their status as member States of the European Communities. However, those obligations do not affect their status in this dispute.”60 The Panel further noted that “[W]hatever responsibility the European
Communities bears for the actions of its member States does not diminish their rights and obligations as WTO Members, but is rather an internal matter concerning the relations between the European Communities and its member States.”61
Following the findings above, the Panel decided that both the EU and its four Member States bear joint international responsibility. This dispute then becomes the only WTO ruling establishing joint responsibility.62
According to Castelerio, the last three cases each reflects a classic area concerning the EU’s executive federalism and the role of its Member States in relation to the
58 Ibid, para 2.13; Koen Lenaerts & Piet van Nuffel, Constitutional Law of the European Union [2005]
2nd ed, Exhibit EC-10
59 WTO, European Communities and Certain Member States – Measures Affecting Trade in Large
Civil Aircraft, Panel Report, WT/DS316/R, adopted 1 June 2011, (EC and Certain Member States – Large Civil Aircraft) para 7.171
60 Ibid, para 7.174 61 Ibid, para 7.175
responsibility of the EU. The EC – Selected Customs Matters case focuses on a
traditional scenario of executive federalism: customs implementation. The EC -
Biotech case examines a more complex scenario such as the implementation of
directives. Finally, the EC and Certain Member States – Large Civil Aircraft case analyses an even more complex situation of EU law implementation: state aid decisions.63
To sum up, as emphasized in this Chapter, it is clear that no matter theoretically or practically, the exclusive external competence of the EU is taking an overwhelming position compared with that of its Member States even before Treaty of Lisbon came into effect. In the post-Lisbon era, such a tendency is clearer.64 A conclusion can be given that unless the measures at issue have actually gone beyond the competence of the EU, it would be difficult to attribute any responsibility to EU members alone.
From the point of view of some scholars, this “competence” model65 analyzed above is not perfect to allocate responsibility. In Duran’s view, 66 absolute dependence on the competence to allocate international responsibility would result in questioning the legal justification for the member states to remain independent members of the WTO. Therefore, he proposed a “competence/remedy” model. This model would cover the areas under WTO better, especially those where a universal administration by the EU is lacking. Besides, it avoids waste of internal allocation of responsibility within the EU by allowing non-EU members to bring a dispute against an EU Member directly when the Member itself is in the capacity of performing the remedy. The author agrees with this model.67 The “competence/remedy” model has not been as widely accepted as the pure “competence” model, but the author holds the view that the former model implies a consistency with rules of international law better, which is, although largely different
63 Casteleiro (supra note 25) p 178
64 There is no cases where both the EU and its Member States presents as joint Respondent entered in
to the panel stage since Treaty of Lisbon came into force.
65 Kuijper and Paasivirta, ‘EU International Responsibility and Its Attribution: From the Inside
Looking Out’, in M Evans and P Koutrakos (eds), The International Responsibility of the European Union. European and International Perspectives [2013] Oxford, Hart Publishing 63
66 Duran (supra note 40) 67 Ibid
from the prupose of the current WTO remedy, to “as far as possible, wipe-out all the consequences of the illegal act”.68
III. RESPONSIBILITY TAKEN BY THE UNITED KINGDOM AS A PRE-MEMBER OF THE EU IN POST-BREXIT ERA
It has been clarified in the former Chapter that the EU exercises its exclusive external competence in most fields that the WTO agreements could cover. Accordingly, under almost all circumstances, the responsibility of violating obligations in those agreements will be solely undertaken by the EU itself Rather than any Member States. But this answer will not satisfy those non-EU members when they intend to deal with issues they had with the UK before and during the transition period.
Chances are that the UK may copy a couple of existing legislation from the EU Law, and such legislation might even coincidently being (or will be) under the challenge by other non-EU WTO members during the transition period. Certainly, the Complainants in these disputes will be unwilling to see that the UK easily avoided being affected by the outcome in the way of withdrawing from the EU. They will be even more unwilling to fall into any extra dispute settlement procedure with the UK in the post-transition era for the same reason they had in the pre-transition disputes since that will cost too much time and money.
In this Chapter, the author will try to identify whether the result of the pre-transition dispute could affect the UK when it is no longer an EU member.
A．Attribution Based on Territoriality: A Double-Side Application of Turkey – Textile Case
Article 4(2) of the DSU indicates that the attribution of the WTO dispute settlement
68 Factory at Chorzów (Germany v. Poland) Judgment, Claim for Indemnity, Merits, Judgment No 13,
mechanism is based on the concept of territoriality.69 This principle is not obeyed within WTO in most of the circumstances approaching the question of attribution, while still observed by WTO dispute settlement mechanism.70
In the Turkey – Textiles case, India challenged Turkey’s imposition of quantitative restrictions on imports of a broad range of textile and clothing products. To defend itself Turkey claimed that India had failed to “direct the complaint to the European Communities as well as Turkey, because the measures at issue stemmed from the Turkey-EC customs union”71 India refuted that “it was not possible to bring a complaint against the European Communities with respect to the measures at issue, since these had not been taken by the European Communities nor were they legally attributable to the European Communities because the territorial scope of its obligations under the WTO Agreement did not extend to the customs territory of Turkey.”72
The panel, therefore, had to identify the attribution of the quantitive measures: are they Turkey’s measures, the EC’s measures or the measures of the Turkey-EC customs union?73 As for the first possibility, the Panel noted that “the measures were implemented through formal action by Turkey and that the measures were published by Turkey in its Official Gazette” and that both two Turkey-EC joint notification has listed the measures at issue under “details of certain quantitative limits introduced/applied by Turkey”. Thus, the panel finds that “the measures at issue appear to be measures taken by Turkey and enforceable on Turkish territory only”74 Concerning the second
69 Casteleiro (supra note 25); Understanding on Rules and Procedures Governing the Settlement of
Disputes art. 1, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 2, 1869 U.N.T.S. 401 (DSU)
Article 4 Consultations […]
2. Each Member undertakes to accord sympathetic consideration to and afford adequate opportunity for consultation regarding any representations made by another Member concerning measures affecting the operation of any covered agreement taken within the territory of the former
[…]
70 Casteleiro (supra note 25); Eva Steinberger, ‘The WTO Treaty as ´ a Mixed Agreement: Problems
with EC’s and the EC Member States’ Membership of the WTO’ [2006]17(4) EJIL 837, 849
71 WTO, Turkey – Restrictions on Imports of Textile and Clothing Products, Panel Report,
WT/DS34/R, adopted 31 June 1999 (Turkey - Textiles) para 3.1
72 Ibid, para 3.3 73 Ibid, para 9.35 74 Ibid, para 9,36
possibility, the Panel supplemented that, the restrictions maintained by the EC are subject to its regulation that only applies within its own territory.75 Therefore, the measures at issue cannot be considered to be EC measures.
Under the third possibility, Turkey also claimed that “when two Members enter into a customs union, there is a fundamental change in the relationship between them and in their relationship with other WTO Members, and the “nationality” of the measures at issue is affected by the nature of the customs union.76 The Panel answered that it should be emphasized case by case. The Panel then looked into the internal framework of the Turkey-EC customs union, and found that both parties maintain their sovereign rights, and that the enforcement is carried out through independent implementation by both parties, the legal personality of the customs union is thereby absent.77 In conclusion, the Panel found that “measures at issue taken, implemented and enforced by the Turkish government itself, applied on Turkish territory only, can only be Turkish measures”78
The Turkey – Textile case reaffirmed that the general rule of attribution within the WTO is based on territoriality. Thus, since the EU and its Member States share the territory, according to this principle, any violation of international obligations can be attributed to either the EU of the Member States where such violation takes place, where laws are designed and applied under the same system.79 However, WTO did not reach further in its agreements on attribution when the territory is shared.
While the detailed practice of the WTO Panels on the attribution had been analyzed in Chapter II, it is now time to think about making use of this general principle of attribution in the question concerning the responsibility of the UK in the pre-transition disputes in the upcoming post-transition era.
Based on the definition of “territories” of the EU, the Complainant and the Respondent
75 Ibid, para 9.39 76 Ibid, para 9.34 77 Ibid, para 9.40 78 ibid
can have exact contrary interpretations on the UK’s responsibility. When interpreting in favor of the Complainant (non-EU WTO members), the scope of “territories” of the EU should contain the territory of the UK, since when the dispute is brought forward, the UK is a Member States of the EU and its territory is of course shared with the Union. Based on the principle of territoriality, the responsibility should be shared jointly by the Union and the UK, this allocation is settled and would not change even if the relationship between the UK and the EU changes.
From the Respondent’s view (especially the UK’s view), the principle of territoriality is a perfect excuse to escape from any possible responsibility generating from pre-transition disputes. Firstly, it is made clear by the Brexit Agreement that legally the UK is not one of the Member States of the EU,80 hence the territory of the UK is not a part of the EU’s territory. Secondly, the wrongful measures triggering responsibility are carried out under the EU Law not British law. As Turkey has claimed in the Textiles case, the measure should be attributed to the EU but not to the UK.
B. Lessons Taken from State Succession Related to International Responsibilities
As emphasized in the previous Chapter, the EU’s exclusive external competence covers almost all areas of the activities under WTO. Under this circumstance, although conventionally both the EU and its Member States bear identical international obligations under the same Treaties, only the EU can be “sighted” as the acting member. Additionally, the Union has taken the sovereign rights of trade-related areas from its Members, we may come to a claim that the EU has the same legal personality as most of the WTO members do. In other words, the EU, as for trade-related conducts, is a “State”. Through withdrawing from the EU, the UK will accomplish a “limited form” of State succession.
Another approach could also be taken to enhance the assumption above. While drafting the Articles on Responsibility of International Organizations, the ILC has paralleled the
framework of Articles on Responsibility of States for Internationally Wrongful Acts, bearing in mind the limited legal personality and the relationship between the organization and its member States. Similarly, when discussing the allocation of the external competence and the resulting international responsibility between an international organization and its withdrawing member State, ideas and principles can be borrowed from the parallel provisions (or draft articles) related to state succession.
i. Vienna Convention on Succession of States in Respect of Treaties
It is meaningless to discuss the membership of the UK to the WTO treaties after the Brexit. However, this treaty should still be referred to in this part since by clarifying succession of treaties, the succession of the rights and obligations within those treaties, and the allocation of the possible responsibility arising from violating those treaties can be clearer.
If we see the EU as a “sovereign state”, the Brexit would be a “separation” among all approaches listed in state succession, to be specific, a State continues after separation of part of its territory. According to Article 35 of the VCSS-T, in such condition, treaties generally continues in force in respect of its remaining territory.81 If any responsibility arises from a violation of such a treaty, the “procedessor State”, which is the EU in our case, should undoubtedly be held responsible.
But there are also exceptions. According to this Article, three exceptions could allow the UK to “succeed” the treaty:
“(a) the States concerned otherwise agree;
(b) it is established that the treaty related only to the territory which has separated from the predecessor State; or
(c) it appears from the treaty or is otherwise established that the application of the treaty in respect of the predecessor State would be incompatible with the object and purpose of the treaty or would radically change the conditions for its operation.”82
81 Vienna Convention on the Succession of States in Respect of Treaties [1987] 1946 UNTS 3, Art 35 82 Ibid.
It is hard to claim that WTO treaties would meet either of the last two conditions. Thus, deducting from the rule of state succession in respect of treaties, it is not possible to hold the UK responsible unless the EU and the UK had agreed so.
ii. Draft Articles on State Succession to International Responsibility.
ILC’s new topic “succession of States in respect of State responsibility” was mandated in 2016 and now obtains 11 (purposed) draft Articles after the third report of the Special Rapporteur. Before the topic was brought up by the ILC, neither State practice nor doctrine gave a uniform answer to the question of whether and in what circumstances a successor State may be responsible for an internationally wrongful act of its predecessor. The traditional view is that there is no transfer of obligations arising from international responsibility to a successor State, and this argument is named as the theory of non-succession.83 However, the ILC has noted that special occasions under this principle exist as a result of the development of the doctrine of international responsibility.84
The relevant Draft Articles are stated as follows:
“Draft article 6 General rule
1. Succession of States has no impact on the attribution of the internationally wrongful act committed before the date of succession of States.
2. If the predecessor State continues to exist, the injured State or subject may, even after the date of succession, invoke the responsibility of the predecessor State and claim from it a reparation for the damage caused by such
internationally wrongful act.
3. This rule is without prejudice to the possible attribution of the
83 Pavel Šturma, First report on succession of States in respect of State responsibility, UN Doc
A/CN.4/708, 31 May 2017; A. Cavaglieri, “Règles générales du droit de la paix”, Collected Courses of The Hague Academy of International Law, vol. 26 (1929-I), pp. 374, 378 and 416 et seq.; K. Marek, Identity and Continuity of States in Public International Law [1968] Geneva, Librairie Droz, pp. 11 and 189; P.M. Eisemann and M. Koskenniemi (eds.), State Succession: Codification Tested against the Facts [2000] The Hague, Academy of International Law, Martinus Nijhoff, pp. 193 -194; M.C.R. Craven, “The problem of State succession and the identity of States under international law” [1998] EJIL vol. 9, No. 1, pp. 142-162, at pp. 149-150;.
internationally wrongful act to the successor State on the basis of the breach of an international obligation by an act having a continuing character if it is bound by the obligation.
4. Notwithstanding the provisions of paragraphs 1 and 2, the injured State or subject may claim reparation for the damage caused by an internationally wrongful act of the predecessor State also or solely from the successor State or States, as provided in the following draft articles.
Draft article 7 Separation of parts of a State (secession)
1. Subject to the exceptions referred to in paragraphs 2 and 3, the obligations arising from an internationally wrongful act of the predecessor State do not pass to the successor State in case of secession of a part or parts of the territory of a State to form one or more States, if the predecessor State continues to exist.
2. If particular circumstances so require, the obligations arising from an internationally wrongful act of the predecessor State will transfer to the successor State when the act was carried out by an organ of a territorial unit of the predecessor that has later become an organ of the successor State. 3. If particular circumstances so require, the obligations arising from an internationally wrongful act of the predecessor State, where there is a direct link between the act or its consequences and the territory of the successor State or States, are assumed by the predecessor and the successor State or States.
4. The conduct of a movement, insurrectional or other, which succeeds in establishing a new State in part of the territory of a predecessor State or in a territory under its administration shall be considered an act of the new State under international law.”85
According to subparagraph 3 of the Draft Article 6, the possibility of successor State undertaking the responsibility if the wrongful act has a continuing character, and if the successor State is also bound by those obligations. This perfectly fits the situations of the EU and its members in the WTO. The mixed nature of WTO Agreements poses identical international obligations on both the EU and EU Members, most of the
85 Pavel Šturma, Second report on succession of States in respect of State responsibility, UN Doc
conducts carried out in compliance with the obligations grant a continuing nature (for example applying legislations). Since the obligations of the UK under WTO agreements will remain unchanged even after it withdraws from the EU, it is possible to hold the UK responsible for the conduct of the EU when the UK was a Member.
Subparagraph 2 of the Draft Article 7 describes the complete transformation from the predecessor State to the successor State. When the organ of the predecessor State that carries out the wrongful conduct has later become the organ of the successor State, the latter would be responsible. It is one of the EU’s notion that, State organs, while exercising its authority under the EU Law, should be treated as an organ or the Union since they are exercising public functions of the EU. When the UK withdraws from the EU, the State organs, which were previously regarded as organs of the EU, will transform back to an organ of the UK, and the responsibility will be accordingly transferred to the UK.
An option is given in subparagraph 3 of Draft Article 7. If there is a direct link between the conduct or the consequence of the conduct and the territory of the successor State, either the predecessor State or the successor State should undertake the responsibility. There is no doubt that the conduct carried out at the Union’s level is directly related to the territory of the UK. The allocation of responsibility under this subparagraph might be decided case by case.
Comparing these three approaches, the one contained in subparagraph 2 of Article 7 involving state organs should be the safest way of attributing international responsibility to the UK, since it needs no case-by-case analysis compared with the last approach. As for the first approach under Article 6, the dual representation, although guarantee the fact that the UK is bound by the exact same obligations as the EU whether there is a Brexit or not, it does not show a link of the UK “succeeding” those obligations from the EU, even though the exclusive external competence makes the condition looks like a succession.
IV. POSSIBLE SOLUTIONS FOR UNRESOLVED PRE-TRANSITION WTO DISPUTES THAT MAY ENDS IN THE POST- TRANSITION ERA
Having realized the uncertainties of the allocation of the responsibility, in this Chapter, the author will bring forward some suggestions for both non-EU WTO members and the WTO itself on reducing the risk of processing WTO disputes that might be affected by UK’s withdrawal from the EU.
A. Actions Taken by Non-EU WTO members
i. Challenging Again Against the EU’s Exclusive External Competence
Although the previous conclusion indicates, the EU is positive to “stand in front of” its members when a violation occurs. Once the EU has declared its exclusive external competence, it is in practice discouraged by the WTO dispute settlement mechanism to involve any of its Member States into the dispute, while theoretically the Members still obtain the identical rights and obligations as independent members of WTO agreements.
However, in the author’s opinion, including the UK as joint Respondent with the EU while dealing with the settlement of the disputes that may end in the post-transition era, will not be hindered much. The reason for the EU being “thirsty of” exclusive external competence and insisting itself as the sole Respondent is to harmonize the internal legislation and thereby create a stable and integrated legal system. The involvement of the UK in the pre-transition disputes will no longer negatively affect the common understanding of EU’s integration of its trade-related legal system. Additionally, the Panels and the Appellate Body would have no stress on the attribution of the responsibility. Therefore, such claim put forward by non-EU members will not be rejected.
ii. Negotiating a Trilateral Mechanism on Unsolved Disputes
with unsolved pre-transition disputes would be negotiating a trilateral mechanism between the non-EU States, the UK, and the EU. Compared with WTO dispute settlement which strictly follows the timeframe drawn by the DSU, a negotiated mechanism between three Parties offers a more flexible timeframe and scope of dispute settlement. The non-EU States have not to worry about the “statute of limitations” of the disputes, not to mention the uncertain allocation of responsibility that would modify according to different times and legal positions of the Parties.
The disadvantage of this suggestion is also obvious. Firstly, the amount of time need for negotiation is expected to be considerable, and it is especially limited when there are only six months left before the transition period comes to its end. Secondly, a datum of the negotiation is absent. Parties are negotiating for their own interest, which varies from State to State. The trilateral mechanism without a settled, universal datum may well cause the difference in the result on the same trade-related issue between two in all of the trilateral agreements reached by States with the UK and the EU. This would definitely bring chaos to international trade order.
iii. Make use of the Internal Dispute Settlement Mechanism of the EU
As the author has mentioned in the introduction, both the UK and the EU are thoughtful that they made detailed arrangements of the dispute settlement mechanism between both Parties of the Brexit Agreement. Not only had they taken the pending case into consideration but they had also been aware of the new cases during the transition period.86 While other approaches of dispute settlement are filled up with uncertain
86 Brexit Agreement (supra note 1)
TITLE X UNION JUDICIAL AND ADMINISTRATIVE PROCEDURES Chapter 1 JUDICIAL PROCEDURES
Article 86 Pending cases before the Court of Justice of the European Union
1. The Court of Justice of the European Union shall continue to have jurisdiction in any proceedings brought by or against the United Kingdom before the end of the transition period. Such jurisdiction shall apply to all stages of proceedings, including appeal proceedings before the Court of Justice and proceedings before the General Court where the case is referred back to the General Court.
2. The Court of Justice of the European Union shall continue to have jurisdiction to give preliminary rulings on requests from courts and tribunals of the United Kingdom made before the end of the transition period.
factors, the UK-EU internal dispute settlement mechanism stands reliable and predictable with the time limit granted by up to four years.
The main difficulty is the usage of the internal mechanism from the external side while the State that is to bring up a dispute is not a EU Member. The non-EU members must have plenty of knowledge of the internal operation of EU legal system in order to exercise this approach. Due to the limited jurisdiction, this method should be applied in an indirect and subsidiary way together with WTO’s dispute settlement.
It is clarified that when attributing responsibility to the EU, the WTO dispute settlement only reach the level of its Members, the internal allocation of responsibility between Member States of international organizations is excluded. If a State is able to identify under what circumstance a WTO dispute will trigger the internal allocation of responsibility between EU members, it can realize its purpose of not suing the UK again for the identical measures copied from EU Law.
Court of Justice of the European Union, and requests for preliminary rulings shall be considered as having been made, at the moment at which the document initiating the proceedings has been registered by the registry of the Court of Justice or the General Court, as the case may be.
Article 87 New cases before the Court of Justice
1. If the European Commission considers that the United Kingdom has failed to fulfil an obligation under the Treaties or under Part Four of this Agreement before the end of the transition period, the European Commission may, within 4 years after the end of the transition period, bring the matter before the Court of Justice of the European Union in accordance with the requirements laid down in Article 258 TFEU or the second subparagraph of Article 108(2) TFEU, as the case may be. The Court of Justice of the European Union shall have jurisdiction over such cases.
2. If the United Kingdom does not comply with a decision referred to in Article 95(1) of this
Agreement, or fails to give legal effect in the United Kingdom's legal order to a decision, as referred to in that provision, that was addressed to a natural or legal person residing or established in the United Kingdom, the European Commission may, within 4 years from the date of the decision concerned, bring the matter to the Court of Justice of the European Union in accordance with the requirements laid down in Article 258 TFEU or the second subparagraph of Article 108(2) TFEU, as the case may be. The Court of Justice of the European Union shall have jurisdiction over such cases.
3. In deciding to bring matters under this Article, the European Commission shall apply the same principles in respect of the United Kingdom as in respect of any Member State.
Article 89 Binding force and enforceability of judgments and orders
1. Judgments and orders of the Court of Justice of the European Union handed down before the end of the transition period, as well as such judgments and orders handed down after the end of the transition period in proceedings referred to in Articles 86 and 87, shall have binding force in their entirety on and in the United Kingdom.
2. If, in a judgment referred to in paragraph 1, the Court of Justice of the European Union finds that the United Kingdom has failed to fulfil an obligation under the Treaties or this Agreement, the United Kingdom shall take the necessary measures to comply with that judgment.
