Basic Legal Instruments for the Liberalisation of Trade: A Comparative Analysis of Ec and Wto Law (Studies in International Trade Law)

524 Pages·2004·1.653 MB·English

by  Federico Ortino

BASIC LEGAL INSTRUMENTS
FOR THE LIBERALISATION OF TRADE
The interpretation and application of the rules of international and
regional trade is becoming an increasingly specialised field. This study
provides an in-depth analysis of the core legal concepts characterising the
two most prominent and successful efforts in the regulation of interna-
tional trade to date. Adopting a comparative method, it analyses the basic
legal instruments employed by the EU and the WTO for the purpose of
liberalising trade in goods among their respective Members. To this end,
this study offers a fresh look at the principles underlying the basic rules
of international trade law, including the prohibition of border measures,
the principle of non-discrimination on grounds of nationality, and the
principle of reasonableness.
VOLUME 1 in the series Studies in International Trade Law
Studies in International Trade Law
Titles in this series:
Basic Legal Instruments for the Liberalisation of Trade byFederico Ortino
Appellate Decisions in the WTO by Rob Howse
Basic Legal Instruments for the
Liberalisation of Trade
A Comparative Analysis of
EC and WTO Law
Federico Ortino
OXFORD AND PORTLAND OREGON
2004
Published in North America (US and Canada) by
Hart Publishing
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© Federico Ortino 2004
Federico Ortino has asserted his right under the Copyright, Designs and
Patents Act 1988, to be identified as the author of this work.
Hart Publishing is a specialist legal publisher based in Oxford, England.
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In memoria di Chiara Ciappi
il cui amore e coraggio
rimarranno sempre vivi
Acknowledgements
This book is based on the thesis that I submitted for the degree of Doctor
of Laws of the European University Institute, Florence. I sincerely thank
my supervisor, Professor Claus-Dieter Ehlermann, for dedicating time,
patience and inspiration to my work. He has been, inside and outside his
supervising role, a guiding light. I would also like to thank the other
members of my jury: Professors Piet Eeckhout (King’s College London),
Paolo Mengozzi (Court of First Instance, Luxembourg) and Ernst-Ulrich
Petersmann (European University Institute). They all have at different
times provided much needed support and encouragement.
I am moreover greatly indebted to Lorand Bartels, Gráinne de Búrca,
Gabrielle Marceau, Joanne Scott, Francis Snyder, Gaëtan Verhoosel, and
Joseph Weiler, all of whom have, in several important ways, contributed
to the making of this book. None of the above friends and colleagues, of
course, bears responsibility for the views expressed in this work.
Particular thanks go to everybody in the Legal Affairs Division of the
WTO who in the fall of 2000 have warmly welcomed me as a stagiaire and
showed me the ropes of that game.
I would also like to thank Professor Allen Mendelsohn at Georgetown
University Law Center and Professor Nicolò Trocker at the Department of
Comparative Law of the University of Florence whose support and guid-
ance have been indispensable since the early stages of my academic
career. My gratitude goes to Richard Hart and his team in Oxford for mak-
ing the publication of this work a smooth ‘walk in the park’.
I am grateful to my parents for their continuous and unconditional
support over the years; to my friends, in particular Philip and Costanza,
who have accompanied me throughout this journey; and last, but not
least, to my wife, Maria, for making everything worthwhile.
Federico Ortino
Florence/Geneva, September 2003
Table of Contents
Table of Cases xi
Introduction: Defining the Boundaries of the Research 1
1. The EC and the WTO: Justification for a Comparison 2
2. Barriers to International Trade 7
A. Tariff v Non-Tariff Measures 7
B. Border v Domestic Measures 8
C. Market Access v Market Regulation Barriers 13
D. Government v Private Barriers 15
3. Approaches to Trade Liberalisation 16
A. Negative v Positive Integration 17
B. Judicial v Legislative (Positive) Integration 24
C. Shallow v Deep Integration 27
4. Structure of the Research 30
PART I. SHALLOW INTEGRATION 35
1. Negative Integration Stricto Sensu: The Elimination of
Border Measures 37
1.1 Reduction/Elimination of Customs Duties and Other
Charges Having Equivalent Effect 40
A. Normative Content 41
1. Articles 25-27 EC 41
2. Article II GATT 42
B. Objective Element 47
1. Article 25 EC 47
2. Article II GATT 55
C. Exceptions 65
1. No Justification Provision in EC Law 66
2. Articles II, III, VI, VIII and XX GATT 67
D. Conclusions 69
1.2 Elimination of Quantitative Restrictions and Other
Import Restrictive Measures 72
A. Normative Content 72
B. Objective Element 74
viii Contents
1. Article XI GATT 75
2. Articles 28 and 29 EC 92
C. Exceptions 101
1. Article 30 EC 106
2. Article XX GATT 112
D. Conclusions 118
2. Judicial Integration—First Layer: The National Treatment
Principle and the Prohibition of De Jure Discrimination 121
2.1 Prohibition of De Jure Discrimination and Fiscal
Charges 127
A. Normative Content 127
1. Article III:2 GATT 127
2. Article 90 EC 135
B. Justification Options 137
1. Article XX GATT 137
2. Border Tax Adjustment in WTO Law 140
3. Judge-Made Public Policy Exception in EC Law 141
C. Conclusions 145
2.2 Prohibition of De Jure Discrimination and Non-Fiscal
Regulation 147
A. Normative Content 147
1. Article III:4 GATT 147
2. Article 28 EC and the Concept of “Distinctly
Applicable Measures” 161
B. Justification Options 183
1. Article 30 EC 183
2. Article XX GATT 192
C. Conclusions 240
PART II. DEEP INTEGRATION 247
3. Judicial Integration—Second Layer: The National Treatment
Principle and the Prohibition of De Facto Discrimination 249
3.1 Prohibition of De Facto Discrimination and
Fiscal Charges 252
A. Normative Content 252
1. Article III:2 GATT 252
2. Article 90 EC 277
B. Justification Options 297
1. Judge-made public policy exception in EC law 298
Contents ix
2. Article XX GATT and Alternative Ways to Justify
De Facto Discriminatory Fiscal (and Non-Fiscal)
Measures on Public Policy Grounds 305
3.2 The Prohibition of De Facto Discrimination and
Non-Fiscal Regulation 319
A. Normative Content 319
1. Article III:4 GATT 319
2. Article 28 EC and the KeckDoctrine 341
B. Justification Options 363
1. De Facto Discriminatory Selling Arrangements and
“Mandatory Requirements” in EC Law 363
2. Article XX GATT 368
3.3 Conclusions 373
4. Judicial Integration—Third Layer: The Reasonableness Rule 387
4.1 Article 28 EC and the Dassonville–Cassis de Dijon
Jurisprudence: “Rule of Reason”, “Mandatory
Requirements” and the “Proportionality Principle” 388
A. Dassonvilleand Cassis de Dijon: The Revolutionary
Approach 389
B. The Dassonville–Cassis de Dijon“Rule of Reason”
Doctrine: Uncovering the Court’s “Formalist Sophistry” 392
C. Asymmetry Between “Normative Objectives” and
“Legal Features” 400
D. Proportionality as the “Normative Standard”: AFew
Preliminary Remarks 402
E. What does “Proportionality” Actually Entail? 408
1. Cassis de Dijon: “Suitability”, “Necessity” and the
Presumption of “Unreasonableness” 408
2. French Woodworking Machineand “Functional
Parallelism” 410
3. Danish Bottlesand “Proportionality Stricto Sensu” 413
4. “Necessity” or “Proportionality Stricto Sensu”?
The Issue of the “Level of Protection” 417
5. Article 30, Second Sentence, EC: Substantive and
Procedural Review 426
6. AFew Concluding Remarks 432
4.2 Reasonableness Rule in WTO Law: The SPS and TBT
Agreements 434
A. Objective Element 436
B. The Proportionality Requirements under
TBT and SPS as Independent from the GATT 441
C. Normative Content 445
x Contents
1. The “Suitability” Requirement or the Need to
Establish a “Rational Relationship” Between the
Measure and the Legitimate Public Policy Objective 445
2. The “Necessity” Requirement or the Need to
Establish that the Measure is the “Least-Trade
Restrictive” Alternative to Achieve the Legitimate
Public Policy Objective 457
3. A“Proportionality Stricto Sensu”
Requirement Under WTO Law? 464
4.3 Conclusions 469
5. Conclusion 474
Bibliography 485
Index 497