Chapter V
Guidelines for Interpretation
of the WTO Covered Agreements


OUTLINE

I Introduction
II Application of Arts. 31, 32 of the Vienna Convention
III WTO Rules on Conflicts: Effective Interpretation
IV The Status of Legitimate Expectations in Interpretation



I Introduction
According to Art. 11 of the DSU, the panel's role is to “make an objective assessment of the matter before it, including an objective assessment of the facts of the case and the applicability and conformity with the relevant covered agreements”. In the previous chapter, we have examined the general standard of review labeled as “an objective assessment” regarding “the facts of the case”; clearly, for panels to fulfil appropriately their functions as designated in Art. 11 of the DSU, it is also indiscerptible to make such an objective assessment of “the applicability and conformity with the relevant covered agreements”. Therefore, the interpretation issue of the covered agreements arises. In this section, the author will scrutinize guidelines for interpretation applied under the WTO jurisprudence.
To resolve a particular dispute, before addressing the parties' arguments in detail, it is clearly necessary and appropriate to clarify the general issues concerning the interpretation of the relevant provisions and their application to the parties' claims. However, the complex nature of the covered agreements has given rise to difficulties in interpretation.
As noted previously, GATT/WTO jurisprudence should not be viewed in isolation from general principles developed in international law or most jurisdictions; and according to Art. 3.2 of the DSU, panels are bound by the “customary rules of interpretation of public international law” in their examination of the covered agreements. A number of recent adopted reports have repeatedly referred, as interpretative guidelines, to “customary rules of interpretation of public international law” as embodied in the text of the 1969 Vienna Convention on the Law of Treaties (‘Vienna Convention’), especially in its Arts. 31, 32. It is in accordance with these rules of treaty interpretation that panels or the Appellate Body have frequently examined the WTO provisions at issue, on the basis of the ordinary meaning of the terms of those provisions in their context, in the light of the object and purpose of the covered agreements and the WTO Agreement. These Vienna Convention articles provide as follows:

“Art. 31: General Rule of Interpretation
1. A treaty shall be interpreted in good faith in accordance with the ordinary meaning to be given to the terms of the treaty in their context and in the light of its object and purpose.
2. The context for the purpose of the interpretation of a treaty shall comprise, in addition to the text, including its preamble and annexes:
(a) any agreement relating to the treaty which was made between all the parties in connexion with the conclusion of the treaty;
(b) any instrument which was made by one or more parties in connexion with the conclusion of the treaty and accepted by the other parties as an instrument related to the treaty.
3. There shall be taken into account together with the context:
(a) any subsequent agreement between the parties regarding the interpretation of the treaty or the application of its provisions;
(b) any subsequent practice in the application of the treaty which establishes the agreement of the parties regarding its interpretation;
(c) any relevant rules of international law applicable in the relations between the parties.
4. A special meaning shall be given to a term if it is established that the parties so intended.

Art. 32 Supplementary Means of Interpretation
Recourse may be had to supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion, in order to confirm the meaning resulting from the application of article 31, or to determine the meaning when the interpretation according to article 31:
(a) leaves the meaning ambiguous or obscure; or
(b) leads to a result which is manifestly absurd or unreasonable.”

II Application of Arts. 31, 32 of the Vienna Convention
Pursuant to Art. 31.1 of the Vienna Convention, the duty of a treaty interpreter is to determine the meaning of a term in accordance with the ordinary meaning to be given to the term in its context and in light of the object and purpose of the treaty. As noted by the Appellate Body in its Report on Japan-Alcoholic Beverages (DS8/DS10/DS11), “Article 31 of provides that the words of the treaty form the foundation for the interpretive process: ‘interpretation must be based above all upon the text of the treaty’. The provisions of the treaty are to be given their ordinary meaning in their context. The object and purpose of the treaty are also to be taken into account in determining the meaning of its provisions”. And in US ? Shrimps (DS58), the Appellate Body accordingly states: “A treaty interpreter must begin with, and focus upon, the text of the particular provision to be interpreted. It is in the words constituting that provision, read in their context, that the object and purpose of the states parties to the treaty must first be sought. Where the meaning imparted by the text itself is equivocal or inconclusive, or where confirmation of the correctness of the reading of the text itself is desired, light from the object and purpose of the treaty as a whole may usefully be sought.”
More specifically, the Panel in US-Sections 301-310 (DS152) rules that: “Text, context and object-and-purpose correspond to well established textual, systemic and teleological methodologies of treaty interpretation, all of which typically come into play when interpreting complex provisions in multilateral treaties. For pragmatic reasons the normal usage, and we will follow this usage, is to start the interpretation from the ordinary meaning of the ‘raw’ text of the relevant treaty provisions and then seek to construe it in its context and in the light of the treaty's object and purpose. However, the elements referred to in Article 31 - text, context and object-and-purpose as well as good faith - are to be viewed as one holistic rule of interpretation rather than a sequence of separate tests to be applied in a hierarchical order. Context and object-and-purpose may often appear simply to confirm an interpretation seemingly derived from the ‘raw’ text. In reality it is always some context, even if unstated, that determines which meaning is to be taken as ‘ordinary’ and frequently it is impossible to give meaning, even ‘ordinary meaning’, without looking also at object-and-purpose. As noted by the Appellate Body: ‘Article 31 of the Vienna Convention provides that the words of the treaty form the foundation for the interpretive process: 'interpretation must be based above all upon the text of the treaty'’. It adds, however, that ‘[t]he provisions of the treaty are to be given their ordinary meaning in their context. The object and purpose of the treaty are also to be taken into account in determining the meaning of its provisions’.” 1
In sum, as noted by the Panel in Canada-Automotive Industry (DS139/DS142), “understanding of these rules of interpretation is that, even though the text of a term is the starting-point for any interpretation, the meaning of a term cannot be found exclusively in that text; in seeking the meaning of a term, we also have to take account of its context and to consider the text of the term in light of the object and purpose of the treaty. Article 31 of the Vienna Convention explicitly refers to the ‘ordinary meaning to be given to the terms of the treaty in their [the terms'] context and in the light of its [the treaty's] object and purpose’. The three elements referred to in Article 31 - text, context and object and purpose - are to be viewed as one integrated rule of interpretation rather than a sequence of separate tests to be applied in a hierarchical order. Of course, context and object and purpose may simply confirm the textual meaning of a term. In many cases, however, it is impossible to give meaning, even ‘ordinary meaning’, without looking also at the context and/or object and purpose”. 2
With regard to Art. 32 of the Vienna Convention, it is repeatedly ruled that, “[t]he application of these rules in Article 31 of the Vienna Convention will usually allow a treaty interpreter to establish the meaning of a term. However, if after applying Article 31 the meaning of the term remains ambiguous or obscure, or leads to a result which is manifestly absurd or unreasonable, Article 32 allows a treaty interpreter to have recourse to ‘... supplementary means of interpretation, including the preparatory work of the treaty and the circumstances of its conclusion’. With regard to 'the circumstances of [the] conclusion' of a treaty, this permits, in appropriate cases, the examination of the historical background against which the treaty was negotiated.” 3
As a whole, under the WTO jurisprudence, with regard to the dispute among the parties over the appropriate legal analysis to be applied, as general principles or guidelines of interpretation, it is often begun with Art. 3.2 of the DSU. To go further, as noted by the Panel in Japan-Alcoholic Beverages, “the ‘customary rules of interpretation of public international law’ are those incorporated in the Vienna Convention on the Law of Treaties (VCLT). GATT panels have previously interpreted the GATT in accordance with the VCLT. The Panel noted that Article 3:2 DSU in fact codifies this previously-established practice”. Consequently, “the Panel concluded that the starting point of an interpretation of an international treaty, such as the General Agreement on Tariffs and Trade 1994, in accordance with Article 31 VCLT, is the wording of the treaty. The wording should be interpreted in its context and in the light of the object and the purpose of the treaty as a whole and subsequent practice and agreements should be taken into account. Recourse to supplementary means of interpretation should be made exceptionally only under the conditions specified in Article 32 VCLT”. 4
In short, it is may be the case that, it is generally considered that the fundamental rules of treaty interpretation set out in Arts. 31 and 32 of the Vienna Convention have attained the status of rules of customary international law. In recent years, the jurisprudence of the Appellate Body and WTO panels has become one of the richest sources from which to receive guidance on their application.
III WTO Rules on Conflicts: Effective Interpretation
The Panel Report on Turkey-Textile and Clothing Products (DS34) states concerning the conflicts issue that: 5
“As a general principle, WTO obligations are cumulative and Members must comply with all of them at all times unless there is a formal ‘conflict’ between them. This flows from the fact that the WTO Agreement is a ‘Single Undertaking’. On the definition of conflict, it should be noted that: ‘… a conflict of law-making treaties arises only where simultaneous compliance with the obligations of different instruments is impossible. ... There is no conflict if the obligations of one instrument are stricter than, but not incompatible with, those of another, or if it is possible to comply with the obligations of one instrument by refraining from exercising a privilege or discretion accorded by another’.
This principle, also referred to by Japan in its third party submission, is in conformity with the public international law presumption against conflicts which was applied by the Appellate Body in Canada - Periodicals and in EC - Bananas III, when dealing with potential overlapping coverage of GATT 1994 and GATS, and by the panel in Indonesia - Autos, in respect of the provisions of Article III of GATT, the TRIMs Agreement and the SCM Agreement. In Guatemala - Cement, the Appellate Body when discussing the possibility of conflicts between the provisions of the Anti-dumping Agreement and the DSU, stated: ‘A special or additional provision should only be found to prevail over a provision of the DSU in a situation where adherence to the one provision will lead to a violation of the other provision, that is, in the case of a conflict between them’.
We recall the Panel's finding in Indonesia - Autos, a dispute where Indonesia was arguing that the measures under examination were subsidies and therefore the SCM Agreement being lex specialis, was the only ‘applicable law’ (to the exclusion of other WTO provisions): ‘14.28 In considering Indonesia's defence that there is a general conflict between the provisions of the SCM Agreement and those of Article III of GATT, and consequently that the SCM Agreement is the only applicable law, we recall first that in public international law there is a presumption against conflict. This presumption is especially relevant in the WTO context since all WTO agreements, including GATT 1994 which was modified by Understandings when judged necessary, were negotiated at the same time, by the same Members and in the same forum. In this context we recall the principle of effective interpretation pursuant to which all provisions of a treaty (and in the WTO system all agreements) must be given meaning, using the ordinary meaning of words.’
In light of this general principle, we will consider whether Article XXIV authorizes measures which Articles XI and XIII of GATT and Article 2.4 of the ATC otherwise prohibit. In view of the presumption against conflicts, as recognized by panels and the Appellate Body, we bear in mind that to the extent possible, any interpretation of these provisions that would lead to a conflict between them should be avoided.”
It is clearly implied by the ruling above that, in the WTO system, any interpretation of the covered agreements that would lead to a conflict between them should be avoided. In this respect, as to WTO rules of conflicts, in the context that all WTO agreements were negotiated “at the same time, by the same Members and in the same forum”, the principle of effective interpretation is recalled. What a principle is it?
As ruled by the Panel in Japan-Alcoholic Beverage (DS8/DS10/DS11), effective interpretation is a principle “whereby all provisions of a treaty must be, to the extent possible, given their full meaning so that parties to such a treaty can enforce their rights and obligations effectively…. this principle of interpretation prevents [the panel] from reaching a conclusion on the claims … or the defense …, or on the related provisions invoked by the parties, that would lead to a denial of either party's rights or obligations.” 6 This ruling is upheld by the Appellate Body when ruling that, “[a] fundamental tenet of treaty interpretation flowing from the general rule of interpretation set out in Article 31 is the principle of effectiveness (ut res magis valeat quam pereat). In United States - Standards for Reformulated and Conventional Gasoline, we noted that ‘[o]ne of the corollaries of the ‘general rule of interpretation’ in the Vienna Convention is that interpretation must give meaning and effect to all the terms of the treaty. An interpreter is not free to adopt a reading that would result in reducing whole clauses or paragraphs of a treaty to redundancy or inutility’.” 7
贵州省贵阳市人民政府


筑府发〔2006〕70号


贵阳市人民政府关于印发《贵阳市建设发展资金管理暂行办法》的通知



各区、市、县人民政府，市政府各工作部门：

《贵阳市建设发展资金管理暂行办法》已经市人民政府研究同意，现印发给你们，请遵照执行。









贵阳市人民政府

二OO六年八月三十日







贵阳市建设发展资金管理暂行办法





第一条 为促进贵阳市经济建设持续、快速、健康发展，保证贵阳市经济建设的资金需求，进一步规范贵阳市建设发展资金的使用管理，提高资金使用效益，结合实际，制定本办法。

第二条 贵阳市建设发展资金是政府为了进一步完善贵阳市城市建设投资有限责任公司(以下简称市城投公司)向国家开发银行申请贷款支持的城市建设、医疗卫生事业建设、教育基础设施建设及社会主义新农村基础设施(含农村医疗)建设等项目偿债机制，维持项目融资工作的良性循环，用于项目建设及偿债的专项资金。

第三条 贵阳市建设发展资金实行财政专户管理，不分来源和性质，均进入市财政局在国家开发银行贵州省分行开立的专户，均作为市人民政府对上述项目的投入。

第四条 贵阳市建设发展资金按照专款专用的原则，市财政局在收到各项资金并与相关部门核准数字后，按规定将资金拨付至市城投公司在国家开发银行贵州省分行开立的专户。

第五条 市发改委会同市财政局负责贵阳市建设发展资金的计划、筹集、分配、管理和监督；市城投公司负责贵阳市建设发展资金的使用。

第六条 贵阳市建设发展资金的来源：

1、根据《贵阳市国有土地有偿使用办法（试行)》(筑府发〔2006〕39号)、《贵阳市土地统征统供和收益分配的实施意见(试行)》(筑府发〔2006〕40号)、《贵阳市土地出让收益偿付国家开发银行贷款的资金管理办法(试行)》(筑府发〔2006〕41号)、《贵阳市国有土地储备整治管理办法（试行)》(筑府发〔2006〕42号)等文件规定，贵阳市出让土地获得的土地纯收益的30％全部进入贵阳市建设发展资金，土地纯收益的剩余部分在保证上述项目贷款本息偿还及建设资金投入后方可进行分配。

2、财政安排的建设性资金支出扣除维护等刚性支出后的节余部分。

（1）一般预算安排支出，包括基本建设支出、企业挖潜改造支出、城市维护费支出、农业建设性支出、其他专项建设支出；

（2）资金预算安排支出，包括文教部门资金支出、土地有偿使用支出、地方财政税费附加支出；

（3）预算外安排支出。

3、与上述项目建设相关的特许经营权转让收益。

4、新开征或新增加的有关税费收入可用于上述项目建设的部分。

5、其它可用于上述项目建设发展的财政性资金。

第七条 市发改委根据市人民政府批准的项目建设年度计划，确定项目的融资规模，并会同市财政局编制下达项目融资年度计划。

按照项目融资年度计划，并根据每年政府项目建设资本金支出需要、政府项目还本付息支出需要，由市发改委会同市财政局等部门具体确定贵阳市建设发展资金的年度来源规模。

资金来源首先是贵阳市土地出让纯收益的30％；若土地出让纯收益的30％不能满足当年还本付息的额度，优先由土地出让纯收益的剩余部分补充。若上述资金来源仍不能满足当年政府贷款还本付息需要，由财政局统筹安排上述其他财政资金划入贵阳市建设发展资金作为当年政府贷款还本付息的来源。

第八条 市财政局会同有关部门根据贵阳市建设发展资金分解落实计划，督促各类资金按时统一纳入市财政专户。

第九条 市财政局按规定将资金拨付至市城投公司在国家开发银行贵州省分行开立的专户，市城投公司必须对贵阳市建设发展资金的使用单独计帐，确保专款专用。

第十条 市发改委会同市财政局等部门应从各自职能出发，主动加强对市城投公司融资工作的监管和指导，建立相应的日常管理制度，对其融资工作的资金管理、财务管理、债务管理等方面实施全方位动态监督，全面掌握融资情况。

对在监管中发现的问题，相应部门应督促市城投公司及时整改；触发法律的，按照相关规定处理。

第十一条 本办法由市发改委、市财政局负责解释。

第十二条 本办法自发布之日起执行。