CHAPTER 17 INTERPRETATION AND APPLICATION OF EXISTING

WTO RULES
1.

INTRODUCTION

In Part II of last years report, we included a chapter on Improving WTO Dispute

Settlement Procedures in which we examined the agenda for improving the WTO dispute
settlement mechanism. The work of reviewing dispute settlement procedures is now moving
forward at the WTO as called for in the Decision on the Application and Review of the
Understanding on Rules and Procedures Governing the Settlement of Disputes that was
adopted in Marrakesh in April 1994. The initial end of 1998 target for completion has been
exceeded, but WTO Members continue to study the issues involved, and there are still many
issues that are as yet unresolved, including many of the problems we discussed in last years
report.
In light of this, our report this year turns the spotlight away from the procedural aspects
of disputes settlement at the WTO in favour of questions of substantive law. Our intention is to
study the cases that have actually come before panels and the Appellate Body and to elucidate
problems in existing rules. It goes without saying that the inadequacies or lacunae in the actual
text of the current WTO rules are an almost daily topic in the discussions of relevant WTO
bodies and committees. They will also be debated in various forms in the next round of
multilateral trade negotiations scheduled to begin in 2000.
Given the basic position that this report has taken of emphasizing internationally
agreed-upon rules as an objective method for the resolution of trade disputes, we will
obviously avoid attempts to legislate solutions favouring one side or the other on points which
WTO Members disagree. We also note that it is the Ministerial Conference and the General
Council who have exclusive authority to interpret the WTO Agreement (Agreement
Establishing the World Trade Organization, Article IX:2).
Still, no one would maintain that the current rules are perfect. In our view, there is
some value in showing how, in ruling on individual disputes, panels and the Appellate Body
are often caught between rigid rules on the one hand and the goal of providing an adequate
solution to the case in question on the other. This exercise will, at any rate, illustrate the
realities of the multilateral trading system. In this chapter, we extract some points that have
appeared in panel and the Appellate Body reports that we consider particularly important. This
is by no means, however, a comprehensive study.
2.

DEFINITION OF LIKE PRODUCTS IN GATT ARTICLE III

(1)

Content of Rules (See Chapter 2)

GATT Article III:1 provides:

The Members recognize that internal taxes and other internal charges, and laws, regulations
and requirements affecting the internal sale, offering for sale, purchase, transportation,
distribution or use of products, and internal quantitative regulations requiring the mixture,
processing or use of products in specified amounts or proportions, should not be applied to
imported or domestic products so as to afford protection to domestic production.
Paragraph 2 continues:
The products of the territory of any Member imported into the territory of any other Member
shall not be subject, directly or indirectly, to internal taxes or other internal charges of any kind
in excess of those applied, directly or indirectly, to like domestic products. Moreover, no
Member shall otherwise apply internal taxes or other internal charges to imported or domestic
products in a manner contrary to the principles set forth in paragraph 1.
Annex I to the GATT provides the following interpretative note ad GATT Article III:2:
A tax conforming to the requirements of the first sentence of paragraph 2 would be
considered to be inconsistent with the provisions of the second sentence only in cases where
competition was involved between, on the one hand, the taxed product and, on the other hand,
a directly competitive or substitutable product which was not similarly taxed.
(2)

The Japan Alcoholic Beverages Case

The interpretation of these provisions was at issue in the Japan Alcoholic Beverages
panel. 1 The panel reached the following conclusions in this case: 1) that shochu and vodka
were like products and Japan, by taxing the latter in excess of the former was in violation of
its obligation under the first sentence of GATT Article III:2; 2) that shochu, whisky, brandy,
rum, gin, genever, and liqueurs were directly competitive or substitutable products and
Japan, by not taxing them similarly, was in violation of its obligations under the second
sentence of GATT Article III:2.
Japan was dissatisfied with this ruling and appealed, and the Appellate Body found the
following errors in the panel report and reversed the panels findings;
(i) The panel erred in law in its conclusion that panel reports adopted by the GATT
CONTRACTING PARTIES and the WTO Dispute Settlement Body constitute
subsequent practice in a specific case by virtue of the decision to adopt them.;
(ii) The panel erred in law in failing to take into account Article III:1 in interpreting Article
III:2, first and second sentences;
(iii) The panel erred in law in limiting its conclusions on directly competitive or
substitutable products to shochu, whisky, brandy, rum gin, genever and liqueurs.; and
(iv) The panel erred in law in failing to examine so as to afford protection in Article III:1
as a separate inquiry from not similarly taxed in the Ad Article to Article III:2, second
1

Japan - Taxes on Alcoholic Beverages, Complaints by the European Communities, Canada, and the United
States, (WT/DS8, DS10, DS11), Appellate Body and panel reports adopted on 1 November 1996.

sentence.
In spite of these errors, however, the Appellate Body upheld the general conclusions
of the panel report and recommended that Japan bring the measures into compliance with its
obligation under the GATT.
Nonetheless, the Appellate Bodys conclusions supported the basic findings in the panel
report. Its reversal affected comparatively trivial points.
(3)

Panel Precedents

The taxation of alcoholic beverages has been the subject of many GATT panels in the
past. No sooner had this report been issued than the WTO also saw complaints brought before
panels on alcoholic beverage taxation in Korea and Chile. This provides an indication that the
issues involved are not as simple as may first appear.
The most significant development to come out of the case was a rejection of the aims
and effects test for like products under GATT Article III. As can be seen from the wording
quoted above, the essence of GATT Article III is to ensure that imported products that have
cleared the customs and entered domestic markets are not given disadvantageous treatment in
relation to like domestic products. This is the concept of national treatment, which together
with the principle of most-favoured-nation treatment in GATT Article I forms the chief pillars
of the GATT/WTO doctrine of non-discrimination.
For example, if a country had a system in which domestically-produced good A was
taxed at 5 percent but a like foreign-produced good A was taxed at 10 percent, this would be
a clear violation of GATT Article III:2. However, it is rare for WTO Members to have such
blatantly discriminatory measures. In many cases, discrimination exists not on a de jure basis
but on a de facto basis. In other words, a system that appears to be origin-neutral is
administered in a discriminatory fashion.
Returning to alcoholic beverage taxation in Japan, one could argue that there is
domestic and imported shochu just as there is domestic and imported vodka. Imported shochu
is subject to the same low tax rate as domestic shochu and domestic vodka is subject to the
same high tax rate as imported vodka so there is no discrimination, but this would be rebutted
by appealing to the national treatment doctrine to claim that shochu and vodka are like
products and the difference in taxation is a de facto discrimination against foreign goods.
Certainly, one must make provisions for the application of GATT Article III even to
systems that appear to be origin-neutral, or regulators would have far too much room for
discretion, which might render the tight disciplines under the GATT meaningless. Broad
interpretation of the scope of application for Article III is therefore appropriate. The decisive
factor, however, will be the significance of like products.
The traditional method used to interpret GATT Article III is the two-step approach. In
the case of Article III:2, this involves objectively verifying whether the products are like by
considering such factors as their physical properties, the purposes for which they are used, and

the tastes of consumers (step one), and if they are found to be like, then determining if the
taxes levied against imports are in excess of the taxes on domestic products (step two).
One could, however, criticize this method as being too mechanical. For example, let us
assume that a country has passed a law exempting recyclable food containers from an excise
tax for the purpose of protecting natural resources. Let us further assume that there are both
domestic and imported recyclable and non-recyclable food containers. Under the two-step
approach, one would easily find that the containers were like products. One would then go
on to consider taxation, where one would find that the tax on imported non-recyclable food
containers was higher than the tax on domestic recyclable food containers. It would not be
unreasonable, critics maintain, to then find a violation of Article III.
Proponents of the system might respond, Who cares? GATT Article XX excepts
measures taken for the protection of exhaustible natural resources from the general principles,
so there is no problem. But Article XX does not provide a comprehensive list of all social
policy objectives, and there were objections from the beginning that there was a danger that
the existence of exceptions would provide a wedge by which to argue for different
interpretations.
An awareness of these issues led to attempts by GATT panels to depart from the simple
two-step approach in the early nineties. The first example was the United States Malt
Beverages case.2 The panel for the case found that the setting of different tax rates according
to the alcoholic content of beer was not in violation of the GATT. The panel in this case
concluded that the differentiation of beer into low alcohol and high alcohol beer did not have
the aim or effect of protecting domestic production. The ideas first propounded in the Malt
Beverages cases were further refined and perfected into the aims and effects test in the
United States Auto Tax case of 1994 (see Chapter 10 under Regulation on Corporate Average
Fuel Economy). The panel clearly departed from the two-step approach, using the wording
so as to afford protection in Article III:1 as rationale for arguing that the finding of like
products should be based on an analyses of the aims and effects of the measure in question. It
then applied this theory to conclude that a luxury tax on automobiles priced in excess of
$30,000 was not protection of domestic production. Rather, automobiles priced over $30,000
were not like products with automobiles priced below that threshold.
The theoretical constructs in the report were welcomed by the respondent, the United
States (even though it lost a part of the suit), but were not accepted by the complainant, the EU.
The report was ultimately not adopted by the GATT Council.
(4)

The Significance of This Case

As can be seen from the discussion above, at the time the Japan Alcoholic Beverages

United States - Measures Affecting Alcoholic and Malt Beverages, Complaint by Canada, adopted on 19 June
1992, BISD 392/206

case was brought before the WTO in 1995, panel precedents had been fluid. The case was
closely watched to see whether the WTO would further develop the aims and effects test to
establish it as a precedent in the new automated procedures or would return to the traditional
two-step approach. In arguing the case, Japan took the aims and effects position, claiming
that the Liquor Tax Law had neither the aim nor the effect of protecting domestic industry.
Shochu and other distilled alcoholic beverages were neither like products nor directly
competitive products, and there was therefore no violation of GATT Article III:2. The EU
argued from the two-step position, maintaining that shochu and other distilled alcoholic
beverages were like products (as an alternative argument, it also claimed that they were
directly competitive) and that different tax rates were contrary to the first sentence of GATT
Article III:2 (or alternatively to the second sentence). Canada took the same position as the EC
and argued that the tax violated GATT Article III:2. Unlike the other complainants, the United
States argued from the aims and effects position, but claimed that the Japanese Liquor Tax
Law had both the aim and the effect of protecting domestic industry and that it essentially
changed the competitive conditions between shochu and other alcoholic beverages, which
constituted a violation of GATT Article III:2. The panels conclusions are described above. In
the process of arriving at the conclusions, however, it should be noted that the panel explicitly
rejected the aims and effects test and elected instead for a theoretical construct based on the
two-step approach. The panel said that it did not find the aims and effects test appropriate
for the following reasons. 1) It departed from the wording of GATT Article III and was
inconsistent with the general interpretative principles for international law established in
Article 31(1) of the Vienna Convention, which provides 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 list of exceptions contained in
Article XX of the GATT could become redundant or useless because the aims and effects
test does not contain a definitive list of grounds justifying departure from the obligations that
are otherwise incorporated in Article III.
The Appellate Body upheld the structure of this panel report. Its differences with the
panel were that it thought there should be a separate consideration of the so as to afford
protection requirement in the second sentence of GATT Article III:2. In this limited sense,
one could argue that the Appellate Body allowed the examination of aims of the regulatory
regime at issue. Like the panel, however, it generally rejected the aims and effects test.
The case more or less established an interpretation for GATT Article III:2 in the WTO
disputes-settlement procedures. Both the panel and the Appellate Body rejected the
teleological interpretation and emphasized interpretation of the original text. Despite Japans
defeat in the case, we understand that the panel and the Appellate Body had to avoid the
impression of excessive judicial activism in a nascent period of the new WTO dispute
settlement mechanism. The purpose of the panel and the Appellate Body are not to make law
but to provide appropriate interpretations for specific cases, and we applaud them for their
prudence and caution.

On the other hand, the two-step approach does not necessarily provide predictable
conclusions, and one could argue that it provides too much room for arbitrary decisions. If the
panel or Appellate Body intuitively feels there to be discrimination in a particular measure,
they will find the products in question like or directly competitive, if not, they will not.
(Instructive in this regard is the comment in the Appellate Body report on the case that the
scope of like products should stretch and squeeze, evoking the image of an accordion
depending on the issues before the panel.) We must also note that the finding in this case does
not directly address the issues that led to the emergence of the aims and effects test in the
first place--the limits to the scope of general exceptions under GATT Article XX. Some
commentators therefore expect that the aims and effects test will be resurrected in some
form sooner or later. 3 Regardless, this case has not provided a complete resolution to the
problem. One will have to wait and see how the panel and Appellate Body rule in similar cases,
such as the Korean and Chilean alcohol taxation cases already in progress.
We would note as a postscript that in the Bananas case, the Appellate Body clearly
specified that the two-step approach should be applied rather than the aims and effects test
in cases brought under GATT Article III:4 involving national treatment under non-tax
regulation.
3.

INTERPRETATION OF THE CHAPEAU OF GATT ARTICLE XX

(1)

Content of the Rules

The introductory paragraph (also known as chapeau) to GATT Article XX erects limits
to the scope of general exceptions. It provides: Subject to the requirement that such
measures are not applied in a manner which would constitute a means of arbitrary or
unjustifiable discrimination between countries where the same conditions prevail, or a
disguised restriction on international trade, nothing in this Agreement shall be construed to
prevent the adoption or enforcement by any Member of measures [identified in
subparagraphs (a) through (j)].
Among the exceptions listed in this article, the one that has most commonly sparked
WTO panels has been subparagraph (g): relating to the conservation of exhaustible natural
resources if such measures are made effective in conjunction with restrictions on domestic
production or consumption. There have also been cases in which the disputing parties brought
complaints under subparagraph (b) (necessary to protect human, animal or plant life or
health) and subparagraph (d) (necessary to secure compliance with laws or regulations
which are not inconsistent with the provisions of this Agreement), but these have not been
3

Hudec, Robert E., GATT/WTO Constraints on National Regulation: Requiem for an 'Aim and Effects' Test,
The International Lawyer, Fall 1998, Vol. 32, No. 3.

major points of dispute in the cases under the WTO and the Appellate Body has not yet ruled
on them, so we will omit them from our analysis here.
(2)

The Gasoline Case

The first ruling by a WTO panel on GATT Article XX(g) was the United States Gasoline
case. The panel found that regulations on the cleanliness of gasoline under the US Clean Air
Act were for the conservation of exhaustible natural resources, but it followed the precedent
set by earlier GATT panels in interpreting measures relating to the conservation of
exhaustible natural resources in the narrow sense of primarily aimed at conservation and
therefore rejected US claims that regulations were consistent with GATT Article XX(g).
Dissatisfied with this panel report, the United States appealed to the Appellate Body. The
Appellate Body, citing Article 31 of the Vienna Convention on the Law of Treaties found the
panel report to be in error because of differences in wording between subparagraph (b) and
subparagraph (g), and therefore concluded that the US regulations were within the scope of
GATT Article XX(g).
The Appellate Body then went on to consider whether the regulations fulfilled the
requirements set forth in the chapeau of GATT Article XX. Here the Appellate Body found
that the United States could have resorted to less discriminatory methods to achieve the
purposes of the Clean Air Act. It therefore ruled that the gasoline regulations constituted a
means of unjustifiable discrimination, which was also a disguised restriction on
international trade and not justified under GATT Article XX.
The methods by which the Appellate Body reached its conclusions differ somewhat from
GATT precedent. It relaxed the standards by which it determined consistency with
subparagraph (g), in effect pulling back its line of defence, but then applied rigorous standards
to judge compliance with the chapeau. Like the interpretation of GATT Article III:2 discussed
above, this methodology is a manifestation of the Appellate Bodys emphasis on the textual
interpretation of the agreements.
4

(3)

The Shrimp Case

Interpretation of GATT Article XX(g) was also an issue in the United States Shrimp
case. In this case, the aim of the US legislation was to protect sea turtles by prohibiting
importation of shrimp and shrimp products from countries from which it could not obtain a
certificate of obligations to harvest wild shrimp with nets equipped with turtle excluder
devices (TED) comparable to the obligations placed on domestic US shrimp fishers (see
5

United States - Standards for Reformulated and Conventional Gasoline, Complaints by Venezuela and Brazil
(WT/DS2, DS4), Appellate Body and panel reports adopted on 20 May 1996.
5
United States - Import Prohibition of Certain Shrimp and Shrimp Products, Complaints by India, Malaysia,
Pakistan, and Thailand (WT/DS58), Appellate Body and panel reports adopted on 6 November 1998.

Chapter 3 for a fuller discussion). The United States did not contest the claim that this measure
was in contravention of GATT Article XI, so the focus of the dispute moved to whether the
measure was justified under GATT Article XX.
The panel took the methodology used by the Appellate Body in the Gasoline case a step
further by not making any judgement about whether the US import ban was justified under
GATT Article XX(b) or (g), and instead looking only at its compliance to the chapeau of
Article XX. The panel concluded that the US measures constituted a means of unjustifiable
discrimination that was not justified under GATT Article XX. Its rationale for this was that it
would impair the stability and predictability of the multilateral trading system were WTO
Members to make the importation of goods conditional upon the adoption of specific policies
by exporting countries. The Appellate Body overturned the panels reasoning on this point,
ruling that when examining Article XX there must first be a consideration of the applicability
of the individual exceptions. The Appellate Bodys ruling was similar to that in the Gasoline
case in that it found the sea turtle to be an exhaustible natural resource and affirmed that
the US import ban was relating to the conservation. Having done so, it went on to do a
detailed analysis of the content of the US measure and found unjustifiable discrimination
because even in countries that had failed to provide the certificate required, there could be
individual concerns that did use TEDs in harvesting shrimp, but importation of their shrimp
would still be prohibited. The Appellate Body also found the way in which countries were
identified for the import ban to be arbitrary, and for that reason as well rejected the Article
XX defense.
(4)

The Significance of These Cases

The Gasoline and Shrimp cases together established a judgement methodology for the
Appellate Body in cases disputed on grounds of GATT Article XX.
Traditionally, GATT panels have taken the position that GATT Article XX constitutes
permission to depart from free trade principles and therefore all exceptions should be subject
to rigorous judgement. As a result, they have shown a pronounced reluctance to permit
justification under Article XX. Were it easy to justify protectionist trade measures under
Article XX, it could undermine the entire basis for the multilateral free trading system. This is
a threat that was noted in the panel report for the Shrimp case and also in the panel report for
an earlier Tuna (II) case (unadopted, see Chapter 3). As a general principle, we welcome the
caution and prudence that panels have exercised in this regard. However, GATT Article XX is
often discussed in the context of trade and environment, and if one takes the position that
there is a conflict of values between environmental conservation and free trade, then the
posture adopted by the panels could be criticized as being too profit oriented and indeed
potentially destructive to the environment. Those who emphasize a dialogue between the
WTO and civil society, might conclude that the WTO would do well to pay such criticisms
more heed, and therefore that GATT Article XX should be restudied from a more neutral

standpoint (more specifically, in a form that more closely emphasizes the wording of the
agreement). Indeed, it would not be at all strange to see pressure for this mounted in the future.
Nor is it difficult to imagine that such considerations formed the backdrop for the Appellate
Bodys ruling. If this methodology is able to bring more flexibility to the interpretation of
GATT Article XX, then there may be reason to also expect a lessening (if only partial) of the
rigidity of the two-step approach to GATT Article III discussed in the preceding section. On
the other hand, any relaxation of the conditions for justification under GATT Article XX still
carries the potential to undermine the stability and predictability of the multilateral free trading
system. It might be possible to argue that in point of fact there is no reason to fear this because
the Appellate Body has only relaxed the conditions to be met for falling under measures listed
in Article XX (and really, only subparagraph (g)), and if anything has brought new strictness
to the interpretation of the chapeau. If that is the case, then the Appellate Body has effectively
equipped itself with a general condition that can be expanded or contracted as necessary to
arrive at a reasonable conclusion for the case in question, a second accordion as it were. This
could threaten the stability and predictability of the multilateral free trading system in a
different sense.
One can only hope that the accumulation of precedent will bring more clarity to the
interpretation of GATT Article XX.
4.

RELATIONSHIP OF GATT 1994 TO OTHER AGREEMENTS ON GOODS

(1)

Content of Rules

It is well known that the WTO Agreement (including its Annexes) is a compilation of
legal documents agreed upon in the Uruguay Round negotiations. The decision to implement
the results of negotiations as a single undertaking had already been made by the Punta Del
Este Declaration of September 1986 that marked the launching of the round. The actual
negotiations, however, were conducted by individual negotiating groups (initially fifteen, but
later integrated into seven), so it was impossible to achieve full consistency among the
individual agreements during the negotiation period. This was not particularly problematic for
the TRIPS and GATS, which were new treaties that started from zero, but problems were
identified during the negotiations for agreements on goods, which were negotiated based on
the existing GATT and the Tokyo Round agreements. At the final stage of negotiation, a legal
drafting group was organized to provide a minimum of consistency in terminology, but time
constraints did not make it possible to rewrite the existing GATT into a form consistent with
the WTO Agreement. Because of this, the Multilateral Agreements on Trade in Goods (Annex
1A) are prefaced with a General Interpretative Note to Annex 1A, which reads: In the event
of conflict between a provision of the [GATT] and a provision of another agreement in Annex
1A to the WTO Agreement, the provision of the other agreement shall prevail to the
extent of the conflict.

Theoretically, the agreement should be a single undertaking, and the above-mentioned

rules of conflict should guarantee a coherent interpretation of differing rules in different
agreements contained in Annex 1A. In reality, however, the application of the conflict rules
is extremely difficult, a point we would like to underscore in this section.
(2)

The Coconut Case

The relative priority of individual agreements on trade in goods was contested in an

abstract form in the WTOs first panel, the Gasoline case, as a question of the relative priority
of GATT Article III versus the TBT Agreement. The Coconut case6 brought this problem into
even sharper relief.
The case occurred when the government of Brazil imposed countervailing duties on
subsidies paid by the government of the Philippines for the production of desiccated coconut.
The Philippines requested the establishment of a panel, arguing violations of GATT Article I,
Article II, Article VI:3 and 6(a), and the Agreement on Agriculture Article XIII (consultations
requested in November 1995, panel established in March 1996). Brazil responded by citing
Article 32.3 of the WTO Subsidies Agreement, which states, ... the provisions of this
Agreement shall apply to investigations and reviews of existing measures, initiated pursuant to
applications which have been made on or after the date of entry into force for a Member of the
WTO Agreement. The application for investigation of the case was made in January 1994,
which was prior to the entry into force of the WTO Agreement, and therefore only the Tokyo
Round Subsidies Code was applicable. It then submitted a preliminary objection that the
Philippines application was illegal on this specific point.
We will omit the details of the case but note that both the panel and the Appellate Body
accepted the preliminary objection made by Brazil and found that the Philippines could not
claim violations only of the GATT because GATT Article VI and the Subsidies Agreement
were inseparable.
This was a rather peculiar case, but it is worth noting that the panel and Appellate Body
were able to set forth a relationship between GATT Article VI and the Subsidies Agreement
without needing to undertake any detailed analysis of the problem of conflicting rules only
because there was a clear intertemporal provision included in the Subsidies Agreement. A
major factor in this was also the fact that the case occurred at a rather unique time, the period
directly following the entry into force of the WTO in which, as a transition measure, GATT
1947, the Tokyo Round Agreements, and the WTO Agreement all were in force side by side. It
is highly unlikely that a similar case will be seen in the future.
Nonetheless, this case is significant for highlighting the locus of problems inherent in the
interpretation of agreements on trade in goods at a very early stage after the WTO disputes6

Brazil - Measures affecting Desiccated Coconut (WT/DS22), Appellate Body and panel reports adopted on 20
March 1997

settlement procedures took effect.

(3)

The Indonesia Auto case

The relative priorities of the GATT and the Subsidies Agreement were also a point of
contention in the Indonesia Auto case (see Chapter 2). The main argument made in the panel
by the respondent Indonesia, was that the Subsidies Agreement was in the position of a lex
specialis vis--vis the GATT, and that the provisions of the Subsidies Agreement apply to the
extent of any conflict, so the developing country exceptions in that Agreement justify
favourable treatment for Indonesias national car. The panel report rejected the notion that
there was a conflict between the GATT and the Subsidies Agreement in this case and found
violations of the GATT in both national treatment and most-favoured-nation status.
(4)

Evaluation of the cases

We consider the conclusions to both cases to be appropriate, but we do note that in the
Coconut case the panel and Appellate Body emphasized the single undertaking aspect of the
entire WTO Agreement to reach the conclusion that the Subsidies Agreement prevailed over
the GATT (obviously in this case there was no judgement on the merits of the case, so there
was no decision made on relative priority in substantive law terms), while in the Indonesia
Auto case, the panel and Appellate Body essentially studied the alleged conflicts between the
two, found there to be none, and concluded that obligations were cumulative.
There is not necessarily any logical conflict between the two cases, but one might well
anticipate that there will come a time when there is an issue of the relative priority of the
GATT and the agreements on trade in goods that forces a panel or the Appellate Body to
render a clear interpretation regarding the general interpretation of Annex 1A agreements.