(iv)Non-violation Claims in the Context of Principles of Customary International Law
With regard to this issue, the Panel in Korea-Government Procurement (DS163) rules as follows:9
“In our view, the non-violation remedy as it has developed in GATT/WTO jurisprudence should not be viewed in isolation from general principles of customary international law. As noted above, the basic premise is that Members should not take actions, even those consistent with the letter of the treaty, which might serve to undermine the reasonable expectations of negotiating partners. This has traditionally arisen in the context of actions which might undermine the value of negotiated tariff concessions. In our view, this is a further development of the principle of pacta sunt servanda in the context of Article XXIII:1(b) of the GATT 1947 and disputes that arose thereunder, and subsequently in the WTO Agreements, particularly in Article 26 of the DSU. The principle of pacta sunt servanda is expressed in Article 26 of the Vienna Convention in the following manner: ‘Every treaty in force is binding upon the parties to it and must be performed by them in good faith.’
It seems clear that good faith performance has been agreed by the WTO Members to include subsequent actions which might nullify or impair the benefits reasonably expected to accrue to other parties to the negotiations in question. The consistency of such an interpretation with the general principles of customary international law is confirmed by reference to the negotiating history of the Vienna Convention. According to the Report of the International Law Commission to the General Assembly, this issue was considered by the members negotiating the Convention in the following manner: ‘Some members felt that there would be advantage in also stating that a party must abstain from acts calculated to frustrate the object and purpose of the treaty. The Commission, however, considered that this was clearly implicit in the obligation to perform the treaty in good faith and preferred to state the pacta sunt servanda rule in as simple a form as possible.’
The non-violation doctrine goes further than just respect for the object and purpose of the treaty as expressed in its terminology. One must respect actual provisions (i.e., concessions) as far as their material effect on competitive opportunities is concerned. It is an extension of the good faith requirement in this sense.
We take note that Article 3.2 of the DSU requires that we seek within the context of a particular dispute to clarify the existing provisions of the WTO agreements in accordance with customary rules of interpretation of public international law. However, the relationship of the WTO Agreements to customary international law is broader than this. Customary international law applies generally to the economic relations between the WTO Members. Such international law applies to the extent that the WTO treaty agreements do not ‘contract out’ from it. To put it another way, to the extent there is no conflict or inconsistency, or an expression in a covered WTO agreement that implies differently, we are of the view that the customary rules of international law apply to the WTO treaties and to the process of treaty formation under the WTO.
As Korea has argued, non-violation is an exceptional concept within the WTO dispute settlement system.
Despite this caution, however, the panel in Japan - Film was of the view that the non-violation remedy had an important role - that of protecting the reasonable expectations of competitive opportunities through negotiated concessions.
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