'Good Faith' in The WTO Jurisprudence-Necessary Balancing Element or An Open Door To Judicial Activism

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2005 Oxford University Press JIEL 2005.8(721)
2005 Oxford University Press
Journal of International Economic Law
September 2005
JIEL 2005.8(721)
LENGTH: 14230 words
TITLE:
'Good Faith' in the WTO Jurisprudence-Necessary Balancing
Element or an Open Door to Judicial Activism?
AUTHOR: Helge Elisabeth Zeitler

Dr. Iur. (University of Freiburg, Germany, 2000); LL.M.
(Georgetown, 2005). The author has been a 2004/2005 Fellow at
the Institute of International Economic Law at the Georgetown
University Law Centre and may be reached at helgezeitler@gmx.de.
She wishes to thank in particular Professor John H. Jackson for
his support and advice as well as Professor Jane Bradley,
Professor Christopher Parlin, Seema Sapra and Martin Heli for
their valuable comments on earlier drafts
LEGISLATION REFERRED TO:

Vienna Convention; Trade Act of 1974; EC Treaty; US Continued Dumping and Subsidy
Offset Act; Vienna Convention on the Law of Treaties
TEXT:
Abstract
The purpose of the article is two-fold: first, it seeks to clarify and structure
those contexts in which the principle of good faith has entered the WTO jurisprudence;
and second, it presents an analysis of the potential effects and risks accompanying
this entrance, such as the allegation of judicial activism on the part of the panels
or the Appellate Body and the viability of a distinction between violation and
non-violation cases. It attempts to define the framework within which a suitable
concept for the application of good faith must be found and explores the conclusion
that thus far the Appellate Body has applied good faith with the necessary caution.
However, it cautions the necessity of avoiding an overbroad use of the concept and
mandates the requirement for the judicial bodies to articulate more clearly the
content attributed to the concept in a particular case and the legal consequences
thereof than it has done thus far. Finally this article urges the judicial bodies
to avoid the idea of an abstract obligation of good faith that adds something to the
obligation under the WTO Agreements. This would accord with the traditional in-
ternational law understanding of what the application of the good faith principle
implies.
Introduction
Good faith has many facets and is certainly one of the broadest concepts of
international law. Known since the Roman times, it continues to exist-although to
a varied extent-in essentially all legal orders, domestic and international,
including the WTO.
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On the international level, the principle is included most fundamentally in

Article 2(2) of the Charter of the United Nations, but also in such different
international conventions as the UN Convention on the Law of the Sea and the UN
Convention on the Sales of Goods. The International Court of Justice has applied the
concept in several decisions. An analysis of the use of good faith in the WTO
jurisprudence shows the enormously widespread and varied use of that concept and
implies that basically all reports, of the panels and the Appellate Body, have
referred to good faith in one way or another.
It has been written that '[t]he axiomatic simplicity and familiarity of the
expression 'good faith' contributes to the uncritical acceptance of the principle
in legal theory'. However, it has proven extremely difficult in the practice of all
legal orders to define its contours and its standard more precisely, and especially
in the context of the WTO, its use has raised not only approval, but also criticism.
One attempt to describe 'the essence of the doctrine' is-based on the jurisprudence
of the International Court of Justice-that 'although a State may have a strict right
to act in a particular way, it must not exercise this right in such a manner as to
constitute an abuse of it; it must exercise its rights in good faith and with a sense
of responsibility; it must have bona fide reasons for what it does, and not act
arbitrarily or capriciously.' his explanation contains in itself so many vague terms
that the obvious difficulty of definition might let it appear tempting to refer to
an 'I know it when I see it' approach for cases of a violation of good faith.
In WTO law, good faith is a term that plays an important role on different levels
and under many different names. The concept is mentioned explicitly only in the TRIPS
Agreement and in the Understanding for the Settlement of Disputes (DSU). However,
through the link in Article 3.2 of the DSU to the interpretation principles of
customary international law and thereby to Article 31 of the Vienna Convention on
the Law of the Treaties, good faith has also gained some importance in the un-
derstanding of other agreements. Finally, another provision of the Vienna Convention,
Article 26 ('Every treaty in force is binding upon the parties to it and must be
performed by them in good faith'), plays some important role, as well.
The purpose of this article is two-fold: first, it seeks to clarify and structure
those contexts in which the principle of good faith has entered the WTO jurisprudence,
and second, it presents an analysis of the potential and risk accompanying this
entrance. Equally as broad as this principle is the scope of the legal problems that
can potentially arise in connection with the application of the good faith concept
in the WTO legal order. Starting from the use of good faith, one sooner or later touches
many of the 'big questions' of the WTO Dispute Settlement System, such as the
allegation of judicial activism by the Appellate Body and the separation of powers
within the WTO, the permissibility of a non liquet or the viability of a distinction
between violation and non-violation cases. The scope of this article is too limited
to address all of them in depth and also to pay particular attention to the special
features of the TRIPS Agreement which directly addresses private parties and their
acting in good faith. What it can do, however, is define the framework within which
a suitable concept for the application of good faith must be found.
The article therefore starts with an overview of the use of good faith in the
jurisprudence of the WTO panels and the Appellate Body (section I) and then conducts
a risk assessment trying to analyse the legal and policy issues at stake (section
II).
I. Overview of the Use of Good Faith in the Jurisprudence of the WTO Panels and
the Appellate Body
The following section offers an overview of the decisions in which the panels and
the Appellate Body have referred to the principle of good faith under different
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headings. This overview will facilitate the analysis in section II of the article
on the risks and difficulties coming with the use of good faith.
A. General understanding-the presumption of good faith
The Appellate Body has considered good faith to be 'at once a general principle
of law and a principle of general international law'. While the former refers to the
expression used in Article 38 of the Statute of the International Court of Justice,
listing such principles as a source of international law, it is not entirely clear
to what the Appellate Body referred by adding the second term. Probably it was just
meant to be another expression of the understanding that the WTO is no self-contained
regime but an open system within the international legal order. Good faith is seen
as an 'organic' and ' 'pervasive' general principle ... that underlies all treaties'.
Its understanding is much broader than just meaning the absence of 'bad faith'. Even
where the panels or the Appellate Body considered in a particular case that Members
had violated certain obligations based on good faith, this was never linked to an
assumption of 'bad faith' in the particular case.
In several decisions, the panel and the Appellate Body have held that good faith
is to be presumed; this corresponds to the traditional understanding of good faith
in general international law. The presumption does, however, not absolve a panel from
the duty to assess the facts of a case. Due to the presumption, the defence that a
Member acted in good faith while violating a provision of the WTO does not entitle
it to special treatment with regard to remedies. Under the presumption, the panel
or the Appellate Body will assume that the defending Member does and will act in
conformity with its obligations under the agreements unless there is 'clear evidence
to the contrary'. The burden of proof lies therefore with the party claiming a
violation of the agreements. However, no proof of bad faith by the complainant is
required. The presumption also does not imply in all cases that the complainant has
the full and complete burden of proof. A defending party invoking, for example, the
exception of Article XX GATT would still have to establish a prima facie case of
justification, but not more, before the burden of proof shifts to the complainant.
The presumption is applied to the implementation of DSU rulings, as well. This
is the area in which the Members most frequently cite the principle of good faith.
The Appellate Body has ruled that the fact alone that a Member's authorities possess
discretionary authority with regard to the implementation of certain WTO obligation
does not allow assuming that the executive will violate its obligation of good faith
application. In the Chile-Alcohol case, the Appellate Body ruled furthermore that
'Members of the WTO should not be assumed, in any way, to have continued previous
protection or discrimination through the adoption of a new measure. This would come
close to a presumption of bad faith'.
B. Good faith as an interpretative tool
In its first decision, the Appellate Body famously held that the General Agreement
was 'not to be read in clinical isolation from public international law'. This is
nothing but a confirmation of what Article 3.2 of the DSU states, i.e. that the Dispute
Settlement System serves to 'preserve the rights and obligations of Members under
the covered agreements, and to clarify the existing provisions of those agreements
in accordance with customary rules of interpretation of public international law'.
It is widely conceded that the Vienna Convention codifies customary international
law with regard to the interpretation of treaties, such that the reference in Article
3.2. leads to Article 31 of the Vienna Convention according to which '[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.'
Constituting a codification of customary international law, Article 31 has also been
referred to by GATT panels at a time before the DSU entered into force.
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The requirement of good faith interpretation has been called a 'core principle
of interpretation of the WTO Agreements'. It is directed to the Members in their
understanding of the treaty, to any judicial organ interpreting it and to the
Ministerial Conference and the General Council, should they ever choose to adopt a
formal interpretation of the Agreements under Article IX.1 of the WTO Agreement. What
standard it imposes, may be clarified by a dissenting opinion of the judges
Lauterpacht, Ko and Spender to a judgement of the International Court of Justice in
1959: 'It is consistent with enlightened practice to apply the test of reasonableness
to the interpretation of international instruments-a test which follows from the ever
present duty of States to act in good faith'. The Appellate Body has adopted this
reasonableness test in the Shrimps-Sea Turtles case regarding the understanding of
Article XX GATT. The citation shows at the same time the close link between Articles
26 and 31 of the Vienna Convention, which the International Law Commission emphasised
as well during the negotiations of the Vienna Convention: The principle of good faith
interpretation 'flows directly from the rule pacta sunt servanda restated in Article
26 of the Vienna Convention'. The close connection makes it sometimes difficult to
distinguish between interpretation and application in good faith, and the analysis
of the WTO jurisprudence with regard to its references to good faith in one or the
other form is proof of this difficulty.
The panels and the Appellate Body have used the principle of good faith in several
cases for the interpretation of the WTO agreements as foreseen in Article 31 of the
Vienna Convention on the Law of the Treaties. However, the reference to this principle
did not change the result found after applying the other interpretation criteria of
Article 31, i.e. wording, context and object and purpose of the treaty. Nor has the
Appellate Body ever made clear what standard it really envisions imposed by the
requirement of good faith interpretation. Rather, the good faith notion was used to
confirm the found interpretation. This coincides in the final result with an
understanding as explained by the panel in the Section 301 case, according to which
text, context, object and purpose, as well as good faith, should be 'viewed as one
holistic rule of interpretation rather than a sequence of separate tests to be applied
in a hierarchical order'. It corresponds also to the understanding of the In-
ternational Law Commission who intentionally chose the title 'General Rule of
Interpretation' in the singular for Article 31 of the Vienna Convention.
Good faith played a substantial role in the interpretation of the Panel on Section
301 of the Trade Act of 1974. The panel used a slightly modified good faith standard,
noting that '[i]t is notoriously difficult, or at least delicate, to construe the
requirement of the Vienna Convention that a treaty shall be interpreted in good faith
in third party dispute resolution, not least because of the possible imputation of
bad faith to one of the parties.' It referred therefore rather to the standard of
'better faith' interpretation By using this 'better faith' standard as the first
interpretation tool (before supporting its finding through recourse to object and
purpose of the DSU) it analysed the compatibility of Section 301 of the US Trade Act
of 1974 with Article 23 of the DSU and held in the end that 'a promise to have recourse
to and abide by the rules and procedures of the DSU, also in one's legislation,
includes the undertaking to refrain from adopting national laws which threaten
prohibited conduct.'
The Panel in the India-Patents case on claims brought by the US went a big step
further with regard to the interpretation of the TRIPS agreement. The panel held that
'good faith interpretation requires the protection of legitimate expectations
derived from the protection of intellectual property rights provided for in the
Agreement.' The purported link between good faith interpretation and legitimate
expectations was less strong in the Panel Report on EC-Computer Equipment. Here, the
panel, after its findings that legitimate expectations need to be protected in order
to achieve security and predictability, held that '[t]his is consistent with the
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principle of good faith interpretation under Article 31 of the Vienna Convention.'

In their arguing, both panels referred to the earlier Panel Report in the US-Underwear
case. In this Report, the Panel had-without further explanation-used the requirement
of good faith interpretation to reach a conclusion about the type of expectations
a Member could legitimately have, based on an interpretation of wording, context and
purpose of the Agreement. The link between good faith and 'legitimate expectations',
interestingly enough, is not completely strange to US law. In the Restatement of
Contracts, good faith is defined as 'faithfulness to an agreed common purpose and
consistency with the justified expectations of the other party'.
As the understanding of the panels refers, however, to the application of a
contract, not to its interpretation, the Appellate Body overturned the approach of
the panels both in the India-Patents and in the EC-Computer Equipment case. In its
India-Patents Report, it harshly criticised the panel for misinterpreting Article
31 of the Vienna Convention and misunderstanding the concept of legitimate ex-
pectations in the context of the interpretation rules in international law. As the
legitimate expectations were already incorporated in the words of the treaties, the
approach of the panel to consider them separately would lead to imputing 'into a treaty
of words that are not there or the importation into a treaty of concepts that were
not intended', something 'neither require[d] nor condone[d]' by the interpretation
rules. The Appellate Body in the EC-Computer Equipment case explained its identical
finding by clarifying: 'The purpose of treaty interpretation under Article 31 of the
Vienna Convention is to ascertain the common intentions of the parties. These common
intentions cannot be ascertained on the basis of the subjective and unilaterally
determined 'expectations' of one of the parties to a treaty.'
Finally, it is worth mentioning that another interpretation principle has been
derived from the requirement of good faith interpretation: The rule of effective
interpretation, 'whereby all terms of a treaty should be given a meaning' and 'an
interpreter is not free to adopt a reading that would result in reducing whole clauses
or paragraphs of the treaty to redundancy or inutility.' This is again in line with
the understanding of the International Law Commission in drafting the Vienna
Convention which had stated: 'When a treaty is open to two interpretations one of
which does and the other does not enable the treaty to have appropriate effects, good
faith and the objects and purposes of the treaty demand that the former interpretation
should be adopted'. This article is not the place to address the issue in depth, but
it is obvious that the principle of effective interpretation bears some potential
for broad, teleological understandings of treaties, and even for judicial activism.
A good example is the interpretation of the EC Treaty by the European Court of Justice.
Frequently referring to effet utile interpretation, its jurisprudence has certainly
brought some consequences for EC law that the negotiating Members never foresaw at
the time the treaty was negotiated.
C. Good faith as a principle guiding the application of WTO law
1. The link to the Vienna Convention
As for substantive obligations in the application of WTO law based on good faith,
there is no such clear link to the principles of international law as there is in
Article 3.2. of the DSU with regard to treaty interpretation. However, the WTO
jurisprudence, in an obviously broader understanding of the link between WTO and
general public international law, has also applied good faith frequently in this
context. Sometimes, but not always, reference was made to Article 26 of the Vienna
Convention. In other cases the Appellate Body simply referred to good faith as a
general principle of international law. This includes the general obligation of
states to refrain from acts which would defeat the object and purpose of a treaty
to which they are members, an obligation considered by the International Law
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Commission to be contained in the pacta sunt servanda rule of Article 26. Section
II of this article will analyse this link in more detail.
2. Good faith obligations in the context of the dispute settlement system
Procedural obligations of the Members have been recognised both based on
provisions explicitly mentioning good faith and on implicit good faith considerations
in the guise of 'due process'. The following overview is not exhaustive, but
illustrative of the breadth of obligations based on good faith in the context of the
WTO Dispute Settlement System.(a) Reference to explicit provisions
The requirement of good faith is explicitly mentioned twice in the DSU. It obliges
the parties in Article 3.10 to 'engage in these procedures in good faith in an effort
to resolve the dispute' and in Article 4.3 to 'enter into consultations in good faith'.
The panels and the Appellate Body ruled in several cases on the concrete procedural
obligations arising for the Members from these provisions.
With regard to Article 3.10 DSU, the Appellate Body in the US-FSC case summarised
the provision, as follows:
[Article 3.10] is another specific manifestation of the principle of good faith
which, we have pointed out, is at once a general principle of law and a principle
of general international law. This pervasive principle requires both complaining and
responding Members to comply with the requirements of the DSU [ ... ] in good faith.
By good faith compliance, complaining Members accord to the responding Members the
full measure of protection and opportunity to defend, contemplated by the letter and
spirit of the procedural rules. The same principle of good faith requires that
responding Members seasonably and promptly bring claimed procedural deficiencies to
the attention of the complaining Member, and to the DSB or the Panel, so that
corrections, if needed, can be made to resolve disputes. The procedural rules of WTO
dispute settlement are designed to promote, not the development of litigation
techniques, but simply the fair, prompt and effective resolution of trade disputes.
This amounts to a relatively broad 'due process' understanding of the DSU
provisions that has also been shown in other cases.
More specifically, Members have, for example, a good faith duty not to simply claim
the inconsistency of another Member's measure with a provision in the agreements but
rather to identify which precise obligations are alleged to have been contravened
and to make written submissions to support this allegation. In the case regarding
the European General System of Preferences this implied that, even though the general
burden of proof to justify its system under the so-called enabling clause was with
the EC, India had to 'define the parameters within which the responding party must
make that defence' and was required to do more than just claim a violation of Article
I.1 GATT. Furthermore, the Members are obliged to comply with a request from the panel
to provide information under Article 13.1 of the DSU. However, the Appellate Body
considered it to be within the discretionary authority of the panel to decide if it
drew adverse inferences from the refusal of a Member to deliver requested information.
Article 3.10 and the principle of good faith can also limit the right of a Member
to withdraw a notice of appeal, which is unlimited under the wording in the Working
Rules. In the Sardines case, the European Communities had first filed a notice of
appeal, and then withdrew it under the condition of maintaining the right to replace
it with a new one, which they did the very same day. The Appellate Body found that
the broad terms of the Working Rules did not prohibit conditions, unless the
'condition imposed undermines the 'fair, prompt and effective resolution of trade
disputes', or unless the Member attaching the condition is not 'engag[ing] in [dispute
settlement] procedures in good faith in an effort to resolve the dispute'.' There
was no proof for such abuse in the case, as the new notice attempted to meet concerns
of the complainant, Peru, with the first notice.
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In the EC-Sugar Subsidies case, the European Communities argued that the ob-
ligation of Article 3.10 DSU may also restrict the right of a WTO Member to request
a panel under Article 6.1 DSU. As the basic argument for this was the principle of
estoppel, this case will be analysed later in the respective context. (b) Implied
good faith considerations
The Appellate Body has linked the concept of 'due process' with good faith in
several, even though not in all, cases when it referred to it-however, both concepts
are not considered identical; they are rather complementary, cited next to each other.
As has been mentioned, the link corresponds to the broad understanding of the
obligations arising under the heading of good faith in Article 3.10 DSU. Without
citing this provision, but referring to considerations of 'good faith, due process
and orderly procedure', the Appellate Body held, for example, that a party is obliged
to explicitly raise any objections it may have so that the panel, the other party
and any third party have 'an adequate opportunity to address and respond to it'. This
falls in line with the content that the Appellate Body has given to Article 3.10 in
the FSC case.
Good faith has also been considered to be implicitly contained in other provisions
of the DSU. In the Mexico-HFCS case, for example, the Appellate Body found that the
first sentence in Article 3.7 'reflects a basic principle that Members should have
recourse to WTO dispute settlement in good faith, and not frivolously set in motion
the procedures contemplated in the DSU'. The general presumption of good faith however
leads to the understanding of Article 3.7 that it 'neither requires nor authorises
a panel to look behind that Member's decision or to question its exercise of judgement
(unless there is evidence of bad faith)'. Therefore (and because 'economic interest'
is not a prerequisite in the DSU for bringing a claim) the panel in the Korea-Dairy
Products case rejected Korea's allegation that the European Communities acted against
good faith because they had little commercial interest in bringing the matter before
a panel. Another panel held that the splitting of a case could be potentially abusive
and a violation of good faith; in the case in question, however, there was insufficient
proof of abuse.
In the context of dispute settlement-related good faith obligations of the
Members, it should also not be forgotten that a good faith obligation also applies
to the panels. Basis for this obligation is their duty to perform an 'objective
assessment of the matter' in Article 11 of the DSU. However, a Member must prove
failures amounting to an 'egregious error of law', e.g. in the form of 'deliberate
disregard of, or refusal to consider, the evidence submitted to a panel ..., the wilful
distortion or misrepresentation of the evidence' in a case, before the Appellate Body
would consider the panel to be in violation of its good faith obligation. As this
amounts to a 'very serious allegation' that 'goes to the very core of the integrity
of the WTO dispute settlement process itself', the Appellate Body has been very
reluctant and has never assumed a violation of the good faith duty of the panels,
despite occasional allegations of the losing party in a panel proceeding.(c) Estoppel
Only briefly should the estoppel principle be considered as neither its link with
good faith nor its role in the WTO jurisprudence is clearly established. A panel has
defined that estoppel 'is premised on the view that where one party has been induced
to act in reliance on the assurances of another party, in such a way that it would
be prejudiced were the other party later to change its position, such a change in
position is 'estopped', that is precluded.' It has been claimed that the principle
is founded in the concept of good faith but the panels tend to separate both concepts.
In their understanding, good faith reliance is, however, considered to be a condition
for the assumption of estoppel. Two cases may illustrate briefly the interaction
between both concepts in the context of the Dispute Settlement System.
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In the Argentina-Poultry case, Argentina argued a violation of both principles,

good faith and estoppel, by Brazil in bringing the case under the DSU after having
lost the identical case under the Mercosur dispute settlement system. The panel saw
no violation of a good faith duty in absence of a violation of a substantive provision
of the agreements. Regarding estoppel, Argentina had claimed that the principle
applied where '(i) a statement of fact which is clear and unambiguous, and which (ii)
is voluntary, unconditional and authorised, is (iii) relied on in good faith'. The
panel added that the reliance in good faith must be 'either to the detriment of the
party so relying on the statement or to the advantage of the party making the
statement'. It held that Argentina had proven neither a clear and unambiguous
statement from Brazil that it would not bring the WTO proceedings, nor exceptional
circumstances indicating an implied statement nor active reliance in good faith to
the extent that it would have acted any differently had Brazil not made the alleged
statement.
In the recent panel report on the EC sugar export subsidies, the European
Communities had claimed that the complainants were estopped from pursuing the
dispute. According to the European Communities, the alleged violations would have
been manifest upon the conclusion of the WTO agreement, but the complainants had never
raised the issues. The panel was much less responsive to the application of the
estoppel principle than the panel in the Argentine case and held that 'it is far from
clear whether the principle of estoppel is applicable to disputes between WTO Members
in relation to their WTO rights and obligations' and explained that '[e]stoppel is
not mentioned in the DSU or anywhere in the WTO agreement.' It referred to the
presumption of good faith and held therefore, that absent evidence of bad faith, 'the
fact that a Member does not complain about a measure at a given point in time, cannot
by itself deprive that Member of its right to initiate a dispute at some later point
in time if that Member considers in good faith that it is fruitful to do so'. Even
assuming for the analysis the applicability of the 'estoppel' principle, the panel
did not find its conditions fulfilled in the case. The Appellate Body upheld the
findings of the panel in this regard and underlined the connection between good faith
and estoppel: 'To the extent that this concept [of estoppel] applies at all, it is
reasonable for a panel to examine estoppel in the context of determining whether a
Member has engaged 'in these procedures in good faith', as required under Article
3.10 of the DSU.'
3. Good faith obligations in the application of WTO law outside the DSU(a)
Provisions in the GATT as expressions of good faith
As has been shown in connection with certain provisions of the DSU, the Appellate
Body and the panels consider several of the substantive provisions of the WTO
Agreements to be expressions of good faith as well. The most prominent explicit
reference to the principle of good faith is that of the Appellate Body in the
Shrimp-Turtle case. Here, the Appellate Body held:
The chapeau of Article XX is, in fact, but one expression of the principle of good
faith. This principle, at once a general principle of law and a general principle
of international law, controls the exercise of rights by states. One application of
this general principle, the application widely known as the doctrine of abus de droit,
prohibits the abusive exercise of a state's rights and enjoins that whenever the
assertion of a right 'impinges on the field covered by [a] treaty obligation, it must
be exercised bona fide, that is to say, reasonably.' An abusive exercise by a Member
of its own treaty right thus results in a breach of the treaty rights of the other
Members and, as well, a violation of the treaty obligation of the Member so acting.
While the Appellate Body in this case did not link its understanding to specific
language in the chapeau, there are other examples where certain terms or expressions
in a provision were referred to as implying the good faith idea. For example, a panel
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considered Article 7 of the TRIPS Agreement to be an expression of good faith, based

on the terms 'balance of rights and obligations' as an objective of the TRIPS
Agreement.
The Appellate Body in the US-Hot-Rolled Steel case as well as several panels
understood the requirement of an 'objective examination' with regard to the volume
and effects of dumped imports in Article 3.1 of the Anti-Dumping Agreement as to oblige
the Members to conduct the process in conformance with 'the dictates of the basic
principles of good faith and fundamental fairness'. The panel in the Pipe Fittings
case refused, however, to 'transpose wholesale the more detailed methodological
obligations of Article 2 concerning dumping into the provisions of Article 3
concerning injury analysis,' based on this recognition of an underlying good faith
duty.
In the Hot-Rolled Steel case, the Appellate Body considered Article 2 of the Annex
II to the Anti-Dumping Agreement as containing good faith elements as well. It held
that the obligation for investigating authorities not to maintain a request for
responses to questionnaires in a particular medium if compliance would impose an
'unreasonable extra burden' and 'entail unreasonable additional cost and trouble'
requires them 'to strike a balance'. It explained that, '[w]e see this provision as
another detailed expression of the principle of good faith.'
Finally, it has been claimed before the panel in the same case that Article X:3(a)
of the GATT constitutes an expression of good faith. According to this provision,
'[e]ach contracting party shall administer in a uniform, impartial and reasonable
manner all its trade laws, regulations, decisions and rulings.' While in an earlier
panel no reference was made to good faith when Article X:3(a) was analysed, Japan
brought this argument before the Hot-Rolled Steel panel regarding the way the US had
conducted its anti-dumping investigation. Japan claimed that 'when parties are
treated differently in different cases or in a single investigation, based simply
upon differences in the administration of anti-dumping rules (which may or may not
be consistent with the AD Agreement)', this could violate the principle of good faith
and the 'fundamental requirements of due process'. The United States rejected this
claim with the argument that 'if the measure is consistent with the AD Agreement,
no claim can be brought under Article X:3, since this general provision cannot be
used to undercut the specific disciplines of the AD Agreement.' The panel followed
the US reasoning and referred to prior findings of the Appellate Body that specific
provisions prevail over the general rule of Article X:3(a). It had 'serious doubts'
if a violation of Article X:3(a) could be found for a particular measure consistent
with the specific provisions governing it. Besides, Japan had not made it clear that
it challenged the 'administration', not the 'substance' of the US rules. Finally,
Article X:3(a) contained an obligation regarding the general administration of trade
regulation, not the administration in a particular case. The issue was not appealed,
so that the Appellate Body had no possibility to resolve definitely the question if
it would consider the wording 'uniform, impartial and reasonable' in Article X:3(a)
GATT as much an expression of good faith as it held in the report for Article 3 and
Article 2 of Annex II of the Anti-Dumping Agreement. This seems not impossible
regarding the Appellate Body's prior ruling in the Shrimp-Turtle case where it had
held that Article X.3 'establishes certain minimum standards for transparency and
procedural fairness in the administration of trade regulations', which were not met
in the case. The US measures at stake were considered 'contrary to the spirit, if
not the letter of Article X:3 of the GATT 1994'. This opinion appeared to imply a
certain general 'due process' standard in the application of WTO law based on Article
X:3.(b) Other principles of treaty application considered being expressions of good
faith
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In connection with general other concepts of treaty application, the Appellate

Body and the panels referred to good faith as the overarching term covering them.(i)
'Pacta sunt servanda'
A 'general notion of fairness' and 'even-handedness'. Such references include,
evidently, the general principle of pacta sunt servanda, the heading of Article 26
of the Vienna Convention. Occasionally, the Appellate Body also invoked a 'general
notion of fairness' or 'even-handedness' to define certain obligations under the
Agreements more precisely. It has never become entirely clear whether-in the
understanding of the Appellate Body-this was a broader or tighter concept than good
faith. In the Appellate Body Report US-Hot-Rolled Steel, both terms were used next
to each other with regard to Article 3 of the Anti-Dumping Agreement. (ii) abus de
droit
The origin of the 'abuse of rights' doctrine in the concept good faith is long
established and now linked to good faith, for example, in Article 300 of the UN
Convention on the Law of the Sea. In US-Shrimp, the Appellate Body considered that
the doctrine of abus de droit was one application of the general principle of good
faith and that the chapeau of Article XX GATT was one expression of this doctrine.
It requires that rights must be exercised bona fide 'that is to say, reasonably'.
In the Article 21.5 recourse by Malaysia, following the Appellate Body Report in the
Shrimp case, the panel concluded with regard to the US obligation to try and negotiate
a multilateral agreement on the protection of sea turtles that 'the notion of good
faith implies a continuity of efforts' and that 'the seriousness of the United States'
efforts in this case must be assessed over a period of time'. Malaysia protested
against the 'serious good faith efforts' standard as insufficient and claimed the
requirement of the 'conclusion' of a multilateral agreement, but the Appellate Body
upheld the finding, without further clarifications. It seemed to consider most
important that such 'serious efforts' were conducted in the same way with all
countries concerned. This would exclude the discrimination between different
shrimp-exporting countries, criticised in the original Appellate Body decision.
Several other panels have referred to the prohibition of 'abuse of rights'. With
regard to Article 7 of the TRIPS Agreement, for example, the Panel used the principle
to provide a safeguard against a potentially arbitrary regulation of trademarks
through a relatively broad interpretation of 'other grounds' for denying regis-
tration.
Without using the term good faith, but evidently also trying to prevent an abuse
of rights, the Appellate Body in the Hot-Rolled Steel case held that the discretion
given to the authorities in determining the 'normal value' under Article 2.2.1 of
the Anti-Dumping Agreement is not without limits. In particular, the discretion must
be exercised in an even-handed way that is fair to all parties affected by an
anti-dumping investigation. (iii) The protection of legitimate expectations?
As demonstrated above, panels have twice tried to introduce a method of 'legitimate
expectations' interpretation into the WTO, but have been blocked by the Appellate
Body. With regard to a potential link between 'legitimate expectations' and the
obligation of good faith application under Article 26 of the Vienna Convention, there
is only one relevant panel report, which is examined below. The link, however, has
been made by others: It is interesting in this context, for example, to take a brief
look at the European legal order. The European Court of Justice had decided as early
as 1977 that the principle of legitimate expectation formed part of the Community
legal order, and hence that failure to respect a legitimate expectation would be
considered a breach of the treaty that could lead to an infringement procedure. The
Court of First Instance made the explicit link to the principle of good faith, by
holding:
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The principle of good faith [ ... ] is a rule of customary international law whose
existence is recognised by the International Court of Justice and is therefore binding
on the Community. That principle is the corollary in public international law of the
principle of protection of legitimate expectations, which forms part of the Community
legal order and on which any economic operator to whom an institution has given
justified hopes may rely.
Yet, the paragraph marks an important difference between the WTO and the EU: The
provisions of the GATT and therefore also the protection of legitimate expectations
refer to the Members, while the EU principle, as part of a legal order with direct
effect on the citizens, protects the legitimate expectations of private parties, i.e.
trader or producers. These expectations may not be represented in the words of the
treaty to the same extent as the legitimate expectations of the Member States.
On the side of substantive obligations, the relevant panel report was the
Korea-Government Procurement case. In this case, the US had claimed that Korea's
measures in relation to the bidding for the construction of an airport, such as
improper bid deadlines, improper qualification and domestic partner requirements for
bidding, nullified or impaired benefits accruing to the US, regardless of whether
a violation of the Government Procurement Agreement was found. The Agreement contains
a non-violation clause in Article XXII.2, similar to the one in Article XXIII GATT.
The panel considered the traditional concept of non-violation cases with its
protection of legitimate expectations to be a 'further development of the principle
of pacta sunt servanda' and the good faith principle. These principles of customary
international law applied to all WTO agreements to the extent that Members had not
'contracted out'. In a second step, after having interpreted the US claim as to refer
to benefits accrued during the negotiation phase, the panel found that the good faith
obligation is incumbent on the Members not only during the treaty application, but
also during the negotiations prior to the conclusion of a treaty. Therefore,
according to the panel, a non-violation complaint could also be based upon an alleged
impairment of benefits accrued during the negotiation phase prior to a treaty. The
panel then examined first the 'traditional' concept of a non-violation complaint,
the conditions of which were not fulfilled, as no expectations from a concession were
nullified or impaired. It continued by analysing the conditions for 'error in treaty
formation' as embodied in Article 48 of the Vienna Convention on the Law of the
Treaties. It considered this principle to be customary international law and held
that on its basis a non-violation complaint could be justified. In the case, however,
the US did not provide sufficient evidence.
The panel was not appealed by the US for a variety of reasons, but several
governments brought 'serious concerns' to the attention of the Dispute Settlement
Body, regarding this line of reasoning. (c) Good faith creating independent ob-
ligations
In all but the last of the cases discussed so far, the panels or the Appellate
Body referred to a particular provision of the GATT or other agreements and understood
good faith as a requirement for the application of the duties contained in this
provision. In the decisions on the Byrd Amendment, the panel and the Appellate Body
have been considered by some observers to go one step further.
In question was the US Continued Dumping and Subsidy Offset Act (CDSOA, otherwise
known as the Byrd Amendment), according to which duties assessed pursuant to a
countervailing duty or antidumping duty order or a finding under the Antidumping Act
were to be distributed to the 'affected domestic producers'. This term was defined
as those who were petitioners or interested parties in support of the petition being
the basis of the order. The complainants, 11 Members, claimed, amongst other
allegations, a violation of Article 5.4. of the Antidumping and 11.4. of the Subsidies
and Countervailing Measures Agreement. They alleged that these provisions required
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a Member to conduct an 'objective and good faith examination' of the level of support
for the application. The complainants argued that through the promise of offset
payments the US government was 'unduly influencing the very facts which the au-
thorities are required to examine in an objective manner'.
In its report, the Panel quickly turned away from the textual interpretation of
the provisions and ruled that the CDSOA defeated the 'object and purpose of these
provisions' and 'undermined their value'. It continued, '[g]ood faith requires a
party to a treaty to refrain from acting in a manner which would defeat the object
and purpose of the treaty as a whole or the treaty provision in questions.' The Panel
then considered the object and purpose of the provisions in question to ensure that
the authority examined the degree of support for an application and on this basis
determined if the application was filed 'by or on behalf of the domestic industry'.
The Panel held that the provisions were introduced explicitly to ensure that support
'was not just assumed to exist but actually existed and that the support ... was
evidence of the industry-wide concern of injury ....' This object was defeated by
the CDSOA, according to the Panel.
Conversely, the Appellate Body held that there was not enough evidence to support
the assumption that the US had not acted in good faith. It found that the panel had
dismissed 'all too quickly' the textual analysis as irrelevant, according to which
the provisions required only a quantitative, not a qualitative threshold of support.
The 'object and purpose' analysis of the panel was overruled as well, as the CDSOA
did not change the requirement to examine the degree of support and did not render
the quantitative threshold tests irrelevant.
Regarding good faith, the Appellate Body rejected the US argument that there was
no basis in the WTO Agreement to conclude that a Member had not acted in good faith.
Rather there was 'clearly ... a basis for a dispute settlement panel to determine,
in an appropriate case, whether a Member has not acted in good faith'; however, to
find a violation of good faith it was not enough to find a violation of a substantive
treaty provisions, but 'it would be necessary to prove more than mere violation to
support such a conclusion'. As such evidence was missing in the case, the panel erred
in automatically assuming a violation of good faith.
In its report, the Panel abandoned the approach used thus far that good faith must
have an expression within the text of the agreements. It rather focused on 'object
and purpose' of the provisions. Still, there are two possible interpretations of what
the Panel actually did: Either it assumed a separate obligation of the Members not
to defeat the object and purpose of the treaty, based on good faith, or it used the
concept of good faith only as a support to get to its finding of a violation of the
provisions based on an 'object and purpose' oriented interpretation. An argument for
the latter is the conclusion of the Panel in which it only notes a failure of the
US to comply with its obligations under the mentioned provisions and does not mention
a separate violation of good faith. The Appellate Body seemed to follow the first
interpretation and supported the general idea that there could be a finding of a
violation of good faith adding to a violation of a substantive treaty provision. But
at the same time, it also shows that the Appellate Body sees the violation of a
substantive treaty provision as a necessary, but not sufficient condition for such
an assumption. However, the Appellate Body could also be understood as only applying
the usual presumption of good faith, i.e. a mere violation was not enough to assume
bad faith in absence of evidence to the contrary.
The approach of the Appellate Body has been followed by the panel in Argen-
tina-Poultry. In this case, Argentina claimed a violation of good faith in the form
of estoppel by Brazil, which had first initiated proceedings under the Mercosur
Dispute Resolution System and, after having lost that case, had filed a claim at the
WTO. The panel held that, as there was no violation of a substantive obligation, there
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could, following the approach in the Byrd Amendment Report of the Appellate Body,
also be no violation of a good faith obligation.
This result falls in line with an earlier panel in the EC-Bed Linen case. India
had claimed a violation of the Anti-Dumping Agreement by a certain method of the EC
to determine the amounts of costs and profits under Article 2.2.2 (ii) of the
Agreement. The European Court of First Instance had found this method to be a violation
of EC Anti-Dumping law, the provisions of which were identical with the WTO
Anti-Dumping Agreement. India considered the EC to be 'estopped' of using an
interpretation other than the one of the Court in front of the panel and the court
decision to be relevant context for the interpretation of the Anti-Dumping Agreement.
If the new EC interpretation would not be considered a violation of the Anti-Dumping
Agreement, India argued that the panel should consider it a violation of good faith.
That panel first found that the court decision did not constitute a relevant context
for purposes of interpretation, and then wrote:
[W]e reject the assertion that a WTO dispute settlement panel should find a
violation of a provision of a covered agreement, not on the basis of inconsistency
of a Member's measure with a provision of a covered agreement, but rather on the basis
that a provision of a covered agreement is 'being applied in bad faith' ... We know
of no basis in international law, and India has not cited any, that would require
us to conclude that a measure which is consistent with a Member's obligations under
a provision of a covered agreement that we have interpreted in accordance with
customary rules of interpretation of public international law could nonetheless be
found to be in violation of that provision on the basis of alleged 'bad faith'.
The Appellate Body did not address this issue.
II. The Use of Good Faith-A Risk Assessment
'Good faith', being a vague and-as has been shown-very flexible and broad term,
by its nature invites both approval and criticism. This section analyses where the
jurisprudence in the WTO really stands regarding the use of good faith (1) and what
legal and policy issues are at stake when panels and Appellate Body make increased
use of the concept (2).
A. The state of affairs
1. A spread of good faith use in the WTO?
Section I of this article has demonstrated that the principle of good faith has
been applied by the panels and the Appellate Body in many different constellations.
A look at the dates when the different decisions were taken reveals that good faith
played a very limited role in the reports of the GATT panels. The establishment of
the Dispute Settlement System under the WTO marked a big shift. Since 1995, one can
observe a frequent use of the principle, both with regard to interpretation and
application of the treaty. Relatively near the beginning, in 1998, two panels, in
the India-Patents and the EC-Computer Equipment cases, attempted to use a
far-reaching concept of good faith, but the Appellate Body stopped them in very clear
terms. In the same year, the Appellate Body in the Shrimp case introduced its
understanding of certain provisions in the agreements embodying the good faith
concept. In 2000, the Korea-Procurement Panel used another far-reaching approach that
was not appealed. In 2003, the reports on the Byrd Amendment were issued, leaving
open questions as to the exact role good faith is playing in defining or adding
obligations to the Members. In summary, it is not possible to make an explicit
assessment that the application of good faith has become broader by the time. Moves
forward by the panels were several times cut back by the Appellate Body.
2. Undisputed good faith interpretation
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In various constellations, the use of the principle of good faith by a panel or

the Appellate Body has been widely undisputed. This includes first of all the
procedural obligations assumed with regard to the explicit good faith provisions in
the DSU, but also the reference to the principle in the efforts to interpret certain
provisions. The rule in Article 3.2 of the DSU and the customary law character of
the interpretation principles laid down in Article 31 of the Vienna Convention are
too unequivocal to cause protest. Besides, the Appellate Body has in basically all
cases paid attention to focus on and justify its finding by a reference to textual
interpretation. A good example is the Byrd Amendment Report where it stopped the panel
which had turned straight to an 'object and purpose' interpretation. The adherence
to the text has gone so far that Weiler has criticised the 'almost obsessive attempt
of the Appellate Body to characterise wherever possible the normal wide-ranging,
sophisticated, multi-faceted and eminently legitimate interpretations of the
Agreements as 'textual' resulting from the ordinary meaning of words'. The motivation
for this, however, is evident: The Appellate Body knows about the caution of the
Members and therefore refers to the least attackable method of interpretation. And
it has noted correctly that details of a text may reflect a 'delicate and carefully
negotiated balance' between competing interests.
An analysis of the minutes of the Dispute Settlement Body shows that there was
also no negative attitude from the Members whenever the panel or the Appellate Body
referred to a certain language in a provision which it considered to embody the good
faith principle, such as Article 3.1 of the Anti-Dumping Agreement or Article 7 of
the TRIPS. If one follows the approach of looking at the particular language of a
provision in order to find if it embodies the good faith concept, in particular the
TRIPS agreements offers plenty of options with several provisions containing the term
'reasonable', but also the GATT contains words as 'objective' and 'reasonable' in
more norms than tested so far.
3. The crucial point-has the jurisprudence laid the ground for a substantive
independent good faith obligation?
While the majority of cases, where good faith is applied, are more or less
undisputed, as has been shown, there remains one fundamental object of dispute, i.e.
the creation of new substantive legal obligations on the basis of public international
law in the form of good faith. It has been claimed that the Panel and the Appellate
Body in the Byrd Amendment case have assumed such an obligation, respectively have
opened the door for it. However, a close analysis shows that what has been decided
so far is not what some Members are really afraid of.
The Panel in the Byrd Amendment case interpreted Article 5.4 of the Anti-Dumping
Agreement and 11.4 of the SCM Agreement based on a test of the object and purpose
of these provisions. It held that the US law 'may be regarded as having undermined
the value' of those provisions and that the 'United States may be regarded as not
having acted in good faith in promoting this outcome'. In its conclusion, as mentioned
above, however, it only noted a violation of the substantive provisions. The Panel
might therefore have referred to the obligation of all members to a treaty to refrain
from acts which would defeat its object and purpose, as incorporated explicitly in
Article 18 of the Vienna Convention. This provision codified existing customary
international law, as has been recognised also by the US, and is therefore binding
for non-members of the Vienna Convention as well. Even if explicitly only referring
to the time between the signature and entry in force of a treaty, it is widely
understood as incorporating a general principle, which is also part of the pacta sunt
servanda obligation.
The Appellate Body held that there was a basis for a panel to determine 'whether
a Member has not acted in good faith', but that it would be necessary to prove more
than mere violation to support such a conclusion. This shows that the condition of
Page 15
a violation of substantive law still exists and that the Appellate Body has not opened
the door for the assumption of a good faith duty that could even be violated if the
measure at stake was compatible with the substantive provisions of the agreement.
It rather seemed to express that the determination of a lack of good faith would add
some kind of additional negative statement to a 'regular' violation without changing
the legal consequences for the Members. This understanding makes an enormous
difference: it is excluded that the panels would order the withdrawal of a measure
just because it violated the good faith obligation if it did not violate at the same
time a substantive provision.
B. Much ado about little? Legal and policy issues at stake
The following section examines the criticism brought by some Members against in
particular-but not only-the decisions of the panel and the Appellate Body on the Byrd
Amendment from a legal and a policy perspective.
1. Legal considerations(a) The criticism
Strong criticism of the practice of using good faith too broadly in the WTO
jurisprudence was expressed by the US representative in a Dispute Settlement Body
Session on the Appellate Body Report on the Byrd Amendment and the Panel Report on
Argentina-Poultry. The US representative criticised the fact that neither the
Appellate Body nor the panel had cited any provision of the agreements as basis for
the conclusion that panels may determine if a Member had violated its obligation of
good faith. He saw a clear violation of Articles 3.2. and 19.2. of the DSU. According
to these provisions, 'in their findings and recommendations, the panel and Appellate
Body cannot add to or diminish the rights and obligations provided in the covered
agreements.' As the list of covered agreements in Appendix 1 of the DSU did not include
good faith, the US representative concluded that basing a finding of violation on
this principle would clearly exceed the mandate of the panels and the Appellate Body.
The attitude of most other Members is similar to the opinion expressed by the US:
The Panel in the Byrd Amendment case had, before issuing its report, sent various
questions to the complainants, among them, 'Does the violation of the international
law principle of good faith necessarily constitute a violation of the WTO Agreement?
Does either the AD Agreement or the WTO Agreement impose an independent obligation
on Members to act in good faith?' With the exception of Japan, all Members answered
in the affirmative to the first question (or at least did not answer in the negative),
but rejected the imposition of an independent obligation. Japan referred to the
obligation of the Members in Article X:3 (a) GATT to administer national trade laws
and regulations in a uniform, impartial and reasonable manner, which created an
additional obligation to the one of conformity of the rules with the Anti-Dumping
Agreement. The idea of an independent obligation of good faith is also supported by
Korea, according to which 'good faith implementation of a treaty provision is a
substantive obligation arising from the Vienna Convention on the Law of Treaties'.
The following sections serve to examine the validity of the opinions of the
Members.(b) The link between the WTO and Article 26 of the Vienna Convention
The analysis must first answer the question on which basis the panels and the
Appellate Body can refer to the obligation of good faith application as a standard
of behaviour for the Members.
There has been much discussion about the role of public international law in the
WTO and the degree to which panels should refer to it. But the fact itself, that
the Members in exercising their WTO obligations are under a good faith duty, has not
been disputed. Even the US, which has been the strongest critic of the way good faith
has been used during the last years by the panels and the Appellate Body, acknowledged
that Article 26 of the Vienna Convention expresses a customary international law
principle and affirmed that 'WTO Members must uphold their obligations under the
Page 16
covered agreements in good faith'. The WTO Agreements equal in this respect any
international treaty. As one author put it: 'The WTO agreements are themselves
creatures of international law; they are treaties binding only because of the
underlying norm of international law pacta sunt servanda'. Good faith is one of the
general principles of law that are listed as one source of international law in Article
38(1) of the Statute of the International Court of Justice. In several cases, the
Members themselves have invoked other general principles of law in WTO proceedings,
thereby expressing their recognition of their being a valid source of WTO law. (c)
Exceeding the mandate?
But the consensus about the obligation of good faith application does not
necessarily imply a consensus about the right of the panels to examine the fulfilment
of this obligation by the Members. It was the key point of the criticism of the United
States with regard to the panels exceeding their mandate under Articles 3.2 DSU and
Article 7.1 DSU as good faith is not mentioned in the Covered Agreements in Annex
1 of the DSU. For the Korea-Procurement Panel, pacta sunt servanda was nevertheless
the sufficient base:
We note that DSU Article 7.1 requires that the relevant covered agreement be cited
in the request for a panel and reflected in the terms of reference of a panel. That
is not a bar to a broader analysis of the type we are following here, for the GPA
would be the referenced covered agreement and, in our view, we are merely fully
examining the issue of non-violation raised by the United States. We are merely doing
it within the broader context of customary international law rather than limiting
it to the traditional analysis that accords with the extended concept of pacta sunt
servanda. The purpose of the terms of reference is to properly identify the claims
of the party and therefore the scope of a panel's review. We do not see any basis
for arguing that the terms of reference are meant to exclude reference to the broader
rules of customary international law in interpreting a claim properly before the
Panel.
Even if this is a quite broad statement, the important difference between the
Korea-Procurement Panel Report and the reports on the Byrd Amendment was that in the
Korea Report the panel used the obligation of Article 26 Vienna Convention namely
for interpreting provisions of the agreements. In such cases, Article 31.3(c) of the
Vienna Convention is relevant. According to this provision 'any relevant rules of
international law applicable in the relations between the parties' shall be taken
into account. The Appellate Body in the Shrimp case referred to it when holding: '[O]ur
task here is to interpret the language of the chapeau, seeking additional in-
terpretative guidance, as appropriate, from the general principles of international
law.' Even if one may have doubts as to whether the general principle invoked by the
Korea panel, the error in treaty formation, really has the status of customary
international law: with regard to general principles such as good faith there are
no legal obstacles for panels who want to consider them for the purpose of in-
terpretation.
For cases where good faith presumably adds something to the obligation arising
out of a substantive provision, this argument is not relevant. Here, Article 26 of
the Vienna Convention is not used as an interpretation instrument but as an expression
of a substantive obligation. However, some other arguments speak in favour of the
ruling of the Panel: First, the Preamble of the WTO Agreement contains the de-
termination of the Parties, 'to preserve the basic principles [ ... ] underlying this
Agreement'. This implies that the Members all agreed that certain general principles,
even if not expressly contained in the provisions of the Agreement, were to rule its
application. And there is an argument for those principles being understood as
general principles of international law such as the prohibition of the abuse of rights
or 'due process' which would then be provisions of the 'covered agreements' under
Article 3 and 7 DSU. A similar view was expressed by the Canadian representative in
Page 17
the Dispute Settlement Body who declared that 'procedural fairness and due process
were not found anywhere in the DSU and yet it would be difficult to imagine any
delegation, relying on a wholly literal interpretation of the DSU to suggest that
these principles did not apply to panel proceedings.' For good faith in the form of
a substantive obligation the case is therefore different than it would be for other
independent obligations arising under international law, e.g. under human rights
treaties. As the wording of Article 26 of the Vienna Convention makes clear, there
is no good faith without a treaty obligation to relate it to. The fact that at the
same time the general duty to act in good faith may not be ignored while interpreting
the substantive WTO obligations is further supported by the requirement of an
'objective assessment' by the panels in Article 11 DSU. The assessment of an
obligation could not be objective disregarding the generally recognised duty of
Article 26 of the Vienna Convention.
Article 3.2 and 19.2 of the DSU are limits to the power of adjudication of the
panels and the Appellate Body, and some decisions show that these bodies are in most
cases well aware of it. In the EC-Sugar Subsidies case, the panel held that 'if it
were to conclude that the Complainants are now estopped from challenging the EC sugar
regime or its alleged excessive export production of subsidised sugar, the Panel would
be acting contrary to Articles 3.2 and 19.2 of the DSU which provide that panels and
the Appellate Body are prohibited from adding to or diminishing Members' rights and
obligations.' Two reports of the Appellate Body, referring to Article 3.2. DSU also
prove this awareness of the power distribution according to the WTO Agreement. In
the Carbon Steel case, it held that following a particular reasoning with regard to
Article 21.3 of the Anti-Dumping Agreement would 'upset the delicate balance of rights
and obligations attained by the parties to the negotiations, as embodied in the final
text of Article 21.3. Such a finding would be contrary to the requirement of Article
3.2 repeated in Article 19.2 of the DSU ... '. But it held in another case also that
'we have difficulty in envisaging circumstances in which a panel could add to the
rights and obligations of a Member of the WTO if its conclusions reflected a correct
interpretation and application of provisions of the covered agreements.' This shows
the intricate problem of these provisions: whether the rule of good faith determines
the rights and obligations of the state parties depends not on the allegedly arbitrary
decision of the panel members but on the position of this rule in international law.
If the WTO agreements are recognised as being part of the body of international law
(and the Appellate Body has spoken out against the 'clinical isolation'), the
consequence must be the application of its general principles, including good faith.
It is up to the judicial bodies, however, to define the scope of this principle in
coherence with its understanding in general international law.(d) Is the obligation
of good faith application meant to give rise to an independent obligation under
general international law?
The mentioned provisions set limits as to how far the panels could go in assuming
an independent substantive obligation of good faith. The International Court of
Justice has held that the principle of good faith is 'one of the basic principles
governing the creation and performance of legal obligations', but made it clear that
'it is not in itself a source of obligation where none would otherwise exist'. As
it has been written: ''Good faith' does not exist as an abstract notion that could
be determined without looking at the same time at the substantive obligation to which
it refers.'
The different understanding of what good faith means in civil and common law
countries must also be considered by the panels. Civil law countries tend to construe
the term more broadly, including the pre-treaty phase of negotiations, while common
law countries tend to limit it to the actual performance and enforcement phase. A
decision like the one in Korea-Government Procurement, where the panel extended the
good faith obligation to the negotiation phase has therefore surely met less criticism
Page 18
in civil law than in common law countries, even though its second step of reasoning,
linking this good faith obligation with the protection of 'legitimate expectations',
is overbroad from all points of view. For an international body like the panels,
however, these different judicial traditions mean that only the 'smallest common
denominator' can be the standard to use when applying broad general principles of
law. Other than domestic courts in national law, they cannot interpret ambiguous terms
relying on a high degree of shared values.
2. Policy issues
Apart from the mentioned legal considerations, assuming an independent sub-
stantive good faith obligation of the Members would have several policy impli-
cations.(a) Destroying the separation of violation and non-violation claims
Non-violation complaints under Article XXIII GATT and good faith violations have
several features in common: due to their vagueness, they create similar problems and
some feel they also fulfil similar needs. Positive and negative opinions are split
on non-violation complaints, as they are regarding good faith. Supporters see the
function of non-violation complaints in 'the possibility of maintaining the balance
of interests even in cases where the substantive law does not cover the issues at
hand', an argument that could be brought forward as well for the use of good faith.
Non-violation complaints in their traditional understanding serve to protect only
a certain type of legitimate expectations, i.e. benefits accrued through certain
tariff concession so that the balance of concessions would not be undermined ex post.
This purpose becomes obvious in Article XXIII GATS which mentions explicitly the
accruement of reasonable expectations by a measure that does not conflict with the
GATS provisions.
Some panel reports and scholars have attempted to make a link between good faith
and legitimate expectations. The Korea-Government Procurement Panel has done so
especially, and has, in a second step, integrated both concepts into a new un-
derstanding of non-violation complaints. The consequence, if more panels should
follow this, would be an enormous broadening of the non-violation concept, a
questionable result with regard to the reluctance towards the current narrower
definition and the role of the panels to interpret, not to create, law.
It has been held that the bigger the role of general principles in interpreting
WTO law, the further reduced will be the role of non-violation complaints. This may
be correct, even though the role has already been small in the past, but the question
remains if there is a right place at all for substantive obligations based solely
on the general principle of good faith. As has been said, non-violation complaints
do not protect all sorts of legitimate expectations. Would the panels assume a
violation of a good faith obligation independently from the violation of a substantive
provision? Potentially even linking that with the concept of legitimate expectations,
an area of complaints that before could not even have been brought as a non-violation
complaint, would suddenly turn into a potentially successful violation complaint.
Assuming that the same constellation could be handled theoretically, both as a
non-violation complaint and as a complaint for violation of the good faith obligations
of a party, the difference in consequences of either approach is significant. A
successful violation complaint leads generally to an obligation of the defending
Member to withdraw the measure under Article 19.1 DSU, while a successful
non-violation complaint only entails the right to withdraw concessions under Article
26.1 (b) DSU and thus puts a lesser burden on the Member concerned. As the Appellate
Body in the India-Patents Report held with regard to the understanding of the TRIPS
agreement: to create a linkage between good faith and legitimate expectations
melds the legally-distinct bases for 'violation' and 'non-violation' complaints
under Article XXIII of the GATT 1994 into one uniform cause of action. This is not
consistent with either Article XXIII of the GATT 1994 or Article 64 of the TRIPS
Page 19
Agreement. Whether or not 'non-violation' complaints should be available for disputes

under the TRIPS Agreement is a matter that remains to be determined by the Council
for Trade-Related Aspects of Intellectual Property ... pursuant to Article 64.3 of
the TRIPS Agreement. It is not a matter to be resolved through interpretation by panels
or by the Appellate Body.
This finding leads to the question of judicial activism in the WTO.(b) The risk
of judicial activism
There has been a lot of discussion in legal journals recently about a risk of
judicial activism in the WTO Dispute Settlement System under various aspects. Most
of the relevant articles dealt with the question of integrating other policies, such
as environmental protection or human rights, into the WTO. But it is evident that
another risk of judicial activism may come with the use of broad general concepts
such as good faith.
The Members, while agreeing on the WTO Dispute Settlement Understanding, have
created a strong organ and struggle now to tame 'the ghosts they called', at least
whenever the respective decision goes to their disadvantage. The theoretical idea
of the Members, assembled in the General Council or the Dispute Settlement body,
having the control over the development of WTO law, is contravened in practice by
the weakness of the same bodies. The Members do not have many possibilities to stop
what they might consider 'judicial activism' if any decision not to adopt Appellate
Body reports can only be taken by consensus. At least the winning party, as past
experience has shown, has too strong an interest in the ultimate result to overturn
the decision, even if it has doubts about certain parts of the legal findings. An
argument frequently put forward against allegedly too broad legal assumptions is
Article IX:2 of the WTO Agreements, which gives the tasks of adopting authoritative
interpretations of the agreements to the Ministerial Conference and the General
Council. The adoption requires a three-fourths majority of the Members. Most cases
of amendments under Article X do not require consensus either. Even with this lower
threshold for adoption, however, the Members have never used this possibility. This
kind of 'paralysis' of the political level raises doubts with regard to a solution
that is considered by some as the right approach for the WTO instead of recurring
to broad principles such as good faith, 'fundamental fairness' and 'even-handedness':
a non liquet.
Even leaving aside voices which consider a non liquet in international law to be
prohibited, one might have doubts in most cases if this would the better alternative.
The Members have committed themselves under Article 23 DSU to bring their disputes
under the agreements to the WTO Dispute Settlement System. They turn to the panels
and the Appellate Body with the 'legitimate expectation' that their dispute be
settled. The constraints on the political level for efficient reactions to disputes
over provisions in the agreements, whether through authoritative interpretation or
through amendments of the agreements, make a dispute settlement system necessary that
takes on its tasks and uses the tools it has to find solutions.
One exception to this might be the situation of the Korea-Procurement panel, which
tried to fill gaps it saw in the law by turning to good faith. This clearly amounts
to creating law instead of interpreting it. Had the case been appealed, the chances
are high that the Appellate Body would have overruled the finding in the way it
overruled the panel in the India-Patent case. There it roundly chastised the panel
finding, suggesting it would lead to imputing 'into a treaty of words that are not
there or the importation into a treaty of concepts that were not intended', something
'neither require[d] nor condone[d]' by the interpretation rules.
This shows that the Appellate Body has so far lived up to its responsibility for
stopping overly broad approaches in applying good faith by the panels and has shown
signs of judicial restraint. It has overruled their attempts to read the requirement
Page 20
of protection of legitimate expectations into the interpretation of the agreements.

(c) The need for clarification
As has been shown, the latest decisions of the Panel and the Appellate Body on
the Byrd Amendment have raised considerable concerns among the Members, but their
implications remain unclear. It is therefore crucial that the Appellate Body make
more effort to give a better foundation to its findings if it refers to broad concepts
such as good faith which, by their very nature, must raise concerns with the Members.
A good example of insufficient foundations for a legal analysis is the
Shrimp-Turtle case. The Appellate Body considered the chapeau of Article XX to be
an expression of the prohibition of abuse of rights, a principle linked to good faith.
It did not refer to a particular wording of the provision as it had done in other
cases, regarding terms such as 'impartial' or 'objective'. Had it tried to do so,
it could have probably only referred to 'arbitrary or unjustifiable'. These terms,
however, only specify the kind of discrimination that is forbidden by Article XX.
The critical question in the case, the justification of the import prohibitions, was
only partly discrimination-related. The Appellate Body criticised, on the one hand,
that the US had tried to negotiate a multilateral agreement for the protection of
sea turtles to a much larger extent with some countries than with others-a dis-
crimination issue. But, on the other hand, it also criticised, for example, that there
was no 'transparent, predictable certification process' and no procedure for review.
This had nothing to do with discrimination but with the form of treatment of the
complainant only, and the standard the Appellate Body applied was also not the
'arbitrary and unjustifiable' standard, but the 'abuse of rights' and 'reason-
ableness' test. The Appellate Body did not apply Article X.3(a) but seemed to consider
its standard of administering national laws in a 'uniform, impartial and reasonable
manner' as a general standard linked to the concepts of good faith and due process.
Despite this vague basis, the Appellate Body came to quite specific procedural
obligations for the Member invoking the exception.
The report of the Appellate Body on the Byrd Amendment serves as the most recent
example for overly unclear references to broad concepts of international law. The
Appellate Body may have made, in two cryptic paragraphs, a finding that could have
enormous impact on the future understanding of WTO obligation, i.e. that good faith
can give rise to independent substantive obligations of the Members. It may have also
meant something else. But the Appellate Body could have foreseen that these few lines
will cause widespread and diverse reactions and should therefore have taken the chance
to clarify its view on the relationship of WTO norms and obligations arising from
public international law. The United States were right in criticising that the
Appellate Body only referred to two of its own prior reports, Shrimp and Hot-Rolled
Steel, in order to support its finding of the role of good faith in the WTO. In the
end, the Members might need a clear and certainly controversial statement to overcome
their paralysis and adopt an authoritative interpretation under Article IX of the
WTO Agreement.
Conclusion
A vague concept, such as good faith, inevitably contains the risk of overbroad
use by judges. Some authors believe that the existence of the good faith principle
will facilitate trade negotiations in the future as the expectations of Members will
be more effectively secured. But there is, of course, a flipside of the coin. The
stronger the reliance of judicial bodies on assumed good faith duties, the greater
caution the Member States may show against these bodies. And they have a valid
foundation for this attitude: The Permanent Court of International Justice held in
the famous 'Lotus' decision that represents the traditional concept of international
law that states are free to act as they wish in the absence of a specific rule or
norm of international law that limits their conduct. This principle could be
Page 21
contravened by a very broad understanding of good faith. The analysis has proven that
the Appellate Body has applied good faith with the necessary caution thus far, but
there is no simple answer as to how to secure the outer boundaries and rule out too
broad good faith decisions in the future. The more obvious solutions bear in
themselves the same risk of ambiguity. One may require, for example, linking the use
of good faith to words in the treaty-but many of the terms used, such as 'reasonable'
or 'objective', offer themselves a broad scope of interpretation. One may limit good
faith to the prohibition of abus de droit, but this is in itself a very vague term.
The Byrd Amendment, for example, offers enough room for different opinions if such
a norm constitutes an abuse of rights or to follow with a more careful reasoning the
'object and purpose' interpretation of the panel. However, all these concepts of
limitation may still increase the acceptance of good faith use by the Members.
International agreements are inevitably vague in many of their provisions and
result sometimes from the negotiators' inability to achieve consensus on more precise
terms. Therefore, Members will have to trust the Appellate Body to define their
contours cautiously. They have given it tools that leave scope for interpretation,
knowing that no legal system is so complete and unambiguous that it does not need
balancing elements to find a just result in a particular case. But if principles like
good faith are supposed to add legitimacy and credibility to the decisions, it is
the task of the judicial bodies to motivate their decisions carefully and com-
prehensively with regard to their use and to thereby give the Members the possibility
to set their limits. It was then up to them to exclude, for example, in an authoritative
interpretation under Article IX of the WTO Agreement the overbroad 'protection of
legitimate expectations' from the scope of good faith.
The following guidelines, a summary of the analysis above, should therefore be
followed with regard to the future use of good faith:
First, the judicial bodies may achieve most of the results delivered by reference
to good faith and also by using other, less disputed methods, such as reference rather
to Article 31 of the Vienna Convention than to Article 26 (the transition between
both provisions is smooth and the former is less contended due to its immediate link
to the wording of the Agreements) or reference to specific terms in the agreements
which may be considered an expression of good faith.
Second, if good faith is referred to, the basis for this reference, the content
attributed to the concept in the particular case and the legal consequences need be
made clearer than it has been done thus far.
And finally: The idea of an abstract obligation of good faith that adds something
to the obligation under the Agreements does not correspond to the traditional
international law understanding of what good faith application implies.
With these limitations in mind, good faith can and will continue to play a
legitimate and important role in the future jurisprudence.
Annex: Overview of Important Decisions with a Reference to Good Faith (GF)
YEAR Appellate Body Panel
2005 EC?Sugar Export Subsidies
Linkage between GF and estoppel
2004 EC?Sugar Export Subsidies:
GF in the context of estoppel
US?Gambling: GF interpretation
implies effective interpretation
2003 US?Byrd-Amendment: panels may in Argentina?Poultry: Panels
principle find a GF violation, follows Byrd test: in the
but only if a substantive case no substantive violation,
provision has been violated therefore also no GF
Page 22
violation; also link between GF

and estoppel
US?Byrd Amendment: GF requires
not to defeat object and
purpose of a treaty
2002 EC?Sardines presumption of
GF confirmed
2001 Mexico?HFCS: Article 3.7 EC?Bed Linen (21.5): Article
DSU as expression of GF 3.1 AD is expression of
GF; no violation of GF
US?Hot-Rolled Steel: Article 3.1 without a violation of a
and Article 2 of Annex II substantive provision
AD Agreement as expressions
of GF
2000 US?FSC: GF understanding of Korea?Procurement: General
Article 3.10 DSU application of customary
law obligations of the Members;
non-violation cases as expression
of GF principle; GF obligation
also during negotiation of a
may give rise to legitimate
expectationstreaty,which are
protected through non-
violation claim.
1999 US?Section 301: GF duty
under Article 23 DSU
1998 US?Shrimps: Article XX as India?Patents GF interpretation
expression of GF requires protection of
(abuse of rights) legitimate expectations
India?Patents: rejecting GF (similar in EC?Computer
interpretation in connection Equipment, also 1998)
with legitimate expectations
(also in EC?Computer Equipment)
1996 US?Underwear: Link between GF
interpretation and legitimate
expectations
Return to Text
FOOTNOTES:
n1 For an overview see Thomas Cottier and Krista N. Scheffer, 'Good Faith and
the Protection of Legitimate Expectations in the WTO', in Bronckers and Quick (eds),
New Directions in International Economic Law (The Hague, 2000), 47, at 48-49; see
also Elisabeth Zoller, La Bonne Foi en Droit International Public (Paris, 1977), at
17-46.
n2 'All Members [ ... ] shall fulfil in good faith the obligations assumed by
them in accordance with the present Charter.'
n3 Article 300: 'States Parties shall fulfil in good faith the obligations
assumed under this Convention and shall exercise the rights, jurisdiction and
freedoms recognised in this Convention in a manner which would not constitute an abuse
of right.'
Page 23
n4 Article 7 (1): 'In the interpretation of this Convention, regard is to be had

to its international character and to the need to promote uniformity in its ap-
plication and the observance of good faith in international trade.'
n5 John O'Connor, Good Faith in International Law (Brookfield, 1991), at 81-98;
see notably International Court of Justice, Nuclear Tests (Australia v France),
Judgement of 20 December 1974, I.C.J. Reports 1974, p 268.
n6 A keyword search in all panel and Appellate Body reports for 'good faith'
performed on www.worldtradelaw.net on 12 June 2005 resulted in 159 hits (excluding
identical reports for different complainants).
n7 Ibid, at 1.
n8 See on this in general John O'Connor, above n 5, at 35-42; Bin Cheng, General
Principles of Law (Cambridge, 1987), at 114-19.
n9 Gerald Fitzmaurice, The Law and Procedure of the International Court of
Justice (Cambridge, 1986), Vol I, at 12.
n10 Justice Stewart in his famous concurring opinion in Jacobellis v State of
Ohio, 378 U.S. 184, 197 (1964), referring to the difficulty of defining obscene
material ('I shall not today attempt further to define the kinds of material I
understand to be embraced within that shorthand description; and perhaps I could never
succeed in intelligibly doing so. But I know it when I see it').
n11 Articles 24.4, 24.5, 48.2 and 58 TRIPS.
n12 See Article 3.10 and Article 4.3 DSU.
n13 Article 31.1: '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.'
n14 See below, at 8, 13, 23.
n15 See in particular Article 24 (5) (application for or registration of a
trademark or acquisition of rights to a trademark in good faith) and the Panel Report
European Communities-Protection of Trademarks and Geographical Indications for
Agricultural Products and Foodstuffs, WT/DS/174/R, WT/DS/290/R, 15 March 2005. On
TRIPS and good faith see also Aditi Bagchi, 'Compulsory Licensing and the Duty of
Good Faith in TRIPS', 55 Stan. L. Rev. 1529.
n16 Appellate Body Report, United States-Tax Treatment for 'Foreign Sales
Corporations' ('US-FSC'), WT/DS108/AB/R, 24 February 2000, para 166.
n17 Appellate Body Report, United States-Anti-Dumping Measures on Certain
Hot-Rolled Steel Products from Japan ('US-Hot-Rolled Steel'), WT/DS184/AB/R, 24 July
2001, para 101.
n18 Appellate Body Report, United States-Transitional Safeguard Measure on
Combed Cotton Yarn from Pakistan ('US-Cotton Yarn'), WT/DS192/AB/R, 8 October 2001,
para 81.
n19 See, e.g., Appellate Body Report, European Communities-Trade Description on
Sardines ('EC-Sardines'), WT/DS231/AB/R, 26 September 2002, para 278; Panel Report,
Argentina-Definitive Safeguard Measures on Imports of Preserved Peaches ('Ar-
gentina-Peaches'), WT/DS238/R, 14 February 2003, para 7.124; Panel Report, Ar-
gentina-Measures Affecting Imports of Footwear, Textiles, Apparels and Other Items
('Argentina-Footwear'), WT/DS56/R, 25 November 1997, para 6.14. This presumption was
also applied by GATT panels, See, e.g., Arbitrator Award, Canada/European Com-
munities-Article XXVIII Rights, DS12/R-37S/80, 26 October 1990, p 4.
n20 Zoller, n 1 above, at 11-12.
Page 24
n21 In the EC-Pipe Fitting case, Brazil objected to the understanding of good
faith as an 'evidentiary principle' and claimed that the Panel had not applied the
correct standard of review of Article 17.6 of the Anti-Dumping Agreement by relying
on the assertion of the EC regarding the character of a certain exhibit. The Appellate
Body, however, rejected this claim and referred to additional questions the panel
had posed to the EC to clarify the character. Brazil itself had not offered any proof
that the panel had committed an 'egregious error' in reaching the result it had
reached. See Appellate Body Report, European Communities-Anti-Dumping Duties on
Malleable Cast Iron Tube or Pipe Fittings from Brazil ('EC-Pipe Fittings'),
WT/DS219/AB/R, 22 July 2003, para 24 and 127.
n22 Decision by the Arbitrator, Canada-Export Guarantees and Loan Credits for
Regional Aircraft (Recourse to Arbitration under Article 22.6 DSU by Canada)
('Canada-Aircraft'), WT/DS222/ARB, 17 February 2003, para 3.99.
n23 Argentina-Footwear, above n 19, para 6.14.
n24 Decision by the Arbitrator, European Communities-Measures Concerning Meat
and Meat Products (Hormones) (Recourse to Arbitration under Article 22.6 DSU by the
European Communities ('EC-Hormones'), WT/DS26/ARB, 12 July 1998, para 9.
n25 Panel Report, Korea-Measures Affecting Government Procurement ('Ko-
rea-Procurement'), WT/DS163/R, 1 May 2000, para 7.99.
n26 Panel Report, United States-Import Prohibitions of Certain Shrimp and Shrimp
Products (Recourse to Article 21.5 by Malaysia) ('US-Shrimps'), WT/DS58/RW, 15 June
2001, para 5.19.
n27 See for example the discussion between the European Communities and the
United States in the Panel Report, United States-Import Measures on Certain Products
from the European Communities ('US-Certain Products'), WT/DS165/R, 17 July 2000, Add.
1, pp 38, 44, 117.
n28 Appellate Body Report, United States-Section 211 Omnibus Appropriations Act
of 1998 ('US-Section 211'), WT/DS176/AB/R, 2 January 2002, para 259; see also the
Panel Report, Korea-Measures Affecting Trade in Commercial Vessels, WT/DS/273/R, 7
March 2005, para 7.78.
n29 Appellate Body Report, Chile-Taxes on Alcoholic Beverages ('Chile-Alcoholic
Beverages'), WT/DS87/AB/R, WT/DS110/AB/R, 13 December 1999, para 74.
n30 Appellate Body Report, United States-Standards for Reformulated and
Conventional Gasoline ('US-Gasoline), WT/DS/2/AB/R, 29 April 1996, p 17.
n31 Emphasis added.
n32 US-Gasoline, above n 30, p 17; Rudolf Bernhardt, 'Interpretation in In-
ternational Law', in Rudolf Bernhardt (ed), Encyclopedia of Public International Law
(Amsterdam/New York, 1995), Vol. II, at 1419; Michael Lennard, 'Navigating by the
Stars: Interpreting the WTO Agreement', 5 JIEL (2002) 17, at 17-18; Ian Sinclair,
The Vienna Convention on the Law of the Treaties (Manchester, 1973), at 153.
n33 See, e.g., GATT Panel Report, United States-Imposition of Countervailing
Duties on Certain Hot-('US-Hot-Rolled Lead and Bismuth Carbon Steel'), SCM/185, 15
November 1994, para 368; GATT Panel Report, United States-Restrictions on Imports
of Tuna ('US-Tuna'), DS29/R, 16 June 1994, para 5.18; GATT Panel Report, United
States-Anti-Dumping Duties on Imports of Stainless Steel Plates from Sweden, ADP 117,
24 February 1994, para 235.
n34 Panel Report, United States-Measures Affecting the Cross-Border Supply of
Gambling and Betting Services ('US-Gambling'), WT/DS285/R, 10 November 2004, para
6-50.
Page 25
n35 Joint Dissenting Opinion, Aerial Incident Case (Israel v Bulgaria) [1959]
ICJ Rep. 188.
n36 In an early GATT panel the US had rejected this link, claiming that 'good
faith concerned motives and intentions, whereas 'reasonableness' concerned ra-
tionality and logic. In this respect a good faith action could be reasonable',
US-Hot-Rolled Lead and Bismuth Carbon Steel, above n 33, para 104. The EEC and the
Netherlands had already shown the understanding of the Appellate Body in the second
Tuna Panel report, see US-Tuna, above n 33, para 3.73. On the difficulties of a
reasonableness standard in the context of international criminal law, see Rosa
Ehrenreich Brooks, 'Law in the Heart of Darkness: Atrocity & Duress', 43 Va. J. Int'l
L. 861, at 869-73.
n37 I.L.C. Yearbook 1966, vol 2, at 221 and Yearbook 1964, vol 2, at 56; see also
Sinclair, above n 32, at 119.
n38 See, e.g., Panel Report, United States-Restrictions on Imports of Cotton and
Man-Made Fibre Underwear ('US-Underwear'), WT/DS24/R, 8 November 1996, para 7.20.
n39 Panel Report, United States-Sections 301-310 of the Trade Act of 1974
('US-Section 301'), WT/DS152/R, 22 December 1999, para 7.22.
n40 Yearbook of the International Law Commission, 1966, Vol. II, at 220.
n41 US-Section 301, above n39, para 7.64.
n42 Ibid.
n43 'Any doubts one might have, however, between these two possible inter-
pretations are dispelled when we consider the other interpretative elements found
in Article 31 of the Vienna Convention.'. Ibid, para 7.70.
n44 Ibid, para 7.68.
n45 Panel Report, India-Patent Protection for Pharmaceutical and Agricultural
Chemical Products (Complaint by US) ('India-Patents (US)'), WT/DS/50/R, 5 September
1997, para 7.18.
n46 Panel Report, European Communities-Customs Classification of Certain
Computer Equipment ('EC-Computer Equipment'), WT/DS62, 67, 68/R, 5 February 1998,
para 8.25.
n47 US-Underwear, above n 38, para 7.20.
n48 Restatement (Second) of Contracts - 205 a (1981).
n49 Appellate Body Report, India-Patent Protection for Pharmaceutical and
Agricultural Chemical Products (Complaint by US) ('India Patents (US)'),
WT/DS50/AB/R, 19 December 1997, para 45.
n50 Ibid.
n51 Appellate Body Report, EC-Customs Classification of Certain Computer
Equipment ('EC-Computer Equipment'), WT/DS62, 67, 68/AB/R, 5 June 1998, para 88.
n52 See for this connection explicitly US-Gambling, above n 34, para 6.46 with
reference to previous decisions in n 606. The same understanding was expressed by
the International Law Commission while drafting the Vienna Convention on the Law of
the Treaties, see Yearbook of the International Law Commission 1964, Vol. II, at 61.
A previously planned separate provision on 'effective interpretation' was not
included in the Final Draft to be submitted to the UN Conference on the Law of the
Treaties, see United Nations Conference on the Law of Treaties-Official Records, Vol.
I-III, New York, 2001.
n53 US-Gambling, above n 34, para 6.46.
Page 26
n54 US-Gasoline (AB), above n 30, p 23.

n55 Yearbook of the International Law Commission 1966, Vol. II, at 219.
n56 See Lennard, above n 32, at 60-61.
n57 Anthony Arnull, The European Union and its Court of Justice (Oxford/New York,
1999), at 515-22.
n58 See, e.g., Panel Report, United States-Import Prohibition of Certain Shrimp
and Shrimp Products ('US-Shrimps'), WT/DS58/R, 15 May 1998, para 7.41; Panel Report,
India-Patent Protection for Pharmaceutical and Agricultural Chemical Products
(Claims brought by the EC) ('India-Patents (EC)'), WT/DS79/R, 24 August 1998, n 135
to para 7.69.
n59 See, e.g., US-Hot-Rolled Steel (AB), above n 17, para 101.
n60 US-Shrimps (Panel), above n 58, para 7.41; see also Panel Report, United
States-Continued Dumping and Subsidy Offset Act of 2000 (Byrd Amendment) ('US-Byrd
Amendment'), WT/DS/217, 234R, 16 September 2002, para 7.64.
n61 Yearbook of the International Law Commission, 1966, vol. II, at 211
(explaining why a separate provision on this duty was not necessary).
n62 Below at 32.
n63 United States-FSC (AB), above n 16, para 166.
n64 Below, at 23.
n65 Appellate Body Report, European Communities-Conditions for the Granting of
Tariff Preferences to Developing Countries ('EC-Tariff Preferences'),
WT/DS246/AB/R, para 118.
n66 GATT Contracting Parties, Decision of November 28, 1979 on Differential and
More Favorable Treatment, Reciprocity and Fuller Participation of Developing
Countries, GATT 26th Supp. BISD 203 (1980).
n67 Ibid, para 114. See also the Appellate Body Report, United States-Measures
Affecting the Cross-Border Supply of Gambling and Betting Services, WT/DS285/AB/R,
7 April 2005, para 272: 'It follows that the principles of good faith and due process
oblige a responding party to articulate its defence promptly and clearly.'
n68 Appellate Body Report, Canada-Measures affecting the Export of Civilian
Aircraft ('Canada-Aircraft'), WT/DS70/AB/R, 2 August 1999,para 190.
n69 Ibid, para 203-05.
n70 EC-Sardines (AB), above n 19, para 141.
n71 Rule 30 (1) of the Working Procedures for Appellate Review, WT/AB/WP/7 of
1 May 2003.
n72 EC-Sardines (AB), above n 19, para 141.
n73 Ibid, para 144-47.
n74 Panel Report, European Communities-Export Subsidies on Sugar ('EC-Sugar'),
WT/DS265/R,WT/DS266/R, WT/DS283/R, 15 October 2004, para 7.54-7.57.
n75 Below, at 18.
n76 Appellate Body Report, Mexico-Anti-Dumping Investigation of High Fructose
Corn Syrup (HFCS) from the United States (Article 21.5 recourse) ('Mexico-HFCS'),
WT/DS132/AB/RW, 21 November 2001, para 47.
n77 Above, at 14.
Page 27
n78 'Before bringing a case, a Member shall exercise its judgement as to whether
action under these procedures would be fruitful.'
n79 Mexico-HFCS (AB), above n 76, para 73.
n80 Above, at 5.
n81 Mexico-HFCS (AB), above n 76, para 74; see also EC-Sugar, above n 74, para
7.69.
n82 Panel Report, Korea-Definitive Safeguard Measure on Imports of Certain Dairy
Products ('Korea-Dairy'), WT/DS98/R, 21 June 1999, para 7.13.
n83 Panel Report, India-Measures Affecting the Automotive Sector ('In-
dia-Autos'), WT/DS146/R, WT/DS175/R, 21 December 2001, para 7.140-7.141. For this
reason the panel explicitly made no finding on the question if a panel would ever
be allowed in such a case to 'make a discretionary determination not to pursue its
express mandate', ibid para 7.142.
n84 Appellate Body Report, European Communities-Measures Concerning Meat and
Meat Products (Hormones) ('EC-Hormones'), WT/DS26/AB/R, WT/DS48/AB/R, 16 January
1998, para 133.
n85 See also Appellate Body Report, Australia-Measure Affecting Importation of
Salmon ('Australia-Salmon'), WT/DS18/AB/R, 20 October 1998, para 266; see also
EC-Pipe Fittings (AB), above n 21.
n86 Appellate Body Report, European Communities-Measures Affecting the Im-
portation of Certain Poultry Products ('EC-Poultry'), WT/DS69/AB/R, 13 July 1998,
para 116.
n87 Panel Report, Guatemala-Definitive Anti-Dumping Measures on Grey Portland
Cement from Mexico ('Guatemala-Cement'), WT/DS156/R, 24 October 2000, para 8.23,
referred to by the panel in EC-Sugar, above n 39, para 7.72. See on the principle
in general Jorg Paul Muller and Thomas Cottier, 'Estoppel', in Rudolf Bernhardt (ed),
Encyclopedia of Public International Law (Amsterdam/New York, 1995), Vol. II, at
116-19.
n88 Ibid, p 117.
n89 See Panel Report, Argentina-Definitive Anti-Dumping Duties on Poultry from
Brazil ('Argentina-Poultry'), WT/DS241/R, 22 April 2003. In the Guatemala-Cement
case, above n 87, good faith was not discussed at all.
n90 See Argentina-Poultry, above n 89, para 7.18.
n91 Ibid, para 7.36; for a more detailed analysis of this point see below, p 30.
n93 Ibid, para 7.39; this definition has been followed by the panel in EC-Sugar,
above n 74, para 7.71.
n94 Ibid, para 7.38-7.39. 9
n95 EC-Sugar, above n 74, para 7.54-7.57.
n98 Ibid, para 7.70-7.75.
n99 Appellate Body Report, European Communities-Export Subsidies on Sugar
('EC-Sugar'), WT/DS265, 266, 283/AB/R, 28 April 2005, para 307, 320.
Page 28
n100 Appellate Body Report, United States-Import of Certain Shrimps and Shrimps
Products ('US-Shrimps'), WT/DS/AB/R, 12 October 1998, para 162.
n101 See in more detail, below, at 47-48.
n102 'The protection and enforcement of intellectual property rights should
contribute to the promotion of technological innovation and to the transfer and
dissemination of technology, to the mutual advantage of producers and users of
technological knowledge and in a manner conducive to social and economic welfare,
and to a balance of rights and obligations.'
n103 Panel Report, United States-Section 211 Omnibus Appropriations Act of 1998
('US-Section 211'), WT/DS176/R, 6 August 2001, para 8.57.
n104 US-Hot-Rolled Steel (AB), above n 17, para 193; Panel Report, European
Communities-Anti-Dumping Duties on Malleable Cast Iron Tube or Pipe Fittings from
Brazil ('EC-Pipe Fittings'), WT/DS219/R, 7 March 2003, para 7.226; Panel Report,
European Communities-Anti-Dumping Duties on Imports of Cotton-Type Bed Linen from
India ('EC-Bed Linen') (Recourse to Article 21.5 DSU by India), WT/DS141/RW, 21
November 2002, para 6.159; Panel Report United States-Investigation of the In-
ternational Trade Commission on Softwood Lumber from Canada ('US-Lumber'),
WT/DS277/R, 22 March 2004, para 7.28; Panel Report Mexico-Definitive Anti-Dumping
Measures on Beef and Rice ('Mexico-Beef and Rice'), WT/DS295/R, 6 June 2005, para
7.55.
n105 EC-Pipe Fittings (Panel), above n 104, para 7.292.
n106 US-Hot-Rolled Steel (AB), above n 17, para 101.
n107 Ibid.
n108 See, e.g., Panel Report, Argentina-Measures Affecting the Export of Bovine
Hides and the Import of Finished Leather ('Argentina-Bovine Hides'), WT/DS155/R, 19
December 2000, para 11.56-11.101.
n109 Japan brought a similar claim again in another case, see Panel Report, United
States-Sunset Review of Anti-Dumping Duties on Corrosion-Resistant Carbon Steel Flat
Products from Japan ('US-Sunset Review'), WT/DS244/R, 14 August 2003, p A-9, but the
good faith argument was not considered by the panel.
n110 Panel Report, United States-Anti-Dumping Measures on Certain Hot-Rolled
Steel Products from Japan ('US-Hot-Rolled Steel'), WT/DS184/R, 28 February 2001, para
7.263.
n112 Ibid, para 7.266 with reference to Appellate Body Report, European
Communities-Regime for the Importation, Sale and Distribution of Bananas
('EC-Bananas'), WT/DS27/AB/R, 9 September 1997, para 204.
n115 For such an understanding see the Dispute Settlement Commentary for the
panel report at www.worldtradelaw.net, p 25 (last visited 12 June 2005).
n116 US-Shrimps (AB), above n 100, para 183.
n117 Ibid.
n118 See, e.g., US-Shrimps (Panel), above n 58, para 6.5 and 7.41; EC-Sardines
(AB), above n 19, para 278; Appellate Body Report, United States-Continued Dumping
and Subsidy Offset Act of 2002 ('US-Byrd Amendment'), WT/DS217/AB/R, WT/DS234/AB/R,
16 January 2003, para 296.
Page 29
n119 See, e.g., US-Gasoline (AB), above n 30, pp 20-21; US-Hot-Rolled Steel (AB),
above n 17, para 167-168.
n120 'The word 'objective', which qualifies the word 'examination', indicates
essentially that the 'examination' process must conform to the dictates of the basic
principles of good faith and fundamental fairness.', US-Hot-Rolled Steel (AB), above
n 17, para 193.
n121 See on this link, e.g., Gillian White, 'The Principle of Good Faith', in
Lowe and Warbrick (eds), The United Nations and the Principles of International Law
(London/New York, 1994) 230, at 244; Cheng, above n 5, at 121-37.
n122 'State Parties shall fulfil in good faith the obligations assumed under this
Convention and shall exercise the rights, jurisdiction and freedoms recognised in
this Convention in a manner which would not constitute an abuse of right.'
n123 Above, at 20.
n124 US-Shrimps (21.5 panel), above n 26, para 6.1.
n125 Appellate Body Report, United States-Import Prohibition of Certain Shrimp
and Shrimp Products ('US-Shrimps') (Recourse to Article 21.5 DSU by Malaysia),
WT/DS58/AB/RW, 22 October 2001, para 29.
n126 Ibid, para 122.
n127 See, e.g., India-Autos, above n 83, para 7.140-7.141.
n128 US-Section 211 (Panel), above n 103, para 8.57.
n129 US-Hot-Rolled Steel (AB), above n 17, para 148.
n130 Above, at 11.
n131 ECJ, Case C-112/77, Topfer [1978] ECR 1019; see on the importance of the
principle in EC law in general John Usher, General Principles of EC Law (London/New
York, 1998), at 54-67.
n132 ECJ, Case T-115/94, Opel Austria v Council, [1997] ECR II-39, para 93.
n133 Korea-Procurement, above n 25, para 7.87.
n134 Ibid, para 7.93, 7.95.
n138 Ibid, para 7.103-7.119.
n139 Ibid, para 7.120-7.126.
n140 Minutes of the Meeting of the Dispute Settlement Body of 19 June 2000,
WT/DSB/M84 of 24 July 2000, para 63.
n141 Ibid, para 59 (Korea), para 64 (Philippines), para 69 (India).
n142 See the reaction of the United States in the Minutes of the Meeting of the
Dispute Settlement Body of 27 January 2003, WT/DSB/M142 of 6 March 2003, para 57;
see also, e.g., Donald M. McRae, 'Comments on Dr. Claus-Dieter Ehlermann's Lecture',
American Society of International Law Proceedings, 2-5 April 2003.
Page 30
n145 US-Byrd Amendment (AB), above n 118.

n147 For this understanding see the Dispute Settlement Commentary on this report
at www.worldtradelaw.net at 15 (last visited 12 June 2005).
n148 US-Byrd Amendment (Panel), above n 60, para 7.66.
n149 See for the implications of this case below, at 34.
n150 Argentina-Poultry, above n 89, para 7.3.
n151 Whereas the Dispute Settlement Commentary on this decision at
www.worldtradelaw.net, at 16, sees this decision 'at odds' with other Panel or
Appellate Body decisions (last visited 12 June 2005).
n152 EC-Bed Linen, above n 104, para 6.89.
n153 Ibid.
n154 Ibid.
n157 Appellate Body Report, European Communities-Anti-Dumping Duties on
Cotton-Type Bed Linen from India ('EC-Bed Linen') (Recourse to Article 21.5 by India),
WT/DS141/AB/RW, 8 April 2003.
n158 Above, at 29.
n159 J. H. H. Weiler, 'The Rule of Lawyers and the Ethos of Diplomats: Reflections
on the Internal and External Legitimacy of WTO Dispute Settlement', 35(2) JWT (2001)
191, at 206.
n160 EC-Hormones (AB), above n 84, para 177; see also, on the attention the
Appellate Body has paid to careful textual interpretation, Robert Howse, 'Adju-
dicative Legitimacy and Treaty Interpretation in International Trade Law: The Early
Years of GATT Jurisprudence', in J. H. H. Weiler (ed), The EU, the WTO and the NAFTA
(Oxford/New York, 2000) 35, at 53.
n161 McRae, above n 142.
n162 See US-Byrd Amendment (Panel), above n 60, para 7.63.
n163 Maria Frankowska, 'The Vienna Convention on the Law of Treaties before US
Courts', 28 Va. J. Int'l L. (1988) 281, at 299, n 82 with further references.
n164 See US-Shrimps (Panel), above n 58, para 7.41, n 644 and US-Byrd Amendment
(Panel), above n 60, para 7.64, n 314.
n165 US-Byrd Amendment (AB), above n 118, para 297.
n167 One could imagine taking the lack of good faith into consideration when the
appropriate level of countermeasures in cases of ongoing violations of the agreements
is to be determined. This approach seems to have been followed by the arbitrator in
the Canada-Aircraft case who held that the clearly stated unwillingness of Canada
to withdraw subsidies in violation of Article 4.7. of the SCM Agreement may be
considered in the determination of the appropriate level of countermeasures to be
taken by Brazil, see Canada-Aircraft (Decision by the Arbitrator), above n 22, para
3.105-3.108.
n168 WT/DSB/M/150 (22 July 2003), para 44, p 9.
Page 31
n169 US-Byrd Amendment (Panel), above n 60, para 4.624 (Canada), 4.654 (Chile),
4.701 (European Communities, India, Indonesia, Thailand), 4.805 (Mexico).
n170 US-Byrd Amendment (AB), above n 118, para 123, with reference to its previous
appellee's submission.
n171 See, e.g., James Cameron, 'Principles of International Law in the WTO
Dispute Settlement', 50(2) ICLQ (2001) 248; Gabrielle Marceau, 'A Call for Coherence
in International Law', 33(5) JWT (1999) 87; Joost Pauwelyn, 'The Role of Public
International Law in the WTO: How Far Can We Go?', 95 Am. J. Int'l L. (2001) 535.
n172 See above, at 35-36. Joost Pauwelyn, 'How to Win a WTO Dispute Based on
non-WTO law: Questions of Jurisdiction and Merits', 6 Journal of World Trade (2003),
at 997-1030.
n173 See US-Byrd-Amendment (AB), above n 118, para 296. This is an important
statement as the US has not ratified the Vienna Convention on the Law of Treaties
and is therefore only bound by its provisions if they amount at the same time to
customary international law.
n174 Ibid, para 296, n 248.
n175 McRae, above n 142.
n176 See, e.g., Guatemala in Guatemala-Cement, above n 87, para 6.382-6.383 (on
harmless error); Canada in EC-Hormones (AB), above n 84, para 60 (on the precautionary
principle).
n177 'The Dispute Settlement System] serves to preserve the rights and ob-
ligations of Members under the covered agreements, and to clarify the existing
provisions of those agreements [... ].'
n178 'Terms of Reference-Panels shall have the following terms of reference
unless the parties to the dispute agree otherwise [ ... ]: 'To examine, in the light
of the relevant provisions in (name of the covered agreement(s) cited by the parties
to the dispute), the matter referred to the DSB by (name of party) in document ...
and to make such findings as will assist the DSB in making the recommendations or
in giving the rulings provided for in that/those agreement(s)'.'
n180 See on this provision Marceau, 'Coherence', above n 171, at 123-28.
n182 For this understanding also Meinhard Hilf, 'Power, Rules and Princi-
ples-Which Orientation for GATT/WTO Law?', 4 JIEL (2001) 111, at 112.
n183 Minutes of the Meeting of the Dispute Settlement Body of 19 May 2004,
WT/DSB/M/169, 30 June 2004, para 53.
n184 See for this argument in the context of human rights law and the WTO,
Gabrielle Marceau, 'WTO Dispute Settlement and Human Rights', 13 Eur. J. Int'l L.
753, at 765.
n185 EC-Sugar (Panel), above n 74, para 7.75.
n186 Appellate Body Report, United States-Imposition of Countervailing Duties
on Certain Hot-Rolled Lead and Bismuth Carbon Steel Products Originating in the United
Kingdom ('US-Bismuth Carbon Steel Products'), WT/DS138/AB/R, 10 May 2000; para 93;
India-Patents (US) (AB), above n 49, para 46-47.
n187 US-Bismuth Carbon Steel Products, above n 185, para 93.
n188 Chile-Alcoholic Beverages (AB), above n 29, para 79.
Page 32
n189 International Court of Justice, Nuclear Tests (Australia v France),

Judgement of 20 December 1974, I.C.J. Reports 1974, p 268, para 46; p 473, para 49.
n190 International Court of Justice, Border and Transborder Armed Actions
(Nicaragua v Honduras), Judgement of 20 December 1988-Jurisdiction of the Court and
Admissibility of the Application, para 94; confirmed in Case Concerning the Land and
Maritime Boundary Between Cameroon and Nigeria (Cameroon v Nigeria), Preliminary
Objections, Judgement of 11 June 1998, paras 39 and 59.
n191 Marceau, 'Coherence', above n 171, at 113-14; see also Mustafa Kamil
Yasseen, 'L'Interpretation des Traites d'apres la Convention de Vienne sur le Droit
des Traites', 151 Recueil des Cours (1976), at 22.
n192 Paul J. Powers, 'Defining the Undefinable: Good Faith and the United Nations
Convention on the Contracts for the International Sale of Goods', 18 J. L. & Com.
(1999) 333, at 336-42.
n193 A similar technique has been used by the Appellate Body in the US-Shirts
and Blouses report, when it referred to the 'generally accepted canon of evidence
in civil law, common law and, in fact, most jurisdictions' to apply the rule in WTO
law that 'the burden of proof rests upon the party [ ... ] who asserts the affirmative
of a particular claim or defence'; Appellate Body Report, United States-Measures
Affecting the imports of Woven Shirts and Blouses from India ('US-Blouses'),
WT/DS33/AB/R, 23 May 1997, p 14.
n194 See John Ragosta, Navin Joneja and Mikhail Zeldovich, 'WTO Dispute
Settlement: The System is Flawed and Must be Fixed', 37 Int'l. Law 697, at 702.
n195 See, e.g., Thomas Cottier and Krista N. Scheffer, 'Non-Violation Complaints
in WTO/GATT Dispute Settlement: Past, Present, Future', in Ernst-Ulrich Petersmann
(ed), International Trade Law and the GATT/WTO Dispute Settlement System (Lon-
don/Boston, 1997), 145, at 147, nn 5 and 6.
n196 Armin V. Bogdandy, 'The Non-Violation Procedures of Article XXIII:2 of GATT:
Its Operational Rationale', 26 Journal of World Trade (1992) 95, at 110.
n197 Ernst-Ulrich Petersmann, 'Violation-Complaints and Non-Violation Com-
plaints in Public International Trade Law', 34 G.Y.I.L. (1991) 174, at 196-97.
n198 Above, at 25.
n199 Cottier and Scheffer, 'Non-Violation Complaints', above n 195, at 171-72
and 'Good Faith', above n 1, at 53. Thomas Cottier was also a member of the In-
dia-Patents panel, one of the two panels that have tried to go further with regard
to the use of the 'legitimate expectations' in the interpretation of treaty ob-
ligations, both being stopped by the Appellate Body.
n200 Below, at 45.
n201 Cottier and Scheffer, 'Non-Violation Complaints', above n 195, at 181; for
such a 'violationisation' also Sung-joon Cho, 'Non-Violation Issues in the WTO
Framework: Are They the Achilles' Heel of the Dispute Settlement Process?', 39 Harv.
Int'l L. J. (1998) 311, at 333.
n202 India-Patents (US) (Panel), above n 43, para 42.
n203 See, e.g., Lorand Bartels, 'The Separation of Powers in the WTO: How to Avoid
Judicial Activism', 53 ICLQ (2004) 861; J. Patrick Kelly, 'Judicial Activism in the
World Trade Organisation: Developing Principles of Self-Restraint', 22 NW. J. Int'l
L. & Bus. (2002) 353; Richard H. Steinberg, 'Judicial Lawmaking at the WTO:
Discursive, Constitutional and Political Constraints', 98 Am. J. Int'l L. (2004) 247.
Page 33
n204 J. W. Goethe, 'The Sorcerer's Apprentice', in Stanley Appelbaum (ed), 103

Great Poems by Johann Wolfgang von Goethe (Dover Publications, 1999), 126.
n205 See Bartels, above n 203, at 864-65 and Steinberg, above n 203, at 249; see
on this problem and possible solutions also John H. Jackson, The Jurisprudence of
GATT and the WTO (Cambridge, 2000), at 185-89.
n206 In this context, a Chilean and US proposal to allow the DSB to adopt a panel
or report only in parts is interesting, see 'Negotiations on Improvements and
Clarifications of the Dispute Settlement Understanding on Improving Flexibility and
Member Control in WTO Dispute Settlement', Textual Contribution by Chile and the
United States, TN/DS/W/52, 14 March 2003.
n207 This view is based on the finding of the Permanent Court of International
Justice in the Lotus decision, France v Turkey, 1927, P.C.I.J. Reports, Series A,
No. 10, according to which any behaviour of states that is not explicitly prohibited
is permitted in international law; see for references Bartels, above n 203, at 873;
in favour Steinberg, above n 203, at 258.
n209 India-Patents (US) (AB), above n 49, para 45.
n210 See above, at 25.
n211 US-Shrimps (AB), above n 100.
n212 '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 in-
ternational trade [ ... ].'
n213 US-Shrimps (AB), above n100, para 172-75.
n215 Grainne de Burca and Joanne Scott, The Impact of the WTO on EU Deci-
sion-Making, Harvard Jean Monnet Working Paper 06/00 (Cambridge, 2000), at 17,
correctly point out that had the US not negotiated with any country, but with the
complainants only, this would not have healed a discrimination, but would have made
the behaviour even worse.
n217 See US-Shrimps (21.5) (Panel), above n 26, para 5.30-5.72 and 5.126-5.136.
n218 Above, at 35.
n219 WT/DSB/M/142 (6 March 2003), para 57.
n220 Youngjin Jung/Sun Hyeong Lee, 'The Legacy of the Byrd Amendment Con-
troversies: Rethinking the Principle of Good Faith', 37(5) JWT (2003) 921, at 957.
n221 Permanent Court of International Justice, Judgement, France v Turkey, 1927,
P.C.I.J. Reports, Series A, No. 10.
n222 See on this function Hilf, above n 182, at 130.
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'Good Faith' in The WTO Jurisprudence-Necessary Balancing Element or An Open Door To Judicial Activism

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2005 Oxford University Press JIEL 2005.8(721)

2005 Oxford University Press

Journal of International Economic Law

LENGTH: 14230 words

AUTHOR: Helge Elisabeth Zeitler

LEGISLATION REFERRED TO:

On the international level, the principle is included most fundamentally in

principle of good faith interpretation under Article 31 of the Vienna Convention.'

In the Argentina-Poultry case, Argentina argued a violation of both principles,

considered Article 7 of the TRIPS Agreement to be an expression of good faith, based

In connection with general other concepts of treaty application, the Appellate

In various constellations, the use of the principle of good faith by a panel or

Agreement. Whether or not 'non-violation' complaints should be available for disputes

of protection of legitimate expectations into the interpretation of the agreements.

violation; also link between GF

n4 Article 7 (1): 'In the interpretation of this Convention, regard is to be had

n54 US-Gasoline (AB), above n 30, p 23.

n145 US-Byrd Amendment (AB), above n 118.

n189 International Court of Justice, Nuclear Tests (Australia v France),

n204 J. W. Goethe, 'The Sorcerer's Apprentice', in Stanley Appelbaum (ed), 103

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